Annual Comprehensive Financial Report, 2012-13

County of San Luis Obispo, California Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2013 Prepared under the direction of James P. Erb, CPA, Auditor-Controller COUNTY OF SAN LUIS OBISPO COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2013 TABLE OF CONTENTS SECTION PAGE INTRODUCTORY SECTION Letter of Transmittal 3 Certificate of Achievement for Excellence in Financial Reporting 12 Board of Supervisors and Principal County Officials 13 Organization Chart 14 FINANCIAL SECTION Independent Auditor’s Report .................................................................................................. 17 Management’s Discussion and Analysis (Required Supplementary Information) .......................... 21 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position .................................................................................................... 41 Statement of Activities ........................................................................................................ 42 Fund Financial Statements: Governmental Funds: Balance Sheet ................................................................................................................ 47 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position .................................................................. 48 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................... 49 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................... 50 Proprietary Funds: Statement of Net Position ............................................................................................... 51 Statement of Revenues, Expenses, and Changes in Net Position ........................................ 52 Statement of Cash Flows ................................................................................................. 53 Fiduciary Funds: Statement of Fiduciary Net Position ................................................................................. 54 Statement of Changes in Net Position – Investment Trust Funds ....................................... 55 Notes to the Basic Financial Statements ............................................................. 59 i TABLE OF CONTENTS (continued) SECTION PAGE Required Supplementary Information Description ......................................................................................................................... 97 Schedule of Funding Progress – Defined Benefit Plan Schedule of Funding Progress .......................................................................................... 98 Schedule of Funding Progress – OPEB Plan .......................................................................... 98 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget to Actual Comparison – General Fund ..................................................................... 99 Notes to Required Supplementary Information ..................................................................... 101 Other Supplementary Information Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Nonmajor Governmental Fund Descriptions ...................................................................... 107 Combining Balance Sheet ................................................................................................ 109 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .............. 110 Debt Service Funds: Combining Balance Sheet ........................................................................................ 111 Combining Statement of Revenues Expenditures, and Changes in Fund Balances ...................................................................................................... 112 Special Revenue Funds: Combining Balance Sheet ........................................................................................ 113 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...................................................................................................... 116 Special Revenue Funds – Special Districts: Combining Balance Sheet ........................................................................................ 119 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...................................................................................................... 120 Major and Nonmajor Budgetary Comparison Schedules: Capital Projects Fund ...................................................................................................... 123 Public Facilities Corporation ............................................................................................. 124 Pension Obligation Bonds ................................................................................................ 125 Public Financing Authority ............................................................................................... 126 Community Development Special Revenue Fund ............................................................... 127 County Medical Services Program (CMSP) Special Revenue Fund ....................................... 128 Emergency Medical Services Special Revenue Fund .......................................................... 129 Driving Under the Influence Programs Special Revenue Fund ............................................ 130 Fish and Game Special Revenue Fund .............................................................................. 131 Road Impact Fees Special Revenue Fund ......................................................................... 132 Library Special Revenue Fund .......................................................................................... 133 ii TABLE OF CONTENTS (continued) SECTION PAGE Other Supplementary Information (continued) Combining and Individual Fund Statements and Schedules (continued): Major and Nonmajor Budgetary Comparison Schedules (continued): Parks Special Revenue Fund ............................................................................................ 134 Public Facilities Fees Special Revenue Fund ...................................................................... 135 Roads Special Revenue Fund ........................................................................................... 136 Wildlife Grazing Special Revenue Fund ............................................................................. 137 Flood Control Districts Special Revenue Funds .................................................................. 138 Lighting Control Districts Special Revenue Funds .............................................................. 139 County Service Area Districts Special Revenue Funds ........................................................ 140 Nonmajor Enterprise Funds: Nonmajor Enterprise Fund Descriptions ............................................................................ 143 Combining Statement of Net Position ............................................................................... 144 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ............... 145 Combining Statement of Cash Flows ................................................................................ 146 Internal Service Funds: Internal Service Fund Descriptions ................................................................................... 151 Combining Statement of Net Position ............................................................................... 152 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ............... 153 Combining Statement of Cash Flows ................................................................................ 154 Internal Service Funds – Insurance Funds Combining Statement of Net Position ........................................................................... 155 Combining Statement of Revenues, Expenses, and Changes in Net Position ................... 156 Combining Statement of Cash Flows ............................................................................ 157 Fiduciary Funds: Fiduciary Fund Descriptions ............................................................................................. 161 Agency Funds: Combining Statement of Fiduciary Net Position ......................................................... 162 Combining Statement of Changes in Assets and Liabilities ......................................... 163 Investment Trust Funds: Combining Statement of Fiduciary Net Position ......................................................... 164 Combining Statement of Changes in Fiduciary Net Position ....................................... 165 General Fund – Detailed Budgetary Comparison Schedules: Detail Schedule of Expenditures – Budget to Actual Comparison – General Fund ................ 169 iii TABLE OF CONTENTS (continued) SECTION PAGE STATISTICAL SECTION (unaudited) Statistical Section Table of Contents......................................................................................... 179 Net Position by Component ..................................................................................................... 181 Changes in Net Position .......................................................................................................... 182 Fund Balances, Governmental Funds ........................................................................................ 184 Changes in Fund Balances, Governmental Funds ...................................................................... 185 Assessed Valuation ................................................................................................................. 186 Direct and Overlapping Property Tax Rates .............................................................................. 187 Principal Property Taxpayers ................................................................................................... 188 Property Tax Levies and Collections ......................................................................................... 189 Special Assessments Billings and Collections ............................................................................. 190 Ratios of Total Debt Outstanding ............................................................................................. 191 Ratios of General Obligation Debt Outstanding ......................................................................... 192 Legal Debt Margin Information ................................................................................................ 193 Demographic and Economic Statistics ...................................................................................... 194 Principal Employers ................................................................................................................. 195 Full Time Equivalent County Government Employees by Function .............................................. 196 Operating Indicators by Function ............................................................................................. 197 Capital Assets Statistics by Function ......................................................................................... 198 iv ________________________________________________________________ INTRODUCTORY SECTION ________________________________________________________________ 1 2 3 4 5 6 7 8 9 10 11 12 COUNTY OF SAN LUIS OBISPO LIST OF ELECTED AND APPOINTED OFFICIALS JUNE 30, 2013 Elected Officials Board of Supervisors District #1 ................................................................................................. Frank R. Mecham District #2 Acting Chairperson ....................................................................... Bruce S. Gibson District #3 ........................................................................................................... Adam Hill District #4 .............................................................................. Vacant (Appointment Pending) District #5 ..................................................................................................... Debbie Arnold Other Elected Officials Assessor ............................................................................................. Tom J. Bordonaro Jr. Auditor-Controller ............................................................................................. James P. Erb Clerk-Recorder .......................................................................................... Julie L. Rodewald District Attorney ........................................................................................... Gerald T. Shea Sheriff-Coroner .............................................................................................. Ian Parkinson Treasurer/Tax Collector/Public Administrator .......................................................... Art Bacon Appointed Officials Agricultural Commissioner .......................................................................... Marty Settevendemie Chief Probation Officer ............................................................................................ James Salio Child Support Services Director ..................................................................................... Phil Lowe County Administrator ............................................................................................. Dan Buckshi County Counsel ....................................................................................................... Rita L. Neal County Fire ............................................................................................................ Robert Lewin Behavioral Health Administrator ................................................................................K aren Baylor General Services Agency Director ............................................................................. Janette Pell Farm Advisor ....................................................................................................... Richard Enfield Health Agency Director ............................................................................................ Jeff Hamm Human Resources Director .......................................................................... Tami Douglas-Schatz Library Director ............................................................................................. Brian A. Reynolds Planning .................................................................................................................. Jason Giffen Public Health Officer ....................................................................................... Penny Borenstein Public Works Director ............................................................................................. Paavo Ogren Social Services Director ............................................................................................. Lee Collins Veteran’s Services Director ............................................................................... Dana Cummings 13 County of San Luis Obispo Organizational Chart Citizens of San Luis Obispo County Special Districts Governed Boards, Commissions and ---------------- Board of Supervisors* ------------------ by the Board of Supervisors Committees County Administrator Health & Land Public Community Fiscal & Internal Human Based Protection Services Administrative Support Services Ag Child Support Auditor- County Health Agency Library Commissioner Services Controller* Counsel Public Health Mental Health Drug & Alcohol Planning & District Animal Services Treasurer-Tax Human Farm Advisor Building Attorney* Medical Services Collector* Resources General General Services Sheriff- Public Works Social Services Services Assessor* Fleet Coroner* Airports Information Golf Technology Parks & Rec Clerk- Probation Veterans' Recorder* Services Administrative County Fire** Office Emergency Services * Elected Officials **Contract 14 ________________________________________________________________ FINANCIAL SECTION ________________________________________________________________ 15 16 INDEPENDENT AUDITOR’S REPORT The Honorable Board of Supervisors County of San Luis Obispo, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of San Luis Obispo, California (County), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the San Luis Obispo County Pension Trust Fund and the First 5 San Luis Obispo County, a discretely presented component unit. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the San Luis Obispo County Pension Trust, and the First 5 San Luis Obispo County are based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County, as of June 30, 2013, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 17 tel: 916.784.7800  fax: 916.784.7850  www.gallina.com The Honorable Board of Supervisors County of San Luis Obispo, California Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of funding progress for both the defined benefit retirement plan and the other post employment benefits (OPEB) plan and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2013 on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County’s internal control over financial reporting and compliance. Roseville, California December 19, 2013 18 ________________________________________________________________ MANAGEMENT’S DISCUSSION AND ANALYSIS ________________________________________________________________ 19 20 COUNTY OF SAN LUIS OBISPO MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 As management of the County of San Luis Obispo, (the County), we offer readers the County’s financial statements, this narrative overview, and analysis of the financial activities of the County for the fiscal year ended June 30, 2013. We encourage readers to consider the information presented here in conjunction with the transmittal letter at the front of this report and the County’s financial statements, which begin on page 41. All amounts, unless otherwise indicated, are expressed in thousands of dollars. FINANCIAL HIGHLIGHTS (in thousands) In FY 2012-13 the County implemented GASB Statements No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources. GASB 63 provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. Deferred outflows and inflows occur when governments enter into transactions that result in the consumption or acquisition of net assets in one period that are applicable to future periods. They are distinguished from assets and liabilities. Consequently, the Statement of Net Assets is now referred to as the Statement of Net Position.  The assets of the County exceeded its liabilities at the close of the most recent fiscal year by $1,662,615 (net position). Of this amount $362,690 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors, $28,863 is restricted for specific purposes (restricted net position), and $1,271,062 is invested in capital assets, net of related debt. (Table A)  The County’s net position increased by $78,917 during the current fiscal year. The increase in restricted and unrestricted net position represents the degree to which increases in ongoing revenues exceeded increases in ongoing expenditures. The increase in capital assets net of related debt represents capital acquisitions during the year reduced by depreciation and increased by retirement of long-term debt. (Table B)  As of June 30, 2013 the County’s governmental activities reported combined ending net position of $1,437,044, an increase of $40,228 in comparison with the prior year. Approximately 22% of the combined fund balances, or $362,690 is available for spending at the County’s discretion for current and future needs (unrestricted net position). (Table A)  Business-type activities posted net program income of $33,804 before general revenues, contributions and transfers from other funds, an increase of $31,249 when compared to net program income of $2,555 in the prior year. Significant differences from the prior year include an increase of $26,590 of contributed capital in the Los Osos Wastewater fund related to escalated construction activity. Additionally, the Los Osos Wastewater fund had a decrease of $6,288 related to the prior year assumption of State loans from the Los Osos CSD.  At the end of the fiscal year, the entire $207,699 fund balance of the general fund was either nonspendable ($3,092), restricted ($4,005), committed ($96,365) or assigned ($104,237).  The County issued new Assessment bonds of $24,173 to the USDA to finance costs of the Los Osos Wastewater project, an increase of $8,809 over prior year issuances required by an increase in construction activities in the current fiscal year. Additional bonds will be issued as future project expenditures occur. 21 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the County’s basic financial statements. The County’s basic financial statements include four components: 1) government-wide financial statements, 2) fund financial statements, 3) notes to the financial statements, and 4) required supplementary information. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The Government-wide financial statements are designed to provide readers with a broad overview of the County’s finances, in a manner similar to a private-sector business. The Statement of Net Position (formerly the Statement of Net Assets) presents information on all of the County’s assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The Statement of Activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused employee vacation balances). Both of the government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their cost through user fees and charges (business-type activities). The governmental activities of the County include public protection, public ways and facilities, health and sanitation, public assistance, education, recreational and cultural services and general government. The main business-type activities of the County include the airport, golf courses, flood control districts, the Nacimiento water project, the Los Osos wastewater project and county services areas. Blended component units are included in our basic financial statements and consist of legally separate entities for which the County is financially accountable and that have substantially the same board as the County or provide services entirely to the County. They include county service areas, flood control districts, waterworks districts, lighting maintenance districts, and the San Luis Obispo County Public Facilities Corporation and San Luis Obispo County Financing Authority. The County discretely presents the First 5 San Luis Obispo County component unit. The mission of First 5 is to allocate funds from the California Children and Families Trust Fund and advocate for quality programs and services, supporting children prenatal to age 5, to ensure that every child is healthy and ready to learn in school. First 5 does not meet the requirements for blending, and therefore its financial activities are presented separately from the County. The government-wide financial statements can be found on pages 41 to 43 of this report. 22 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government- wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on the balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains twenty-four individual governmental funds organized according to their type: general, special revenue, debt service, and capital projects. Information is presented separately in the governmental funds’ balance sheet and in the governmental funds’ statement of revenues, expenditures, and changes in fund balances for the general fund and the capital projects fund, which are considered to be major funds. Data from the remaining twenty-two governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements found in the other supplementary information section of this report. A budgetary comparison statement has been provided for the general fund and any major special revenue funds to demonstrate compliance with the budget and can be located in the required supplementary section of the report. Individual budgetary data for each of the non-major governmental funds is provided in the other supplementary information section of this report. The basic governmental fund financial statements can be found on pages 47 to 50 of this report. Proprietary funds – The County maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for the airport, golf course, transit districts, flood control districts, waterworks districts and county service areas. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for its reprographic services, vehicle operations and maintenance, public works services, Other Post Employment Benefits, and self-insurance programs. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the governmental-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The Airport, Nacimiento Water Contract, State Water Project, Lopez Flood Control, and Los Osos Wastewater funds are considered to be major funds of the County and are presented separately in the proprietary fund financial statements. All other enterprise funds have been combined into a single column for presentation. The eight internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service and enterprise funds is provided in the form of combining statements found in the other supplementary section of this report. 23 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The basic proprietary fund financial statements can be found on pages 51 to 53 of this report. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 54 to 55 of this report. Notes to the Basic Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 59 to 93 of this report. Required Supplementary Information – The statements are followed by a section of required supplementary information (RSI) that further explains and supports the information in the financial statements. The required supplementary information can be found on pages 97 to 101 of this report. Other Supplementary Information – In addition to the basic financial statements, accompanying notes, and required supplementary information, this report also presents certain other supplementary information concerning the County’s general fund and special revenue funds budgetary schedules and combining and individual fund statements. Combining and individual fund statements and schedules – The combining and individual fund statements and schedules referred to earlier provide information for non-major governmental funds, enterprise, internal service funds, and fiduciary funds and are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 107 to 120 and 143 to 165 of this report. Budgetary comparison schedules – Budgetary comparison schedules for major funds (other than the General Fund which is presented with the individual General Fund statements). The budgetary comparison schedules for the Capital Projects, Pension Obligation Bond, Public Financing Corporation, Public Financing Authority and non-major Special Revenue funds can be found on pages 123 to 140 of this report. Detail Budgetary schedules demonstrating legal level of compliance with budgetary control for the General Fund are presented with the individual General Fund statements on pages 169 to 175 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS In accordance with changes in governmental accounting standards, the County applied Governmental Accounting Standards Board (GASB) Statement No. 34 to these financial statements. As stated earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the County, assets and deferred outflows exceeded liabilities and deferred inflows by $1,662,615 as detailed in the table below: 24 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table A Statement of Net Position (in thousands) 2012- June 30, 2013 June 30, 2012 2013 Total Total Govern- Business- Primary Govern- Business- Primary Total mental Type Govern- mental Type Govern- % Activities Activities ment Activities Activities ment Chg Assets: Current assets $ 382,639 $ 167,426 $ 550,065 $ 353,819 $ 169,017 $ 522,836 5.2% Other long-term assets 140,715 14,094 154,809 139,500 16,134 155,634 (0.5%) Capital assets 1,128,549 448,918 1,577,467 1,125,153 415,313 1,540,466 2.4% Total assets 1,651,903 630,438 2,282,341 1,618,472 600,464 2,218,936 2.9% Liabilities: Long-term liabilities 164,520 292,697 457,217 170,518 275,774 446,292 2.4% Other liabilities 50,339 112,170 162,509 51,138 137,808 188,946 (14.0%) Internal balances - - - - - - - Total liabilities 214,859 404,867 619,726 221,656 413,582 635,238 (2.4%) Net position: Net Investment in capital assets 1,103,924 167,138 1,271,062 1,099,885 153,801 1,253,686 1.4% Restricted 28,863 - 28,863 31,477 - 31,477 (8.3%) Unrestricted 304,257 58,433 362,690 265,454 33,081 298,535 21.5% Total net position $ 1,437,044 $ 225,571 $ 1,662,615 $ 1,396,816 $ 186,882 $ 1,583,698 5.0% Analysis of Net Position Approximately 22% or $362,690 of the County’s net position represents unrestricted net position, which may be used to meet the County’s ongoing obligations to citizens and creditors. The most significant portion of the County’s net position, $1,271,062 or 76%, reflects its investment in capital assets net of accumulated depreciation (e.g. land and easements, structures and improvements, infrastructure, and equipment), less any outstanding related debt used to acquire those assets. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The remaining balance of the County’s net position of $28,863, or 2%, represents resources that are subject to external restrictions on how they may be used. At the end of the current fiscal year, the County reported positive balances in all three categories of net position, both for the County as a whole, as well as for its separate governmental activities and business- type activities. Net position for governmental activities increased $40,228 and net position for business activities increased $38,689 resulting in an overall increase of $78,917 in the County’s total net position. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Net Investment in capital assets for business type activities increased $13,337. This increase is primarily due to construction activity in the Los Osos Wastewater fund that does not have related debt. The remainder is comprised of reductions to capital related debt from scheduled debt service principal payments and construction in progress in various nonmajor enterprise activities. Net Investment in capital assets for governmental activities increased $4,039. The majority of the increase is associated with construction in progress for several large infrastructure projects having no related debt, and the retirement of capital related long-term debt. There was an increase of $64,155 in unrestricted net position reported in connection with the Total Primary Government. This category represents net position of the County which is not subject to constraints imposed by creditors, grantors, contributors, laws or regulations. This amount may be used to meet the County’s general obligations. The increase was due to excess general revenues over net program revenues and a decrease in amounts restricted for commitments to creditors. The table on the next page indicates the changes in net position for governmental and business-type activities: 26 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table B Statement of Activities (in thousands) June 30, 2013 June 30, 2012 2012- 2013 Govern- Business- Total Govern- Business- Total Total mental Type Primary mental Type Primary % Activities Activities Government Activities Activities Government Chg Revenues: Program revenues: Charges for services $ 54,526 $ 36,933 $ 91.459 $ 53,170 $ 37,789 $ 90,959 0.5% Operating grants and contributions 209,118 193 209,311 188,526 468 188,994 10.8% Capital grants and contributions 3,537 36,583 40,120 14,020 9,329 23,349 71.8% General revenues: Property taxes 143,182 4,145 147,327 140,288 3,799 144,087 2.2% Other taxes 23,940 29 23,969 16,330 28 16,358 46.5% Interest and investment income 733 385 1,118 1,202 755 1,957 (42.9%) Grants not restricted to specific programs 3,537 - 3,537 3,978 - 3,978 (11.1%) Other revenues 4 160 164 - 31 31 429% Total revenues 438,577 78,428 517,005 417,514 52,199 469,713 10.1% Expenses: General government 34,507 - 34,507 35,231 - 35,231 (2.1%) Public protection 142,353 - 142,353 136,219 - 136,219 4.5% Public ways and facilities 28,474 - 28,474 27,120 - 27,120 5.0% Health sanitation 69,222 - 69,222 65,799 - 65,799 5.2% Public assistance 97,929 - 97,929 96,435 - 96,435 1.5% Education 9,922 - 9,922 10,000 - 10,000 (0.8%) Recreational and cultural services 9,735 - 9,735 7,344 - 7,344 32.6% Interest on Long-term debt 6,041 - 6,041 6,620 - 6,620 (8.7%) Airport - 5,435 5,435 - 5,422 5,422 0.2% Golf - 2,779 2,779 - 2,863 2,863 (2.9%) State water contract - 5,536 5,536 - 6,761 6,761 (18.1%) Nacimiento Water Contract - 14,738 14,738 - 11,901 11,901 23.8% Lopez dam - 6,548 6,548 - 5,752 5,752 13.8% General Flood Control - 746 746 - 1,816 1,816 (58.9%) Transit - - - - 8 8 (100.0%) County Service Areas - 3,779 3,779 - 3,836 3,836 (1.5%) Los Osos Wastewater - 344 344 - 6,672 6,672 (94.8%) Total expenses 398,183 39,905 438,088 384,768 45,031 429,799 1.9% Excess/(deficiency) before transfers 40,394 38,523 78,917 32,746 7,168 39,914 97.7% Transfers (166) 166 - 8,048 (8,048) - - Change in net position 40,228 38,689 78,917 40,794 (880) 39,914 97.7% Net position at beginning of year 1,396,816 186,882 1,583,698 1,356,022 187,762 1,543,784 2.6% Net position at end of year $ 1,437,044 $ 225,571 $ 1,662,615 $ 1,396,816 $ 186,882 $ 1,583,698 5.0% 27 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Governmental and Business-type Activities Governmental Activities Governmental activities increased San Luis Obispo County’s net position by $40,228 compared to an increase of $40,794 in the prior year. Factors contributing to the increase are as follows: Total revenues from Governmental Activities grew by 5.0% with a net increase of $21.1 million from the prior year. Program Revenues were essentially unchanged with the exception of increases in Operating Grants and Contributions and Other Taxes and a decrease in Capital Grants and Contributions. The Operating Grants and Contributions category rose primarily due to a $10.3 million increase in Mental Health Medi-Cal and Mental Health Services Act state funding in the Health and Sanitation function. Operating Grants and Contributions also saw increases in the Public Protection function in part due to increased State funding from the passage of AB 109, commonly known as 2011 Public Safety Realignment, which realigned responsibility for incarcerating certain offenders from the State to counties with funding provided by the State. Additionally the Public Protection function received increased Proposition 172 sales tax funding. Other Taxes increased by $7.6 million the majority of which relates to an increase in Sales and Use tax revenue due to the construction of a solar farm in the Carissa Plains. Transient Occupancy taxes and Property Transfer taxes also showed slight increases over the prior year. A $10.5 million decrease in the Capital Grants and Contributions category was caused primarily by revenue reductions in the Public Ways and Protection function as the Willow Road Interchange and San Simeon Creek roads projects wound-down. Transfers from Business-type to Governmental activities decreased by slightly more than $8 million primarily due to a prior year one-time transfer of reserves from the Nacimiento Water Contract fund (Nacimiento Water Contract Business-Type activity) to the SLO Flood Control & Water Conservation District (Governmental Activities, Public Ways and Facilities function). Total expenses from Governmental Activities increased $14 million over the prior year. Within Governmental Activities, the Recreation and Cultural Services function had the most significant increase (32.6%) driven slightly by the expense of increased salaries, but mostly by the loss on the retirement of Parks capital assets. Health and Sanitation (5.2%) and Public Ways and Facilities (5.0%) functional expenses also increased. The increase in Health and Sanitation functional expenses was caused by increased salaries, services and supplies for Mental Health and Drug and Alcohol treatment services including an adult drug treatment court collaborative. The increase in Public Ways and Facilities reflects greater general road maintenance activity in FY 2012-13. The County has remained committed to a seven-year plan enacted in FY 2007-08 to navigate through national and local fiscal challenges and address a consequential structural budget gap. The plan includes a combination of short-term measures and expenditure reductions, with expenditure reductions addressing a larger share of the gap as the plan progresses. Expenditure measures have included reducing department budgets, maintaining a partial hiring freeze, and progressing labor negotiations including pension cost sharing, reduced benefit pension plans (Tier 2 and Tier 3) for new employees; and an updated approach to setting salaries by using a broader labor market for equitable compensation comparisons. As a result, the budget gap has been reduced from a peak of $30 million in FY 2009-10 to $2.2 million FY 2013-14. Business-type Activities Business-type Activities increased San Luis Obispo County’s net position by $38.7 million compared to a decrease of $.9 million in the previous year. Revenues exceeded expenses by $38.5 million, and a transfer of $166 thousand from Governmental Activities resulted in the total increase to net position. Key elements of current year activity are as follows: 28 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Total revenue increased $26.2 million from the preceding year. The largest increase occurred in Capital Grants and Contributions ($27.3 million) due to escalated construction activity for the Los Osos Wastewater Project. The increase in Capital Grants and Contributions was offset by slight decreases in Fees, Fines and Charges for Services ($856 thousand) and in Operating Grants and Contributions ($275 thousand). The largest decrease in Fees Fines and Contributions ($522 thousand) resulted from decreased water sales in the General Flood Control activity. Decreased water sales also resulted in lower revenue for the State Water Contract activity. The $275 thousand decrease in Operating Grants and Contributions was primarily caused by a prior year one-time Federal Aviation Administration reimbursement for airport equipment. General Revenues for Business-type activities were consistent with the prior year with the exception of an $8 thousand decrease in transfers due to a prior year one-time transfer of reserves from the Nacimiento Water Contract fund to the SLO Flood Control & Water Conservation District reported under Governmental Activites. Expenses for Business-type Activities decreased $5.1 million from the prior year. Within Business-type activities, the largest decrease ($6.3 million) was attributable to a spike in Los Osos Wastewater expenses in the prior year caused by a one-time charge related to the assumption of State loans from the Los Osos CSD. This decrease in expenses was offset slightly by an increase in Nacimiento Water Contract services and supplies. FUND FINANCIAL STATEMENT ANALYSIS FINANCIAL ANALYSIS OF COUNTY'S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds The focus of the County’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County’s financing requirements. In particular, total fund balance less the nonspendable portion may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Total fund balance consists of the following components (see footnote 11 for additional detail):  Nonspendable fund balance, $3,688, represents amounts that are not spendable in form, or are legally or contractually required to be maintained intact, and includes (1) inventories of $96 (2) prepaid items of $340 and (3) long term receivables of $3,252.  Restricted fund balance, $22,316, represents amounts that are subject to externally enforceable legal restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation. This balance includes amounts restricted for (1) Tax Loss Reserves of $4,005 (2) Public Protection of $11, (3) Public Ways and Facilities of $16,033, and (4) Debt Service of $2,267.  Committed fund balance, $162,268, represents amounts with constraints imposed by the Board of Supervisors for specified purposes. Significant components of this balance include commitments for (1) Public Protection – $16,976, (2) Solar Plant Mitigation – $8,078, (3) Automation Projects – $10,755 (4) Building Replacement $12,441 (5) Tax Reduction Reserve – $35,549, and (6) Capital Projects – $25,084.  Assigned fund balance, $104,237, represents amounts the County intends to use for specific purposes that are neither restricted nor committed. Significant components of this balance include (1) Health and Sanitation – $20,342, (2) Tax Reduction Reserve – $17,394, (3) Public Protection – $16,384, (4) Public Assistance – $13,134, and (5) Subsequent Fiscal Year Budget - $30,134. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) As of the end of the current fiscal year, the County’s governmental funds reported combined ending fund balance of $292,509, an increase of 11.5%, or $30,158 in comparison with the prior year. Approximately 91% of the total fund balance, or $266,505, is available to meet the County’s current and future needs. General Fund The general fund is the chief operating fund of the County. As of the end of the current fiscal year, spendable fund balance of the general fund was $204,607 while total fund balance reached $207,699. As a measure of the general fund’s liquidity, it is useful to compare both total fund balance and spendable fund balance to total fund expenditures of $346.4 million. Spendable fund balance represents 59% of the total fund expenditures, while total fund balance represents 60% of the same amount, a 7% increase from the prior year. During the current fiscal year, the fund balance of the general fund increased by $26.7 million. The following provides an explanation for the change in fund balance.  Total revenues exceeded total expenditures by $51.1 million. General fund revenues ended the year with an increase of $20.3 million over the prior year. Total expenditures increased $7.6 million.  Most revenue categories were essentially unchanged from the prior year with the exception of Aid from Governmental Agencies and Taxes which increased by $11.4 million and $10.5 million respectively. The $11.4 million increase in Aid from Governmental Agencies was driven by large increases in state funding for Mental Health Medi-Cal and Mental Health Services Act services along with increases in realignment revenue. The Taxes increase is primarily comprised of a $6.4 million increase in Sales and Use Tax due to the construction of a new solar farm in the Carissa Plains. Revenue from Current Property Taxes and Transient Occupancy Taxes also increased for the third consecutive year.  Total expenditures in General Fund increased $7.6 million (2.2%) from the prior year. Expenditures were down or relatively flat for all functions except for the Public Protection function which experienced a $5.1 million increase over the prior year. This increase was driven by additional Sheriff-Coroner expense related to the 2011 Realignment program, as well as County Fire staffing associated with the Carissa Plains solar farm construction project and Planning Department strategic planning and affordable housing activities. General Government functional expenditures decreased $1.5 million primarily due to decreased Information Technology maintenance contracts and across the board decreases in insurance costs. The decrease was offset by increases in the Health and Sanitation function due to increased salaries, services and supplies for Mental Health and Drug and Alcohol treatment services and increased salaries in the Public Assistance function. Capital Projects The Capital Projects Fund handles construction projects for the County’s governmental funds. The fund had a total fund balance of $25.1 million. Capital outlay expenditures exceeded revenues by $3.3 million and transfers in exceeded transfers out by $5.7 million. The net of these two factors resulted in a $2.4 million increase in fund balance for the current year. Funding for specific projects comes from use of designations, public facilities fees, issuance of long-term debt, and aid from other government agencies. The general fund transferred $3.5 million for Facility Planning and $1.2 million for Solar and Energy projects to the Capital Projects Fund in the current year. Significant current year activities of the Capital Projects Fund are discussed in the Capital Assets section under Governmental Activities. Governmental Fund Revenues Revenues for governmental funds combined totaled $451.4 million in the current fiscal year, which represents an increase of approximately 3.0% or $13.2 million from the prior fiscal year revenues of $438.2 million. The following table presents the amount of revenues from various sources and also displays increases or decreases from the prior year. 30 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table C Revenues Classified by Source Governmental Funds Fund Financial Statements (in thousands) 2012-2013 2011-2012 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount Change Revenues by Source: Taxes $ 171,771 38.1% $ 160,920 36.7% $ 10,851 6.7% Licenses, Permits, Franchises 9,247 2.0% 7,863 1.8% 1,384 17.6% Fines, Forfeits, and Penalties 6,654 1.5% 6,750 1.6% (96) (1.4%) Revenues from Use of Money and Property 1,475 0.3% 2,273 0.5% (798) (35.1%) Aid from Governmental Agencies 209,234 46.4% 206,372 47.1% 2,862 1.4% Charges for Current Services 41,690 9.2% 45,538 10.4% (3,848) (8.5%) Other Revenues 11,342 2.5% 8,451 1.9% 2,891 34.2% Total $ 451,413 100% $ 438,167 100% $ 13,246 3.0% The following provides an explanation of revenues by source that changed significantly over the prior year in the governmental funds.  Taxes increased $10.9 million or 6.7%. $6.4 million of the increase is from Sales and Use Tax due to the construction of a new solar farm in the Carissa Plains. Revenue from Current Property Taxes and Transient Occupancy Taxes also increased for the third consecutive year; however, the Transient Occupancy Tax increase was offset by a slight decrease in Tax Loss Reserve Fund proceeds.  Revenues from Use of Money and Property decreased $798 thousand or 35.1%. The most significant factor relates to a spike in the prior fiscal year caused by the receipt of two year’s worth of right of way lease payments being received in a single year. In addition, the County experienced a decrease in interest revenue.  Charges for Current Services decreased $3.9 million or 8.5%. The largest factor contributing to the decrease was the issuance of $1.8 million in refunds of SB2557 property tax administrative fees previously charged to cities in the County. The refunds resulted from a Supreme Court decision regarding the method of calculation of the fees. Also contributing to the decline was a reduction in collections of Road Impact Fees and also in payments by the Courts for County provided services.  Other Revenues increased $2.9 million or 34.2%. The increase was comprised primarily of receipts of $1.7 million from a court settlement regarding a local development. Additionally, the County received $815 thousand in non-governmental contributions toward the construction of new libraries in Cambria and Atascadero. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The following table presents the amount of expenditures by function as well as increases or decreases from the prior year. Table D Expenditures By Function Including Capital Outlay Governmental Funds Fund Financial Statements (in thousands) 2012-2013 2011-2012 Increase/(Decrease) Amount Percent Amount Percent Amount Percent of Total of Total of Change Expenditures by Function: General Government $ 44,374 10.5% $ 45,850 10.8% $ (1,476) (3.2%) Public Protection 143,832 34.1% 138,579 32.7% 5,253 3.8% Public Ways and Facilities 34,178 8.1% 40,338 9.5% (6,160) (15.3%) Health and Sanitation 70,021 16.6% 67,830 16.0% 2,191 3.2% Public Assistance 98,059 23.2% 97,185 23.0% 874 0.9% Education 9,901 2.3% 9,973 2.4% (72) (0.7%) Recreational and Cultural Services 7,538 1.8% 6,998 1.7% 540 7.7% Principal payments 4,065 1.0% 4,435 1.0% (370) (8.3%) Interest on Long-Term Debt 5,863 1.4% 6,289 1.5% (426) (6.8%) Debt Issuance Costs 269 0.1% - - 269 - Capital outlay 3,692 0.9% 5,540 1.3% (1,848) (33.4%) Total $ 421,792 100% $ 423,017 100% $ (1,225) (0.3%) The following provides an explanation of the expenditures by function that changed significantly over the prior year.  Public Protection expenditures increased $5.3 million or 3.8% due to additional Sheriff-Coroner expenditures related to the 2011 Realignment program. Costs also increased for County Fire staffing associated with Carissa Plains solar farm construction projects and for Planning Department strategic planning and affordable housing activities.  Public Ways and Facilities expenditures decreased $6.2 million or 15.3%. The fluctuation is attributable primarily to decreased spending on countywide maintenance projects along with decreased construction and maintenance activity in the Roads Fund. Significant projects finalized in the current fiscal year include the Willow Road Interchange project in Nipomo and the preliminary engineering phase of the Oceano Drainage project.  Capital Outlay expenditures decreased $1.8 million or 33.4%. The majority of the decrease is attributable to the Creston Fire Station construction being completed in the prior year. The decrease due to the fire station was partially offset by a slight increase in expenditures related to the Juvenile Hall construction project. Proprietary Funds The County’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The following table shows actual revenues, expenses, and results of operations for the 2012-2013 fiscal year. 32 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table E Statement of Revenues, Expenses and Results of Operations Proprietary Funds Fund Financial Statements For the Year Ended June 30, 2013 (in thousands) Major Nonmajor Funds Funds Total Nacimiento State Lopez Other Water Water Flood Los Osos Enterprise Total Airport Contract Project Control Wastewater Funds Enterprise Operating revenues $ 4,146 $ 13,881 $ 6,185 $ 6,174 $ - $ 6,729 $ 37,115 Operating expenses 5,264 5,043 5,527 4,587 339 6,840 27,600 Operating income (loss) (1,118) 8,838 658 1,587 (339) (111) 9,515 Non- operating revenues (expenses), net (44) (8,197) 1,582 (846) 19 (58) (7,544) Net income (loss) before contributions and transfers (1,162) 641 2,240 741 (320) (169) 1,971 Contributions and transfers, net 479 - - 13 35,717 540 36,749 Change in net position $ (683) $ 641 $ 2,240 $ 754 $ 35,397 $ 371 $ 38,720 All the enterprise funds are expected to continue to meet all ongoing cost of operations and in the long term be able to maintain sufficient reserves.  The Airport Fund reported an operating loss of $1.1 million, slightly less than the prior year loss of $1.6 million. Net position decreased by $683 thousand in the current year. The loss was less than anticipated in the FY 2012-13 budget due to control of expenditures, despite a 1.4% decrease in passenger enplanements compared to the prior year. Although enplanements declined, the 1.4% decrease is an improvement over the prior year decrease of 4%.  The Nacimiento Water Contract Fund realized operating income of $8.8 million, and increased net position by $641 thousand, an improvement over the prior year $5.1 million decrease in net position. The prior year decrease in net position was due to a one-time $8.8 million transfer of reserves to the SLO Flood Control & Water Conservation District that became available for general district needs once the pipeline became fully operational. In its second full year of water delivery, the fund’s revenues decreased slightly ($12 thousand) and expenditures for contractors increased by $2.2 million causing a net decrease in operating income of $2.4 million (21%). 33 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  The State Water Project Fund reported $658 thousand in operating income after reporting a loss of $174 thousand in the prior year. The $832 thousand increase in operating income resulted from a 25% increase in property tax revenue and an 89% decrease in professional services expenses.  The Los Osos Wastewater Fund reported an operating loss of $339 thousand primarily due to costs associated with the Water Conservation Program. Capital contributions increased to $35.7 million which is $26.6 million over the prior year amount. The increase in capital contributions caused a change in net position of $35.4 million. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget for expenditures and transfers out increased by $28.4 million, or 7%, during the course of the year contributing towards the final amended budget. This increase was funded in part by increases in budgeted revenues of $16.4 million and the use of reserves and designations for the balance. Unanticipated revenues totaling $9.3 million in State and Federal Aid, $3.9 million in Other Revenue, and $1.3 million in Charges for Current Services financed the budget augmentations and also offset an unanticipated decrease of $174 thousand in Other Financing Sources. The largest budget augmentations occurred in the functional areas of General Government ($12.3 million), Public Protection ($8.3 million), and Health and Sanitation ($3.9 million). The increases for the General Government function include prior year carryovers for facilities planning funding and new library construction ($4.7 million) and for services and supplies for all departments ($4.2 million). $3.2 million of the services and supplies carryover is attributable to maintenance project budgets that were carried forward from FY 2011-12 to FY 2012-13. Other significant budget increases for the General Government function include $596 thousand in appropriations to fund a lawsuit regarding the construction of the New Government Center as well as other litigation matters, and a $600 thousand increase in funding to the Public Defender. Significant Public Protection function budget augmentations include $2.1 million for the Sheriff-Coroner’s programs, $1.8 million for Planning programs and $1.2 million for County Fire services. Several additional budget supplements took place in the Health and Sanitation function. $1.2 million of augmentations were approved for Mental Health Services Act programs; $831 thousand for federal and state grants for Drug and Alcohol services; and $703 thousand for Mental Health services. At the close of the current fiscal year, actual General Fund expenditures were 90% of budget, while General Fund revenues were realized at 99% of budget. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At June 30, 2013, the County had $1.6 billion invested in a broad range of capital assets, including land, buildings, systems improvements, machinery and equipment, park facilities, golf courses, airport facilities, roads, bridges, dams, and water and sewer lines (see Table F on the following page). This amount represents a net increase (including additions and deductions) of $37 million or 2.4% from last year. 34 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table F Capital Assets (in thousands) Govern- Govern- Business Business Total Total mental mental Type Type Capital Capital Activities Activities Activities Activities Assets Assets Total June 30, June 30, June 30, June 30, June 30, June 30, Percent 2012 2013 2012 2013 2012 2013 Change Land $ 791,410 $ 789,246 $ 32,485 $ 32,617 $ 823,895 $ 821,863 -0.2% Water Rights - - 42,551 44,564 42,551 44,564 4.7% Other Property Non Depreciable - - 1,968 1,968 1,968 1,968 - Construction- in-progress 66,710 71,143 19,302 54,479 86,012 125,622 46.1% Structures & Improvements 173,518 177,637 167,843 169,175 341,361 346,812 1.6% Equipment 72,371 73,465 3,106 3,096 75,477 76,561 1.4% Other Property Depreciable 340 340 554 554 894 894 - Infrastructure Depreciable 285,141 295,829 189,974 191,153 475,115 486,982 2.5% Subtotal 1,389,490 1,407,660 457,783 497,606 1,847,273 1,905,266 3.1% Less Accumulated Depreciation (264,337) (279,111) (42,470) (48,688) (306,807) (327,799) 6.8% Total $ 1,125,153 $ 1,128,549 $ 415,313 $ 448,918 $ 1,540,466 $ 1,577,467 2.4% Major additions and future commitments in capital assets – Governmental activities County Roads had the majority of additions in governmental activities with $5.0 million worth of assets related to the Willow Road Interchange project in Nipomo, $3.0 million for a bridge project on Price Canyon road, $1.3 million on a Nacimiento Road overlay project and $810 thousand of improvements to the Maria Vista Estates project. Other infrastructure projects completed during FY 2012-13 include an upgrade to the Sheriff-Coroner’s evidence room ($0.4 million) and dispatch console system ($0.5 million) as well as Office of Emergency Services decontamination showers and radiation monitors ($0.1 million). On-going projects include a Women’s Jail, expansion of the Juvenile Hall, and development of new sites for the Cambria and Atascadero Libraries. Major additions and future commitments in capital assets – Business-type activities The majority of additions ($39 million) and future commitments ($60 million) in business-type activities relate to the $173 million wastewater project for the community of Los Osos. The project is designed to address groundwater contamination issues caused by years of seepage from septic systems and is scheduled for completion in early 2015. In FY 2012-13, the County implemented a water conservation program with the goal of reducing indoor consumption to 50 gallons per person per day in accordance with the project’s Coastal Development Permit. The General Flood Control Zone recognized $0.4 million of assets related to the Arroyo Grande Rodriguez Bridge fish passage improvement project. This project was designed to reconstruct a portion of the Arroyo Grande Creek that had an exposed concrete water supply line within the bed of the channel. Water flow had nearly undermined the encasement, potentially leading to failure of the pipeline and creating a drop that created a partial barrier to fish passage. 35 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) More detailed information about the County's capital assets is presented in Notes 4 and 5 in the financial statements. Debt Administration At the end of the current fiscal year, the County of San Luis Obispo had total notes and bonds payable of $442.1 million. In July 2003, the county issued Pension Obligation Bonds to refund the Unfunded Actuarial Accrued Liability due to the Pension Trust. In 2009, the County issued the 2009 Series A Term Bonds to refund and defease the 2003 Series B Auction Rate Bonds. The balance remaining on the County’s Pension Obligation Bonds at the end of FY 2012-13 is $115.6 million. Pension Obligation Bonds debt service payments are funded by County payroll benefits. The remainder of the County’s debt consists of: $45.3 million in certificates of participation, which are repaid from a variety of revenues; $34.4 million in State loans and $196.3 million in revenue bonds which are repaid with water service revenue. General Obligation Bonds totaling $10.9 million are backed by the full faith and credit of the County. Additionally, the County is liable for $2.4 million of special assessment debt in the event of default by the property owner subject to the assessment. Table G Outstanding Debt (in thousands) Govern- Govern- Business Business mental mental Type Type Activities Activities Activities Activities Total Total Total June 30, June 30, June 30, June 30, June 30, June 30, Percent 2012 2013 2012 2013 2012 2013 Change Certificates of participation $ 27,792 $ 26,892 $ 19,060 $ 18,412 $ 46,852 $ 45,304 (3.3%) Pension Obligation Bonds 119,429 115,624 - - 119,429 115,624 (3.2%) State notes - - 35,884 34,399 35,884 34,399 (4.1%) Revenue bonds - - 199,641 196,334 199,641 196,334 (1.7%) General obligation bonds - - 11,317 10,905 11,317 10,905 (3.6%) Assessment Bonds - - 15,364 39,527 15,364 39,527 157.3% $ 147,221 $ 142,516 $ 281,266 $ 299,577 $ 428,487 $ 442,093 3.2% The increase over last year for the County’s notes and bonds payable was $13.6 million, or 3.2%. This increase is the net of new debt issuances and scheduled debt payments. During FY 2012-13, the County issued $24.2 million in Assessment Bonds. The County also issued a $19.8 million Certificate of Participation (COP) to refund the 2002 A COP, which was used to finance a portion of the new government center along with the Dairy Creek Golf Course. The economic gain from the refunding was $2.4 million. Debt service is provided by semi-annual payments funded by general County revenues for the portion of the COP relating to the new government center and by semi-annual lease payments from the Dairy Creek Golf Course. 36 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The County received a credit rating of “AA-” from Standard & Poor’s and an “AA” rating from Fitch on the COP debt issuance in FY 2012-13. State statutes limit the amount of general obligation debt a governmental entity may issue to 1.25% of its net assessed valuation. The current debt limitation for the County is $522.5 million. Additional information on the County’s long-term debt can be found in Note 10 to the financial statements. Other liabilities include compensated absences of $25.8 million for governmental activity compensated absences and $297 thousand for business-type activities compensated absences; landfill post-closure costs of $4.2 million; and a self-insurance liability of $18.8 million. More detailed information about the County’s long-term liabilities is presented in Note 10 to the financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES  For the sixth straight year, the County is forced to tackle budgeting challenges created by flat or decreasing revenues. Fiscal year 2013-2014 represents year six of a seven year budget balancing plan that began in fiscal year 2008-09. The plan is designed to gradually close a structural budget gap by transitioning from the use of short-term solutions initially to, increasing reliance on expenditure reductions so that structural balance is achieved by the end of year seven. The plan has been successful to date, with the budget gap reduced to $2.2 million for FY 2013-14 from $30 million in FY 2009-10.  Faced with a $2.2 million budget gap in the General Fund’s Status Quo budget, the County used a combination of short-term solutions and expenditure reductions to bridge the gap. The FY 2013-14 budget used short-term solutions to bridge 10% of the gap and ongoing expenditure reductions to cover the remaining 90%.  The County’s unemployment rate dropped to 6.2% in October 2013, lower than both the state rate of 8.7% and the national rate of 7.3%.  Economic indicators show some signs of local economic improvement from the recent economic downturn:  Local housing market indicators were mixed. Home sales dropped to 353 homes sold (data as of October 2013) or by 6.1 % year from the prior year. However, as of October 2013, the median price for homes increased 20.7%, to $434,500 from $360,000 in October 2012.  The number of building permits issued was flat and remained around the lowest number issued in the last 10 years  Property transfer taxes for unincorporated areas came in 16.8% higher than the preceding year reflecting an increase in the value and number of real estate transactions  County assessed property tax valuations increased slightly from $41.3 million to $41.8 million or 1.1%.  Transit Occupancy tax (bed tax) collections continued an upward trend in FY 2012-13, with an increase of 16.6% over FY 2011-12.  The Board of Supervisors adopted the FY 2013-14 budget in June 2013, with a $65.2 million fund balance in the general fund, of which $30.1 million was appropriated to finance the current year’s expenditures including contingencies, $9 million was placed in general reserves, and $8.2 million was earmarked for designations. The total General Fund budget for FY 2013-14 is $414 million, a 3% increase from the previous year. The County budget also includes community- wide results and indicators as well as department goals and performance measures that gauge how departments are meeting the needs of the community. 37 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the County's finances and to show the County's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the County Auditor-Controller-Treasurer-Tax Collector-Public Administrator, Post Office Box 1149, San Luis Obispo, California 93406-1149. This report is also available online at www.slocounty.ca.gov. 38 ________________________________________________________________ BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS ________________________________________________________________ 39 40 COUNTY OF SAN LUIS OBISPO Statement of Net Position June 30, 2013 (in thousands) Primary Government Governmental Business-Type Component Unit ASSETS Activities Activities Total First 5 Current Assets: Cash and cash equivalents $ 332,029 $ 51,409 $ 383,438 $ 8,514 Accounts receivable, net 35 2,661 2 ,696 -- Property taxes receivable 16,021 -- 16,021 -- Other receivables 1,110 116,171 1 17,281 -- Due from other governments 29,327 33 29,360 352 Deposits with others -- 171 1 71 4 Internal balances 3,085 (3,085) - - -- Inventories 664 -- 664 -- Prepaid items 340 33 3 73 3 Loans receivable 28 33 6 1 -- Total Current Assets 382,639 167,426 5 50,065 8,873 Noncurrent Assets: Restricted cash with fiscal agent 2,267 11,310 1 3,577 -- Net pension asset 135,119 -- 135,119 -- Prepaid bond issuance costs 1,790 2,784 4 ,574 -- OPEB asset 1,539 -- 1,539 -- Capital Assets: Nondepreciable 860,389 133,628 9 94,017 -- Depreciable, net 268,160 315,290 5 83,450 -- Total Noncurrent Assets 1,269,264 463,012 1,732,276 -- Total Assets 1,651,903 630,438 2,282,341 8,873 LIABILITIES Current Liabilities: Salaries and benefits payable 5,395 57 5,452 -- Accounts payable 12,613 16,269 2 8,882 371 Deposits from others 1,952 4,676 6 ,628 21 Accrued interest 1,742 4,093 5 ,835 -- Other current liabilities 567 -- 567 -- Unearned revenue 1,231 79,898 8 1,129 -- Bonds and notes payable 5,412 7,011 12,423 -- Compensated absences 17,342 166 17,508 -- Landfill closure/postclosure costs 591 -- 591 -- Self insurance payable 3,494 -- 3,494 -- Total Current Liabilities 50,339 112,170 1 62,509 392 Long Term Liabilities: Bonds and notes payable 137,104 292,566 4 29,670 -- Compensated absences 8,518 131 8,649 -- Landfill closure/postclosure costs 3,560 -- 3,560 -- Self insurance payable 15,338 -- 15,338 -- Total Long-term Liabilities 164,520 292,697 4 57,217 -- Total Liabilities 214,859 404,867 6 19,726 392 NET POSITION Net investment in capital assets 1,103,924 167,138 1,271,062 -- Restricted for: General government 563 -- 563 -- Public protection 2,251 -- 2,251 -- Health and sanitation 33 -- 33 -- Public assistance 59 -- 59 -- Public ways and facilities 16,046 -- 16,046 -- Recreation and culture 243 -- 243 -- Education 29 -- 29 -- Debt service 9,639 -- 9,639 -- Unrestricted 304,257 58,433 362,690 8,481 Total Net Position $ 1,437,044 $ 225,571 $ 1,662,615 $ 8,481 The accompanying notes are an integral part of these financial statements. 41 COUNTY OF SAN LUIS OBISPO Statement of Activities For the Year Ended June 30, 2013 (in thousands) Program Revenues Fees, Fines, Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental Activities: General government $ 34,507 $ 16,575 $ 122 $ 8 Public protection 142,353 16,352 50,477 -- Public ways and facilities 28,474 5,465 15,018 3,479 Health and sanitation 69,222 5,196 55,064 -- Public assistance 97,929 2,920 87,912 -- Education 9,922 3,583 175 -- Recreation and cultural services 9,735 4,435 350 50 Interest on long-term debt 6 ,041 - - - - -- Total Governmental Activities 398,183 54,526 2 09,118 3,537 Business-Type Activities: Airport 5,435 4,053 132 572 Golf 2,779 2,639 -- -- State Water Contract 5,536 6,185 1 3 -- Nacimiento Water Contract 14,738 13,800 2 9 -- Lopez Dam 6,548 6,174 1 5 -- General Flood Control 7 46 730 -- -- County Service Areas 3,779 3,352 3 294 Los Osos Wastewater 3 44 -- 1 35,717 Total Business-Type Activities: 39,905 36,933 193 3 6,583 Total primary government $ 438,088 $ 91,459 $ 209,311 $ 40,120 Component Unit First Five San Luis Obispo $ 1,538 $ -- $ 1 ,961 $ - - General Revenues: Taxes: Property taxes Sales and use taxes Transient occupancy taxes Transfer tax Other taxes Grants not restricted to specific programs Interest earnings not restricted to specific programs Other revenues Transfers Total General Revenues and Transfers Change in net position Net position - beginning of year Net position - end of year The accompanying notes are an integral part of these financial statements. 42 Net (Expense) Revenue and Changes in Net Position Component Primary Government Unit Governmental Business-Type First 5 Activities Activities Total San Luis Obispo $ (17,802) $ - - $ ( 17,802) ( 75,524) -- (75,524) (4,512) -- (4,512) (8,962) -- (8,962) (7,097) -- (7,097) (6,164) -- (6,164) (4,900) -- (4,900) (6,041) -- (6,041) (131,002) -- (131,002) -- (678) ( 678) -- (140) ( 140) -- 662 662 -- (909) ( 909) -- (359) ( 359) -- (16) (16) -- (130) ( 130) -- 35,374 35,374 -- 33,804 33,804 (131,002) 3 3,804 (97,198) -- -- -- $ 423 143,182 4,145 1 47,327 - - 13,770 -- 13,770 - - 7,519 -- 7,519 - - 2,178 -- 2,178 - - 473 29 502 - - 3,537 -- 3,537 - - 733 385 1,118 23 4 160 164 11 (166) 166 -- - - 171,230 4,885 1 76,115 34 40,228 38,689 78,917 4 57 1,396,816 186,882 1,583,698 8,024 $ 1 ,437,044 $ 225,571 $ 1,662,615 $ 8,481 The accompanying notes are an integral part of these financial statements. 43 44 ________________________________________________________________ BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS ________________________________________________________________ 45 46 COUNTY OF SAN LUIS OBISPO Balance Sheet Governmental Funds June 30, 2013 (in thousands) Nonmajor Total General Capital Governmental Governmental Fund Projects Funds Funds Assets Cash and cash equivalents $ 2 02,815 $ 2 5,988 $ 60,602 $ 289,405 Restricted cash with fiscal agent - - -- 2,267 2 ,267 Accounts receivable, net 2 3 - - -- 23 Accrued property taxes receivable 1 6,021 - - -- 16,021 Other receivables 1 ,110 - - -- 1,110 Due from other governments 2 6,091 1 98 3,038 29,327 Inventories 9 6 - - -- 96 Prepaid items 3 29 - - 11 340 Loans receivable - - -- 28 2 8 Advances to other funds 2 ,667 - - 557 3,224 Other assets - - -- 5,412 5 ,412 Total Assets $ 2 49,152 $ 2 6,186 $ 71,915 $ 347,253 Liabilities Salaries and benefits payable $ 4 ,674 $ - - $ 260 $ 4,934 Accounts payable 9 ,909 3 25 1,424 11,658 Deposits from others 6 99 - - 628 1,327 Unearned revenue 5 10 579 142 1,231 Other current liabilities 5 67 - - 5,412 5 ,979 Advances from other funds - - -- 2,313 2 ,313 Total Liabilities 1 6,359 9 04 10,179 27,442 Deferred Inflows of Resources Unavailable revenue 2 5,094 1 98 2,010 27,302 Fund Balances: Nonspendable 3 ,092 - - 596 3,688 Restricted 4 ,005 - - 18,311 22,316 Committed 9 6,365 2 5,084 40,819 162,268 Assigned 1 04,237 - - -- 104,237 Total Fund Balances 2 07,699 2 5,084 59,726 292,509 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2 49,152 $ 2 6,186 $ 71,915 $ 347,253 The accompanying notes are an integral part of these financial statements. 47 COUNTY OF SAN LUIS OBISPO Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position - Governmental Activities June 30, 2013 (in thousands) Fund Balance - total governmental funds (page 47) $ 2 92,509 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds. 1 ,118,178 Accrued property tax and grant revenues are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 27,302 The pension assets resulting from contributions in excess of the annual required contribution are not financial resources and, therefore, are not reported in the funds. 135,119 The other post employment benefit (OPEB) asset is not available to pay for current-period expenditures and, therefore, is deferred in the funds. 1,539 Cost of issuance on pension obligation bonds recognized as current expenditures in the governmental funds are deferred in the statement of net position. 1,790 Internal service funds are used by the County to charge the cost of vehicle fleet management, centralized reprographic services, comprehensive public works services, and operations of the County's workers' compensation, protected self-insurance, unemployment, and dental insurance programs to individual funds. The assets and liabilities are included in governmental activities in the statement of net position. 30,324 Adjustments for Internal Service Funds are necessary to "close" those funds by charging additional amount to participating business-type activities to completely cover the Internal Service Funds' cost for the year. 2,174 Interest on long-term debt is recognized as it accrues, regardless of when it is due. ( 1,742) Long-term liabilities, including bonds and notes payable, are not due and payable in the current period and, therefore, are not reported in the governmental funds as follows: Certificates of participation (115,624) Bonds and notes payable (26,892) Compensated absences (23,482) Landfill closure/postclosure costs ( 4,151) Net position of governmental activities (page 41) $ 1,437,044 The accompanying notes are an integral part of these financial statements. 48 COUNTY OF SAN LUIS OBISPO Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2013 (in thousands) Nonmajor Total General Capital Governmental Governmental Fund Projects Funds Funds Revenues: Taxes $ 161,274 $ -- $ 10,497 $ 171,771 Licenses, permits, and franchises 9,247 -- -- 9,247 Fines, forfeits and penalties 5,462 22 1,170 6,654 Revenue from use of money and property 1,149 71 255 1,475 Aid from governmental agencies 1 85,116 50 24,068 2 09,234 Charges for current services 28,893 223 12,574 41,690 Other revenues 6,351 1 4,990 11,342 Total revenues 3 97,492 367 53,554 4 51,413 Expenditures: Current: General government 44,374 -- -- 44,374 Public protection 1 41,041 -- 2,791 1 43,832 Public ways and facilities 2,958 -- 31,220 34,178 Health and sanitation 65,197 -- 4,824 70,021 Public assistance 92,428 -- 5,631 98,059 Education 436 -- 9,465 9,901 Recreation and cultural services -- -- 7,538 7,538 Debt service: Principal payments -- -- 4,065 4,065 Interest and fiscal charges -- -- 5,863 5,863 Debt issuance costs -- -- 269 269 Capital outlay -- 3,692 -- 3,692 Total expenditures 3 46,434 3,692 71,666 4 21,792 Excess (Deficiency) of Revenues Over (Under) Expenditures 51,058 (3,325) (18,112) 29,621 Other Financing Sources (Uses): Refunding certificates of participation issued -- -- 14,427 14,427 Premium on refunding certificates of participation issued -- -- 1,418 1,418 Payment to refunded debt escrow agent -- -- (16,400) (16,400) Transfers in 2,039 6,200 39,874 48,113 Transfers out (26,427) (466) (20,128) (47,021) Total Other Financing Sources (Uses) (24,388) 5,734 19,191 537 Net Change in Fund Balances 26,670 2,409 1,079 30,158 Fund Balances - Beginning 1 81,029 22,675 58,647 2 62,351 Fund Balances - Ending $ 207,699 $ 25,084 $ 59,726 $ 292,509 The accompanying notes are an integral part of these financial statements. 49 COUNTY OF SAN LUIS OBISPO Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities - Governmental Activities For the Year Ended June 30, 2013 (in thousands) Net Change in fund balance - total governmental funds (page 49) $ 30,158 Amounts reported for governmental activities in the statement of activities are different because: Property tax and intergovernmental revenue in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 2,301 Governmental funds report capital outlay as expenditures. These expenditures have no effect on net position. Capital outlay expenditures that have no effect on net position is reported in the following functional categories: Capital outlay $ 3,604 General government 1,538 Public protection 2,312 Public ways 14,488 Health and sanitation 114 Public assistance 4 2 Education -- Recreation and cultural services 2 3 22,121 In the statement of activities, the cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense. (16,595) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (2,467) Bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net position. Refunding certificates of participation issued (14,427) Premium on refunded certificates of participation issued (1,418) Payment to refunded fiscal agent 16,400 Debt principal payments 4,065 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds as follows: Change in compensated absences (167) Change in accrued interest payable 135 Change in landfill closure/postclosure costs ( 73) Change in OPEB (291) Amortization of debt premiums, discounts and issuance costs ( 43) Amortization of prepaid pension contributions 1,905 Internal service funds are used by the County to charge the cost of vehicle fleet management, centralized reprographic services, comprehensive public works services, and operations of the County's workers' compensation, protected self-insurance, unemployment, and dental insurance programs to individual funds. The net revenue or expenditure effect of internal service funds is reported with governmental activities. (1,407) Adjustment necessary to close internal service funds activities. This is the current year excess of revenues over expenses allocable to business-type activities 31 Change in net position of governmental activities (page 43) $ 40,228 The accompanying notes are an integral part of these financial statements. 50 COUNTY OF SAN LUIS OBISPO Statement of Fund Net Position Proprietary Funds June 30, 2013 (in thousands) Governmental Business-type Activities - Enterprise Funds Activities Nacimiento Nonmajor Total Internal Water State Water Lopez Los Osos Enterprise Enterprise Service Airport Contract Project Flood Control Wastewater Funds Funds Funds Assets Current Assets: Cash and investments $ 2 ,540 $ 17,462 $ 1 1,161 $ 6 ,931 $ 7,801 $ 5 ,514 $ 51,409 $ 4 2,624 Accounts receivable, net - - - - 2,442 - - -- 219 2,661 1 2 Other receivables 1 1 - - -- - - 116,160 - - 116,171 - - Due from other governments 3 3 - - -- - - -- -- 33 - - Deposits with others - - 148 - - - - 10 13 171 - - Inventories - - - - -- - - -- -- -- 568 Prepaid items 5 -- -- 28 -- -- 33 - - Loans receivable - - - - -- - - -- 33 33 - - Total Current Assets 2 ,589 1 7,610 13,603 6 ,959 123,971 5 ,779 170,511 4 3,204 Noncurrent assets: Advances to other funds - - - - -- - - -- 686 686 - - Restricted cash with fiscal agent - - 11,310 - - - - -- -- 11,310 - - Prepaid bond issuance costs - - 2,049 - - 4 83 252 - - 2,784 - - Capital assets: Nondepreciable: Land 2 3,224 3 ,110 - - 2,153 2,470 1,659 32,616 - - Construction in progress 1 ,053 4 58 - - 3 42 51,730 8 97 54,480 - - Water rights - - - - 44,564 - - -- -- 44,564 - - Other property - - - - - - 1,968 - - -- 1,968 - - Depreciable: Infrastructure, net 7 85 157,435 1 10 25,831 - - 416 184,577 - - Structures and improvements, net 5 7,379 9 ,751 6,994 35,782 - - 19,195 129,101 1 45 Equipment, net 6 70 - - 9 31 -- 402 1,112 1 0,226 Other propery, net - - - - -- - - -- 500 500 - - Total Noncurrent Assets 8 3,111 1 84,113 51,677 6 6,590 54,452 23,755 463,698 1 0,371 Total Assets 8 5,700 2 01,723 65,280 7 3,549 178,423 2 9,534 634,209 5 3,575 Liabilities: Current Liabilities: Salaries and benefits payable 3 0 - - -- - - -- 27 57 4 61 Accounts payable 2 2 6 88 5,051 2 6 10,331 1 51 16,269 9 55 Interest payable 3 8 3,178 - - 4 22 383 7 2 4,093 - - Self insurance payable - - - - -- - - -- -- -- 3,494 Deposits from others 5 3 1,561 2,856 6 5 -- 141 4,676 6 25 Unearned revenue 7 6 2,733 1,912 2 34 74,907 3 6 79,898 - - Accrued vacation and sick leave - current 9 9 - - -- - - -- 67 166 1 ,535 Notes and bond payable - current 2 63 3,210 - - 1,850 1,208 4 80 7,011 - - Total Current Liabilities 5 81 11,370 9,819 2 ,597 86,829 9 74 112,170 7 ,070 Noncurrent Liabilities: Self insurance payable - - - - -- - - -- -- -- 15,338 Advances from other funds 1 ,045 - - -- - - -- 552 1,597 - - Accrued vacation and sick leave 43 - - - - - - -- 88 131 8 43 Notes and bonds payable 3 ,145 193,100 - - 42,935 44,608 8,778 292,566 - - Total Noncurrent Liabilities 4 ,233 193,100 - - 42,935 44,608 9,418 294,294 1 6,181 Total Liabilities 4 ,814 204,470 9 ,819 45,532 131,437 1 0,392 406,464 2 3,251 Net Position Net investment in capital assets 7 9,703 ( 14,246) 51,677 2 1,322 14,672 14,010 167,138 1 0,371 Unrestricted 1 ,183 1 1,499 3,784 6 ,695 32,314 5,132 60,607 1 9,953 Total Net Position $ 8 0,886 $ ( 2,747) $ 55,461 $ 2 8,017 $ 46,986 $ 1 9,142 227,745 $ 3 0,324 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (page 41) (2,174) Net position of business-type activities $ 2 25,571 The accompanying notes are an integral part of these financial statements. 51 COUNTY OF SAN LUIS OBISPO Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position For the Year Ended June 30, 2013 (in thousands) Governmental Business-type Activities - Enterprise Funds Activities Nacimiento Nonmajor Total Internal Water State Water Lopez Los Osos Enterprise Enterprise Service Airport Contract Project Flood Control Wastewater Funds Funds Funds Operating Revenues: Charges for current services $ 4,053 $ 13,800 $ 6,185 $ 6,174 $ -- $ 6,721 $ 36,933 $ 43,485 Other revenues 93 81 -- -- -- 8 182 253 Total Operating Revenues 4,146 1 3,881 6,185 6,174 -- 6,729 37,115 43,738 Operating Expenses: Salaries and benefits 1,322 -- -- -- -- 1,163 2,485 20,963 Services and supplies 1,664 2,839 5,281 3,261 339 4,680 18,064 15,468 Other charges 24 14 -- 2 -- -- 40 -- Insurance benefit payments -- -- -- -- -- -- -- 5,455 Depreciation 2,151 2,174 206 1,282 -- 789 6,602 1,961 Countywide cost allocation 1 03 16 40 42 -- 208 409 261 Total Operating Expenses 5,264 5,043 5,527 4,587 339 6,840 27,600 44,108 Operating Income (Loss) ( 1,118) 8,838 658 1,587 (339) (111) 9,515 ( 370) Nonoperating Revenues (Expenses): Property taxes -- 1,162 1,546 1,072 -- 394 4,174 -- Interest income 4 295 32 21 18 15 385 114 Interest expense (167) (9,683) (9) (1,954) -- (362) (12,175) (1) Debt issuance costs -- -- -- -- -- (99) (99) -- Aid from governmental agencies 1 32 29 13 15 1 3 193 1 9 Other nonoperating revenue (expenses) (13) -- -- -- -- (9) (22) (3) Total Nonoperating Revenues (Expenses) (44) (8,197) 1,582 (846) 19 (58) (7,544) 129 Income (Loss) Before Contributions and Transfers ( 1,162) 641 2,240 7 41 (320) (169) 1,971 ( 241) Capital contributions 5 72 -- -- 13 35,717 299 36,601 7 4 Transfers in -- -- -- -- -- 941 941 5 0 Transfers out (93) -- -- -- -- (700) (793) (1,290) Changes in net position (683) 641 2,240 7 54 35,397 371 38,720 (1,407) Net Position - Beginning 81,569 (3,388) 5 3,221 27,263 11,589 18,771 31,731 Net Position - Ending $ 8 0,886 $ (2,747) $ 55,461 $ 28,017 $ 46,986 $ 19,142 $ 30,324 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. (31) Change in net position of business-type activities (page 43) $ 38,689 The accompanying notes are an integral part of these financial statements. 52 COUNTY OF SAN LUIS OBISPO Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2013 (in thousands) Governmental Business-type Activities - Enterprise Funds Activities Nacimiento Nonmajor Total Internal Water State Water Lopez Los Osos Enterprise Enterprise Service Airport Contract Project Flood Control Wastewater Funds Funds Funds Cash Flows from Operating Activities: Receipts from customers and third parties $ 4 ,170 $ 13,858 $ 5 ,602 $ 4 ,479 $ - - $ 6,720 $ 34,829 $ - - Receipts from interfund billings - - -- - - - - -- -- -- 4 3,750 Payments for goods and services ( 1,822) ( 4,480) ( 5,124) (3,312) ( 339) (4,902) (19,979) ( 14,708) Payments to employees for service ( 1,335) - - - - - - -- (1,144) (2,479) ( 20,954) Payments for insurance benefits - - -- - - - - -- -- -- ( 4,287) Payments for premiums - - -- - - - - -- -- -- ( 2,475) Net Cash Provided (Used) by Operating Activities 1 ,013 9 ,378 4 78 1,167 (339) 6 74 12,371 1 ,326 Cash Flows from Noncapital Financing Activities: Property tax proceeds - - 1,162 1 ,546 1 ,072 - - 394 4,174 - - Grants and subsidies from other gov't agencies 1 32 2 9 1 3 1 5 1 3 193 1 9 Advances from other funds 2 06 - - - - - - -- (50) 156 - - Advances to other funds - - -- - - - - -- 63 63 - - Transfers from other funds - - -- - - - - -- 941 941 5 0 Transfers to other funds ( 93) - - - - - - -- (700) (793) ( 1,290) Net Cash Provided (Used) by Noncapital and Related Financing Activities 2 45 1,191 1 ,559 1 ,087 1 651 4,734 ( 1,221) Cash Flows from Capital and Related Financing Activities: Purchases and construction of capital assets ( 798) (326) (2,013) ( 696) (25,893) ( 520) (30,246) ( 2,517) Proceeds from issuance of long-term debt - - -- - - - - 24,173 5,814 29,987 - - Debt issuance costs - - -- - - - - (1) (99) (100) - - Proceeds from sale of capital assets ( 13) - - - - - - -- (133) (146) 2 91 Capital contributions 5 71 - - - - - - 3,554 2 98 4,423 ( 8) Principal paid on capital debt ( 251) (3,090) - - (1,814) ( 10) (6,229) (11,394) - - Interest paid on capital debt ( 169) (9,851) - - (1,629) - - (397) (12,046) ( 1) Debt Service deposit from bond participant - - 1,508 - - - - -- -- 1,508 - - Net Cash Provided (Used) by Capital and Related Financing Activities ( 660) (11,759) ( 2,013) (4,139) 1,823 (1,266) (18,014) ( 2,235) Cash Flows from Investing Activities: Interest received 4 294 3 2 2 3 18 15 386 1 16 Net Cash Provided (Used) by Investing Activities 4 294 3 2 2 3 18 15 386 1 16 Net Increase (Decrease) in Cash and Cash Equivalents 6 02 (896) 5 6 (1,862) 1,503 7 4 (523) ( 2,014) Cash and Cash Equivalents - Beginning of Year 1 ,938 2 9,668 1 1,105 8 ,793 6,298 5,440 63,242 4 4,638 Cash and Cash Equivalents - End of Year $ 2 ,540 $ 28,772 $ 1 1,161 $ 6 ,931 $ 7,801 $ 5,514 $ 62,719 $ 4 2,624 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ ( 1,118) $ 8 ,838 $ 6 58 $ 1,587 $ (339) $ (111) $ 9,515 $ ( 370) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation expense 2,151 2,174 206 1,282 -- 789 6,602 1,961 Change in Assets and Liabilities: Receivables, net (21) -- (793) -- -- (30) (844) 4 Inventory -- -- -- -- -- - - -- (89) Accounts payable (18) (1,610) 186 (8) -- 8 (1,442) 176 Deposits from others 17 -- 8 -- -- - - 25 55 Salaries and benefits payable 4 -- -- -- -- - - 4 46 Unearned revenue 11 (24) 213 (1,694) -- (1) (1,495) -- Accrued vacation and sick leave (13) -- -- -- -- 19 6 (34) Self-insurance liability -- -- -- -- -- - - -- (423) Total Adjustments 2,131 540 (180) (420) -- 785 2,856 1,696 Net Cash Provided (Used) by Operating Activities $ 1,013 $ 9,378 $ 478 $ 1,167 $ (339) $ 674 $ 12,371 $ 1,326 Noncash Investing, Capital, and Financing Activities: Contributions of capital assets $ -- $ -- $ -- $ 13 $ 3 5,717 $ -- $ 35,730 $ 66 Change in special assessment receivable $ -- $ -- $ -- $ - - $ (42) $ -- $ (42) $ -- The accompanying notes are an integral part of these financial statements. 53 COUNTY OF SAN LUIS OBISPO Statement of Fiduciary Net Position Agency and Investment Trust Funds June 30, 2013 (in thousands) San Luis Obispo Pension Trust Fund December 31, 2012 (in thousands) Investment San Luis Obispo Agency Trust County Funds Fund Pension Trust 06/30/13 06/30/13 12/31/2012 Assets Cash and cash equivalents $ 40,422 $ 190,314 $ 26,729 Notes receivable -- - - Contributions receivable -- - - 1,272 Accrued interest and dividends receivable -- - - 1,459 Accounts receivable -- - - 2 Securities sold -- - - 27,190 Prepaid benefits -- - - 181 Investments pension trust: Bonds and notes, at fair value -- - - 234,359 International fixed income, at fair value -- - - 77,438 Collateralized mortgage obligations, at fair value -- - - 11,358 Domestic equities, at fair value -- - - 306,004 International equities, at fair value -- - - 242,966 Alternative investments, at fair value -- - - 64,954 Real estate, at fair value -- - - 91,897 Other investments, at fair value 13 Capital assets-net of accumulated depreciation -- - - 962 Total Assets 40,422 190,314 1,086,784 Liabilities Agency obligations 40,422 - - -- Securities purchased -- - - 72,169 Accrued liabilities -- - - 1,179 Total Liabilities 40,422 - - 73,348 Net Position Net position held in trust for pool participants -- 190,314 -- Net position held in trust for pension benefits -- - - 1,013,436 Total Net Position $ - - $ 190,314 $ 1,013,436 The accompanying notes are an integral part of these financial statements. 54 COUNTY OF SAN LUIS OBISPO Statement of Changes in Fiduciary Net Position Investment Trust Funds For the Year Ended June 30, 2012 (in thousands) San Luis Obispo Pension Trust Fund For the Year Ended December 31, 2012 (in thousands) Investment San Luis Obispo Trust County Fund Pension Trust 06/30/13 12/31/12 Additions Contributions: Employer contributions $ 769,516 $ 30,942 Member contributions -- 25,207 Total Contributions 769,516 56,149 Investment Income: Realized and unrealized gains and losses -- 90,762 Interest 381 5,930 Dividends -- 14,698 Real estate management trust income -- 93 Real estate operating income, net -- 1,420 Other investment income, net -- (30) Investment expenses -- (4,055) Total Investment Earnings 381 108,818 Total Additions 769,897 164,967 Deductions Benefits: Monthly benefit payments -- 54,548 Refunds of contributions -- 1,138 Death benefits -- 126 Total benefits -- 55,812 Administrative expenses -- 2,069 Total Administrative Expenses -- 2,069 Distributions from investment pool 764,680 -- Total deductions 764,680 57,881 Change in Net Position 5,217 107,086 Net Position - Beginning 185,097 906,350 Net Position - Ending $ 1 90,314 $ 1,013,436 The accompanying notes are an integral part of these financial statements. 55 56 ________________________________________________________________ NOTES TO THE BASIC FINANCIAL STATEMENTS ________________________________________________________________ 57 58 COUNTY OF SAN LUIS OBISPO NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2013 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. FINANCIAL REPORTING ENTITY The County of San Luis Obispo (the County) was established by an act of the Legislature on February 18, 1850 as one of California’s original 27 Counties. The County is a political subdivision of the State of California and may exercise the powers specified by the Constitution and laws of the State. The County exercises its powers through an elected five member Board of Supervisors. The County provides various services on a countywide basis including public protection, public ways and facilities, health and sanitation, public assistance, education, recreational and cultural services. The County reporting entity includes all significant organizations, departments, and agencies over which the County is considered financially accountable. The component units discussed below are included in the County’s reporting entity because of the significance of their operational and financial relationships with the County. The accompanying financial statements present the financial position of the County and those County-related entities that meet the criteria for component units established by the Governmental Accounting Standards Board (GASB) Statements 14 and 61. Blended Component Units These component units are so intertwined with the County that they are, in substance, the same as the County and, therefore, are blended and reported as if they were part of the County. Each of the following entities’ governing bodies are substantively the same as the governing body of the County, are fiscally accountable to the County, and have a significant relationship with the County, and therefore are included in its government-wide, governmental fund and proprietary fund financial statements: County Service Areas – County Service Areas have been established for the purpose of providing specific services to distinct geographical areas within the County. These services include drainage and sewer collections facilities maintenance, street lighting energy charges, centralized septic services, wastewater disposal and treatment, and fire and emergency medical services in various unincorporated areas of the county. Flood Control and Water Conservation Districts – Flood control and water conservation districts have been established for the purpose of providing specific flood and conservation services to distinct geographical areas within the county. These services include weather and hydrological data collections services, delivery, water treatment, and water distribution services, and the construction of the Lopez Dam Seismic Remediation project. San Luis Obispo County Financing Authority – The Authority was created to assist in the financing, construction, and equipping of public facilities for one or both of the Authority’s members. San Luis Obispo County Public Facilities Corporation – The PFC is a nonprofit public benefit corporation organized to assist public agencies within the County of San Luis Obispo with the acquisition and construction of various public facilities. Separate financial statements or additional financial information for each of the component units may be obtained from the Auditor-Controller at 1055 Monterey, Room D220, San Luis Obispo, CA 93408. 59 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Also included in the accompanying financial statements as investment trust funds are the assets of numerous self-governed schools, special districts, and regional boards and authorities for which the County Treasurer acts as custodian of those assets. The financial reporting for these governmental entities, which are independent of the County, is limited to the total amount of cash and investments and the related fiduciary responsibility of the County for disbursement of these assets. Activities of these entities are administered by separate boards and are independent of the County Board of Supervisors. The County Auditor-Controller makes disbursements upon the request of the entity’s officers. The County Board of Supervisors has no effective authority to govern, manage, approve budgets, assume financial accountability, establish revenue limits, nor to appropriate surplus funds available in these entities. Seven cities and numerous self-governed special districts provide services to the residents of the county. The operations of these entities have been excluded from the basic financial statements as each entity conducts its own day- to-day operations and answers to its own governing board. Discretely Presented Component Unit First 5 San Luis Obispo County – First 5 was created in 1998 with the passage of Proposition 10, the California Children and Families First Act. First 5’s mission is to allocate funds from the California Children and Families Trust Fund and advocate for quality programs and services, supporting children prenatal to age 5, to ensure that every child is healthy and ready to learn in school. First 5 is governed by a nine-member commission that includes public officials and community leaders from the fields of early childhood education, health care, and family support. The County can influence the day-to-day operations and financial decisions of First 5 as the County Board of Supervisors appoints all commission members. First 5 is reported as a discretely presented component unit because its governing body is not the substantively the same as the County’s governing body, and it does not provide services entirely or exclusively to the County. B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Government-wide Financial Statements The Government-wide financial statements consist of the statement of net position and the statement of activities that report information about the County and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. The statements distinguish between governmental and business-type activities of the County. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the County and for each function of the County’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Internal activities and indirect expenses are consolidated in the statement of activities. Examples of expenses that have been eliminated include the allocation of indirect costs under the County-wide Cost Allocation Plan and internal payments for services provided between departments. Amounts reported as program revenues include 1) fees, fines and charges to customers or applicants for goods or services offered by the programs, 2) operating grants and contributions that are restricted to meeting the operational requirements of a particular program, and 3) capital grants and contributions restricted to particular programs. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operation. The principal operating revenues of the County enterprise funds (Airport, Nacimiento Water Contract, State Water Project, Lopez Flood Control 60 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Project, Los Osos Wastewater, and nonmajor enterprise) and of the government’s internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Fund Financial Statements The fund financial statements report detailed information about the County’s funds, including fiduciary funds and blended component units. Separate statements are provided for each fund category – Governmental, Proprietary, and Fiduciary even though the latter are excluded from the Government-wide financial statements. The emphasis of the Governmental and Proprietary Fund financial statements is on major individual funds. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. The internal service funds are presented in a single column on the face of the proprietary fund statements. New Accounting Pronouncements For the fiscal year ended June 30, 2013, the County implemented the following Governmental Accounting Standards Board (GASB) Statements:  GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. The requirements of this statement are effective for financial statement periods beginning after June 15, 2012. GASB 61 augments the relevance of the financial statements by improving guidance for including, presenting, and disclosing information about component units and equity interest transactions of the County. It allows users of the financial statements to better assess the accountability of elected officials by ensuring that the financial reporting entity includes only organizations for which the elected officials are financially accountable or that are determined by the government to be misleading to exclude.  GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The requirements of this statement are effective for financial statement periods beginning after December 15, 2011. GASB 62 codifies all sources of generally accepted accounting principles for state and local governments so that they derive from a single source. GASB 62 modifies guidance as necessary to appropriately recognize the governmental environment and the needs of governmental financial statement users.  GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. The requirements of this statement are effective for financial statement periods beginning after December 15, 2011. GASB 63 provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. Deferred outflows and inflows occur when governments enter into transactions that result in the consumption or acquisition of net assets in one period that are applicable to future periods. They are distinguished from assets and liabilities. Consequently, the Statement of Net Assets is now referred to as the Statement of Net Position. GASB 63 standardizes the presentation of deferred outflows and inflows of resources and their effects on a government’s net position. The County reports the following Major Governmental Funds:  The General Fund is the County’s primary operating fund. The General Fund is used to account for all revenues and expenditures necessary to carry out the basic governmental activities of the County that are not accounted for through other funds. For the County, the General Fund includes such activities as public protection, public ways and facilities, health and sanitation, public assistance, education, and recreational and cultural services. 61 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued)  The Capital Projects Fund is used to account for the financial resources restricted for the acquisition or construction of specific projects, or items other than those financed by proprietary funds. The County reports the following Major Proprietary Funds:  The Airport Fund accounts for the maintenance, operations, and development of the County-owned commercial service airports in San Luis Obispo and Oceano.  The Nacimiento Water Contract Fund accounts for the activities and delivery of water associated with the Nacimiento water supply reservoir and the contract with Monterey County.  The State Water Project Fund accounts for revenues, expenses and net position relating to the countywide taxpayers’ obligations associated with the State Water Project, which provides for the delivery of state water into the County.  The Lopez Dam Flood Control Fund accounts for the maintenance, water treatment and water distribution services of the Lopez Dam Flood Control Zone 3, which provides water to south San Luis Obispo County, and the activities of the Lopez Dam Seismic Remediation Project.  The Los Osos Wastewater Fund accounts for the construction, operation and maintenance of the wastewater treatment plant serving the community of Los Osos.  Additionally, the County reports on Internal Service Funds. Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the County or to other governments on a cost-reimbursement basis. Internal Service Funds account for the activities of fleet operations, equipment maintenance services, and self-insurance programs such as workers’ compensation, long-term disability, employee benefits, and personal injury and property damage. The County reports the following Fiduciary Funds:  The Pension Trust Fund accumulates contributions from the County, its employees, and earnings from the fund’s investments. Disbursements are made from the fund for retirement, disability and death benefits (based on a defined benefit formula) and administrative expenses. This fund includes all assets of the San Luis Obispo County Pension Trust as of December 31, 2012.  The Investment Trust Funds account for the assets of legally separate entities that deposit cash with the County Treasurer. These entities include school and community college districts, other special districts governed by local boards, regional boards and authorities and pass through funds for tax collections for cities. These funds represent the assets, primarily cash and investments, and the related liability of the County to disburse these monies on demand. The County reports on 99 different Investment Trust Funds.  The Agency Funds account for the resources held by the County in a custodial capacity on behalf of other agencies. The County reports on 137 different Agency Funds. These include accounts for temporary holding of funds for the tax assessment areas created under the 1915 Improvement Act, temporary clearing funds, and other temporary holding funds not classified in other agency categories. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The Government-wide, Proprietary, and Fiduciary Fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, except that Agency Fund financial statements have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Nonexchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, 62 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) include property, sales, and transient occupancy taxes, grants, entitlements, and donations. On an accrual basis, revenues from property taxes are recognized in the fiscal year for which the taxes are levied. Revenues from sales and occupancy taxes are recognized when the underlying transactions take place. Revenues from grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been satisfied. Governmental Fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they become both measurable and available. The County considers all revenues in governmental funds to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the County considers property tax revenues and all other revenues to be available if they are collected within 60 days of the end of the current fiscal period. It is the County’s policy to submit reimbursement and claim requests for federal and state grant revenues within 30 days of the end of the program cycle, and payments are generally received within 90 days. Property taxes, franchise taxes, licenses, and interest are considered to be susceptible to accrual. Expenditures generally are recorded when the related liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recognized as expenditures only to the extent that payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. The County eliminates the effect of interfund activity from the Government-wide financial statements by consolidating internal activities and indirect expenses in the statement of activities. When both restricted and unrestricted resources are available for use, it is the County’s policy to use restricted resources first, and then unrestricted resources as they are needed. D. ASSETS, LIABILITIES, AND FUND EQUITY Deposits and Investments As required by Government Code Section 27130, a treasury oversight committee serves the County. The committee consists of a representative appointed by the Board of Supervisors, the Auditor-Controller, Superintendent of Schools, a representative from the County's school districts and community college, and one member from the public at large. The committee meets annually and is subject to the California open meeting statutes. Cash balances of substantially all funds are pooled and invested by the County Treasurer for the purpose of increasing earnings through investment activities. State statutes authorize the County to invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase agreements, and the State Treasurer’s Investment Pool. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments held by the County Treasurer are stated at fair value at June 30, 2013. The fair value of pooled investments is determined annually and is based on current market prices. The County pool is not registered with the Securities and Exchange Commission as an investment company and does not issue separate investment reports. The County has not provided or obtained any legally binding guarantees to support the value of the shares. Participants may withdraw up to the amortized cost of their respective shares as displayed on the combined balance sheet. The share of the Treasurer's pool related to involuntary participants is 99.9 percent. 63 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Cash and Cash Equivalents The County’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short- term investments with original maturities of three months or less from the date of acquisition. All short-term cash surpluses are maintained in the County Treasury cash and investments pool, the earnings from which are allocated quarterly to each fund based on average daily cash balances. Receivables and Payables All trade and property tax receivables are shown net of an allowance for uncollectible accounts. No uncollectible allowance is recorded for enterprise special district receivables, which are primarily for water service billings. These receivables are written off in the year they become uncollectible. Property Tax The County is responsible for the assessment, collection, and apportionment of property taxes for all taxing jurisdictions within the County, including school, cities, and special districts. Property taxes, for which the lien date is January 1, are payable in two equal installments, November 1 and February 1, and become delinquent on December 10 and April 10, respectively. Property taxes receivable are recognized when levied. Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent on August 31. The County is permitted by Article XIII-A of the State of California Constitution (known as Proposition 13) to levy a maximum tax of $1.00 per $100.00 of full cash value. The bills are payable in equal installments, November 1st and February 1st and become delinquent on December 10th and April 10th, respectively. Property taxes are accounted for in the Unapportioned Property Tax and Interest Fund, an Agency Fund, until apportionment and disbursement to the taxing jurisdictions. Property tax receivables are recognized when the taxes are levied. Beginning in fiscal year 1993-1994, the County of San Luis Obispo adopted the "Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds" provided for in Revenue and Taxation Code Sections 4701-4717, which is commonly known as the "Teeter Plan". The Teeter Plan has no impact on tax rates or collection procedures. It merely changes the way the collections of delinquent taxes and penalties are distributed among the taxing agencies. Those agencies participating in the Teeter Plan receive 100% of the secured property taxes billed each year without regard to delinquencies. The General Fund covers the delinquent amount to all agencies and, in return, receives the delinquent taxes, penalties and interest when collected. As a result of the Teeter Plan, secured property taxes receivable are recorded in the General Fund only, and there is no allowance for uncollectible amounts. Penalties and interest are deposited into the Tax Loss Reserve Fund. Once the Tax Loss Reserve Fund balance exceeds 25% of the secured delinquent roll, the excess may be credited to the General Fund. The Teeter Plan was amended beginning fiscal year 2001-2002 by removing unitary tax payments (including PG&E), so that all agencies in the County will share in any delinquency that may occur. Unsecured property is not part of the Teeter Plan. Unsecured property taxes receivable are accrued to taxing agencies, net of the uncollectible amount which is estimated based on prior year collections. Interfund Transactions Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-wide financial statements as “internal balances.” 64 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Inventories and Prepaid Items Inventories held by the General Fund, Public Works, Reprographics and the Garage Internal Service Funds are carried at cost (first-in, first-out). The Internal Service Funds’ inventories are controlled by perpetual inventory systems, and are adjusted as appropriate to reflect year-end physical inventory counts. Governmental Funds (other than the General Fund) record inventory as expenditures when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the Government-wide and Fund financial statements. Capital Assets Capital assets, which include land, structures and improvements, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activity columns in the Government-wide financial statements. Capital assets are defined as assets with an initial individual cost greater than the capitalization threshold for the specified type of asset and an estimated useful life beyond a single fiscal period. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. General infrastructure assets acquired prior to July 1, 1980, are reported at estimated historical cost using deflated replacement costs. Normal maintenance and repairs are not capitalized, but are charged to operations when incurred. Betterments or major improvements, which significantly increase values, change capacities, or extend useful lives, are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations. Capital outlays are recorded as expenditures in the General, Special Revenue, and Capital Projects Funds and as capital assets in the Government-wide financial statements to the extent the County’s capitalization thresholds are met. Interest incurred, during the construction phase, on financing capital assets of business- type activities is reflected in the capitalized value of the asset constructed net of interest earned on the invested proceeds over the same period. Amortization of assets acquired under capital leases is included in depreciation and amortization. Facilities and improvements, infrastructure, and machinery and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the estimated useful lives. The capitalization thresholds and estimated useful lives of specific asset types are as follows: Asset Type Capitalization Threshold Estimated Useful Life Land No threshold --------------- Infrastructure $100,000 20 to 100 years Structures & Improvements $25,000 15 to 50 years Equipment $5,000 2 to 15 years Capital Lease By asset type Lease term or useful life Compensated Absences The County’s policy is to permit employees to accumulate earned but unused vacation and sick leave benefits. Each year-end, a liability is accrued for the balance of unpaid compensatory time off, sick leave, and vacation earned. 65 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Accumulated benefits will be liquidated in future years as employees elect to use them. In the normal course of business, all payments of these accumulated benefits will be funded from appropriations in the year in which they are to be paid; therefore the total liability is recorded as long-term. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee designations and retirements. Long-term Obligations In the Government-wide financial statements, and in proprietary funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund financial statements, governmental funds report fund balance in classifications based primarily on the extent to which the County is bound to honor the constraints on the specific purposes for which amounts in the funds can be spent. The fund balance classifications used are nonspendable, restricted, committed, assigned and unassigned (see Note 11 for a description of these categories). In circumstances when an expenditure is made for a purpose for which amounts are available from multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned. E. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 66 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) DETAIL NOTES ON ALL FUNDS 2. CASH AND CASH EQUIVALENTS Cash in Treasury Investments made by the Treasurer are regulated by the California Government Code and by the County's Investment Policy (IP). The objectives of the policy in order of priority are safety and preservation of capital, liquidity sufficient to meet scheduled cash flow needs, and then yield, subject to safety and liquidity, while maintaining compliance with federal, state, and local laws and regulations. The San Luis Obispo County Investment Pool is rated by Fitch Ratings, one of the Nationally Recognized Statistical Rating Organizations. Fitch has consistently rated the County Pool with their highest rating since FY 1994/95. The County Pool’s “AAA” rating reflects the “pool’s lowest vulnerability to losses as a result of defaults in its portfolio and is based on the actual and prospective average credit quality of the pool’s investments.” The County Pool’s “V1” volatility rating reflects the pool’s low market risk and capacity to return stable principal value to meet anticipated cash flow requirements, even in adverse interest rate environments. Effective February 10, 2010, Fitch eliminated the V1+ rating from its Fund Volatility Rating scale and revised its highest rating to V1. On March 18, 2010, the County Pool’s volatility rating was revised from “V1+” to “V1,” to reflect the new highest rating. Most recently on August 8, 2013, Fitch confirmed the County Pool’s “AAA/V1” rating. The County Treasury Oversight Committee (CTOC) was created by the Board of Supervisors' Resolution and is formed by five members. The CTOC monitors and reviews quarterly, the management of public funds maintained in the investment pool in accordance with the California Government Code. The CTOC and the Board of Supervisors review and approve the IP annually. The County Treasurer prepares and submits a comprehensive investment report to the members of the CTOC and the investment pool participants every quarter. The report covers the type of investments in the pool, maturity dates, par value, actual costs and fair value. California Government Code directs the CTOC to cause an annual IP compliance audit. A list of providers for the annual compliance audit is specified in the Board Resolution which created the CTOC. These providers are: County Auditor in conjunction with or in addition to work directed by California Government Code; independent certified public accountants (CPAs) selected to review the County’s Comprehensive Annual Financial Report; and independent CPAs as deemed appropriate. Gallina, LLP was selected to perform the Annual Investment Program Compliance Audit for the fiscal year ended June 30, 2013. The results of these audits have been presented to the Board of Supervisors on a yearly basis. Under parameters established by the California Government Code, the County may purchase: obligations issued by the United States Treasury; obligations, participations, or other instruments of or issued by a federal agency or a United States government-sponsored enterprise; obligations of state and local agencies of this state and any of the other 49 states; bankers’ acceptances; commercial paper; negotiable certificates of deposit; repurchase agreements; medium-term corporate notes; as well as other investments established by the California Government Code. The California Government Code prohibits investments in derivatives which include inverse floaters, range notes, or mortgage-derived, interest strips and any security that could result in zero interest accrual if held to maturity. While securities lending and reverse repurchase agreements are considered permitted investments per California Government Code, the County IP prohibits these types of investments. The County maintains a combined pool with cash and investments which provide cash flow for the funding needs of the County and local agencies required by law to keep funds in the Treasury. 67 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) The combined pool’s investments have a carrying value that uses the amortized cost method and includes accrued interest. This pool, which is available to all funds, has deposits and investments with a weighted- average maturity of less than one year. Interest is apportioned to the separate funds based on the individual fund's average daily balance. Investments were authorized by the California Government Code and the County Treasurer's IP: Securities were held in a customer-segregated safekeeping account during the fiscal year. Repurchase agreements were collateralized 102% with government and agency securities in accordance with multi-party agreements on file with the Treasurer. A Cash Statement and Asset List is requested monthly from the appropriate institutions and verified against records maintained in the Treasury. Governmental Accounting Standards Board (GASB) Statement No. 31 requires governmental external investment pools to report certain investments at fair value in the financial statements and report the change in the fair value of investments in the year in which the change occurred. In compliance with these requirements, the fair value of the County's combined pool is determined annually and is based on current market prices received from the securities custodian, and the California State Local Agency Investment Fund (LAIF), except for instruments which are carried at amortized cost plus accrued interest. The County Treasury has provided a fair value dollar factor of 1.000349217007 in the Quarterly Report of Investments as of June 30, 2013, which can be used for financial reporting by the pool participants. The fair value of the investments is the pool participant’s amount invested balance multiplied by the fair value dollar factor. The County’s combined pool has invested in LAIF. This fund is not registered with the Securities and Exchange Commission as an investment company, but is required to invest according to California State Code. Market valuation is conducted quarterly. LAIF provided a fair value dollar factor of 1.000273207 for its portfolio as of June 30, 2013. The fair value of the investments in LAIF is the pool participant’s amount invested balance multiplied by the fair value dollar factor. As of June 30, 2013, 1.96% of the LAIF pool includes structured notes and asset-backed securities. The Local Investment Advisory Board, which consists of five members as designated by statute, provides oversight for LAIF. As of June 30, 2013, the County’s combined pool includes funds deposited in collateralized Public Investment Money Market Accounts (PIMMAs), Certificates of Deposit placed through the Certificate of Deposit Account Registry Service (CDARS), and a Federally Insured Cash Account (FICA). PIMMAs are interest-bearing active bank accounts and by California Government Code (GC) §53631 et seq., are considered depository accounts, not investments. PIMMAs are fully liquid and collateralized by eligible securities per GC 53651 et seq. Deposits placed through CDARS as authorized by California GC §53635.8, are distributed into individual Certificates of Deposit (CD) of less than $250,000 each that are fully FDIC insured, and placed through a network participating bank that uses the CD Account Registry Service, a private entity that assists in the placement of the individual CDs. FICA is similar to CDARS where a single large deposit is placed into individual deposits of less than $250,000 with network banks. As a result, full FDIC insurance is maintained. Unlike CDARS, FICAs are not term deposits, and the full balance is available at any time on demand. Even though PIMMAs and FICAs are not investments by code, they are included in the County’s combined pool and are treated internally as investments for tracking, management, and reporting purposes. The table below identifies the investment types that are authorized for the County by the California Government Code. The County’s combined pool is further restricted by both the County IP and the Treasurer’s written policies and procedures to reduce exposure to investment risks. The County IP gives the County Treasurer the authority to act in the best interest of the County in the face of changing market conditions and circumstances by making written exceptions to the County IP and the Treasurer’s written policies and procedures within the limits of the California Government Code and all relevant laws. As of June 30, 2013, the table represents the County’s IP or where more restrictive, the Treasurer’s written policies and procedures, that address interest risk, credit risk, and concentration of credit risk. 68 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Maximum Percentage Maximum Investment of Portfolio in One Issuer Authorized Investment Type Maximum Maturity Bonds issued by a Local Agency Requires written approval of 1 year 5% County Treasurer for each investment. U.S. Treasury Notes 3 years 100% N/A U.S. Treasury Bonds 3 years 100% N/A U.S. Treasury Bills Maximum issued 100% N/A Cash Management Bills Maximum issued 100% N/A Registered State Warrants 1 year 10% N/A Treasury Notes or Bonds of this state Not authorized in FY 2012-13 Registered Treasury Notes or Bonds of any of the Not authorized in FY 2012-13 other 49 United States Bonds, Notes, Warrants, other evidences of No more than 10% of issuer indebtedness of any local agency within this state debt and assets. Requires 1 year 5% written approval of County Treasurer for each investment. U.S. Government Agencies: Federal National Mortgage Assoc. Not authorized in FY 2012-13 Federal Home Loan Mortgage Corp. Not authorized in FY 2012-13 Federal Home Loan Bank 3 years 20% N/A Farm Credit Bank 3 years 20% N/A Bankers’ Acceptances-Domestic 30 days 10% 4% Bankers’ Acceptances-Foreign Not authorized in FY 2012-13 Commercial Paper 30 days 5% 2% Collateralized Certificates of Deposit 1 year 5% 1% Negotiable Certificates of Deposit Not authorized in FY 2012-13 CDARS 1 year 15% 1% Tri-Party Repurchase Agreements 30 days 15% of all repos N/A Bi-Party Repurchase Agreements Not authorized in FY 2012-13 Reverse Repurchase Agreements Not authorized in the County’s IP Securities Lending Agreements Not authorized in the County’s IP Medium-Term Notes Not authorized in FY 2012-13 Money Market Mutual Funds Not authorized in FY 2012-13 Pledged Funds held by a trustee or fiscal agent Per specific statutory provisions or in accordance with the ordinance, resolution, indenture, or agreement of a local agency providing for the issuance. Notes, Bonds, or other obligations that are at all times secured by a valid first priority security Not authorized in FY 2012-13 interest Mortgage Pass-Through Securities Not authorized in FY 2012-13 Local Agency Investment Fund N/A 15% N/A *An investment in a Tax Revenue Anticipation Note (TRAN) for $1,116,378, with an interest rate of 2.6%, issued by the Port San Luis Harbor District, was approved by the County Treasurer in January 2013. The investment is an exception to the above restriction of one (1) year as it has a maturity of five (5) years. However, it is within what is allowed by California Government Code. Interest Rate Risk In accordance with its investment policy, the County manages its exposure to declines in fair values by structuring the portfolio so that securities mature to meet cash flow requirements for ongoing operations and thereby avoiding the need to sell securities on the open market prior to maturity. Custodial Credit Risk The County minimizes this type of credit risk by pre-qualifying the custodial financial institution, and requiring the custodian to hold securities in the County Treasurer's name. 69 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Credit Risk The County minimizes its exposure to credit risk by pre-qualifying the financial institutions limiting investments to the safest types of securities, diversifying the portfolio, and setting limits per issuer. Concentration of Credit Risk At June 30, 2013, the County did not have investments in corporate bonds, medium term notes, or money market mutual funds. Investments in obligations of the U.S. government, U.S. government agencies or government-sponsored enterprises are exempt from limitations set by GASB. The following is a summary of the credit quality distribution and concentration of credit risk by investment type as a percentage of the County's Investment Pool's fair value at June 30, 2013. Investment Type S&P Moody's % of Portfolio* Commercial Paper A-1 P-1 3.75% U.S Treasuries AA+ Aaa 22.65% U.S. Government Agencies AA+ Aaa 35.65% CDARS Not Rated Not Rated 18.76% Local Agency Investment Fund Not Rated Not Rated 18.77% TRAN Not Rated Not Rated 0.42% Total 100% *Bank Deposit accounts such as PIMMAs and FICA are tracked, managed, and reported as part of the County’s combined pool and are included in portfolio percentage limit calculations. CDARS and LAIF are both at 9% of the County’ combined pool inclusive of the PIMMAs and FICA and therefore are within the limits authorized in the Treasurer’s Investment Policy. GASB Statement No. 40 requires that investments in single issuers exceeding 5% of the County’s pooled investments be disclosed as concentrations of credit risk. As of the year ended June 30, 2013 no investments exceed the 5% disclosure threshold. At June 30, 2013, the County had the following investments and interest-bearing deposits (in thousands): Weighted Average Maturity Interest Maturity Carrying Fair Instrument Dates Rate % Years Amount Value Par Value CDARS 10/31/13- 0.30% 0.58 50,000 50,000 50,000 5/08/14 CommercialPaper 7/26/13 0.16% 0.07 9,999 9,999 10,000 U.S. Treasuries 7/15/13- 0.695%- 0.38 60,156 60,381 60,000 4/15/14 1.321% U.S. Government Agencies 12/27/13- 0.137%- 5/22/14 1.057% 0.76 95,038 95,020 95,000 Local Agency Investment On Fund Demand 0.24% - 50,030 50,044 50,000 TRAN 1/30/18 2.60% 4.58 1,128 1,128 1,116 Total Investments in County Treasury 0.49 $266,351 $266,572 $266,116 Deposits in Financial Institutions 364,658 364,658 364,658 Cash on Hand 118 118 118 Total Cash held in Treasury 631,127 631,348 630,892 Deposits in Transit 1,050 1,050 1,050 Outstanding Warrants (11,481) (11,481) (11,481) Total 620,696 620,917 620,461 Imprest Cash 797 797 797 Non-pool Cash Deposits 1,195 1,195 1,195 Other Cash Deposits 1,992 1,992 1,992 Total cash and cash equivalents $ 622,688 $ 622,909 $ 622,453 70 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Carrying Fair Restricted Cash with Fiscal Agent Amount Value Par Value U.S. Government & Federal Agencies $ 13,577 $ 13,577 $ 13,577 Total 13,577 13,577 13,577 Total restricted and unrestricted cash and cash equivalents $ 636,265 $ 636,486 $ 636,030 Carrying Total Cash and Investments Summary Amount Total Governmental Activities $ 334,296 Total Business-type Activities 62,719 Total Fiduciary Funds 230,736 Total Component Unit 8,514 Total Cash and Investments $ 636,265 The following represents a condensed statement of net position and changes in net position for the Treasurer's investment pool as of June 30, 2013 (in thousands): Carrying Amount Fair Value Statement of Net Position: Net position held for pool participants $ 622,689 $ 622,910 Equity of internal pool participants $ 432,374 $ 432,595 Equity of external pool participants (voluntary and involuntary) 190,315 190,315 Total Equity $ 622,689 $ 622,910 Statement of Changes in Net Position: Revenue $ 2,575 $ 2,575 Investment Costs (941) (941) Net Deposits 35,643 35,643 Change in fair value - (862) Net change in pool 37,277 36,415 Net position at July 1, 2012 585,412 586,495 Net position at June 30, 2013 $ 622,689 $ 622,910 Restricted Cash with Fiscal Agent Cash and investments at June 30, 2013 that are restricted by legal or contractual requirements are comprised of the following (in thousands): Various Governmental Funds Amount Required lease reserves for long term debt $ 12,859 Restricted interest on lease reserves 718 Total Restricted Cash $ 13,577 Cash Deposits outside of the Treasury Pool At fiscal year end, the carrying amount of the County's other cash deposits was $1,123,716 and the combined financial institutions' balance was $1,208,864. The difference of $85,148 between the County's deposit balance and the financial institutions' balance results from transactions in transit, and outstanding warrants and bond coupons. The entire bank balance of $1,208,864 was covered by federal depository insurance or by collateral held by County's agent in the County's name. 71 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 3. RECEIVABLES Accounts receivable at year end of the County’s major individual funds and nonmajor and Internal Service Funds in the aggregate, including the applicable allowance for uncollectible accounts are as follows (in thousands): Governmental Governmental Activities Business Type Activities Activities State Nacimiento Nonmajor Internal Service Water Water Enterprise Funds General Fund Project Contract Funds Accounts Receivable $ 23 $ 2,442 $ 1,506 $ 219 $ 12 Allowance for Doubtful Accounts - - (1,506) - - Net Accounts Receivable $ 23 $ 2,442 $ - $ 219 $ 12 4. CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2013, is as follows (in thousands): Balance Transfers & Balance Governmental Activities July 1, 2012 Additions Retirements Adjustments June 30, 2013 Capital assets, not being depreciated: Land $ 791,410 $ - $ (2,224) $ 60 $ 789,246 Construction in progress 66,710 17,229 - (12,796) 71,143 Total capital assets, not being depreciated 858,120 17,229 (2,224) (12,736) 860,389 Capital assets, being depreciated: Structures and improvements 173,518 810 (883) 4,192 177,637 Equipment 72,371 4,450 (3,356) - 73,465 Infrastructure 285,141 2,162 - 8,526 295,829 Other property 340 - - - 340 Total capital assets, being depreciated 531,370 7,422 (4,239) 12,718 547,271 Less accumulated depreciation for: Structures and improvements (66,471) (3,928) 675 194 (69,530) Equipment (40,471) (5,556) 3,106 - (42,921) Infrastructure (157,384) (9,067) - (194) (166,645) Other property (11) (4) - - (15) (264,337) (18,555) 3,781 - (279,111) Total accumulated depreciation 267,033 (11,133) (458) 12,718 268,160 Total capital assets being depreciated, net $1,125,153 $ 6,096 $ (2,682) $ (18) $ 1,128,549 Governmental activities capital assets, net 72 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Balance Transfers & Balance Business-Type Activities July 1, 2012 Additions Retirements Adjustments June 30, 2013 Capital assets, not being depreciated: Land $ 32,485 $ 29 $ - $ 103 $ 32,617 Construction in progress 19,302 37,194 - (2,017) 54,479 Water Rights 42,551 2,013 - - 44,564 Other Property 1,968 - - - 1,968 Total capital assets, not being depreciated 96,306 39,236 - (1,914) 133,628 Capital assets, being depreciated: Infrastructure 189,974 675 - 504 191,153 Structures and improvements 167,843 183 (279) 1,428 169,175 Equipment 3,106 122 (132) - 3,096 Other Property 554 - - - 554 Total capital assets, being depreciated 361,477 980 (411) 1,932 363,978 Less accumulated depreciation for: Infrastructure (3,734) (2,843) - - (6,577) Structures and improvements (36,728) (3,607) 261 - (40,074) Equipment (1,956) (150) 123 - (1,983) Other Property (52) (2) - - (54) (42,470) (6,602) 384 - (48,688) Total accumulated depreciation 319,007 (5,622) (27) 1,932 315,290 Total capital assets being depreciated, net $ 415,313 $ 33,614 $ (27) $ 18 $ 448,918 Business-type activities capital assets, net Depreciation expense Depreciation expense was charged to functions as follows (in thousands): Governmental Activities Amount General Government $ 3,742 Public Protection 2,630 Public Ways and Facilities 8,888 Health and Sanitation 307 Public Assistance 254 Education 193 Recreational and Cultural Services 580 Capital assets held by the County’s internal service funds are charged to the various functions based on their usage of the assets 1,961 Total Depreciation Expense-Governmental Activities $ 18,555 Business-type Activities Amount Airport $ 2,151 Nacimiento 2,174 State Water Project 206 Lopez Flood Control 1,282 Nonmajor Enterprise 789 Total Depreciation Expense-Business-type Activities $ 6,602 73 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 5. CONSTRUCTION IN PROGRESS AND RELATED COMMITMENTS Construction in Progress accounts reflect the amount within governmental and business-type funds for construction projects which are not yet complete. The following is a schedule of major projects included in Construction in Progress as of June 30, 2013 (in thousands): Governmental Activities Expended to Committed Project June 30, 2013 Funds Sheriff Women’s Jail Expansion $ 3,027 $ 1,101 Behavioral Health Electronic Health 224 347 Record System Roads Infrastructure 60,180 10,437 North County Public Service Center 161 1,606 SLO Probation Juvenile Hall Expansion 1,448 691 Business-Type Activities Expended to Committed Project June 30, 2013 Funds SLO Airport Facilities Infrastructure $ 1,053 $ 572 Los Osos Wastewater Project 51,730 59,593 Nacimiento Water Project 458 1,205 6. LEASES County as Lessor The County's General Fund and Enterprise Funds receive revenue from various properties leased to others under agreements classified as operating leases in accordance with Financial Accounting Standards Board (FASB) Statement 13. The leases cover periods ranging generally from 1 to 40 years. The General Fund leases portions of the former County General Hospital and North County healthcare facilities. The original cost of these facilities was $10,787. As of June 30, 2013 they had a carrying value of $8,794 net of accumulated depreciation of $1,993. The Airport leases portions of airport land to various operators. The cost and carrying value of the original Airport land area is $2,011. The following is a schedule of minimum future rentals to be received under these non-cancelable operating leases at June 30, 2013 (in thousands): Year Ending June 30 General Fund Airport 2014 $ 749 $ 313 2015 712 313 2016 599 308 2017 599 259 2018 556 243 Later Years 2,207 7,313 Total $ 5,422 $ 8,749 74 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Minimum future rentals do not include contingent rentals, which are received as stipulated in the lease contracts. These contingent rental payments are based on the monthly revenues of the concessionaire operating on the premises. Contingent rentals amounted to $1,425,137 for the fiscal year ended June 30, 2013. County as Lessee Operating Leases: The County has commitments under long-term real property operating lease agreements for facilities used in operations. These leases do not meet any of the four criteria for capitalization set by FASB 13. The County is the lessee under operating leases for real property used to house certain County functions. In addition to real property leases, the County has also entered into operating leases for equipment, of which most are data processing and office equipment leases. Management expects that in the normal course of business, leases that expire will be renewed or replaced by other leases. Commitments under the operating lease agreements for equipment, as described above, are not material. Rental payments for fiscal year ended June 30, 2013 totaled $3,547,609. The following rental costs represent future minimum payments under leases that have remaining non-cancelable terms in excess of one year as of June 30, 2013 for the next five years and for each five-year period thereafter (in thousands): Year Ending Minimum Lease Payments June 30 2014 $ 1,956 2015 1,859 2016 1,695 2017 1,581 2018 1,207 2019-2023 5,386 2024-2028 2,236 2028-2032 752 Total $ 16,672 7. RISK MANAGEMENT The County is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County has self-insurance programs for liability, workers' compensation, unemployment insurance and dental coverage. There were four liability and no workers’ compensation claim settlements that have exceeded insurance coverage during the past three fiscal years. Insurance coverage for liability and workers' compensation above the County's self-insured retention (SIR) is provided through the California State Association of Counties (CSAC) Excess Insurance Authority. The County is a member of CSAC Excess Insurance Authority, a joint powers authority whose purpose is to develop and fund programs of excess insurance for its member counties. The authority is solvent. Self-insurance and authority limits are as follows: Type of Coverage Self-Insurance Authority Liability $ 250,000 per occurrence $ 25,000,000 Workers' Compensation $ 250,000 per occurrence Statutory Unemployment $ 583,782 maximum ----- Dental None–Funded by Employees ----- 75 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Annual actuarial valuations are obtained for the Workers' Compensation and the General Liability Funds. These valuations provide the basis for premiums charged to insured departments. The County's SIR amounts are paid directly, without the use of purchased annuity contracts. Financial information on CSAC Excess Insurance Authority is available on request from the Office of Risk Management, County of San Luis Obispo. The estimated claims liability for the Protected Self Insurance Fund was recorded at a discounted 85% confidence level, and the estimated liability for the Workers' Compensation Self Insurance Fund was recorded at a discounted 80% confidence level. Changes in the balances of claims liabilities for the self funded insurance program including: the Protected Self Insurance Fund, Worker’s Compensation Fund, Unemployment Insurance Fund, and Dental Insurance Fund for fiscal years 2011-2012 and 2012-2013, were as follows (in thousands): Beginning of the fiscal year Current year claims, Balance at fiscal liability changes & estimates Claim payments year end 2011-12 $ 19,773 $ 4,065 $ 4,583 $ 19,255 2012-13 $ 19,255 $ 4,085 $ 4,508 $ 18,832 8. INTERFUND RECEIVABLES AND PAYABLES The composition of interfund balances at June 30, 2013 was (in thousands): Advances to/from other funds: Payable Fund Receivable Fund Amount Nonmajor Governmental Funds Nonmajor Enterprise Funds 686 Nonmajor Governmental Funds 207 General Fund 1,420 2,313 Nonmajor Enterprise Funds General Fund 202 Nonmajor Governmental Funds 350 552 Airport General Fund 1,045 Total $ 3,910 Advances from Nonmajor Enterprise Funds to Nonmajor Governmental Funds of $686 represents reserve funds of the Golf Enterprise fund held by the Public Financing Authority Debt Service Fund ($487) and the obligation of the Parks Special Revenue Fund to the Lopez Park Enterprise fund for future debt service ($199). The Roads Fund (Nonmajor Governmental) advanced $207 to the Roads Impact Fees Fund (Nonmajor Governmental). Advances from the General Fund to Nonmajor Governmental Funds of $1,420 represent internal loans issued to the County Service Areas Special Districts Special Revenue Fund ($202), the Flood Control Districts ($22), and the Library Special Revenue Fund ($1,196). 76 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Advances from the General Fund to Nonmajor Enterprise Funds of $202 represent internal loans issued to County Service Area 18 ($142) and County Service Area 7 ($60). Advances from Nonmajor Governmental Funds of $350 represent internal loans issued to the County Service Areas Enterprise Fund from the County Service Areas Special Districts Special Revenue Fund The Airport owes the General Fund $1,045 for an internal loan for various projects. 9. TRANSFERS A reconciliation of transfers is detailed below (in thousands): Transfer From Transfer To Amount General Fund Nonmajor Governmental Funds $ 21,327 Capital Projects Fund 5,050 Internal Service Funds 50 26,427 Nonmajor Governmental Funds General Fund 1,478 Capital Projects Fund 642 Nonmajor Governmental Funds 17,067 Nonmajor Enterprise Funds 941 20,128 Airport Nonmajor Governmental Funds 46 General Fund 47 93 Capital Projects Fund General Fund 466 Nonmajor Enterprise Funds General Fund 1 Nonmajor Governmental Funds 699 700 Internal Service Funds General Fund 47 Nonmajor Governmental Funds 735 Capital Projects 508 1,290 Total Transfers $ 49,104 General Fund transfers to Nonmajor Governmental Funds included contributions to the following Special Revenue Funds: Roads ($8,110), Library ($516), Community Development ($354), County Medical Services Program ($1,518) and Parks ($4,023). The General Fund also transferred $6,806 to the Pension Obligation Bond Debt Service Fund to finance debt service payments, $50 to the Public Works Internal Service Fund for emergency services, and $5,050 to the Capital Projects Fund. The reassignment of land from the General Fund to the County Service Area 1 Enterprise Fund ($3), the County Service Area 10 Enterprise Fund ($2), the Public Works ISF Fund ($49), and the Garage ISF Fund ($17) resulted in a $71 transfer-out of the General Fund. Corresponding transfer-ins are not reflected in the receiving funds since the assets are considered contributions. 77 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Nonmajor Governmental Fund transfers consist of contributions of Public Facilities Fees revenue from the Public Facilities Fees Special Revenue Fund to the General Fund ($858), the Capital Projects Fund ($596), Parks ($31) and the Library Fund ($134) to fund capital and maintenance projects. The Parks Special Revenue Fund made transfers to the General Fund to fund maintenance projects ($166), to the Capital Projects Fund ($46), to the Pension Obligation Bond Debt Service Fund ($117) and the Lopez Park Enterprise Fund ($5) for debt service. The Roads Fund transferred $4 to Flood Control Zone 18 for maintenance projects. The Road Impact Fee Special Revenue Fund transferred Impact Fees of $454 to the General Fund for certificate of participation payments and $2,878 to the Roads Fund for capital and maintenance projects. The Library Fund ($181), the County Medical Services Program Fund ($30) and the Driving Under the Influence Fund ($30) made transfers to the Pension Obligation Bond Debt Service Fund to finance debt service payments. Other Nonmajor Governmental Fund transfers include $585 from the Public Financing Authority and $60 from the Public Facilities Corporation to the Golf Fund related to the refunding of the 2002 Certificates of Participation; $291 of transfers between various County Service Areas and $13,662 of certificate of participation proceeds transferred from the Public Financing Authority Fund to the Public Facilities Corporation Fund. The reassignment of capital assets from the Parks Special Revenue Fund to the Flood Control Zone 3 Enterprise Fund resulted in a $13 transfer-out of the Parks Fund. A corresponding transfer-in is not reflected in the Flood Control Zone 3 Enterprise fund since the assets are considered contributions. The Airport Enterprise Fund transferred $46 to the Pension Obligation Bond Fund for debt service and $47 to the General Fund for public works projects. The Capital Projects Fund transferred $466 to the General Fund for maintenance projects. Transfers from Nonmajor Enterprise funds included transfers from the County Service Areas ($1) to the General Fund for interest on internal loans; transfers from the Golf Enterprise Fund to the Pension Obligation Bond Debt Service Fund ($35) and to the Public Facilities Corporation Fund ($642) for debt service; as well as transfers between various County Services Areas ($22). The Garage Internal Service Fund transferred $37 to the General Fund for assets sales, and the Worker’s Compensation Internal Service Fund transferred $10 to the General Fund for safety equipment for the Psychiatric Health Facility. The Public Works Internal Service Fund transferred $125 and the Self-Insurance Liability Internal Service Fund transferred $383 to the Capital Projects Fund. Internal Service Fund transfers to nonmajor governmental funds represent contributions to the Pension Obligation Bond Debt Service Fund for debt service by the Public Works ($692), Reprographics ($3), and Garage ($40) Internal Service Funds. 78 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 10. BONDED INDEBTEDNESS AND LONG TERM DEBT Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2013 (in thousands) is as follows: Beginning Ending Balance Balance Due within Governmental Activities July 1, 2012 Additions Reductions June 30, 2013 one year Bonds and notes payable: Certificates of participation $ 27,895 $ 14,427 $ 16,660 $ 25,662 $ 1,022 Unamortized discount on COP (103) - (4) (99) - Unamortized premium on COP 1,418 89 1,329 Pension Obligation Bonds 119,429 - 3,805 115,624 4,390 Total Bonds and notes payable 147,221 15,845 20,550 142,516 5,412 Other liabilities: Compensated absences 25,728 15,476 15,344 25,860 17,342 Landfill post-closure costs 4,078 415 342 4,151 591 Self insurance 19,255 4,085 4,508 18,832 3,494 Total other liabilities 49,061 19,976 20,194 48,843 21,427 Total Governmental Activities $ 196,282 $ 35,821 $ 40,744 $ 191,359 $ 26,839 Business-Type Activities Bonds and notes payable: Certificates of participation $ 19,060 $ 5,323 $ 6,463 $ 17,920 $ 702 Unamortized premium on COP 525 33 492 State notes 35,884 - 1,485 34,399 1,523 Revenue bonds 193,483 - 3,094 190,389 3,218 Unamortized premium on Revenue Bonds 6,158 - 213 5,945 - General obligation bonds 10,245 - 355 9,890 360 Unamortized premium on 1,072 - 57 1,015 - General obligation bonds Assessment bonds 15,364 24,173 10 39,527 1,208 Total bonds and notes payable 281,266 30,021 11,710 299,577 7,011 Other liabilities: Compensated absences 297 143 143 297 166 Total other liabilities 297 143 143 297 166 Total Business-Type Activities $ 281,563 $ 30,164 $ 11,853 $ 299,874 $ 7,177 79 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Annual debt service requirements for governmental activities as of June 30, 2013 are summarized as follows: Governmental Activities Certificates of Participation Pension Obligation Bonds Year Ended June 30, Principal Interest Principal Interest 2014 $ 1,022 $ 1,049 $ 4,390 $ 4,335 2015 1,040 1,032 5,030 4,140 2016 1,073 1,002 5,715 3,911 2017 1,116 958 6,460 3,644 2018 1,159 913 7,265 3,336 2019-2023 6,539 3,809 60,469 32,163 2024-2028 7,908 2,253 17,519 43,536 2029-2033 2,715 1,054 8,776 29,338 2034-2038 3,090 381 - - Total $ 25,662 $ 12,451 $ 115,624 $ 124,403 Business-Type Activities Certificates of Participation State Notes Revenue Bonds Year Ended Principal Interest Principal Interest Principal Interest June 30, 2014 $ 702 $ 804 $ 1,523 $ 799 $ 3,218 $ 9,472 2015 720 786 1,569 753 3.357 9,337 2016 742 761 1,774 834 3,503 9,191 2017 775 731 1,827 782 3,665 9,026 2018 803 699 1,880 728 3,850 8,837 2019-2023 4,602 2,923 10,076 2,788 22,495 40,942 2024-2028 5,794 1,660 8,545 1,440 29,015 34,396 2029-2033 2,790 438 4,302 473 37,455 25,948 2034-2038 240 192 1,175 257 48,375 15,030 2039-2043 298 133 1,297 134 35,455 2,586 2044-2048 370 60 431 18 - - 2049-2051 84 2 - - - - Total $ 17,920 $ 9,189 $ 34,399 $ 9,006 $ 190,388 $ 164,765 Business-Type Activities (continued) General Obligation Bonds Assessment Bonds Year Ended June 30, Principal Interest Principal Interest 2014 $ 360 $ 474 $ 1,208 $ 913 2015 375 461 1,244 1,037 2016 395 445 1,271 1,002 2017 410 429 1,307 967 2018 425 413 1,343 930 2019-2023 2,435 1,746 7,309 4,067 2024-2028 3,155 1,021 8,385 2,990 2029-2033 2,335 179 9,627 1,754 2034-2037 7,833 401 Total $ 9,890 $ 5,168 $ 39,527 $ 14,061 80 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Long-term liabilities at June 30, 2013 consisted of the following: Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2013 Governmental Activities Certificates of Participation 2007 Series A 2/8/2007 2037 4% - 4.25% $304 - $308 5,090 4,585 Used to finance the construction of the Paso Robles Courthouse building. Debt service is provided by court fines specifically designated and restricted for new construction or major renovation of court facilities. 2008 Series A 1/23/2008 2038 4% - 4.625% $440 - $451 7,325 6,650 Used to finance improvements to the Vineyard Drive Interchange. Debt service is provided by Development Fees. 2012 Series A 10/15/2012 2028 .5%-5.0% $1,034-1,289 14,427 14,427 Lease Revenue Refunding Bonds used to refund the 2002 A Certificates of Participation. The original COP was partially used to finance a portion of the new government center. Debt service is provided by semi-annual payments funded by general County revenues. Pension Obligation Bonds Used to refund the Unfunded Actuarial Accrued Liability (UAAL) due to the Pension Trust as of July 2, 2003 as determined by an outside actuary. Debt service payments are expected to be funded by County payroll benefits. 2003 Series A Standard Bonds 7/2/2003 2018 1.68% - 4.54% $2,164 - $7,594 47,995 28,860 2003 Series C Capital Appreciation Bonds 7/2/2003 2031 5.27% - 5.73% zero - $15,000 44,199 44,199 2009 Series A Term Bonds 8/19/2009 2019 7.45% $3,171 42,565 42,565 $161,601 $141,286 Semi Annual Original Issue Outstanding at Date of Issue Maturity Interest Rates Installments Amount 6/30/2013 Business-Type Activities Certificates of Participation USDA 2009 4/30/2009 2049 4.375% $6 - $86 1,631 1,572 Used to finance a water system improvement project in County Service Area 23. Debt service is provided by water sales revenues. 2011 Refunding – Lopez Dam Remediation 5/12/2011 2030 2.0% - 5.5% $928 - $934 11,990 11,025 Used to refund the 2000 A COP issue. The original COP was used to improve and retrofit the Lopez Dam. Debt service is provided by semi-annual lease payments made by the Flood Control District for the use of the retrofitted facilities. 2012 Series A 10/15/2012 2028 .5%- 5.0% $381-$475 5,323 5,323 Lease Revenue Refunding Bonds used to refund the 2002 A Certificates of Participation. The original COP was partially used to the finance the Dairy Creek Golf Course. Debt service is provided by semi-annual lease payments from the Dairy Creek Golf Course. $18,944 $17,920 81 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Semi Annual Original Issue Outstanding at Date of Issue Maturity Interest Rates Installments Amount 6/30/2013 Business-Type Activities (continued) State Notes The County has borrowed from the State of California Department of Water Resources and the California Department of Transportation to finance the construction of water systems in unincorporated areas and to construct hangars at the San Luis Obispo airport. State loans are repaid with water service revenue and hangar rental revenue. Cayucos Water Treatment Facility 1998 2023 3.0315% $174 $3,011 $1,487 Santa Margarita Water System 1999 2018 3.41% $36 513 162 Lopez Recreation Area 2004 2024 2.5132% $21 325 199 Lopez Water Treatment Plant Upgrade 2006 2028 2.60% $1,672 25,945 22,854 Airport Hangars 2006 2025 4.6124% $334 4,734 2,626 Airport Hangars 2007 2025 4.6557% $86 1,000 782 Los Osos Waste Water Project 2012 2044 2.0% $1,431 6,289 6,289 $41,817 $34,399 Revenue Bonds 1976 Water Bond-County Service Area 16 4/1/1976 2016 5.00% $7 - $9 $135 $22 Used to improve the Shandon Water System. Debt service is provided primarily by water sales revenues. 2007 Nacimiento Pipeline $7,658 - Project Series A 9/26/2007 2040 3.75% - 5.0% $10,048 157,845 152,888 2007 Nacimiento Pipeline 5.196% - Project Series B 9/26/2007 2040 5.571% $2,132 - $2,646 38,565 37,485 Used to build the Nacimiento Water Delivery Project. Debt service is provided by water sales revenues of participating cities and districts payable under water delivery contracts. $196,545 $190,389 General Obligation Bonds 2011 Refunding – Lopez Dam Remediation 5/12/2011 2030 2.0% - 5.5% $833 - $840 $10,760 $9,890 Used to refund the 2000 A GO issue. The original GO Bonds were used to improve and Retrofit the Lopez Dam. Debt service is provided by applicable property taxes. Assessment Bonds 2012 2037 2.75% $1,609 - $2,257 $39,537 $39,527 Issued to the USDA to finance the construction of the Los Osos Waste Water Project. Debt Service will be provided by amounts levied against property owners who benefit from the project. Public Facilities Corporation The San Luis Obispo County Public Facilities Corporation (PFC) was incorporated on 9/7/1994. The PFC is a nonprofit public benefit corporation organized to assist public agencies within the County of San Luis Obispo with the acquisition and construction of various public facilities. Financing Authority The San Luis Obispo County Financing Authority was formed on 8/22/2000 as a joint exercise of powers authority between the County and the Flood Control District, which administers Lopez Dam. The Authority was created to assist in the financing, construction, and equipping of public facilities for one or both of the members. 82 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Description of Long-Term Lease Arrangements The County formed the Public Facilities Corporation and the Financing Authority for the purpose of issuing debt. On behalf of the County, these two entities issued all currently outstanding certificates of participation and the Lopez Dam remediation general obligation bond. Therefore, the County makes semi-annual lease payments in lieu of debt service to these entities from a variety of sources including State and Federal revenues, penalty assessments, golf course fees, water contract payments, and property taxes. For lease payment details, see above schedules for specific type of debt. Description of Special Assessment Bonds Special assessment debt has been issued to provide funds for the construction of streets, utility and water delivery systems. These bonds will be repaid from amounts levied against the property owners benefited by this construction. The County acts in an agent capacity for the assessment districts. In the event that a deficiency exists because of unpaid or delinquent special assessments at the time a debt service payment is due, the County must provide resources to cover the deficiency until other resources, for example, foreclosure proceeds, are received. Special assessment principal outstanding at June 30, 2013 totals $2,376 with interest rates from 3.5% to 6.85%. Accrued Vacation and Sick Leave Pay and Compensatory Time Off County employees have accumulated unpaid vested benefits for compensatory time off, sick leave and vacation earned of $26,157 at June 30, 2013. The accumulated benefits will be liquidated in future years as employees elect to use them. In the normal course of business, all payments of these accumulated benefits will be funded from appropriations in the year in which they are to be paid. Legal debt margin State statutes limit the amount of general obligation debt a governmental entity may issue to 1.25% of its net assessed valuation. The current debt limitation for the County is $522,454 with a margin of $512,564. Rebatable Arbitrage Earnings The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax- exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service. During the current year, the County performed calculations of excess investment earnings and at June 30, 2013 had an arbitrage liability of $655,278. Debt Refunding On July 17, 2012, all the outstanding principal and interest due on the Certificates of Participation 2002 Series A were paid. Funding was provided by the issuance of the SLO County Financing Authority Lease Revenue Refunding Bonds 2012 Series A. The aggregate difference between the 2002 Series A and the 2012 Series A was $3,187. Using the effective interest rate method, the refunding resulted in an economic gain of $2,404. 11. NET POSITION/FUND BALANCES The government-wide and business-type activities fund financial statements utilize a net position presentation. Net position is categorized as invested capital assets (net of related debt), restricted and unrestricted. Investment in Capital Assets, Net of Related Debt – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances 83 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category. Net position invested in capital assets, net of related debt at June 30, 2013 is as follows (in thousands): Amount Governmental activities $ 1,103,924 Business-typeactivities 167,138 Total $ 1,271,062 Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Included in total restricted net position At June 30, 2013 is $16,033 restricted due to enabling legislation. Restricted net position at June 30, 2013 for governmental activities is as follows (in thousands): Amount RESTRICTED FOR: General Government Commitments for Board of Supervisorsrelated professional services $ 27 Commitments for Administrative Office related professional services 4 Commitments for Risk Management related professional services 50 Commitments for Information Technology related equipment and training 34 Commitments for Human Resources related professional services 42 Commitments for Auditor-Controller related professional services 14 Commitments for Clerk-Recorder related equipment 1 Commitments for County Counsel related professional services 143 Commitments for building maintenance projects 61 Commitments for architectural services related professional services 4 Commitments for capital projects 32 Claims, contracts and other restrictions 151 Public Protection Commitments for Agricultural Commissioner related professional services 5 Commitments for Planning related professional services 337 Commitments for Waste Management relatedsupplies andprofessional 65 services Commitments for Probation related professional servicesand licenses 31 Commitments for Public Defender related professional services 2 Commitments for District Attorney related equipment 2 Commitments for Flood Control related engineering services 634 Commitments for fire protection equipment 201 Commitments for capital projects 974 Health and Sanitation Commitments for Behavioral Health related equipment 7 Commitments for Public Health related professionalservices 16 Commitments for capital projects 10 Public Assistance Commitments for Social Services related suppliesand professional 59 services Public Ways and Facilities Commitments for Public Works related professional services 7 Road maintenance and construction 6,625 Public facilities fees restricted for public facilities 9,408 Commitments for capital projects 6 84 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Education Commitments for capital projects 29 Recreation and Culture Commitments for capital projects 213 Commitments for parks related supplies and professional services 30 Debt Service 9,639 Total Restricted Net Position $ 28,863 Unrestricted Net Position – This category represents net position of the County, not restricted for any project or other purpose. Unrestricted net position at June 30, 2013 are as follows (in thousands): Amount Governmental activities $ 304,257 Business-type activities 58,433 Total $ 362,690 In the fund financial statements, governmental funds report fund balance in classifications based primarily on the extent to which the County is bound to honor the constraints imposed on the use of resources reported in the funds. In circumstances when an expenditure is made for a purpose for which amounts are available from multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned. As prescribed by GASB statement 54, the following classifications are used to identify the components of fund balance:  Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long- term notes receivable.  Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of the resource provider.  Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by formal action of the County’s highest level of decision-making authority. As prescribed by the State of California County Budget Act, fund balance commitments are established, modified or rescinded by resolution adopted by a four-fifths vote of the Board of Supervisors at regular or special meetings. The general reserve, however, is only established, cancelled, increased or decreased at the time of adopting the budget except in cases of legally declared emergency.  Assigned Fund Balance – comprises amounts intended to be used by the County for specific purposes that are neither restricted nor committed. As a practice, for financial statement presentation the County Auditor-Controller assigns non-restricted and non-committed fund balance of the General Fund to its intended purpose. Assigned fund balance can be identified by departments and the County Administrative Officer for specific uses during the County’s budgeting process. Budgets requested by departments require approval by the County Board of Supervisors.  Unassigned Fund Balance – is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. 85 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Fund balances for all the major and nonmajor governmental funds as of June 30, 2013 are distributed as follows: Capital Nonmajor General Projects Gov’tl Fund Fund Funds Total Nonspendable: Inventories $ 96 $ - $ - $ 96 Prepaid Items 329 - 11 340 Loans receivable - - 28 28 Advances to other funds 2,667 - 557 3,224 Subtotal 3,092 - 596 3,688 Restricted for: Tax loss reserves 4,005 - - 4,005 Public ways and facilities - - 16,033 16,033 Public protection - - 11 11 Debt service - - 2,267 2,267 Subtotal 4,005 - 18,311 22,316 Committed to: General government 7,227 - - 7,227 Public protection 1,676 - 15,300 16,976 Public assistance 80 - 2,196 2,276 Public ways and facilities 98 - 7,656 7,754 Health and sanitation 50 - 309 359 Education 5 - 4,036 4,041 Recreation - - 3,949 3,949 General reserve 8,000 - - 8,000 Fire equipment 967 - - 967 Pension Obligation Bonds 4,689 - - 4,689 Internal financing 4,168 - - 4,168 Solar plant mitigation 8,078 - - 8,078 Automation projects 10,755 - - 10,755 Building replacement 12,441 - - 12,441 Organizational development 1,673 - - 1,673 Tax reduction reserve 35,549 - - 35,549 Lease financing 909 - - 909 Capital Projects - 25,084 - 25,084 Debt service - - 7,373 7,373 Subtotal 96,365 25,084 40,819 162,268 Assigned to: Tax reduction reserve 17,394 - - 17,394 General government 5,586 - - 5,586 Public protection 16,384 - - 16,384 Public assistance 13,134 - - 13,134 Public ways and facilities 1,188 - - 1,188 Health and sanitation 20,342 - - 20,342 Subsequent Fiscal Year 30,134 - - 30,134 Budget Imprest cash 75 - - 75 Subtotal 104,237 - - 104,237 Total $ 207,699 $ 25,084 $ 59,726 $ 292,509 86 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 12. LAPSING ENCUMBRANCES The County allows some encumbrances to lapse at year-end and then automatically reappropriates them as part of the subsequent year’s budget. The following is a summary of lapsing encumbrances at June 30, 2013 to be reappropriated during the next fiscal year (in thousands): Total Encumbrances Function General Government $ 2,531 Health & Sanitation 1,279 Public Protection 1,325 Public Assistance 380 Public Ways and Facilities 9,006 Education 4 Recreation 862 Total Lapsing Encumbrances $ 15,387 13. OTHER COMMITMENTS In 1965, San Luis Obispo County Flood Control and Water Conservation District (District), a blended component unit of the County, began payments in accordance with a contract with the State Department of Water Resources (DWR) for a water supply from the State Water Project. Estimated future principal payments for the State Water Contract will total $28,897,726 over the next 22 years. The estimated amounts vary by year. For example, the principal amount due in 2013 is $832,082 while $1,980,213 is due in 2035. In 1992 the District entered Water Supply Contracts, of like terms, with various sub-contractors which presently provide resources to cover approximately 85% of the capital costs. The contract with the DWR expires in 2035, and during 2013 the State began formal contract extension negotiations with the District and all of the other State Water Contractors. The negotiations are still in progress. 14. CONTINGENT LIABILITIES The County is subject to various lawsuits, inverse condemnation cases, personnel actions, disputes over tax assessments, and other actions incidental to the ordinary course of County operations. In the opinion of the County Counsel, the total potential claims against the County not covered by insurance resulting from litigation would not materially affect the financial statements of the County at June 30, 2013. 15. DEFINED BENEFIT PENSION PLAN Plan Description The County of San Luis Obispo (the “County”) contributes to the San Luis Obispo County Employees Retirement Plan (the “Plan”), which is an independent single-employer, contributory defined benefit pension plan for employees of the County of San Luis Obispo, employees of the Superior Court in San Luis Obispo County, employees of the San Luis Obispo Local Agency Formation Commission, employees of the San Luis Obispo Air Pollution Control District and employees of the San Luis Obispo County Pension Trust. The Plan exists, operates and is constituted under the authority of Section 53215 of Section 17 of Article XVI of the California Constitution and the Government Code Article 1.5 (Pension Trusts), of Chapter 2 (Officers and Employees), of Part 1 (Powers and Duties Common to Cities, Counties and Other Agencies), of Division 2 (Cities, Counties and Other Agencies), of Title 5 (Local Agencies) of the California Government Code. 87 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Pursuant to the foregoing California Government Code provisions, the County of San Luis Obispo Board of Supervisors established the San Luis Obispo County Pension Trust (the “Trust”) by the adoption of Chapter 2.56 of the San Luis Obispo County Code. Following the adoption of Chapter 2.56 of the County Code, the Board of Supervisors adopted the By-Laws of the Pension Trust. The San Luis Obispo County Employees Retirement Plan is part of those By-Laws. The County of San Luis Obispo Board of Supervisors may amend the Plan’s provisions. Participation in the Plan is mandatory for all regular employees. The Trust and the Plan are both administered by the San Luis Obispo County Pension Trust Board of Trustees (the “Trustees”). Separate stand-alone financial statements were issued for the Plan and are available at the County of San Luis Obispo Auditor-Controller's office. Benefit Provisions Plan participants, upon attaining the normal retirement age of 55 for Safety employees and Probation Officers and 60 for Miscellaneous employees, are entitled to annual retirement benefits as defined in the Plan document. The applicable retirement formula, minimum retirement age, compensation base, post retirement cost of living adjustment, cost of living adjustment carry over, and final compensation maximum may differ depending upon the Plan provisions in effect at the member’s date of hire, the member’s classification, and the member’s bargaining unit. The Plan permits early retirement for all employees at age 50 with 5 or more years of service credit. Participants receive their accumulated plan benefits as a life annuity payable monthly upon retirement. In the event of total and permanent disability, participants, upon satisfaction of membership service requirements and other applicable provisions of the Plan, receive disability benefits as defined in the Plan document. The Plan provides for an Annual Cost of Living Adjustment (COLA) based on the Consumer Price Index. The Plan also provides death benefits. Summary of Significant Accounting Policies Basis of Accounting - The Plan's consolidated financial statements include the accounts of the Plan and its wholly owned subsidiary, Fiduciary Properties Incorporated, and are prepared on the accrual basis of accounting. Contributions from the County and the County's employees are recognized as revenue when due, pursuant to formal commitments, as well as statutory or contractual requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Investment income is recognized as earned by the Plan. Investments in corporate notes, bonds, collateralized mortgage obligations, alternative investments, equities, futures, real estate investment funds, equity real estate holdings, and other short-term cash investments are reported at fair value. Securities traded on a national exchange are valued at the last reported sales price or at year-end closing prices as quoted by an independent securities valuation company. Investments that do not have an established market are reported at estimated fair value. The Plan uses the calendar year for financial reporting purposes. The County's contributions to the Plan are recognized when due. The County’s contributions are due at the end of each pay period. The Plan has elected to present the financial statements in accordance with Statement No. 25 of the Governmental Accounting Standards Board (GASB). There are no investments in loans or investments in leases with parties related to the pension plan. Concentrations – As of December 31, 2012, the Plan held no investments of a single issuer comprising 5% or more of net position. Funding Policy – The Trustees establish and may amend the funding policy. Participants were required to contribute to the Plan for the 2012 calendar year at rates ranging from 4.89% to 23.98% of includable compensation as defined in the Plan document, depending upon the collective bargaining agreement under which the participant is covered. Such contributions, together with the County's appropriations, are 88 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) currently invested in corporate notes, bonds, collateralized mortgage obligations, alternative investments, equities, futures, real estate investment funds, equity real estate holdings, and other short-term cash investments. The participants' accumulated contributions may be withdrawn at any time should the participant leave the employment of the County prior to retirement. The Trustees established the pension plan contribution rate requirement with the advice of their retained actuary. There were no legal or contractual maximum contribution rates in effect during 2012. Periodic employer contributions to the Plan were determined on an actuarial basis using the Entry Age Normal cost method. This method is one of the actuarial methods authorized under GASB 27. In 2003 the County issued a Pension Obligation Bond. The Entry Age Normal cost method permitted the selection of either a 30-year or 40-year amortization period for such bonds. The Trustees chose a closed amortization period of 30-years. As a result of the issuance of the Pension Obligation Bond by the County, the scheduled increases in required contributions previously adopted by the Board of Trustees were rescinded and, based upon the advice of the plan actuary, the rates charged to the County were established at a range of 15.09% to 27.78% of payroll. Specific appropriation rates were adopted for each benefit group at various times during 2012 as negotiations for changes to the Retirement Allowance formula were concluded and implemented. Total contributions and appropriations to the Plan in 2012 amounted to $55,945,080. Of this total, $30,942,038 was regular Employer appropriations. Employee contributions amounted to $25,003,042. The Employee contributions did not include Employee Additional Voluntary Contributions of $107,470 and County Additional for Employee Contributions of $96,653. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation report as of December 31, 2012. Annual Pension Cost and Net Pension Asset The County's annual pension cost and prepaid pension asset, computed in accordance with GASB 27, Accounting for Pensions by State and Local Governmental Employers, for the year ended June 30, 2013, (based on an actuarial valuation report as of December 31, 2012) were as follows (in thousands): Amount Annual Required Contribution (ARC) $ 31,123 Interest on beginning net pension asset (9,658) Adjustment to the ARC 7,571 Annual Pension Cost (APC) 29,036 Employer contributions made 30,941 Increase (decrease) in net pension asset 1,905 Net pension asset / (obligation), beginning of year 133,214 Net pension asset / (obligation), end of year $ 135,119 The annual pension cost and net pension asset were based on an actuarial valuation report as of December 31, 2012. The actuarial values of assets were determined on a market related blend basis, with each years’ gains and losses smoothed over a five year period for all years except 2008. The loss in 2008 was smoothed over a ten year period. The net position held in trust for pension benefits are allocated among various reserves. For the year ended December 31, 2012, these reserves were generally credited with interest at the rate of 7.25%. In addition, any additional employee or employer contributions, as well as interest credited to these additional contributions, earned interest at the rate of 2.80%. Any interest or dividends earned in excess of the amount required to be credited to the various reserves is accumulated in the contingency reserve account. 89 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Three-Year Trend Information Year Ended Annual Pension Percentage of APC Net Pension June 30 Cost (APC) Contribution Contributed Asset 2011* $27,331 $32,148 118% $129,972 2012* $27,195 $30,436 112% $133,214 2013* $29,036 $30,941 107% $135,119 *Based on an actuarial valuation report as of January 1 Funded Status The Plan’s funded status based upon the most recent actuarial valuation performed by Gabriel, Roeder Smith and Company dated January 1, 2013 is as follows: Schedule of Funding Progress (Funding Actuarial Unfunded Excess) Accrued AAL UAAL as a Actuarial Actuarial Liability (UAAL) Annual Percentage Valuation Value of (AAL) Funding Covered of Covered Date Assets Entry Age Excess) Payroll Payroll Funded Ratio Jan 1 (a) (b) (b-a) (a/b) (c) (b-a)/c 2013 $1,122,151 $1,468,001 $345,850 76.4% $164,299 210.5% Disclosure of Information about Actuarial Methods and Assumptions The Schedule of Funding Progress included as Required Supplementary Information immediately following the Notes to the Financial Statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits over time. Actuarial calculations are based on the benefits provided under the terms of the substantive plan in effect at the time of each valuation and on the pattern of cost sharing between the employers and plan members to that point. The projection of benefits for financial reporting does not explicitly incorporate the potential effect of legal or contractual funding limitations on the pattern of cost sharing between the employer and the future plan members to that point in time. Actuarial calculations reflect a long-term perspective. Actuarial methods and assumptions used include techniques to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Latest Actuarial Valuation Methods and Assumptions Contributions were made in accordance with actuarially determined requirements. A variety of significant actuarial assumptions are used to determine the contributions required. These assumptions are summarized below: 90 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Valuation Date: December 31, 2012 (January 1, 2013) Actuarial Cost Method Entry Age Normal Amortization Method 30 years declining, Closed Method Remaining Amortization Period 27 years Asset Valuation Method Market Related Blend, Five-year smoothing for all years except 2008, which was smoothed over 10 years Actuarial Assumptions: Investment Rate of Return 7.25% effective annual interest rate Inflation Rate Assumption 2.75% per year Base Annual Rate of Compensation Increase 3.25% (including inflation) Payroll Growth Rate 3.75% per year Cost-of-Living Adjustments 2.75% for Tier 1/ 2.00% for Tier 2 Amortization of Unfunded Actuarial Liabilities is done as a level percent of payroll over 27 years (28 years was used in the previous valuation) for funding computation. The Schedule of Funding progress included as Required Supplementary Information following the Notes to the Financial Statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits over time. 16. LANDFILL POSTCLOSURE CARE COSTS The Los Osos Landfill is a closed facility under the responsibility of the County. State and federal laws and regulations require the County of San Luis Obispo to perform various maintenance and monitoring activities at the site. By agreement with the land owner, the County assumed responsibility for all closure and postclosure costs when the facility stopped accepting waste. As of this date, the landfill closure is complete and only postclosure costs remain. The remaining estimated liability for landfill postclosure cost as of June 30, 2013 is $4,151,279 (in 2013 dollars). Of this $3,130,610 is for the Maintenance Cost and $1,020,669 is the Corrective Action Cost. The cost estimates were provided by a licensed professional geologist in the Post Closure Maintenance Plan dated May 8, 2012 and the Engineers Estimate of Corrective Action for a Foreseeable Release dated March 23, 2011. Both reports are required to be updated every five years. However, the actual cost of postclosure care may be higher (or lower) due to inflation, changes in technology, or changes in landfill laws and regulations. Therefore, the cost estimate will be reviewed and adjusted as needed for changes in these factors. 17. POST EMPLOYMENT HEALTHCARE BENEFITS Plan Description and Benefits The County administers a single-employer defined postemployment benefit (OPEB) plan. Employees retiring from the County with at least 50 years of age and 5 years of service may continue to purchase healthcare coverage, if they select one of the plans offered under the County’s contract with the state’s California Public Employee Retirement System (CalPERS.) The County assists eligible retirees by paying a portion of their premiums for medical care. In April 2010 the County established an irrevocable trust with the California Employer’s Retiree Benefit Trust (CERBT) to prefund the future cost of retiree health insurance benefits. The CERBT’s administrator, CalPERS, issues a publicly available financial report consisting of financial statements and required supplementary information for the CERBT in aggregate. The report may be obtained by writing to CalPERS, 91 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Lincoln Plaza North, 400 Q Street, Sacramento, CA 95811. CalPERS does not provide a separate, audited GAAP-basis postemployment benefit plan report for the County’s discrete information. Funding Policy The CalPERS contract requires that the County contribute certain minimum amounts for each retiree’s health insurance. If the County selected another provider for health insurance coverage these minimum amounts might not apply. However, the County has been using CalPERS for medical coverage since 1990, and currently has not expressed intent to change providers. The amounts the County actually contributes depend on bargaining unit and for calendar year 2012 ranged from $112 to $139 per month. The subsidy is adjusted annually to reflect changes in the medical component of the Consumer Price Index. Annual OPEB Cost and Net OPEB Asset The County’s annual Other Post Employment Benefits (OPEB) cost is equal to the (a) annual required contribution (ARC) less (b) one year’s interest on the beginning balance of the net OPEB asset plus/minus (c) any adjustment to the ARC. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost of each year and any unfunded actuarial liabilities (or funding excess) amortized over a thirty year open period. The ARC of $1,439 for the fiscal year ended June 30, 2013 includes the normal cost for current active employees of $706 and a component for amortization of the total unfunded actuarial accrued liability (UAAL) of $734. The following table shows the components of the Net OPEB Asset as of June 30, 2013: Annual required contribution (ARC) $1,439 Interest on prior year net OPEB asset (139) Adjustment to ARC 528 Annual OPEB Cost 1,828 Contributions made 1,537 Increase (decrease) in net OPEB obligation 291 Net OPEB obligation (asset) – beginning of year (1,830) Net OPEB obligation (asset) – end of year ($1,539) The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the Net OPEB Obligation (Asset) for the fiscal year ended 2013 and the two preceding years are as follows: Fiscal Annual Percent of Net OPEB Year OPEB OPEB Cost Obligation Ended Cost Contributions Contributed (Asset) 2011 $1,645 $1,747 106% ($1,995) 2012 $1,863 $1,698 91% ($1,830) 2013 $1,868 $1,537 84% ($1,539) Funded Status and Funding Progress The funded status of the OPEB plan as of June 30, 2013 (based on the County’s June 30, 2011 actuarial valuation) is as follows: Actuarially accrued liability $21,185 Actuarial value of plan assets (8,775) Unfunded actuarially accrued liability $12,410 Funded ratio (actuarial value of plan assets/AAL) 41.42% Covered payroll (active plan members) $152,893 UAAL as a percentage of covered payroll 8.12% 92 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the County’s June 30, 2011 actuarial valuation the Entry Age Normal, Level Percent of Pay actuarial cost method was used. The actuarial assumptions included a 7.61% investment rate of return, an inflation rate of 3.25% per year, and assumed future medical inflation of 5% graded down to 4% beginning 2014. The OPEB plan’s unfunded actuarial liability is being amortized by level percent of payroll contributions over 28 years. The Schedule of Funding progress included as Required Supplementary Information following the Notes to the Financial Statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing relative to the actuarial accrued liability for benefits over time. 93 94 ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION ________________________________________________________________ 95 96 REQUIRED SUPPLEMENTARY INFORMATION Required supplementary information includes financial information and disclosures that are required by the GASB but are not considered a part of the basic financial statements. Such information includes:  Schedule of Funding Progress – Defined Benefit Retirement Plan  Schedule of Funding Progress – Other Post Employment Benefits Plan (OPEB)  Budgetary Comparison Schedule – General Fund  Notes to required supplementary information 97 COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION SAN LUIS OBISPO COUNTY PENSION TRUST SCHEDULE OF FUNDING PROGRESS FOR THE YEAR ENDED JUNE 30, 2013 (in thousands) Unfunded Unfunded AAL Actuarial AAL (Funding Excess) Actuarial Actuarial Accrued (Funding Annual as a Percentage Valuation Value of Liability (AAL) Excess) Funded Covered of Covered Jan 1 Assets (a) Entry Age (b) (b-a) Ratio (a/b) Payroll (c) Payroll ((b-a)/c) 2011 $1,000,169 $1,282,058 $281,889 78.0% $161,783 174.2% 2012 $1,057,922 $1,378,549 $320,627 76.7% $161,055 199.1% 2013 $1,122,151 $1,468,001 $345,850 76.4% $164,299 210.5% Separate stand-alone financial statements were issued for the Pension Plan and are available at the County of San Luis Obispo Auditor-Controller’s office located at the County Government Center Room D220, San Luis Obispo, CA 93408. COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION SAN LUIS OBISPO COUNTY OTHER POST EMPLOYMENT BENEFITS (OPEB) PLAN SCHEDULE OF FUNDING PROGRESS FOR THE YEAR ENDED JUNE 30, 2013 (in thousands) Unfunded Unfunded AAL Actuarial AAL (Funding Excess) Actuarial Actuarial Accrued (Funding Annual as a Percentage Valuation Value of Liability (AAL) Excess) Funded Covered of Covered Dec 31 Assets (a) Entry Age (b) (b-a) Ratio (a/b) Payroll (c) Payroll ((b-a)/c) 2007 $0 $28,517 $28,517 0% $154,252 18.5% 2009 $6,324 $19,718 $13,394 32.1% $154,282 8.9% 2011* $8,775 $21,185 $12,410 41.42% $152,893 8.1% *Valuation Date 6/30/2011 Source: Gabriel Roeder Smith & Company “San Luis Obispo County Retiree Health Care Plan Actuarial Valuation Report”. The 2009 actuarial value of assets represent fiscal year 2009/10 CERBT contributions of $6.3 million. 98 COUNTY OF SAN LUIS OBISPO Required Supplementary Information General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 137,721 $ 137,721 $ 161,274 $ 23,553 Licenses, permits, and franchises 8,222 8,573 9,247 674 Fines, forfeits, and penalties 3,779 4,100 5,094 994 Use of money and property 628 628 602 (26) Aid from other governmental agencies 185,349 194,704 185,116 (9,588) Charges for services 30,695 33,252 28,028 (5,224) Other revenue 3,190 7,139 6,351 (788) Total Revenues 369,584 386,117 395,712 9,595 Expenditures: Current: General government 44,904 51,672 39,703 11,969 Public protection 144,495 152,643 141,041 11,602 Public ways and facilities 2,176 4,448 2,958 1,490 Health and sanitation 69,107 72,976 65,197 7,779 Public assistance 97,624 99,330 92,428 6,902 Education 475 475 436 39 Contingencies 15,043 14,222 -- 14,222 Total Expenditures 373,824 395,766 341,763 54,003 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,240) (9,649) 53,949 63,598 Other Financing Sources (Uses): Transfers in 1,375 1,123 1,098 (25) Transfers (out) (24,198) (28,713) (26,181) 2,532 Total Other Financing Sources (Uses) (22,823) (27,590) (25,083) 2,507 Net change in fund balances (27,063) (37,239) 28,866 66,105 Fund balances, beginning 135,182 135,182 135,182 -- Fund balances, ending $ 108,119 $ 97,943 $ 164,048 $ 66,105 Continued 99 COUNTY OF SAN LUIS OBISPO Required Supplementary Information General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Explanation of Differences between Budgetary Outflows and GAAP Expenditures: Actual amounts (budgetary basis) "Total Revenues" from the Budgetary Comparison Schedule $ 395,712 Revenues for funds not meeting the special revenue fund defininition which are presented with the General Fund for financial reporting purposes 1,780 Total Revenues as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 397,492 Uses/outflows of resources Actual amounts (budgetary basis) "Total Expenditures" from the Budgetary Comparison Schedule $ 341,763 Expenditures for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 4,671 Total Expenditures as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 346,434 Other financing sources/(uses) of resources Actual amounts (budgetary basis) "Total Other Financing Sources (Uses)" from the Budgetary Comparison Schedule $ (25,083) Other financing sources (uses) for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 695 Total Other Financing Sources (Uses) as reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds $ (24,388) 100 COUNTY OF SAN LUIS OBISPO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2013 1. BUDGETARY BASIS OF ACCOUNTING A. BUDGETARY ACCOUNTING In accordance with the provisions of Sections 29000 through 29144 inclusive of the California Government Code and other statutory provisions, commonly known as the County Budget Act, the County prepares and legally adopts a final budget on or before August 30th for each fiscal year. The County operation, commencing July 1st, is governed by the proposed budget, adopted by the Board of Supervisors, in June of the prior year unless the final budget is adopted before June 30. After the budget is approved, the appropriations can be added to, subtracted from, or changed only by Board resolution. All such changes must be within the revenues and reserves estimated as available in the final budget or within revised revenue estimates as approved by the Board. During the fiscal year ended June 30, 2013, the Board of Supervisors approved all necessary supplemental appropriations. Generally, the effects of the supplemental appropriations are to increase the budget for cost of living adjustments and new programs and grants financed by other governmental agencies. An operating budget is adopted each fiscal year for Governmental Funds on a basis consistent with generally accepted accounting principles. Additionally, encumbrance accounting is utilized to assure effective budgetary control. Encumbrances outstanding at year end represent the estimated amount of the expenditures ultimately to result if the unperformed contracts in process at year end are completed or purchase commitments satisfied. Such year end encumbrances are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year and included in the subsequent year's budget. Unencumbered appropriations lapse at year end. All Governmental, Enterprise, and Internal Service Funds that are under the control of the Board of Supervisors, have legally adopted annual budgets except for the Public Facilities Corporation debt service fund. Although the Enterprise and Internal Service Funds have adopted budgets, there is no appropriation of expenditures and these budgets only serve as spending plans for the year. The legal level of budgetary control (the level on which expenditures may not legally exceed appropriations) is at the department/budget unit and object level except for capital assets, which are controlled at the sub-object level. Object levels of expenditures are as follows: salaries and benefits, services and supplies, other charges, capital assets, and contingencies. Sub-object levels of expenditures for capital assets are land, structures and improvements, and equipment. BUDGETARY EXPENDITURES IN EXCESS OF APPROPRIATION During the current fiscal year, no governmental funds had excess expenditures over the related appropriations at the legal level of budgetary control. 101 102 ________________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ________________________________________________________________ 103 104 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS ________________________________________________________________ 105 106 NONMAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS: Debt service funds are used to account for the accumulation of resources for and the payment of general long-term debt principal and interest. San Luis Obispo County Public Facilities Corporation (PFC) The PFC is a non-profit public benefit corporation organized to assist public agencies within the County of San Luis Obispo with the acquisition and construction of various public facilities. Pension Obligation Bonds The Pension Obligation Bonds debt service fund is used to account for the accumulation of monies for payment of taxable pension obligation bonds. These bonds were issued to fund the County’s unfunded actuarial accrued liability (UAAL). San Luis Obispo County Public Financing Authority (PFA) The PFA is a joint exercise of powers authority created to assist in the financing, construction, and equipping of public facilities for its members. SPECIAL REVENUE FUNDS: Special revenue funds are used to account for revenues that are restricted by law or administrative actions to expenditures for specified purpose. Nonmajor special revenue funds used by the County are listed below: California Health Care Indigent Program Accounts for revenues received from the State of California used to provide health care for the indigent population of the County. Community Development Program Accounts for pass through grants from Housing and Urban Development (HUD) entitlements to be distributed to the County and other local agencies. County Medical Services Program (CMSP) Accounts for resources used to provide for the County Medical Services program which provides medical care for indigents pursuant to the County’s obligation under Welfare and Institution Code Section 17000 et seq. Emergency Medical Services Accounts for payments to physicians, hospitals, and other providers of emergency medical care from revenues imposed and collected by the courts. Driving Under the Influence Programs Accounts for resources collected from persons convicted of driving under the influence to provide education and rehabilitation programs. Fish & Game Accounts for funds generated by fines levied as a result of Fish and Game violations. Road Impact Fees Accounts for resources collected from developers to add, maintain, and improve roads in specific areas where the fees were allocated. 107 NONMAJOR GOVERNMENTAL FUNDS (Continued) Library Accounts for resources used to provide library services throughout the county. Parks Accounts for resources used to provide parks and recreational services countywide. Public Facilities Fees Accounts for resources collected from the building permit process to build public facilities such as fire and law enforcement stations, library and general government structures. Roads Accounts for resources used to maintain the county road system. Wildlife & Grazing Accounts for resources used to provide for range improvements and the control of predators. SPECIAL REVENUE SPECIAL DISTRICT FUNDS: Flood Control Districts Accounts for resources used to provide control and conservation of flood and storm waters, which are mutually exclusive of Enterprise Flood Control District funds. Lighting Districts Accounts for resources used to provide street lighting in unincorporated areas of the county. County Service Areas Accounts for resources used to provide for water and sewer services which are mutually exclusive of Enterprise Fund County Service Areas. 108 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Governmental Funds June 30, 2013 (in thousands) Total Debt Special Nonmajor Service Revenue Governmental Funds Funds Funds ASSETS Cash and cash equivalents $ 7,860 $ 52,742 $ 60,602 Restricted cash with fiscal agent 2,267 - - 2,267 Due from other governments -- 3,038 3,038 Prepaid items -- 11 11 Loans receivable -- 28 28 Advances to other funds -- 557 557 Other assets 5,412 - - 5,412 Total Assets $ 1 5,539 $ 56,376 $ 7 1,915 LIABILITIES Salaries and benefits payable $ -- $ 260 $ 260 Accounts payable -- 1,424 1,424 Deposits from others -- 628 628 Unearned revenue -- 142 142 Other current liabilities 5,412 - - 5,412 Advances from other funds 487 1,826 2,313 Total Liabilities 5,899 4 ,280 10,179 DEFERRED INFLOWS OF RESOURCES Unavailable revenue -- 2,010 2,010 FUND BALANCES Nonspendable -- 596 596 Restricted 2,267 16,044 18,311 Committed 7,373 33,446 40,819 Total Fund Balances 9,640 50,086 59,726 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 1 5,539 $ 56,376 $ 7 1,915 109 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2013 (in thousands) Total Debt Special Nonmajor Service Revenue Governmental Funds Funds Funds Revenues: Taxes $ -- $ 10,497 $ 10,497 Fines, forfeits and penalties -- 1,170 1,170 Use of money and property 11 244 255 Aid from other governmental agencies -- 24,068 24,068 Charges for current services 2,206 10,368 12,574 Other revenues 534 4,456 4,990 Total revenues 2,751 50,803 53,554 Expenditures: Current: Public protection -- 2,791 2,791 Public ways and facilities -- 31,220 31,220 Health and sanitation -- 4,824 4,824 Public assistance -- 5,631 5,631 Education -- 9,465 9,465 Recreation and cultural services -- 7,538 7,538 Debt service: Principal payments 4,065 -- 4,065 Interest and fiscal charges 5,863 -- 5,863 Debt issuance costs 269 -- 269 Total expenditures 10,197 61,469 71,666 Excess (deficiency) of revenues over (under) expenditures (7,446) (10,666) (18,112) Other financing sources (uses): Refunding certificates of participation issued 14,427 -- 14,427 Premium on refunding debt issued 1,418 -- 1,418 Payment to refunded debt escrow agent (16,400) -- (16,400) Transfers in 22,283 17,591 39,874 Transfers out (14,308) ( 5,820) (20,128) Total other financing sources and (uses) 7,420 11,771 19,191 Net changes in fund balances (26) 1,105 1,079 Fund balances - beginning 9,666 48,981 58,647 Fund balances - ending $ 9,640 $ 50,086 $ 59,726 110 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Debt Service Funds June 30, 2013 (in thousands) Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Public Financing Debt Service Corporation Bonds Authority Funds ASSETS Cash and cash equivalents $ 903 $ 6,956 $ 1 $ 7,860 Restricted cash with fiscal agent 452 -- 1,815 2,267 Other assets 270 4,390 7 52 5,412 Total Assets $ 1 ,625 $ 1 1,346 $ 2,568 $ 15,539 LIABILITIES AND FUND BALANCES Liabilities: Other current liabilities $ 270 $ 4,390 $ 752 $ 5,412 Advances from other funds -- -- 487 487 Total Liabilities 270 4,390 1,239 5,899 Fund Balances: Restricted 452 -- 1,815 2,267 Committed 903 6,956 ( 486) 7,373 Total Fund Balances 1,355 6,956 1,329 9,640 Total Liabilities and Fund Balances $ 1,625 $ 1 1,346 $ 2,568 $ 15,539 111 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Funds For the Year Ended June 30, 2013 (in thousands) Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Public Financing Debt Service Corporation Bonds Authority Funds Revenues: Use of money and property $ -- $ 10 $ 1 $ 11 Charges for current services 1,787 -- 419 2,206 Other revenues -- 534 -- 534 Total revenues 1,787 544 420 2,751 Expenditures: Debt service: Principal payments 260 3,805 -- 4,065 Interest and fiscal charges 909 4,535 419 5,863 Debt issuance costs -- -- 269 269 Total expenditures 1,169 8,340 688 10,197 Excess (deficiency) of revenues over (under) expenditures 618 (7,796) (268) (7,446) Other financing sources (uses): Refunding certificates of participation issued -- -- 14,427 14,427 Premium on refunding debt issued -- -- 1,418 1,418 Payment to refunded debt escrow agent (16,400) -- (16,400) Transfers in 14,304 7,979 -- 22,283 Transfers out (60) -- (14,248) (14,308) Total other financing sources and (uses) (2,156) 7,979 1,597 7,420 Net changes in fund balances (1,538) 183 1,329 (26) Fund balances - beginning 2,893 6,773 -- 9,666 Fund balances - ending $ 1,355 $ 6,956 $ 1,329 $ 9,640 112 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2013 (in thousands) Community Emergency Driving Under the Development CMSP Med Services Influence Pgms ASSETS Cash and cash equivalents $ 490 $ 1,267 $ 3 58 $ 783 Due from other governments -- -- 5 97 -- Prepaid items -- -- - - -- Loans receivable -- -- - - -- Advances to other funds -- -- - - -- Total Assets $ 490 $ 1,267 $ 9 55 $ 783 LIABILITIES Accounts payable $ 86 $ 4 $ - - $ 18 Salaries and benefits payable -- 23 - - 21 Deposits from others 95 -- - - -- Unearned revenue -- -- - - -- Advances from other funds -- -- - - -- Total Liabilities 181 27 - - 39 DEFERRED INFLOWS OF RESOURCES Unavailable revenue -- -- - - -- FUND BALANCES Nonspendable -- -- - - -- Restricted -- -- - - -- Committed 309 1,240 9 55 744 Total Fund Balances 309 1,240 9 55 744 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 490 $ 1,267 $ 9 55 $ 783 continued 113 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Special Revenue Funds (continued) June 30, 2013 (in thousands) Road Impact Public Facilities Fish and Game Fees Library Parks Fees ASSETS Cash and cash equivalents $ 190 $ 6,832 $ 4,670 $ 4,539 $ 9,432 Due from other governments -- -- -- -- -- Prepaid items -- -- 10 1 -- Loans receivable -- -- -- -- -- Advances to other funds -- -- -- -- -- Total Assets $ 190 $ 6,832 $ 4,680 $ 4,540 $ 9,432 LIABILITIES Accounts payable $ 7 $ -- $ 62 $ 135 $ -- Salaries and benefits payable -- -- 121 95 -- Deposits from others -- -- -- 162 24 Unearned revenue -- -- -- -- -- Advances from other funds -- 207 1,197 1 99 -- Total Liabilities 7 207 1,380 5 91 24 DEFERRED INFLOWS OF RESOURCES Unavailable revenue -- -- -- -- -- FUND BALANCES Nonspendable -- -- 10 1 -- Restricted -- 6,625 -- -- 9,408 Committed 183 -- 3,290 3,948 -- Total Fund Balances 183 6,625 3,300 3,949 9,408 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 190 $ 6,832 $ 4,680 $ 4,540 $ 9,432 continued 114 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Special Revenue Funds (continued) June 30, 2013 (in thousands) Total Nonmajor Wildlife Special Special Revenue Roads Grazing Districts Funds ASSETS Cash and cash equivalents $ 7,986 $ 15 $ 16,180 $ 52,742 Due from other governments 2,441 -- - - 3,038 Prepaid items -- -- - - 11 Loans receivable -- -- 2 8 28 Advances to other funds 207 -- 350 557 Total Assets $ 10,634 $ 15 $ 16,558 $ 56,376 LIABILITIES Accounts payable $ 964 $ -- $ 148 $ 1,424 Salaries and benefits payable -- -- - - 260 Deposits from others 346 -- 1 628 Unearned revenue 142 -- - - 142 Advances from other funds -- -- 223 1,826 Total Liabilities 1,452 -- 372 4,280 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 2,010 -- - - 2,010 FUND BALANCES Nonspendable 207 -- 378 596 Restricted -- 11 - - 16,044 Committed 6,965 4 15,808 33,446 Total Fund Balances 7,172 15 16,186 50,086 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 10,634 $ 15 $ 16,558 $ 56,376 115 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds For the Year Ended June 30, 2013 (in thousands) Community Emergency Driving Under the Development CMSP Med Services Influence Pgms Revenues: Taxes $ -- $ -- $ - - $ -- Fines, forfeits and penalties -- -- 1,148 -- Use of money and property 1 3 - - 2 Aid from other governmental agencies 4,666 2,490 - - -- Charges for current services -- 107 - - 1,407 Other revenues 47 1,047 - - -- Total revenues 4,714 3,647 1,148 1,409 Expenditures: Current: Public protection -- -- - - -- Public ways and facilities -- -- - - -- Health and sanitation 4,824 -- - - -- Public assistance -- 4,854 7 77 -- Education -- -- - - 1,334 Recreation and cultural services -- -- - - -- Total expenditures 4,824 4,854 777 1,334 Excess (deficiency) of revenues over (under) expenditures (110) (1,207) 371 75 Other financing sources (uses): Transfers in 354 1,518 - - -- Transfers out -- (30) - - (30) Total other financing sources (uses) 354 1,488 -- (30) Net changes in fund balances 244 281 371 45 Fund Balances - beginning 65 959 5 84 699 Fund Balances - ending $ 309 $ 1,240 $ 9 55 $ 744 continued 116 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds (continued) For the Year Ended June 30, 2013 (in thousands) Public Fish and Road Impact Facilities Game Fees Library Parks Fees Revenues: Taxes $ -- $ -- $ 7,056 $ -- $ -- Fines, forfeits and penalties 19 -- -- 3 -- Use of money and property -- 23 5 119 28 Aid from other governmental agencies -- -- 170 1 60 -- Charges for current services -- 1,696 362 4,474 1,492 Other revenues -- 1 1,957 6 19 500 Total revenues 19 1,720 9,550 5,375 2,020 Expenditures: Current: Public protection 11 -- -- -- -- Public ways and facilities -- -- -- -- -- Health and sanitation -- -- -- -- -- Public assistance -- -- -- -- -- Education -- -- 8,131 - - -- Recreation and cultural services -- -- -- 7,538 -- Total expenditures 11 -- 8,131 7,538 -- Excess (deficiency) of revenues over (under) expenditures 8 1,720 1,419 (2,163) 2,020 Other financing sources (uses): Transfers in -- -- 650 4,054 -- Transfers out -- (3,332) (181) ( 334) (1,618) Total other financing sources (uses) -- (3,332) 469 3,720 (1,618) Net changes in fund balances 8 (1,612) 1,888 1,557 402 Fund Balances - beginning 175 8,237 1,412 2,392 9,006 Fund Balances - ending $ 183 $ 6,625 $ 3,300 $ 3,949 $ 9,408 continued 117 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds (continued) For the Year Ended June 30, 2013 (in thousands) Total Nonmajor Wildlife Special Special Revenue Roads Grazing Districts Funds Revenues: Taxes $ 1,461 $ -- $ 1,980 $ 10,497 Fines, forfeits and penalties -- -- -- 1,170 Use of money and property 17 -- 46 244 Aid from other governmental agencies 16,539 5 38 24,068 Charges for current services 281 -- 549 10,368 Other revenues 218 -- 67 4,456 Total revenues 18,516 5 2,680 50,803 Expenditures: Current: Public protection -- 2 2,778 2,791 Public ways and facilities 31,164 -- 56 31,220 Health and sanitation -- -- -- 4,824 Public assistance -- -- -- 5,631 Education -- -- -- 9,465 Recreation and cultural services -- -- -- 7,538 Total expenditures 31,164 2 2,834 61,469 Excess (deficiency) of revenues over (under) expenditures (12,648) 3 (154) (10,666) Other financing sources (uses): Transfers in 10,989 -- 26 17,591 Transfers out (4) -- ( 291) (5,820) Total other financing sources (uses) 10,985 -- (265) 11,771 Net changes in fund balances (1,663) 3 (419) 1,105 Fund Balances - beginning 8,835 12 1 6,605 48,981 Fund Balances - ending $ 7,172 $ 15 $ 16,186 $ 50,086 118 COUNTY OF SAN LUIS OBISPO Combining Balance Sheet Nonmajor Special Revenue Funds - Special Districts June 30, 2013 (in thousands) Flood Control Lighting County Districts Districts Service Areas Total ASSETS Cash and cash equivalents $ 14,802 $ 485 $ 8 93 $ 16,180 Loans receivable -- 3 2 5 28 Advances to other funds -- -- 3 50 350 Total Assets $ 1 4,802 $ 4 88 $ 1 ,268 $ 1 6,558 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 148 $ -- $ - - $ 148 Deposits from others 1 -- - - 1 Advances from other funds 22 -- 2 01 223 Total Liabilities 171 -- 2 01 372 Fund Balances: Nonspendable -- 3 3 75 378 Committed 14,631 485 6 92 15,808 Total Fund Balances 14,631 488 1 ,067 16,186 Total Liabilities and Fund Balances $ 1 4,802 $ 4 88 $ 1 ,268 $ 1 6,558 119 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds - Special Districts For the Year Ended June 30, 2013 (in thousands) Flood Control Lighting County Districts Districts Service Areas Total Revenues: Taxes $ 1,575 $ 30 $ 3 75 $ 1,980 Use of money and property 43 1 2 46 Aid from other governmental agencies 36 -- 2 38 Charges for current services 543 2 4 549 Other revenue 67 -- -- 67 Total revenues 2,264 33 383 2,680 Expenditures: Current: Public protection 2,762 16 -- 2,778 Public ways and facilities -- -- 56 56 Total expenditures 2,762 16 56 2,834 Excess (deficiency) of revenues over (under) expenditures (498) 17 327 (154) Other financing sources (uses): Transfers in 4 -- 22 26 Transfers out -- -- (291) (291) Total other financing sources (uses) 4 -- (269) (265) Net changes in fund balances (494) 17 58 (419) Fund Balances - beginning 15,125 471 1,009 16,605 Fund Balances - ending $ 14,631 $ 488 $ 1,067 $ 16,186 120 ________________________________________________________________ BUDGETARY COMPARISON SCHEDULES CAPITAL PROJECTS FUND PUBLIC FINANCING CORPORATION PENSION OBLIGATION BOND FUND NON MAJOR GOVERNMENTAL FUNDS ________________________________________________________________ 121 122 COUNTY OF SAN LUIS OBISPO Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeits, and penalties $ -- $ 181 $ 22 $ (159) Revenue from use of money and property -- -- 71 71 Aid from other governmental agencies -- 2,873 50 (2,823) Charges for services -- 2,699 223 (2,476) Other revenue -- -- 1 1 Total Revenues -- 5,753 367 (5,386) Expenditures: Capital Outlay 1,122 19,659 3,692 15,967 Total Expenditures 1,122 19,659 3,692 15,967 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,122) (13,906) (3,325) 10,581 Other Financing Sources (Uses): Transfers in 4,775 9,100 6,200 (2,900) Transfers out (233) (596) (466) 130 Total Other Financing Sources (Uses) 4,542 8,504 5,734 (2,770) Net change in fund balances 3,420 (5,402) 2,409 7,811 Fund balances, beginning 22,675 22,675 22,675 -- Fund balances, ending $ 26,095 $ 17,273 $ 25,084 $ 7,811 123 COUNTY OF SAN LUIS OBISPO Public Facilities Corporation Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Charges for current services $ -- $ -- $ 1,787 $ 1,787 Total Revenues -- -- 1,787 1,787 Expenditures: Debt Service: Principal -- -- 260 (260) Interest and fiscal charges -- -- 909 (909) Total Expenditures -- -- 1,169 (1,169) Excess (Deficiency) of Revenues Over (Under) Expenditures -- -- 618 618 Other Financing Sources (Uses): Payment to refunding debt issued -- -- (16,400) (16,400) Transfers in -- -- 14,304 14,304 Transfers out -- -- (60) (60) Total Other Financing Sources (Uses) -- -- (2,156) (2,156) Net change in fund balances -- -- (1,538) (1,538) Fund balances, beginning 2,893 2,893 2,893 -- Fund balances, ending $ 2,893 $ 2,893 $ 1,355 $ (1,538) 124 COUNTY OF SAN LUIS OBISPO Pension Obligation Bonds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Revenue from use of money and property $ 18 $ 18 $ 1 0 $ (8) Other revenue 8,294 8,294 534 (7,760) Total Revenues 8,312 8,312 544 (7,768) Expenditures: Debt Service: Principal payments 3,805 3,805 3,805 -- Interest and fiscal charges 4,539 4,539 4,535 4 Total Expenditures 8,344 8,344 8,340 4 Excess (Deficiency) of Revenues Over (Under) Expenditures (32) (32) (7,796) (7,764) Other Financing Sources (Uses): Transfers in -- -- 7,979 7,979 Total Other Financing Sources (Uses) -- -- 7,979 7,979 Net change in fund balances (32) (32) 183 215 Fund balances, beginning 6,773 6,773 6,773 -- Fund balances, ending $ 6,741 $ 6,741 $ 6,956 $ 215 125 COUNTY OF SAN LUIS OBISPO Public Financing Authority Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Revenue from use of money and property $ -- $ -- $ 1 $ 1 Charges for current services -- -- 419 419 Total Revenues -- -- 420 420 Expenditures: Debt Service: Interest and fiscal charges -- -- 419 (419) Debt issuance costs -- -- 269 (269) Total Expenditures -- -- 688 (688) Excess (Deficiency) of Revenues Over (Under) Expenditures -- -- (268) (268) Other Financing Sources (Uses): Refunding certificates of participation issued -- -- 14,427 14,427 Premium on refunding debt issued -- -- 1,418 1,418 Transfers out -- -- (14,248) (14,248) Total Other Financing Sources (Uses) -- -- 1,597 1,597 Net change in fund balances -- -- 1,329 1,329 Fund balances, beginning -- -- -- -- Fund balances, ending $ -- $ -- $ 1,329 $ 1,329 126 COUNTY OF SAN LUIS OBISPO Community Development Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ -- $ -- $ 1 $ 1 Aid from other governmental agencies 3,707 10,689 4,666 (6,023) Other revenue -- -- 47 47 Total Revenues 3,707 10,689 4,714 (5,975) Expenditures: Current: Health and sanitation Services and supplies 665 1,116 700 416 Other charges 3,368 9,959 4,124 5,835 Total Expenditures 4,033 11,075 4,824 6,251 Excess (Deficiency) of Revenues Over (Under) Expenditures (326) (386) (110) 276 Other Financing Sources (Uses): Transfers in 326 354 354 -- Total Other Financing Sources (Uses) 326 354 354 -- Net change in fund balances -- (32) 244 276 Fund balances, beginning 65 65 65 -- Fund balances, ending $ 65 $ 33 $ 309 $ 276 127 COUNTY OF SAN LUIS OBISPO County Medical Services Program (CMSP) Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 5 $ 5 $ 3 $ (2) Aid from governmental agencies 2,490 2,490 2,490 -- Charges for current services 117 117 107 (10) Other revenues 670 670 1,047 377 Total Revenues 3,282 3,282 3,647 365 Expenditures: Current: Public assistance Salaries wages benefits 986 958 928 30 Services and supplies 4,110 5,096 3,926 1,170 Total Expenditures 5,096 6,054 4,854 1,200 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,814) (2,772) (1,207) 1,565 Other Financing Sources (Uses): Transfers in 1,814 1,814 1,518 (296) Transfers out -- -- (30) (30) Total Other Financing Sources (Uses) 1,814 1,814 1,488 (326) Net change in fund balances -- (958) 281 1,239 Fund balances, beginning 959 959 959 -- Fund balances, ending $ 959 $ 1 $ 1 ,240 $ 1,239 128 COUNTY OF SAN LUIS OBISPO Emergency Medical Services Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeits, and penalties $ 800 $ 800 $ 1,148 $ 348 Use of money and property 1 1 -- (1) Total Revenues 801 801 1,148 347 Expenditures: Current: Public assistance Services and supplies 801 1,160 777 383 Total Expenditures 801 1,160 777 383 Net change in fund balances -- (359) 371 730 Fund balances, beginning 584 584 584 -- Fund balances, ending $ 584 $ 225 $ 955 $ 730 129 COUNTY OF SAN LUIS OBISPO Driving Under the Influence Programs Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 4 $ 4 $ 2 $ (2) Charges for current services 1,370 1,370 1,407 37 Total Revenues 1,374 1,374 1,409 35 Expenditures: Current: Education Salaries wages benefits 982 937 904 33 Service and supplies 391 436 430 6 Contingencies 79 79 -- 79 Total Expenditures 1,452 1,452 1,334 118 Excess (Deficiency) of Revenues Over (Under) Expenditures (78) (78) 75 (83) Other Financing Sources (Uses): Transfers out -- -- (30) (30) Total Other Financing Sources (Uses) -- -- (30) (30) Net change in fund balances (78) (78) 45 123 Fund balances, beginning 699 699 699 -- Fund balances, ending $ 621 $ 621 $ 744 $ 123 130 COUNTY OF SAN LUIS OBISPO Fish and Game Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeits, and penalties $ 20 $ 20 $ 19 $ (1) Total Revenues 20 20 19 (1) Expenditures: Current: Public protection Services and supplies 20 20 11 9 Total Expenditures 20 20 11 9 Net change in fund balances -- -- 8 8 Fund balances, beginning 175 175 175 -- Fund balances, ending $ 175 $ 175 $ 183 $ 8 131 COUNTY OF SAN LUIS OBISPO Road Impact Fees Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 22 $ 22 $ 2 3 $ 1 Charges for current services 1,732 1,525 1,696 171 Other revenues -- -- 1 1 Total Revenues 1,754 1,547 1,720 173 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,754 1,547 1,720 173 Other Financing Sources (Uses): Transfers out (2,283) (5,117) (3,332) 1,785 Total Other Financing Sources (Uses) (2,283) (5,117) (3,332) 1,785 Net change in fund balances (529) (3,570) (1,612) 1,958 Fund balances, beginning 8,237 8,237 8,237 -- Fund balances, ending $ 7,708 $ 4,667 $ 6,625 $ 1,958 132 COUNTY OF SAN LUIS OBISPO Library Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 6,681 $ 6,681 $ 7 ,056 $ 375 Use of money and property 7 7 5 (2) Aid from other governmental agencies 106 164 170 6 Charges for services 347 347 362 15 Other revenue 16 2,458 1,957 (501) Total Revenues 7,157 9,657 9,550 (107) Expenditures: Current: Education Salaries and benefits 5,796 5,796 5,402 394 Services and supplies 2,376 2,824 2,586 238 Other charges 5 2,386 143 2,243 Contingencies 258 258 -- 258 Total Expenditures 8,435 11,264 8,131 3,133 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,278) (1,607) 1,419 3,026 Other Financing Sources (Uses): Transfers in 516 650 650 -- Transfers out -- -- (181) (181) Total Other Financing Sources (Uses) 516 650 469 (181) Net change in fund balances (762) (957) 1,888 2,845 Fund balances, beginning 1,412 1,412 1,412 -- Fund balances, ending $ 650 $ 455 $ 3 ,300 $ 2,845 133 COUNTY OF SAN LUIS OBISPO Parks Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Licenses, permits and franchises $ 25 $ 76 $ 3 $ (73) Use of money and property 96 96 119 23 Aid from other governmental agencies 5 5 160 155 Charges for services 4,342 4,766 4,474 (292) Other revenue 38 50 619 569 Total Revenues 4,506 4,993 5,375 382 Expenditures: Current: Recreational and cultural services Salaries wages benefits 4,158 4,113 3,872 241 Services and supplies 3,841 4,151 3,626 525 Other charges 34 967 40 927 Capital outlay -- 96 -- 96 Contingencies 505 505 -- 505 Total Expenditures 8,538 9,832 7,538 2,294 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,032) (4,839) (2,163) 2,676 Other Financing Sources (Uses): Transfers in 4,020 4,458 4,054 (404) Transfers out (21) (21) (334) (313) Total Other Financing Sources (Uses) 3,999 4,437 3,720 (717) Net change in fund balances (33) (402) 1,557 1,959 Fund balances, beginning 2,392 2,392 2,392 -- Fund balances, ending $ 2,359 $ 1,990 $ 3 ,949 $ 1,959 134 COUNTY OF SAN LUIS OBISPO Public Facilities Fees Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ -- $ -- $ 28 $ 28 Charges for current services 676 676 1,492 816 Other revenue -- -- 500 500 Total Revenues 676 676 2,020 1,344 Other Financing Sources (Uses): Transfers out (500) (4,650) (1,618) 3,032 Total Other Financing Sources (Uses) (500) (4,650) (1,618) 3,032 Net change in fund balances 176 (3,974) 402 4,376 Fund balances, beginning 9,006 9,006 9,006 -- Fund balances, ending $ 9,182 $ 5,032 $ 9,408 $ 4 ,376 135 COUNTY OF SAN LUIS OBISPO Roads Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,440 $ 1,440 $ 1,461 $ 21 Use of money and property 40 40 17 (23) Aid from other governmental agencies 16,461 32,416 16,539 (15,877) Charges for services 128 382 281 (101) Other revenue -- 241 218 (23) Total Revenues 18,069 34,519 18,516 (16,003) Expenditures: Current: Public ways and facilities Services and supplies 17,751 17,778 30,824 (13,046) Other charges 613 821 340 481 Capital outlay 9,806 35,861 -- 35,861 Total Expenditures 28,170 54,460 31,164 23,296 Excess (Deficiency) of Revenues Over (Under) Expenditures (10,101) (19,941) (12,648) 7,293 Other Financing Sources (Uses): Transfers in 9,259 16,390 10,989 (5,401) Transfers out (4) (4) (4) -- Total Other Financing Sources (Uses) 9,255 16,386 10,985 (5,401) Net change in fund balances (846) (3,555) (1,663) 1,892 Fund balances, beginning 8,835 8,835 8,835 -- Fund balances, ending $ 7,989 $ 5,280 $ 7,172 $ 1,892 136 COUNTY OF SAN LUIS OBISPO Wildlife Grazing Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Aid from governmental agencies 4 4 5 1 Total Revenues 4 4 5 1 Expenditures: Current: Public protection Services and supplies 4 4 2 2 Total Expenditures 4 4 2 2 Net change in fund balances -- -- 3 3 Fund balances, beginning 12 12 12 -- Fund balances, ending $ 12 $ 12 $ 15 $ 3 137 COUNTY OF SAN LUIS OBISPO Flood Control Districts Special Revenue Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,505 $ 1,505 $ 1 ,575 $ 70 Use of money and property 36 36 43 7 Aid from other governmental agencies 613 11,364 36 (11,328) Charges for services 554 554 543 (11) Other revenue 68 68 67 (1) Total Revenues 2,776 13,527 2,264 (11,263) Expenditures: Current: Public protection Services and supplies 3,288 4,168 2,743 1,425 Other charges -- 2,550 19 2,531 Capital outlay -- 630 -- 630 Total Expenditures 3,288 7,348 2,762 4,586 Excess (Deficiency) of Revenues Over (Under) Expenditures (512) 6,179 (498) (6,677) Other Financing Sources (Uses): Transfers in 773 773 4 (769) Transfers out (569) (6,514) -- 6,514 Total Other Financing Sources (Uses) 204 (5,741) 4 5,745 Net change in fund balances (308) 438 (494) (932) Fund balances, beginning 15,125 15,125 15,125 -- Fund balances, ending $ 14,817 $ 15,563 $ 14,631 $ ( 932) 138 COUNTY OF SAN LUIS OBISPO Lighting Control Districts Special Revenue Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 33 $ 33 $ 30 $ (3) Use of money and property 2 2 1 (1) Charges for services -- -- 2 2 Total Revenues 35 35 33 (2) Expenditures: Current: Public protection Services and supplies 38 38 16 22 Total Expenditures 38 38 16 22 Net change in fund balances (3) (3) 17 20 Fund balances, beginning 471 471 471 -- Fund balances, ending $ 468 $ 468 $ 488 $ 20 139 COUNTY OF SAN LUIS OBISPO County Service Area Districts Special Revenue Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2013 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 369 $ 369 $ 375 $ 6 Use of money and property 6 6 2 (4) Aid from other governmental agencies 2 2 2 -- Charges for services 5 5 4 (1) Total Revenues 382 382 383 1 Expenditures: Current: Public ways and facilities Services and supplies 125 125 56 69 Capital outlay 32 32 -- 32 Total Expenditures 157 157 56 101 Excess (Deficiency) of Revenues Over (Under) Expenditures 225 225 327 102 Other Financing Sources (Uses): Transfers in 1,040 1,040 22 (1,018) Transfers out (309) (309) (291) 18 Total Other Financing Sources (Uses) 731 731 (269) (1,000) Net change in fund balances 956 956 58 (898) Fund balances, beginning 1,009 1,009 1,009 -- Fund balances, ending $ 1,965 $ 1,965 $ 1,067 $ (898) 140 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR ENTERPRISE FUNDS ________________________________________________________________ 141 142 NONMAJOR ENTERPRISE FUNDS ENTERPRISE FUNDS: Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is to have the costs of providing goods or services to the general public on a continuing basis be financed primarily through user charges; or where the County has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. General Flood Control Zone Accounts for resources used to provide control and conservation of flood and storm waters, which are mutually exclusive of Special Revenue Funds. Golf Accounts for the operations and maintenance of County-owned golf courses located in Atascadero, Morro Bay, and San Luis Obispo. Lopez Park Accounts for the accumulation of resources for the repayment of State loans related to the Lopez Lake recreational area. County Service Areas Accounts for resources used to provide for a variety of services such as street lighting, drainage, sewer and road maintenance, which are mutually exclusive of the Special Revenue Funds County Service Areas. 143 COUNTY OF SAN LUIS OBISPO Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2013 (in thousands) General Flood County Control Zone Golf Lopez Park Service Areas Total ASSETS Current Assets: Cash and cash equivalents $ 1,242 $ 874 $ 23 $ 3,375 $ 5,514 Accounts receivable, net 15 16 -- 188 219 Loans receivable -- -- -- 3 3 33 Deposits with others -- -- -- 1 3 13 Total Current Assets 1,257 890 23 3,609 5,779 Noncurrent assets: Advances to other funds -- 487 199 - - 686 Capital Assets Nondepreciable: Land -- 1,333 - - 326 1,659 Construction in progress -- 70 -- 827 897 Depreciable: Infrastructure, net -- -- -- 416 416 Structures & improvements, net -- 9,583 - - 9,612 19,195 Equipment, net -- 130 -- 272 402 Other property, net -- -- -- 500 500 Total Noncurrent Assets -- 11,603 199 11,953 23,755 Total Assets 1,257 12,493 222 15,562 29,534 LIABILITIES Current Liabilities: Accounts payable 86 54 -- 1 1 151 Salaries and benefits payable -- 27 -- - - 27 Deposits from others -- -- -- 141 141 Accrued interest -- 43 -- 2 9 72 Unearned revenue -- -- -- 3 6 36 Accrued vacation and sick leave - current -- 67 -- - - 67 Notes and bonds payable - current -- 278 16 1 86 480 Total Current Liabilities 86 469 16 4 03 974 Noncurrent Liabilities: Advances from other funds -- -- -- 552 552 Accrued vacation and sick leave - noncurrent -- 88 -- - - 88 Notes and bonds payable - noncurrent -- 5,537 183 3,058 8,778 Total Noncurrent Liabilities -- 5,625 183 3,610 9,418 Total Liabilities 86 6,094 199 4,013 10,392 NET POSITION Net investment in capital assets -- 5,301 - - 8,709 14,010 Unrestricted 1,171 1,098 23 2,840 5,132 Total Net Position $ 1,171 $ 6,399 $ 2 3 $ 11,549 $ 19,142 144 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenses, and Changes in Net Position Nonmajor Enterprise Funds For the Year Ended June 30, 2013 (in thousands) General Flood County Control Zone Golf Lopez Park Service Areas Total Operating Revenues: Charges for current services $ 730 $ 2,639 $ - - $ 3,352 $ 6,721 Other revenues 4 3 -- 1 8 Total operating revenues 734 2,642 -- 3,353 6,729 Operating expenses: Salaries and benefits -- 1,163 -- -- 1,163 Services and supplies 738 753 -- 3,189 4,680 Depreciation -- 367 -- 422 789 Countywide cost allocation 8 158 -- 4 2 208 Total operating expenses 746 2,441 -- 3,653 6,840 Operating income (loss) (12) 201 -- ( 300) (111) Nonoperating revenues (expenses): Property taxes -- -- -- 394 394 Interest income 4 2 -- 9 15 Interest expense -- (237) (3) ( 122) (362) Debt issuance costs -- (99) -- -- (99) Aid from governmental agencies -- -- -- 3 3 Other nonoperating revenue (expense) -- (9) -- -- (9) Total nonoperating revenues (expenses) 4 (343) (3) 284 (58) Income (loss) before contributions and transfers (8) (142) (3) (16) (169) Capital contributions -- -- -- 299 299 Transfers in -- 646 5 290 941 Transfers out -- (677) -- (23) (700) Change in net position (8) (173) 2 550 371 Net position - beginning 1,179 6,572 21 10,999 18,771 Net position - ending $ 1,171 $ 6,399 $ 23 $ 11,549 $ 19,142 145 COUNTY OF SAN LUIS OBISPO Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2013 (in thousands) General Flood Control Zone Golf Lopez Park Cash Flows from Operating Activities: Receipts from customers $ 734 $ 2,640 $ -- Payments to employees for service -- ( 1,144) -- Payments for goods and services (757) ( 889) -- Net Cash Provided (Used) by Operating Activities (23) 607 -- Cash Flows from Noncapital Financing Activities: Property tax proceeds -- -- -- Grants and subsidies from other gov't agencies -- -- -- Advances from other funds -- -- -- Advances to other funds -- 63 -- Transfers from other funds -- 646 5 Transfers to other funds -- ( 677) -- Net Cash Provided (Used) by Noncapital and Related Financing Activities -- 32 5 Cash Flows from Capital and Related Financing Activities: Purchases and construction of capital assets -- 132 -- Proceeds from issuance of long-term debt -- 5,814 -- Proceeds from sale of capital assets -- ( 133) -- Proceeds from capital contributions -- -- -- Debt issuance costs -- ( 99) -- Principal paid on capital debt -- ( 6,050) -- Interest paid on capital debt -- ( 268) (4) Net Cash Provided (Used) by Capital and Related Financing Activities -- ( 604) (4) Cash Flows from Investing Activities: Interest received 4 2 -- Net Cash Provided (Used) by Investing Activities 4 2 -- Net Increase (Decrease) in Cash and Cash Equivalents (19) 37 1 Cash and Cash Equivalents - Beginning of Year 1,261 837 22 Cash and Cash Equivalents - End of Year $ 1,242 $ 874 $ 23 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (12) $ 201 $ -- Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation expense -- 367 -- Change in Assets and Liabilities: Receivables, net (15) (2) -- Accounts payable 4 22 -- Unearned revenue -- -- -- Accrued vacation and sick leave -- 19 -- Total Adjustments (11) 406 -- Net Cash Provided (Used) by Operating Activities: $ (23) $ 607 $ -- 146 COUNTY OF SAN LUIS OBISPO Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2013 (in thousands) County Service Areas Total Cash Flows from Operating Activities: Receipts from customers $ 3 ,346 $ 6,720 Payments to employees - - (1,144) Payments for goods and services ( 3,256) (4,902) Net Cash Provided (Used) by Operating Activities 9 0 674 Cash Flows from Noncapital Financing Activities: Property tax proceeds 3 94 394 Grants and subsidies from other gov't agencies 3 3 Advances from other funds ( 50) (50) Advances to other funds - - 63 Transfers from other funds 2 90 941 Transfers to other funds ( 23) (700) Net Cash Provided (Used) by Noncapital and Related Financing Activities 6 14 651 Cash Flows from Capital and Related Financing Activities: Purchases and construction of capital assets ( 652) (520) Proceeds from issuance of long-term debt - - 5,814 Proceeds from sale of capital assets - - (133) Proceeds from capital contributions 2 98 298 Debt issuance costs - - (99) Principal paid on capital debt ( 179) (6,229) Interest paid on capital debt ( 125) (397) Net Cash Provided (Used) by Capital and Related Financing Activities ( 658) (1,266) Cash Flows from Investing Activities: Interest received 9 15 Net Cash Provided (Used) by Investing Activities 9 15 Net Increase (Decrease) in Cash and Cash Equivalents 5 5 74 Cash and Cash Equivalents - Beginning of Year 3 ,320 5,440 Cash and Cash Equivalents - End of Year $ 3 ,375 $ 5,514 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ ( 300) $ (111) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation expense 422 789 Change in Assets and Liabilities: Receivables, net (13) (30) Accounts payable (18) 8 Unearned revenue (1) (1) Accrued vacation and sick leave -- 19 Total Adjustments 390 785 Net Cash Provided (Used) by Operating Activities: $ 90 $ 674 147 148 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS ________________________________________________________________ 149 150 INTERNAL SERVICE FUNDS INTERNAL SERVICE FUNDS: Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments on a cost-reimbursement basis. Internal Service Funds used at the County are listed below: Reprographics Accounts for resources used to provide centralized reprographic services to various County departments and other governmental agencies. Garage Accounts for resources used to provide a vehicle fleet of cars, trucks, and police vehicles for use by various County departments at the lowest possible maintenance and operating costs. Public Works Accounts for resources used to provide comprehensive engineering services in the form of manpower, equipment and contractual services and supplies to all departments, agencies, and private citizens as requested or required by state law or local ordinance. Insurance Funds Account for the operations of the County’s Workers’ Compensation, Protected Self-Insurance, Unemployment, Dental Insurance, and Other Post-Employment Benefits (OPEB) programs. 151 COUNTY OF SAN LUIS OBISPO Combining Statement of Net Position Internal Service Funds June 30, 2013 (in thousands) Combined Public Insurance Reprographics Garage Works (5 funds) Total ASSETS Current Assets: Cash and cash equivalents $ - - $ 3,737 $ 14,750 $ 2 4,137 $ 4 2,624 Accounts receivable - - -- 1 2 - - 12 Inventory - - 22 5 46 - - 568 Total Current Assets - - 3,759 15,308 24,137 4 3,204 Noncurrent assets: Capital Assets: Structures & improvements, net - - 38 1 07 - - 145 Equipment, net - - 4,135 6 ,091 - - 10,226 Total Noncurrent Assets - - 4,173 6 ,198 - - 10,371 Total Assets - - 7,932 21,506 24,137 5 3,575 LIABILITIES Current Liabilities: Accounts payable - - 252 2 95 4 08 955 Salaries and benefits payable - - 27 4 34 - - 461 Self insurance liability - - -- - - 3,494 3,494 Deposits from others - - -- 6 25 - - 625 Accrued vacation and sick leave - current - - 69 1,466 - - 1,535 Total Current Liabilities - - 348 2 ,820 3 ,902 7,070 Noncurrent Liabilities: Self insurance liability - - -- - - 15,338 1 5,338 Accrued vacation and sick leave - - 38 8 05 - - 843 Total Noncurrent Liabilities - - 38 8 05 15,338 1 6,181 Total Liabilities - - 386 3 ,625 19,240 2 3,251 NET POSITION Net investment in capital assets - - 4,173 6 ,198 - - 10,371 Unrestricted - - 3,373 1 1,683 4 ,897 19,953 Total Net Position $ - - $ 7,546 $ 1 7,881 $ 4 ,897 $ 30,324 152 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds For the Year Ended June 30, 2013 (in thousands) Combined Public Insurance Reprographics Garage Works (5 funds) Total Operating Revenues: Charges for current services $ 204 $ 5,855 $ 30,029 $ 7 ,397 $ 4 3,485 Other revenues 15 8 230 -- 2 53 Total Operating Revenues 219 5,863 30,259 7,397 43,738 Operating Expenses: Salaries and benefits 72 1,185 19,706 -- 20,963 Services and supplies 217 2,828 8,624 3,799 15,468 Insurance benefit payments -- -- -- 5,455 5,455 Depreciation 2 1,253 706 -- 1,961 Countywide cost allocation 11 68 54 128 2 61 Total Operating Expenses 302 5,334 29,090 9,382 44,108 Operating Income (Loss) (83) 529 1,169 (1,985) (370) Nonoperating Revenues (Expenses): Interest income -- 9 36 69 1 14 Interest expense -- -- (1) -- (1) Aid from governmental agencies -- -- -- 19 19 Other revenue (expense) (9) 18 (12) -- (3) Total Nonoperating Revenues (Expenses) (9) 27 23 88 1 29 Income (Loss) Before Capital Contributions and Transfers (92) 556 1,192 (1,897) (241) Capital contributions -- 17 57 -- 74 Transfers in -- -- 50 -- 50 Transfers out (3) (77) (817) (393) ( 1,290) Change in Net Position (95) 496 482 (2,290) ( 1,407) Net position - beginning 95 7,050 17,399 7,187 31,731 Net position - ending $ -- $ 7,546 $ 17,881 $ 4 ,897 $ 3 0,324 153 COUNTY OF SAN LUIS OBISPO Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2013 (in thousands) Combined Public Insurance Reprographics Garage Works (5 funds) Total Cash Flows from Operating Activities: Receipts from interfund billings $ 2 19 $ 5,863 $ 30,271 $ 7 ,397 $ 43,750 Payments for goods and services ( 232) (2,818) (8,545) ( 3,113) (14,708) Payments to employees for service ( 101) (1,179) (19,674) - - (20,954) Payments for insurance benefits - - -- - - (4,287) (4,287) Payments for premiums - - -- - - (2,475) (2,475) Net Cash Provided (Used) by Operating Activities ( 114) 1,866 2,052 ( 2,478) 1,326 Cash Flows from Noncapital Financing Activities: Grants and subsidies from other gov't agencies - - -- - - 19 19 Transfers from other funds - - -- 50 - - 50 Transfers to other funds ( 3) (77) (817) ( 393) (1,290) Net Cash Provided (Used) by Noncapital and Related Financing Activities ( 3) (77) (767) ( 374) (1,221) Cash Flows from Capital and Related Financing Activities: Purchases and construction of capital assets - - (1,652) ( 865) - - (2,517) Proceeds from sale of capital assets 2 202 87 - - 291 Capital contributions - - -- (8) - - (8) Interest paid on capital debt - - -- ( 1) - - (1) Net Cash Provided (Used) by Capital and Related Financing Activities 2 (1,450) ( 787) - - (2,235) Cash Flows from Investing Activities: Interest received - - 9 38 6 9 116 Net Cash Provided (Used) by Investing Activities - - 9 38 6 9 116 Net Increase (Decrease) in Cash and Cash Equivalents ( 115) 348 536 (2,783) ( 2,014) Cash and Cash Equivalents - Beginning of Year 1 15 3,389 14,214 2 6,920 4 4,638 Cash and Cash Equivalents - End of Year $ - - $ 3,737 $ 14,750 $ 2 4,137 $ 42,624 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (83) $ 529 $ 1,169 $ ( 1,985) $ (370) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Depreciation expense 2 1,253 706 -- 1 ,961 Change in Assets and Liabilities: Receivables, net -- -- 4 -- 4 Inventory 2 (8) (83) -- (89) Accounts payable (8) 85 169 (70) 176 Deposits from others -- -- 55 -- 55 Salaries and benefits payable (3) 4 45 -- 46 Accrued vacation and sick leave (24) 3 (13) -- (34) Self-insurance liability -- -- - - (423) (423) Total Adjustments (31) 1,337 883 (493) 1 ,696 Net Cash Provided (Used) by Operating Activities $ (114) $ 1,866 $ 2 ,052 $ (2,478) $ 1,326 Noncash Investing, Capital, and Financing Activities: Contributions of capital assets $ -- $ 17 $ 49 $ -- $ 66 154 COUNTY OF SAN LUIS OBISPO Combining Statement of Net Position Internal Service Funds - Insurance June 30, 2013 (in thousands) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total ASSETS Current Assets: Cash and cash equivalents $ 1 5,995 $ 7,120 $ 584 $ 438 $ - - $ 24,137 Total Current Assets 1 5,995 7,120 584 438 - - 24,137 LIABILITIES Current Liabilities: Accounts payable 3 55 11 -- 42 - - 408 Self insurance payable 2 ,442 1,052 -- -- -- 3,494 Total Current Liabilities 2 ,797 1,063 -- 42 - - 3,902 Noncurrent Liabilities: Self insurance liability 1 2,998 2,340 -- -- -- 15,338 Total Noncurrent Liabilities 1 2,998 2,340 -- -- -- 15,338 Total Liabilities 1 5,795 3,403 -- 42 - - 19,240 NET POSITION Unrestricted 2 00 3,717 584 396 - - 4,897 Total Net Position $ 2 00 $ 3,717 $ 584 $ 396 $ - - $ 4,897 155 COUNTY OF SAN LUIS OBISPO Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds - Insurance For the Year Ended June 30, 2013 (in thousands) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Operating Revenues: Charges for current services $ 2,410 $ 1,730 $ 163 $ 1,632 $ 1,462 $ 7,397 Total Operating Revenues 2 ,410 1,730 1 63 1,632 1 ,462 7,397 Operating Expenses: Services and supplies 2 ,629 995 16 149 10 3,799 Insurance benefit payments 1 ,633 620 2 64 1,402 1,536 5,455 Countywide cost allocation -- 128 - - -- -- 128 Total Operating Expenses 4 ,262 1,743 2 80 1,551 1,546 9,382 Operating Income (Loss) (1,852) (13) (117) 81 (84) (1,985) Nonoperating Revenues (Expenses): Interest income 46 20 2 1 -- 69 Aid from governmental agencies -- -- - - -- 19 19 Total Nonoperating Revenues (Expenses) 46 20 2 1 19 88 Income (Loss) Before Transfers (1,806) 7 (115) 82 (65) (1,897) Transfers out (10) (383) - - -- -- (393) Change in net position (1,816) (376) (115) 82 (65) (2,290) Net position - beginning 2 ,016 4,093 6 99 314 65 7,187 Net position - ending $ 200 $ 3,717 $ 584 $ 396 $ -- $ 4,897 156 COUNTY OF SAN LUIS OBISPO Combining Statement of Cash Flows Internal Service Funds - Insurance For the Year Ended June 30, 2013 (in thousands) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Cash Flows from Operating Activities: Receipts from interfund billings $ 2 ,410 $ 1,730 $ 1 63 $ 1,632 $ 1,462 $ 7 ,397 Payments for goods and services ( 1,815) (1,123) ( 16) (149) ( 10) (3,113) Payments for insurance benefits ( 1,921) ( 216) ( 264) (1,391) ( 495) (4,287) Payments for premiums ( 814) (620) - - -- (1,041) ( 2,475) Net Cash Provided (Used) by Operating Activities ( 2,140) ( 229) ( 117) 92 (84) (2,478) Cash Flows from Noncapital Financing Activities: Transfers to other funds ( 10) (383) - - -- -- (393) Grants and subsidies from other gov't agencies - - - - -- -- 19 1 9 Net Cash Provided (Used) by Noncapital and Related Financing Activities ( 10) (383) - - -- 19 (374) Cash Flows from Investing Activities: Interest received 4 6 20 2 1 -- 69 Net Cash Provided (Used) by Investing Activities 4 6 20 2 1 -- 69 Net Increase (Decrease) in Cash and Cash Equivalents ( 2,104) ( 592) ( 115) 93 (65) (2,783) Cash and Cash Equivalents - Beginning of Year 1 8,099 7 ,712 6 99 345 65 26,920 Cash and Cash Equivalents - End of Year $ 1 5,995 $ 7 ,120 $ 5 84 $ 438 $ - - $ 24,137 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities: Operating income (loss) ( 1,852) ( 13) (117) 81 (84) (1,985) Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Change in Assets and Liabilities: Accounts payable (31) (50) -- 11 -- (70) Self-insurance liability (257) (166) -- - - -- (423) Total Adjustments (288) (216) -- 11 -- (493) Net Cash Provided (Used) by Operating Activities $ (2,140) $ (229) $ (117) $ 92 $ (84) $ (2,478) 157 158 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS FIDUCIARY FUNDS ________________________________________________________________ 159 160 FIDUCIARY FUNDS AGENCY FUNDS: These funds account for assets held by the County as an agent for various local governments. The County has the following types of Agency Funds: 1915 Act Accounts for temporary holding of funds for tax assessment areas created under the 1915 Improvement Act. Clearing Funds Serve as a temporary holding fund for subsequent disposition to an outside agency or taxing authority. Other Funds Account for temporary holding of funds that are not specifically classified in other agency categories. INVESTMENT TRUST FUNDS These funds are used by the County to account for the assets of legally separate entities who deposit cash with the County Treasurer. These include school and community college districts, other special districts governed by local boards, regional boards and authorities, courts and pass through funds for tax collections for cities. These funds represent the assets, primarily cash and investments, and the related liability of the County to disburse these monies on demand. The County combines Investment Trust Funds into four reporting types because of their similar nature: School Districts (40 funds), Special Districts (32 funds), Courts (6 funds), and Other Local Boards (19 funds). 161 COUNTY OF SAN LUIS OBISPO Combining Statement of Fiduciary Net Position Agency Funds June 30, 2013 (in thousands) 1915 Act Other Clearing Funds Service Funds Agency Funds (90 Funds) (17 Funds) (30 Funds) Total ASSETS Cash and cash equivalents $ 11,879 $ 2,060 $ 26,483 $ 40,422 Total Assets 11,879 2,060 2 6,483 40,422 LIABILITIES Assets held as agency for others 11,879 2,060 2 6,483 40,422 Total Liabilities $ 1 1,879 $ 2 ,060 $ 26,483 $ 40,422 162 COUNTY OF SAN LUIS OBISPO Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2013 (in thousands) July 1, 2012 Additions Deductions June 30, 2013 Clearing and Revolving Funds (90 funds) Assets: Cash and cash equivalents 17,094 $ 942,332 $ 947,547 $ 11,879 Total Assets 17,094 942,332 947,547 11,879 Liabilities: Assets held as agency for others 17,094 942,332 947,547 11,879 Total Liabilities $ 17,094 $ 942,332 $ 9 47,547 $ 1 1,879 1915 Act Service Funds (17 funds) Assets: Cash and cash equivalents $ 2,164 $ 519 $ 6 23 $ 2,060 Total Assets 2,164 519 623 2,060 Liabilities: Assets held as agency for others 2,164 519 623 2,060 Total Liabilities $ 2 ,164 $ 5 19 $ 6 23 $ 2 ,060 Other Agency Funds (30 funds) Assets: Cash and cash equivalents $ 22,697 $ 229,675 $ 225,889 $ 26,483 Total Assets 22,697 229,675 225,889 26,483 Liabilities: Assets held as agency for others 22,697 229,675 225,889 26,483 Total Liabilities $ 22,697 $ 229,675 $ 2 25,889 $ 2 6,483 Total All Agency Funds Assets: Cash and cash equivalents $ 41,955 $1,172,526 $1,174,059 $ 40,422 Total Assets 41,955 1,172,526 1,174,059 40,422 Liabilities: Assets held as agency for others 41,955 1,172,526 1,174,059 40,422 Total Liabilities $ 41,955 $1 ,172,526 $ 1,174,059 $ 4 0,422 163 COUNTY OF SAN LUIS OBISPO Combining Statement of Fiduciary Net Position Investment Trust Funds June 30, 2013 (in thousands) School Special Other Districts Districts Courts Local Boards (42 Funds) (32 Funds) (6 Funds) (19 Funds) Total ASSETS Cash and cash equivalents $ 152,801 $ 1 1,282 $ 2 ,219 $ 2 4,012 $ 190,314 Total Assets 1 52,801 1 1,282 2 ,219 2 4,012 190,314 NET POSITION Assets held in trust for pool participants 152,801 1 1,282 2 ,219 2 4,012 190,314 Total Net Position $ 1 52,801 $ 1 1,282 $ 2 ,219 $ 2 4,012 $ 190,314 164 COUNTY OF SAN LUIS OBISPO Combining Statement of Changes in Fiduciary Net Position Investment Trust Funds For the Year Ended June 30, 2013 (in thousands) School Special Other Districts Districts Courts Local Boards (42 Funds) (32 Funds) (6 Funds) (19 Funds) Total Additions Contributions to pooled investments $ 7 10,559 $ 7,290 $ 20,716 $ 3 0,951 $ 769,516 Interest 299 37 -- 4 5 381 Total Additions 710,858 7,327 20,716 3 0,996 769,897 Deductions Distributions from investment pool 7 07,310 6,587 20,737 3 0,046 764,680 Total Deductions 7 07,310 6,587 20,737 3 0,046 764,680 Change in Net Position 3,548 740 (21) 9 50 5,217 Net Position - Beginning 1 49,253 10,542 2,240 23,062 185,097 Net Position - Ending $ 152,801 $ 1 1,282 $ 2,219 $ 24,012 $ 190,314 165 166 ________________________________________________________________ GENERAL FUND DETAIL BUDGETARY COMPARISON SCHEDULES ________________________________________________________________ 167 168 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget General Government - Expenditures Legislative and Administrative Administrative Office: Salaries wages benefits $ 1,617 $ 1,617 $ 1,426 $ 191 Services and supplies 165 194 128 66 Expenditure transfers and reimbursements (85) (85) (85) -- Total 1,697 1,726 1,469 257 Board of Supervisors: Salaries wages benefits 1,436 1,436 1,372 64 Services and supplies 256 288 218 70 Expenditure transfers and reimbursements (36) (36) (36) -- Total 1,656 1,688 1,554 134 Clerk/Recorder: Salaries wages benefits 2,046 2,051 1,972 79 Services and supplies 1,013 1,021 895 126 Capital outlay -- 83 79 4 Total 3,059 3,155 2,946 209 Total Legislative and Administrative 6,412 6,569 5,969 600 Finance Assessor: Salaries wages benefits 8,111 7,995 7,097 898 Services and supplies 808 1,087 858 229 Capital outlay 23 53 21 32 Expenditure transfers and reimbursements -- -- (2) 2 Total 8,942 9,135 7,974 1,161 Auditor-Controller: Salaries wages benefits 4,628 4,628 4,234 394 Services and supplies 262 472 324 148 Capital outlay -- 188 6 182 Expenditure transfers and reimbursements (9) (9) (12) 3 Total 4,881 5,279 4,552 727 Treasurer-Tax Collector-Public Administrator: Salaries wages benefits 2,810 2,810 2,379 431 Services and supplies 300 300 371 (71) Total 3,110 3,110 2,750 360 Total Finance 16,933 17,524 15,276 2,248 Counsel County Counsel: Salaries wages benefits 3,341 3,341 3,120 221 Services and supplies 185 1,042 738 304 Total Counsel 3,526 4,383 3,858 525 continued 169 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget General Government - Expenditures (continued) Personnel Personnel: Salaries wages benefits $ 1,885 $ 1,885 $ 1,793 $ 92 Services and supplies 470 708 262 446 Total Personnel 2,355 2,593 2,055 538 Property Management General Services: Salaries wages benefits 7,923 7,889 7,177 712 Services and supplies 4,246 4,299 4,235 64 Other charges 73 73 72 1 Capital outlay -- 56 56 -- Expenditure transfers and reimbursement (2,584) (2,584) (3,008) 424 Total 9,658 9,733 8,532 1,201 Maintenance Projects: Services and supplies 2,417 7,321 1,724 5 ,597 Expenditure transfers and reimbursement -- (257) (127) (130) Total 2,417 7,064 1,597 5 ,467 Total Property Management 12,075 16,797 10,129 6,668 Other General Information Technology: Salaries wages benefits 9,890 9,890 9,076 814 Services and supplies 3,190 3,303 3,020 283 Capital outlay -- 14 14 -- Expenditure transfers and reimbursement (2,940) (2,940) (2,898) (42) Total 10,140 10,267 9,212 1,055 Risk Management: Salaries wages benefits 789 789 716 73 Services and supplies 825 848 724 124 Expenditure transfers and reimbursement (76) (76) (76) -- Total 1,538 1,561 1,364 197 Non-Department Financing Uses: Expenditure transfers and reimbursement (9,942) (9,942) (10,004) 62 Total (9,942) (9,942) (10,004) 62 Contributions to Other Agencies: Services and supplies 1,867 1,920 1,844 76 Total 1,867 1,920 1,844 76 Total Other General 3,603 3,806 2,416 1,390 Total General Government 44,904 51,672 39,703 11,969 continued 170 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures Judicial Court Operations Fund: Services and supplies $ 1 40 $ 1 40 $ 1 37 $ 3 Other charges 2,295 2,295 2,284 11 Total 2,435 2,435 2,421 14 District Attorney: Salaries wages benefits 13,250 13,287 12,685 602 Services and supplies 1,403 1,987 1,565 422 Other charges -- 25 25 -- Expenditure transfers and reimbursement (266) (266) (261) (5) Total 14,387 15,033 14,014 1 ,019 Family Support: Salaries wages benefits 3,601 3,601 3,369 232 Services and supplies 1,057 1,057 970 87 Total 4,658 4,658 4,339 319 Grand Jury: Salaries wages benefits 39 39 38 1 Services and supplies 99 99 90 9 Total 138 138 128 10 Public Defender: Services and supplies 5,414 6,054 5,967 87 Total 5,414 6,054 5,967 87 Total Judicial 27,032 28,318 26,869 1 ,449 Police Protection Sheriff-Coroner: Salaries wages benefits 50,872 51,143 48,645 2 ,498 Services and supplies 9,193 10,125 10,225 (100) Other charges 60 342 159 183 Capital outlay 186 1,387 775 612 Expenditure transfers and reimbursement (207) (207) (171) (36) Total Police Protection 60,104 62,790 59,633 3 ,157 Detention and Correction Probation Department: Salaries wages benefits 15,075 15,043 13,671 1 ,372 Services and supplies 4,120 3,687 3,301 386 Capital outlay -- 140 140 -- Expenditure transfers and reimbursement (291) (291) (280) (11) Total Detention and Correction 18,904 18,579 16,832 1 ,747 Fire Protection County Fire: Services and supplies 1 6,575 17,398 16,430 968 Capital outlay 797 1,468 448 1 ,020 Total Fire Protection 17,372 18,866 16,878 1 ,988 continued 171 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures (continued) Protective Inspection Agricultural Commissioner: Salaries wages benefits $ 4,425 $ 4,470 $ 4,278 $ 192 Services and supplies 709 744 711 33 Capital outlay -- 6 6 -- Total Protective Inspection 5,134 5,220 4,995 225 Other Protection Animal Services: Salaries wages benefits 1,525 1,480 1,420 60 Services and supplies 885 930 927 3 Total 2,410 2,410 2,347 63 Emergency Services: Salaries wages benefits 670 670 619 51 Services and supplies 516 581 292 289 Other charges 335 595 326 269 Capital outlay 12 124 119 5 Total 1,533 1,970 1,356 614 Planning Department: Salaries wages benefits 9,935 9,669 9,255 414 Services and supplies 1,175 3,893 2,161 1 ,732 Other charges 6 6 2 4 Expenditure transfers and reimbursement -- -- (1) 1 Total 11,116 13,568 11,417 2 ,151 Waste Management: Services and supplies 880 912 714 198 Capital outlay 10 10 -- 10 Total 890 922 714 208 Total Other Protection 15,949 18,870 15,834 3 ,036 Total Public Protection 144,495 152,643 141,041 11,602 Public Ways and Facilities - Expenditures Public Works: Services and supplies 2,156 2,539 2,878 (339) Other charges 20 83 80 3 Capital outlay -- 1,826 -- 1 ,826 Total 2,176 4,448 2,958 1,490 Total Public Ways and facilities 2,176 4,448 2,958 1 ,490 continued 172 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget Health and Sanitation - Expenditures Health Public Health: Salaries wages benefits 16,212 16,355 15,390 965 Services and supplies 4,508 4,729 5,729 (1,000) Other charges 1,410 2,113 394 1 ,719 Capital outlay -- 80 74 6 Expenditure transfers and reimbursement (1,205) (1,232) (1,043) (189) Total 20,925 22,045 20,544 1 ,501 Behavioral Health: Salaries wages benefits 24,555 25,393 23,293 2 ,100 Services and supplies 2 4,728 26,486 22,891 3 ,595 Other charges 512 708 333 375 Capital outlay -- 40 40 -- Expenditure transfers and reimbursement (1,613) (1,696) (1,904) 208 Total 48,182 50,931 44,653 6 ,278 Total Health 69,107 72,976 65,197 7 ,779 Total Health and Sanitation 69,107 72,976 65,197 7 ,779 continued 173 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget Public Assistance - Expenditures Administration Department of Social Services: Salaries wages benefits $ 37,045 $ 36,477 $ 34,411 $ 2,066 Services and supplies 1 4,884 15,598 14,936 662 Other charges 7,488 8,211 6,547 1 ,664 Capital outlay 104 88 42 46 Expenditure transfers and reimbursement (76) (76) (89) 13 Total Administration 5 9,445 60,298 55,847 4 ,451 Aid Programs Aid Foster Care Non-Fed: Services and supplies 44 68 54 14 Other charges 18,847 19,133 18,706 427 Total 18,891 19,201 18,760 441 Calworks Assistance: Other charges 13,119 13,119 11,497 1 ,622 Total 13,119 13,119 11,497 1 ,622 Total Aid Programs 32,010 32,320 30,257 2 ,063 Medical Services Medical Assistance Program: Services and supplies 2,500 2,500 2,500 -- Total Medical Services 2,500 2,500 2,500 -- General Relief General Relief: Other charges 1,074 1,184 1,149 35 Total General Relief 1,074 1,184 1,149 35 Veterans Service Veterans Service: Salaries wages benefits 369 398 381 17 Services and supplies 37 89 68 21 Total Veterans Service 406 487 449 38 Other Assistance Law Enforcement Med Care: Salaries wages benefits 1,742 2,002 1,779 223 Services and supplies 971 1,063 966 97 Expenditure transfers and reimbursement (524) (524) (519) (5) Total Other Assistance 2,189 2,541 2,226 315 Total Public Assistance 97,624 99,330 92,428 6 ,902 continued 174 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2013 Original Adjusted Variance with Description Budget Budget Actual Final Budget Education - Expenditures Agricultural Education Farm Advisor: Salaries wages benefits $ 3 70 $ 3 70 $ 3 48 $ 22 Services and supplies 105 105 88 17 Capital outlay -- -- -- -- Total Agricultural Education 475 475 436 39 Total Education 475 475 436 39 Total General Fund - Expenditures 358,781 381,544 341,763 39,781 (Before Contingencies) Contingencies Appropriation for Contingencies Contingencies - General Fund: Appropriation for contingency 14,558 13,718 -- 13,718 Total 14,558 13,718 -- 13,718 Total Appropriation for Contingency 15,043 14,222 -- 13,718 Total Contingency 15,043 14,222 -- 13,718 Total General Fund Expenditures $ 373,824 $ 395,766 $ 341,763 $ 53,499 Explanation of Differences between Budgetary Outflows and GAAP Expenditures Uses/outflows of resources Actual amounts (budgetary basis) from the Budget to Actual Comparison Schedule $ 341,763 Differences - budget to GAAP: Expenditures by funds no longer meeting the special revenue fund classification which are presented with the General Fund for financial reporting purposes 4,671 Total expenditures as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 346,434 175 176 ________________________________________________________________ STATISTICAL SECTION ________________________________________________________________ 177 178 COUNTY OF SAN LUIS OBISPO Statistical Section This part of the County of San Luis Obispo’s comprehensive annual financial report presents detailed information as a context for understanding this year’s financial statements, note disclosures, and required supplementary information. Page Financial Trends Information These schedules contain trend information that may assist the reader in assessing the County’s current financial performance by placing it in historical perspective .................................... 181 Revenue Capacity Information These schedules contain information that may assist the reader in assessing the viability of the County’s two most significant local revenue sources; property taxes and sales taxes ........... 186 Debt Capacity Information These schedules present information that may assist the reader in analyzing the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future ................................................................................................................... 191 Demographic & Economic Information These schedules offer economic and demographic indicators that are commonly used for financial analysis and that can enhance a reader’s understanding of the County’s present and ongoing financial status ................................................................................................... 194 Operating Information These schedules contain service and infrastructure indicators about how the information in the County’s financial statements relates to the services the County provides and the activities it performs......................................................................................................................... 197 179 180 County of San Luis Obispo Net Position by Component Last Ten Fiscal Years (in thousands) (UNAUDITED) 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Governmental Activities Invested in Capital Assets, net of related debt $ 956,773 $ 981,543 $ 996,381 $ 1,012,458 $ 1,047,361 $ 1,063,955 $ 1,071,844 $ 1,084,978 $ 1,099,885 $ 1,103,924 Restricted 66,474 48,141 40,178 50,061 52,566 41,188 36,385 36,258 31,477 28,863 Unrestricted 109,032 1 30,632 1 69,766 1 90,107 1 73,396 1 92,271 2 06,786 2 34,786 2 65,454 3 04,257 Total governmental activities net position $ 1,132,279 $ 1,160,316 $ 1,206,325 $ 1,252,626 $ 1,273,323 $ 1,297,414 $ 1,315,015 $ 1,356,022 $ 1,396,816 $ 1,437,044 Business-type activities Invested in Capital Assets, net of related debt $ 109,785 $ 114,785 $ 122,534 $ 146,021 $ 155,907 $ 167,188 $ 160,627 $ 149,097 $ 153,801 $ 167,138 Unrestricted 17,146 12,867 19,178 16,511 16,202 12,266 18,117 38,665 33,081 58,433 Total business-type activities net position $ 126,931 $ 127,652 $ 141,712 $ 162,532 $ 172,109 $ 179,454 $ 178,744 $ 187,762 $ 186,882 $ 225,571 Total Primary Government Invested in Capital Assets, net of related debt $ 1,066,558 $ 1,096,328 $ 1,118,915 $ 1,158,479 $ 1,203,268 $ 1,231,143 $ 1,232,471 $ 1,234,075 $ 1,253,686 $ 1,271,062 Restricted 66,474 48,141 40,178 50,061 52,566 41,188 36,385 36,258 31,477 28,863 Unrestricted 126,178 1 43,499 1 88,944 2 06,618 1 89,598 2 04,537 2 24,903 2 73,451 2 98,535 3 62,690 Total primary government net position $ 1,259,210 $ 1,287,968 $ 1,348,037 $ 1,415,158 $ 1,445,432 $ 1,476,868 $ 1,493,759 $ 1,543,784 $ 1,583,698 $ 1,662,615 Notes: Source - Statement of Net Position for FY 2003-2004 through 2011-2012 Statement of Net Position beginning in 2012-2013 and ongoing 181 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (in thousands) (UNAUDITED) 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Expenses Governmental Activities General government $ 34,862 $ 29,565 $ 39,872 $ 50,819 $ 46,971 $ 41,658 $ 36,561 $ 35,344 $ 35,231 $ 34,507 Public protection 104,594 106,402 100,234 120,165 135,987 136,755 134,768 132,413 136,219 142,353 Public ways and facilities 23,147 23,647 32,858 22,256 24,503 24,713 24,927 27,365 27,120 28,474 Health and sanitation 50,240 52,540 53,113 55,173 66,382 66,542 68,199 66,657 65,799 69,222 Public assistance 82,461 83,209 84,451 84,045 93,472 97,803 96,645 98,841 96,435 97,929 Education 7,969 7,459 7,786 8,626 9,966 10,967 10,390 10,057 10,000 9,922 Recreation and cultural services 5,762 4,238 4,244 6,106 6,024 7,561 8,708 7,363 7,344 9,735 Interest on long term debt 4,379 4,173 7,184 5,163 5,771 5,433 6,356 6,787 6,620 6,041 Total Governmental Activities Expenses 313,414 311,233 329,742 352,353 389,076 391,432 386,554 384,827 384,768 398,183 Business-type Activities Expenses Airport 3,116 3,628 3,703 4,021 7,809 4,559 5,204 7,732 5,422 5,435 Golf 3,132 2,905 2,867 3,301 3,033 3,249 2,974 2,690 2,863 2,779 Hospital 17,987 2,149 - - - - - - - - State Water contract 5,045 5,451 5,102 4,792 5,179 5,661 5,630 6,705 6,761 5,536 Naciemento Water contract 4 56 497 580 5 59 20,021 10,144 10,613 11,844 11,901 14,738 Lopez Dam 3,449 5,418 5,237 5,807 7,945 6,189 5,813 6,499 5,752 6,548 General Flood Control Zone 7 18 526 726 6 81 6 89 7 12 8 31 9 28 1,816 746 Transit 8 41 933 745 7 14 1,071 9 87 1,143 1,105 8 - County Service Areas 4,583 2,692 2,907 3,465 3,419 3,434 3,744 3,877 3,836 3,779 Los Osos Wastewater 5 6,672 344 Total Business-type Activities Expenses 39,327 24,199 21,867 23,340 49,166 34,935 35,952 41,385 45,031 39,905 Total Primary Government Expenses $ 352,741 $ 335,432 $ 351,609 $ 375,693 $ 438,242 $ 426,367 $ 422,506 $ 426,212 $ 429,799 $ 438,088 Program Revenues Governmental Activities Fees, Fines, Charges for Services General government $ 25,112 $ 29,911 $ 22,293 $ 18,743 $ 13,299 $ 17,729 $ 12,878 $ 13,971 $ 17,545 $ 16,575 Public protection 7,012 7,642 11,776 21,061 20,380 23,285 21,072 20,843 15,679 16,352 Public ways and facilities 6,767 6,607 9,730 7,236 7,580 4,190 3,234 11,549 5,069 5,465 Health and sanitation 6,766 8,555 8,831 6,505 6,583 6,863 7,026 7,453 6,014 5,196 Public assistance 2,279 2,680 2,438 2,798 2,864 2,784 9 25 2,399 2,366 2,920 Education 1,515 1,853 1,460 1,759 1,891 1,922 2,304 2,037 2,545 3,583 Recreation and cultural services 2,598 1,110 1,370 1,246 2,183 3,931 3,822 3,714 3,952 4,435 Operating Grants and Contributions General Government 3,616 2,404 1,442 1,454 4 46 7 51 3 77 1,120 6 28 122 Public Protection 33,188 33,888 39,054 41,429 40,924 38,080 40,034 37,244 45,646 50,477 Public ways and facilities 8,364 9,099 11,459 8,712 8,975 10,406 10,679 9,446 11,813 15,018 Health and sanitation 38,518 37,474 39,611 44,135 46,267 49,149 57,784 48,567 44,741 55,064 Public assistance 67,088 67,559 73,863 75,391 79,190 83,175 81,525 86,479 85,505 87,912 Education 4 20 250 250 2 99 2 62 2 60 2 59 2 89 1 75 175 Recreation and cultural services - 1,029 158 1 67 1 85 1 78 1 77 3 57 18 350 Capital Grants and Contributions General government - 311 - 2 91 2 64 3 84 4 49 2 79 8 43 8 Public protection 1,054 935 208 1,799 3 19 82 - - - - Public ways and facilities 6,028 4,091 6,253 6,008 15,130 5,966 10,259 7,411 12,930 3,479 Health and sanitation - 177 - - 34 - - - - - Public assistance - 80 - - - - - - - - Recreation and cultural services 6 82 403 805 1 71 9 79 4 23 1 73 81 2 47 50 Total Governmental Activities 211,007 216,058 231,001 239,204 247,755 249,558 252,977 253,239 255,716 267,181 Source: Statement of Activities (continued) 182 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (in thousands) (UNAUDITED) 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Business-type Activities Fees, Fines, Charges for Services Airport 4,846 4,206 3,864 3,919 4,585 3,734 3,541 3,888 3,719 4,053 Golf 2,928 2,719 2,895 3,016 3,058 2,879 2,653 2,590 2,690 2,639 Hospital 6,993 - - - - - - - - - State Water Contract 5,084 5,506 5,098 4,458 5,309 5,767 6,513 6,453 6,609 6,185 Nacimiento Water Contract 36 31 5,509 6,893 3,018 2 84 3 55 7,968 13,893 13,800 Lopez Dam 3,006 4,383 4,717 5,987 6,453 5,494 6,164 6,359 6,440 6,174 General Flood Control Zone 5 57 550 562 5 75 6 00 6 37 6 61 1,870 1,252 730 Transit 74 74 57 52 55 63 - - - - County Service Areas 3,812 2,323 2,604 2,860 2,869 2,658 2,784 3,090 3,186 3,352 Operating Grants and Contributions Airport 391 11 279 2 81 8 20 1 44 1 82 1 80 3 72 132 Golf - 75 - - - - - - 5 - Hospital - - - - - - - - - - State Water Contract 8 8 8 8 8 8 8 10 10 13 Nacimiento Water Contract 17 20 23 25 28 31 31 30 28 29 Lopez Dam 10 14 - - - 15 15 15 15 15 Transit 887 950 1,190 - - - 1,172 1,097 - - General Flood Control Zone - - 5 43 6 24 9 62 - - - - County Service Areas 3 3 222 1 55 2 4 4 3 3 3 Los Osos Wastewater 35 1 Capital Grants and Contributions Airport 1,002 3,188 3,792 9,509 19,201 6,750 4,310 2,074 1 38 572 County Service Areas 1 24 - - - 1 65 2 75 3 39 2 88 64 294 Los Osos Wastewater 9,357 9,127 35,717 Total Business-type Activities Revenues 29,778 24,061 30,820 38,281 46,795 29,705 28,732 45,272 47,586 73,709 Total Primary Government Revenues $ 240,785 $ 240,119 $ 261,821 $ 277,485 $ 294,550 $ 279,263 $ 281,709 $ 298,511 $ 303,302 $ 340,890 Net (Expense)/Revenues Governmental Activities $ (102,407) $ (95,175) $ (98,741) $ (113,149) $ (141,321) $ (141,874) $ (133,577) $ (131,588) $ (129,052) $ (131,002) Business-Type Activities (9,549) (138) 8,953 14,941 (2,371) (5,230) (7,220) 3,887 2,555 33,804 Total Primary Government net expense $ (111,956) $ (95,313) $ (89,788) $ (98,208) $ (143,692) $ (147,104) $ (140,797) $ (127,701) $ (126,497) $ (97,198) General Revenue and Other Changes in Net Position Governmental Activities Property Taxes $ 75,559 $ 98,025 $ 114,076 $ 128,867 $ 133,292 $ 141,195 $ 132,723 $ 139,214 $ 140,288 $ 143,182 Other Taxes 15,422 14,333 15,823 15,798 15,881 14,389 13,358 14,393 16,330 23,940 Interest and investment income 3,221 4,420 7,176 11,025 9,790 4,646 1,690 9 86 1,202 733 Unrestricted Grants 15,681 4,609 9,559 4,079 4,019 4,890 3,972 3,520 3,978 3,537 Other revenues 83 331 - - - - - 1 72 - 4 Transfers (10,214) 1,494 (1,884) (319) (964) 8 45 (565) 1 50 8,048 (166) Total Governmental Actives 99,752 123,212 144,750 159,450 162,018 165,965 151,178 158,435 169,846 171,230 Business-type Activities Property Taxes 3,073 1,765 2,051 3,359 3,402 3,678 3,654 3,841 3,799 4,145 Other Taxes - - - - - 27 28 28 28 29 Interest and investment income 3 18 406 1,085 1,897 7,290 6,190 1,900 9 65 7 55 385 Other revenues 1 51 182 86 3 04 2 92 5 72 3 63 4 47 31 160 Transfers 10,214 (1,494) 1,884 3 19 9 64 (845) 5 65 (150) (8,048) 166 Total Business-type Activities 13,756 859 5,106 5,879 11,948 9,622 6,510 5,131 (3,435) 4,885 Total Primary Government $ 113,508 $ 124,071 $ 149,856 $ 165,329 $ 173,966 $ 175,587 $ 157,688 $ 163,566 $ 166,411 $ 176,115 Change in Net Position Governmental Activities $ (2,655) $ 28,037 $ 46,009 $ 46,301 $ 20,697 $ 24,091 $ 17,601 $ 26,847 $ 40,794 $ 40,228 Business-Type Activities 4,207 721 14,059 20,820 9,577 4,392 (710) 9,018 (880) 38,689 Total Primary Government $ 1,552 $ 28,758 $ 60,068 $ 67,121 $ 30,274 $ 28,483 $ 16,891 $ 35,865 $ 39,914 $ 78,917 183 County of San Luis Obispo Fund Balances, Governmental Funds Last Ten Fiscal Years (in thousands) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 General Fund Reserved $ 19,194 $ 18,255 $ 17,665 $ 29,841 $ 31,853 $ 40,561 $ 49,543 Unreserved 59,105 76,200 86,924 74,727 64,886 63,626 66,559 Total General Fund $ 78,299 $ 94,455 $ 104,589 $ 104,568 $ 96,739 $ 104,187 $ 116,102 All Other Governmental Funds Reserved $ 73,309 $ 41,727 $ 9,039 $ 30,278 $ 50,422 $ 42,697 $ 39,243 Unreserved, reported in: Special Revenue Funds 32,263 42,828 80,293 70,630 60,384 51,703 55,513 Capital Project Funds 13,793 19,877 27,245 31,638 21,233 23,248 20,859 Debt Service Funds - - - - - - - Total all other Governmental Funds $ 119,365 $ 104,432 $ 116,577 $ 132,546 $ 132,039 $ 117,648 $ 115,615 2011 2012 2013 General Fund Nonspendable $ 3,333 $ 3,176 $ 3,092 Restricted 7,113 6,682 4,005 Committed 62,380 68,880 96,365 Assigned - - 104,237 Unassigned 87,741 102,291 - Total General Fund $ 160,567 $ 181,029 $ 207,699 All Other Governmental Funds Nonspendable $ 352 $ 390 $ 596 Restricted 22,065 19,788 18,311 Committed 55,446 61,144 65,903 Assigned 94 - - Unassigned - - - Total all other Governmental Funds $ 77,957 $ 81,322 $ 84,810 Note: In 2011, the County began implementation of GASB Statement 54, which changed the classifications of the fund balance. Fund balance information in years prior to 2011 is presented according to the previous guidelines. Source: Balance Sheet - Governmental Funds 184 County of San Luis Obispo Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (in thousands) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenues Taxes $ 9 0,553 $ 112,565 $ 128,586 $ 141,934 $ 144,596 $ 154,155 $ 153,910 $ 155,419 $ 160,920 $ 1 71,771 Licenses, permits, and franchises 8 ,674 13,637 10,744 9 ,404 9 ,117 8 ,006 6 ,906 7 ,413 7 ,863 9,247 Fines, forfeits, and penalties 7 ,901 6 ,105 3,544 6,262 6,224 6,973 6,078 7,993 6,750 6 ,654 Revenues from use of money and property 2 ,973 4 ,063 6,637 9,789 8,452 4,122 1,644 1,242 2,273 1,475 Aid from governmental agencies 1 72,425 160,452 182,750 184,142 196,994 188,794 199,771 194,625 206,372 209,234 Charges for current services 5 4,300 54,769 55,547 55,083 50,592 54,208 47,065 56,486 45,538 41,690 Other revenues 4 ,608 4 ,712 7,146 6,750 3,122 6,856 5,358 6,531 8,451 11,342 Total revenues 341,434 356,303 394,954 413,364 419,097 423,114 420,732 429,709 438,167 451,413 Expenditures Current: General government 4 9,491 49,074 5 3,691 5 5,375 5 1,733 5 1,461 4 5,162 5 0,321 4 5,850 44,374 Public protection 1 01,203 107,355 116,791 126,043 134,058 140,746 136,857 135,636 138,579 143,832 Public ways and facilities 2 9,718 24,096 2 5,749 3 8,981 4 4,814 4 2,139 3 1,093 3 7,261 4 0,338 34,178 Health and sanitation 4 9,542 52,894 5 5,464 5 7,590 6 6,180 6 7,267 6 8,442 6 8,472 6 7,830 70,021 Public assistance 8 1,616 82,673 8 7,020 8 7,182 9 2,682 9 8,170 9 6,248 100,202 9 7,185 98,059 Education 7 ,606 7 ,802 7,891 8,755 9,698 1 1,016 1 3,020 1 0,191 9,973 9,901 Recreational and cultural services 5 ,645 5 ,092 4,159 8,005 9,911 8,654 8,313 7,187 6,998 7,538 Debt service: Principal payments 1 ,815 1 ,895 4,970 6,560 2,601 3,264 3,790 4,595 4,435 4,065 Interest and fiscal charges 5 ,105 6 ,226 5,774 6,401 5,593 5,181 5,954 6,464 6,289 5,863 Debt issuance costs 2 ,173 - - - - - 550 - - 2 69 Capital outlay 1 4,490 18,673 9,551 1 0,241 1 3,333 2,849 1,965 3,399 5,540 3,692 Total expenditures 348,404 355,780 371,060 405,133 430,603 430,747 411,394 423,728 423,017 421,792 Excess (deficiency) of revenues over expenditures (6,970) 523 2 3,894 8,231 (11,506) (7,633) 9,338 5,981 1 5,150 29,621 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Other Financing Sources Refunding certificates of participation issued - - - - - - - - - 14,427 Premium on refunding certificates of participation issued - - - - - - - - - 1,418 Proceeds of long term debt 1 37,194 - - 5,090 7 ,325 - - - - - Payment to San Luis Pension Trust ( 135,000) - - - - - - - - - Refunding bonds issued - - - - - - 42,565 - - - Payment to refunded escrow agent - - - - - - (42,000) - - (16,400) Discount on certificates of participation issued - - - - (119) - - - - - Transfers in 2 9,420 19,792 31,910 42,996 42,324 43,523 33,044 34,421 35,815 4 8,113 Transfers out ( 39,248) ( 19,093) (33,525) (42,817) (42,751) (42,833) (33,065) (33,595) (27,138) ( 47,021) Total other financing sources and uses ( 7,634) 6 99 (1,615) 5 ,269 6 ,779 6 90 544 826 8,677 5 37 Net change in fund balances $ ( 14,604) $ 1 ,222 $ 22,279 $ 13,500 $ (4,727) $ (6,943) $ 9 ,882 $ 6,807 $ 23,827 $ 3 0,158 Debt Service as a percentage of 2.19% 2.55% 3.12% 3.50% 2.13% 2.13% 2.51% 2.80% 2.73% 2.45% non-capital expenditures Source: Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 185 County of San Luis Obispo Assessed Valuation* Last Ten Fiscal Years (in thousands) (UNAUDITED) Percentage Increase Fiscal Net Assessed from Prior Year Secured Unsecured Exemptions Valuations Year Tax Rate 2004 27,134,968 859,295 (658,326) 27,335,938 8.1% 1.0023 2005 29,677,821 836,182 (627,898) 29,886,105 9.3% 1.0023 2006 32,984,334 933,185 (701,193) 33,216,326 11.1% 1.0022 2007 36,890,449 1,000,873 (781,070) 37,110,252 11.7% 1.0021 2008 40,252,987 1,035,443 (835,356) 40,453,074 9.0% 1.0020 2009 42,348,044 1,132,435 (891,949) 42,588,530 5.3% 1.0020 2010 42,185,284 1,148,662 (914,309) 42,419,637 -0.4% 1.0020 2011 41,846,720 1,118,384 (927,194) 42,037,910 -0.9% 1.0029 2012 41,223,923 1,081,597 (965,089) 41,340,431 -1.7% 1.0030 2013 41,667,316 1,138,202 (1,009,234) 41,796,284 1.1% 1.0040 Source: County Property Tax Information Booklet 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 tnecreP Total Net Assessed Value Increase from Prior Year Percentage Increase from Prior Year for Fiscal Year Ended June 30 *Due to Article XIII‐A,added to the California Constitution by Proposition 13 in 1978, the County does not track the estimated actual value of all county properties. Proposition 13 fixed the base for valuation of real property at the full cash value which appeared on the Assessor's 1975‐76 assessment roll. Thereafter, full cash value can be increased to reflect: (1) annual inflation up to two percent; (2) current market value at time of ownership change; and (3) market value for new construction. As a result, similar properties can have substantially different assessed values based on the date of purchase. 186 County of San Luis Obispo Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (per $100 of assessed values) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 County Direct Rates General 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 State Water Project 0 .00230 0.00223 0.00222 0.00221 0.00220 0.00220 0.00220 0.00290 0.00300 0 .00400 Total Direct Rate 1.00230 1.00223 1.00222 1.00221 1.00220 1.00220 1.00220 1.00290 1.00300 1.00400 Cities, Schools, and Special Districts Combined Rates Arroyo Grande 0 .0403 0.0593 0.0423 0.0392 0.0422 0.0464 0.0464 0.0470 0.0477 0 .0576 Atascadero 0 .0975 0.0975 0.0975 0.0975 0.0975 0.0975 0.0975 0.0975 0.0442 0 .0452 Grover Beach 0 .0273 0.0463 0.0313 0.0295 0.0333 0.0382 0.0382 0.0389 0.0396 0 .0495 Morro Bay 0 .0082 0.0081 0.0231 0.0231 0.0492 0.0492 0.0492 0.0499 0.0501 0 .0510 Paso Robles 0 .1775 0.1775 0.1082 0.0952 0.0997 0.0948 0.0988 0.0389 0.0816 0 .0815 Pismo Beach 0 .0273 0.0463 0.0335 0.0295 0.0333 0.0382 0.0382 0.0389 0.0396 0 .0495 San Luis Obispo - - - - - - - - - - Note: Rates shown represent the most common rates encountered for the tax rate areas within these cities. Source: County Property Tax Information Booklet 187 County of San Luis Obispo Principal Property Taxpayers Current Year and Ten Years Ago (in Thousands) (UNAUDITED) Fiscal Year 2013 Fiscal Year 2004 Percentage of Percentage of Assessed Total County Assessed Total County Taxpayer Industry Value Rank Assessed Value Value Rank Assessed Value Pacific Gas & Electric Co. Utility 2,641,186 1 6.32% 2,163,485 1 7.90% TOSCO Corp Petroleum & Gas 1 44,966 2 0.35% 176,951 2 0.65% Beringer Wine Estates Company Winery 89,873 3 0.22% 58,283 5 0.21% Plains Exploation & Production Petroleum & Gas 81,401 4 0.19% - - CSHV Mustang Village LLC Apartments 76,800 5 0.18% - - Pacific Bell Telephone Co Telephone 71,897 6 0.17% - - Southern California Gas Co Utility 63,866 7 0.15% 48,942 6 0.18% Martin Hotel Mgmt Co LLC Hotel 62,521 8 0.15% - - Pasquini Charles Jr Tre Etal Private 55,665 9 0.13% - - Sierra Vista Hospital Inc Hospital 55,004 10 0.13% 45,450 7 0.17% Duke Energy Morro Bay, LLC Utility - - - 110,431 3 0.40% SBC California Utility - - - 92,297 4 0.34% Charter Communications Communications - - - 42,564 8 0.16% ESJ Centers LLC ETAL Real Estate - - - 37,070 9 0.14% Vons Companies Grocery Store - - - 32,432 10 0.12% Total $ 3,343,180 8.00% $ 2,807,905 10.27% Total County Assessed Value $ 41,796,284 $ 27,335,938 Source: County Property Tax System 188 County of San Luis Obispo Property Tax Levies and Collections Last Ten Fiscal Years (in thousands) (UNAUDITED) Collected within the Total Levy Fiscal Year of the Levy Fiscal for the Collected % of Collections in Delinquent % of Year Fiscal Year Amount Original Levy Subsequent Years* Amount Levy Delinquent 2004 2 65,009 261,422 98.65% N/A 3,587 1.35% 2005 2 90,692 286,937 98.71% N/A 3,755 1.29% 2006 3 24,547 319,214 98.36% N/A 5,333 1.64% 2007 3 62,429 354,117 97.71% N/A 8,312 2.29% 2008 3 94,779 380,943 96.50% N/A 13,836 3.50% 2009 4 16,262 400,120 96.12% N/A 16,142 3.88% 2010 4 12,698 398,951 96.67% N/A 13,747 3.33% 2011 4 08,623 397,830 97.36% N/A 10,793 2.64% 2012 4 03,472 396,238 98.21% N/A 7,234 1.79% 2013 4 05,225 399,807 98.66% N/A 5,418 1.34% Note: Amounts do not include Tax collections for Bonds or Special Assessments Source: County Property Tax Booklet *Collections in Subsequent Years are not available from the County's current property tax system 189 County of San Luis Obispo Special Assessment Billings and Collections (in thousands) (UNAUDITED) Special Special Year ended Assessment Assessment June 30, Billings Collected (a) (b) 2011 - $ 3,127 * 2012 3,836 3,798 * 2013 3,544 2,979 Note: The billings and collections shown are for those Special Assessment Bonds for which the County has established redemption funds for the purpose of facilitating bond payment in the case of delinquent accounts. 2011 was the first year of special assessment billings and collections Source: a.County Property Tax System b.Public Works by County Enterprise System * Amounts restated 190 County of San Luis Obispo Ratios of Total Debt Outstanding Last Ten Fiscal Years (in thousands) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Governmental Activities Certificates of Participation $26,487 $25,323 $23,107 $27,125 $33,319 $31,920 $30,420 $28,820 $27,895 $25,662 Less deferred amounts: For issuance discounts: - - - - (119) (115) (111) (107) (103) (99) Add deferred amounts: For issuance premiums: - - - - - - - - - 1,329 Pension Obligation Bonds 137,194 137,194 135,199 130,504 129,034 127,169 125,444 122,689 119,429 115,624 Total bonds and notes payable 163,681 162,517 158,306 157,629 162,234 158,974 155,753 151,402 147,221 142,516 Less resources restricted for principal repayment (5,241) (6,888) (10,018) (13,505) (15,297) (10,929) (10,665) (9,752) (9,666) (9,640) Net total bonds and notes payable 158,440 155,629 148,288 144,124 146,937 148,045 145,088 141,650 137,555 132,876 Business Type Certificates of Participation 23,068 22,577 22,069 21,535 20,985 20,848 20,657 19,897 19,060 17,920 Add deferred amounts: For issuance premiums: - - - - - - - - - 492 Pension Obligation Bonds State Note 3,211 3,077 15,126 26,144 31,824 32,283 32,418 31,024 35,884 34,399 Revenue Bonds 71 66 61 56 196,461 196,456 196,450 196,444 193,483 190,389 Add deferred amounts: For issuance premiums: - - - - 6,371 6,371 6,371 6,371 6,158 5,945 General Obligation Bonds 12,750 12,510 12,260 12,000 11,730 11,450 11,155 10,760 10,245 9,890 Add deferred amounts: For issuance premiums: - - - - - - - 1,128 1,072 1,015 Bond Anticipation Notes - - - - - - - 8,677 - - Assessment Bonds - - - - - - - - 15,364 39,527 Total bonds and notes payable 39,100 38,230 49,516 59,735 267,371 267,408 267,051 274,301 281,266 299,577 Net total bonds and notes payable 39,100 38,230 49,516 59,735 267,371 267,408 267,051 274,301 281,266 299,577 Total Outstanding Debt less restricted resources $197,540 $193,859 $197,804 $203,859 $414,308 $415,453 $412,139 $415,951 $418,821 $432,453 Percentage of Personal Income 2.48% 2.30% N/A N/A N/A N/A N/A N/A N/A N/A Percentage of Assessed Value of Taxable Property* 0.74% 0.66% 0.60% 0.55% 1.02% 0.98% 0.97% 0.99% 1.01% 1.03% Net outstanding debt Per Capita $785.36 $769.95 $789.47 $ 769.57 $ 1,538.25 $ 1,536.27 $ 1,508.39 $ 1,535.07 $ 1,542.72 $ 1,588.87 Note: 1. See the Demographic Statistics Schedule for detail information on personal income and population. 2. Source - Notes to the Financial Statements, Note 10 * Due to Article XIII-A, added to the California Consititution by Proposition 13 in 1978, the County does not track the estimated actual value of all county properties; therefore, the ratio of net outstanding debt to the estimated actual value of taxable property is unable to be determined; however, the ratio of net outstanding debt to the assessed value of taxable property is determinable and presented in the table. 191 County of San Luis Obispo Ratios of General Obligation Debt Outstanding Last Ten Fiscal Years (in thousands) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Certificates of Participation $21,180 $20,655 $20,110 $19,545 $18,965 $18,361 $17,730 $17,075 $16,400 $14,427 Less deferred amounts: For issuance discounts: - - - - - - - - - - Add deferred amounts: For issuance premiums: - - - - - - - - - 1,330 General Obligation Bonds 12,750 12,510 12,260 12,000 11,730 11,450 11,155 10,760 10,245 9,890 Add deferred amounts: For issuance premiums: - - - - - - - 1,128 1,072 1,015 Assessment Bonds - - - - - - - - 15,364 39,527 Total General Obligation Debt $ 33,930 $ 3 3,165 $ 32,370 $ 31,545 $ 30,695 $ 29,811 $ 28,885 $ 28,963 $ 43,081 $ 6 6,189 Percentage of Personal Income 0.41% 0.38% N/A N/A N/A N/A N/A N/A N/A N/A Percentage of Assessed Value of Taxable Property* 0.12% 0.11% 0.10% 0.09% 0.08% 0.07% 0.07% 0.07% 0.10% 0.16% Net outstanding debt Per Capita $131.41 $127.20 $122.97 $ 119.08 $ 113.97 $ 110.24 $ 105.72 $ 106.89 $ 158.69 $ 2 43.18 Note: 1. See the Demographic Statistics Schedule for detail information on personal income and population. 2. Source - Notes to the Financial Statements, Note 10 * Due to Article XIII-A, added to the California Consititution by Proposition 13 in 1978, the County does not track the estimated actual value of all county properties; therefore, the ratio of net outstanding debt to the estimated actual value of taxable property is unable to be determined; however, the ratio of net outstanding debt to the assessed value of taxable property is determinable and presented in the table. 192 County of San Luis Obispo Legal Debt Margin Information Last Ten Fiscal Years (in thousands) (UNAUDITED) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Assessed Value of Property (a) (b) $ 27,335,938 $ 29,886,105 $ 33,216,326 $ 37,110,252 $ 40,453,074 $ 42,588,529 $ 42,419,637 $ 42,037,909 $ 41,340,430 $41,796,283 Debt Limit, 1.25% of Assessed Value 341,699 373,576 415,204 463,878 505,663 532,357 530,245 525,474 516,755 522,454 Amount of Debt Applicable to Limit General Obligation Bonds (c) 1 2,750 1 2,510 12,260 12,000 11,730 11,450 11,155 11,888 11,317 10,905 Less: Resources Restricted to Paying Principal - - - - - - - - - - Total Debt Applicable 1 2,750 12,510 12,260 12,000 11,730 11,450 11,155 11,888 11,317 10,905 Legal Debt Margin $ 328,949 $ 361,066 $ 402,944 $ 451,878 $ 493,933 $ 520,907 $ 519,090 $ 513,586 $ 505,438 $ 511,549 Total Debt Applicable as a Percentage of the Debt Limit 3.73% 3.35% 2.95% 2.59% 2.32% 2.15% 2.10% 2.26% 2.19% 2.09% Source: (a) Property Assessed Value BOE report (years 2000-2008) (b) Countywide Assessed Values & Exemptions 2009 and ongoing years (c) Footnote 10 Bonded Indebtedness and Long-Term Debt Assessed value calculation (in thousands) Locally Assessed-Secured San Luis Obispo Countywide $38,746,813 Pipeline Right-of-Way (Unitary) 6 ,024 Aircraft 7 2,593 Total Local Assessed 38,825,430 State Assessed Local Utility 4 8,760 Unitary 2,922,093 Total State Assessed 2,970,853 Combined Assessed Values Sub-Total Combined Assessed Values 41,723,690 Aircraft 7 2,593 Total Combined Assessed Values $41,796,283 193 County of San Luis Obispo Demographic and Economic Statistics Last Ten Fiscal Years (UNAUDITED) Personal Income Unemployment Calendar Population (in thousands) Per Capita Income Median Age School Enrollment Rate Year (1,a,f) (2,a,d) (2,a,d) (4,c) (3,b,e) (2,a) 2004 258,200 8,334,258 * 32,524* 38.20 45,539 3.4 2005 260,727 8,727,001* 33,855* 39.40 45,268 4.2 2006 263,242 9,488,605 36,544 39.20 44,537 4.1 2007 264,900 9,977,057 38,144 37.30 44,610 4.6 2008 269,337 10,709,753 40,204 37.30 44,441 5.7 2009 270,429 10,237,494 38,179 39.30 44,874 9.0 2010 273,231 10,532,649 38,994 39.40 44,351 10.0 2011 270,966 10,966,438 40,322 40.30 44,104 9.9 2012 271,483 N/A N/A 39.20 43,022 8.5 2013 272,177 N/A N/A N/A 42,600 6.4 Sources: 1. State Department of Finance 2. Employment Development Department, Research Division, Los Angeles 3. San Luis Obispo County Schools & Cuesta College 4. U.S. Census Bureau Notes: N/A = not available * = restated a. Data for Calendar Years b. Data includes kindergarten through grade 12 and Cuesta College c. Calendar year 2004 -2010 figures are projections based on the 2000 census d. Prior years were revised per the US Department of Commerce e. Data for School Year ending in the stated calendar year. f. Calendar year 2011-2013 figures are projections based on the 2010 census 194 County of San Luis Obispo Principal Employers Current Year and Ten Years Ago (UNAUDITED) 2013 2004 Number of Percentage of Total Number of Percentage of Total Employer Employees Rank County Employment Employees Rank County Employment County of San Luis Obispo 2,800 1 1.88% 2,508 2 1.92% Cal Poly State University, SLO 2,573 2 1.73% 2,574 1 1.97% Atascadero State Hospital 2,300 3 1.55% 2,066 3 1.58% California Men's Colony 2,000 4 1.35% 1,700 4 1.30% Pacific Gas and Electric Company 1,700 5 1.14% 1,632 5 1.25% Tenet Healthcare 1,200 6 0.81% - - - Lucia Mar Unified School District 1,000 7 0.67% 1,013 7 0.77% Paso Robles Public Schools 935 8 0.63% 918 8 0.70% Cal Poly Corporation 906 9 0.61% - - San Luis Coastal Unified School District 902 10 0.61% 805 10 0.62% Cal Poly Foundation - - - 1,349 6 1.03% Sierra Vista Regional Medical Center - - - 854 9 0.65% Total Employment Labor Force 148,600 130,800 Source: 1. SLO Chamber of Commerence 2. State of California Employment Development Department 195 County of San Luis Obispo Full Time Equivalent County Government Employees by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 General Government 481.25 480.25 479.75 482.00 495.50 485.25 451.00 442.75 437.50 438.25 Public Protection 862.50 850.50 856.00 885.25 891.75 879.50 799.75 783.25 808.25 812.00 Public Ways and Facilities 194.50 184.00 185.00 185.25 191.25 199.25 202.25 194.25 193.75 193.75 Health and Sanitation 507.25 419.25 413.25 394.50 423.75 421.00 424.75 424.00 430.50 445.25 Public Assistance 464.50 439.00 438.75 443.75 453.25 437.25 426.75 424.75 425.75 428.00 Education 74.00 73.00 74.00 84.00 87.50 87.50 78.50 78.50 77.50 75.50 Recreation and Cultural Services 55.50 56.50 55.00 59.00 58.00 58.00 56.00 56.00 52.00 55.00 Total 2,639.50 2,502.50 2,501.75 2,533.75 2,601.00 2,567.75 2,439.00 2,403.50 2,425.25 2,447.75 Source: County Budget Report Notes: Position allocation figures are calculated at the time of budget preparation for the following year. Figures include limited-term but do not include part-time or contract positions. 196 County of San Luis Obispo Operating Indicators by Function Last Ten Fiscal Years (UNAUDITED) Function / Department 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Recreation and Cultural Services Parks Day Use Passes 64,679 53,906 62,951 66,899 65,895 47,156 47,011 51,519 57,135 56,601 Annual Passes 1,478 1,436 1,496 1,416 1,598 3,547 2,220 1,992 2,357 2,406 Daily Boat Launches 26,552 21,085 22,481 19,737 14,085 16,864 15,802 15,602 16,133 14,809 Annual Boat Passes 842 795 804 793 847 752 627 618 633 551 Public Protection Planning and Building Total Permits Issued 3,856 3,747 3,548 2,897 2,634 2,261 2,067 2,073 2,086 2,070 Number of New Affordable Housing 141 267 184 63 218 105 82 80 39 44 Sheriff Jail bookings (a) 15,016 14,240 14,927 18,718 18,321 14,158 1 3,025 12,682 12,966 13,273 Average daily population (a) 460 506 534 553 567 540 551 558 679 717 Health and Sanitation Mental Health Total number of patient days in State Hospitals 571 986 522 447 603 365 364 n/a n/a n/a Day Treatment Days provided to youth in out-of-county group home facilities n/a n/a n/a n/a 2,067 2,692 2,212 2,937 1588* 1,885 Public Health Number of Children enrolled in the Healthy Families Program 3,824 4,331 4,436 4,752 5,098 5,450 5,709 n/a n/a n/a Percentage of the State allocated caseload enrolled in the Women, Infants & Children(WIC) Program n/a n/a n/a n/a 100 98 97 100 99 99 Percentage of live born infants whose mothers received prenatal care in the first trimester. n/a n/a n/a 82.7 76.0 7 8.0 78.0 78.5 81.7 80.0 Public Assistance Social Services Rate per 1,000 children entering out-of- home care for the first time (State Rate is 2.8) 3.3 2.9 3.8 2.9 n/a n/a n/a n/a n/a n/a Percentage of child abuse/neglect referrals where a response is required within 10 days that were timely n/a n/a n/a 77.1 69.8 88.7 94.1 96.8 97.6* 97.6 Education Library Annual number of items circulated per capita 7.1 5.8 6.0 7.0 7.5 9.2 9.4 10.0 10.1 n/a Annual Expenditure per capita for total Library budget $ 2 4.03 $ 27.37 $ 28.34 $ 31.07 $ 33.75 $ 38.43 $ 35.35 $ 35.35 $ 35.25 $ 34.35 Public Ways and Facilities Roads Pavement Condition Rating for all county roads (70 = "good") 64 58 70 69 65 62 65 60 58 60 Airport Airport Takeoffs and Landings (a) 115,066 101,849 n/a 92,096 96,172 95,419 88,161 80,556 80,158 71,428 Passenger Enplanements 154,726 173,370 182,177 177,176 182,285 132,748 125,152 139,909 134,244 132,315 Note: (a) Data collected per calendar year Source: County Budget Performance Indicators * Restated 197 County of San Luis Obispo Capital Asset Statistics by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Recreation and Cultural Services County golf courses 3 3 3 3 3 3 3 3 3 3 Park acreage 11,946 12,026 12,056 12,056 13,402 13,422 13,422 13,572 13,424 13,424 Public Protection Correction facility capacities (a) 689 693 693 684 693 693 693 689 637 717 Public Ways and Facilities Miles of county roads 1,315 1,317 1,321 1,321 1,334 1,336 1,329 1,332 1,333 1,335 Airport Number of runways 2 2 2 2 2 2 2 2 2 2 Note: Majority of County assets are in buildings and equipment, which are under the Functional area of General Government (a) Amount is all holdings actual totals, including Main Jail, Women's Jail, West Housing, West Dorm, Honor Farm, and Weekender Barracks Source: County management 198