Annual Comprehensive Financial Report, 2019-20

Comprehensive Annual Financial Report County of San Luis Obispo, California Fiscal Year Ended June 30, 2020 Prepared under the direction of James W. Hamilton, CPA Auditor-Controller  Treasurer-Tax Collector Cover photo of the Pismo Beach pier taken by Ryan Richmond, Auditor-Controller-Treasurer-Tax Collector’s Office COUNTY OF SAN LUIS OBISPO COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2020 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal .......................................................................................................... 1 Certificate of Achievement for Excellence in Financial Reporting ......................................... 12 List of Elected and Appointed Officials .............................................................................. 13 Organizational Chart ........................................................................................................ 14 FINANCIAL SECTION Independent Auditors’ Report ........................................................................................... 15 Management’s Discussion and Analysis ............................................................................. 18 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position ............................................................................................. 36 Statement of Activities.................................................................................................. 37 Fund Financial Statements: Governmental Funds: Balance Sheet .............................................................................................................. 39 Reconciliation of Governmental Funds Balance Sheet to the Government- Wide Statement of Net Position – Governmental Activities ............................................. 40 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ................................................................................................... 41 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities – Governmental Activities.............................................................................. 42 Proprietary Funds: Statement of Fund Net Position ..................................................................................... 43 Statement of Revenues, Expenses, and Changes in Fund Net Position ............................. 44 Statement of Cash Flows .............................................................................................. 45 Fiduciary Funds: Statement of Fiduciary Net Position ............................................................................... 46 Statement of Changes in Fiduciary Net Position ............................................................. 47 Notes to Basic Financial Statements ............................................................................... 48 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Required Supplementary Information Description .................................................................................................................. 90 Schedule of the County’s Proportionate Share of the San Luis Obispo County Pension Plan’s Net Pension Liability .............................................................................. 91 Schedule of the County’s Contributions to the San Luis Obispo County Pension Plan ......... 92 Other Post-Employment Benefits (OPEB) Plan Schedule of Changes in the County’s Net OPEB Liability and Related Ratios ............................................................. 93 Other Post-Employment Benefits (OPEB) Plan Schedule of Actuarially Determined Plan Contributions and Related Ratios ........................................................ 94 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Comparison - General Fund ............................................................... 95 Notes to Required Supplementary Information ............................................................... 97 Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Nonmajor Governmental Fund Descriptions ............................................................ 98 Combining Balance Sheet ..................................................................................... 100 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................... 104 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual Comparison: Capital Projects ................................................................................................... 108 Community Development ..................................................................................... 109 Emergency Medical Services ................................................................................ 110 Driving Under the Influence Programs .................................................................. 111 Fish and Game .................................................................................................... 112 Road Impact Fees ............................................................................................... 113 Library ................................................................................................................ 114 Parks .................................................................................................................. 115 Public Facilities Fees ............................................................................................ 116 Roads ................................................................................................................. 117 Wildlife Grazing ................................................................................................... 118 Flood Control Districts ......................................................................................... 119 Lighting Control Districts ...................................................................................... 120 County Service Area Districts ............................................................................... 121 Public Facilities Corporation ................................................................................. 122 Pension Obligation Bonds .................................................................................... 123 SLO County Financing Authority ........................................................................... 124 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Nonmajor Enterprise Funds: Nonmajor Enterprise Fund Descriptions ................................................................ 125 Combining Statement of Net Position ................................................................... 126 Combining Statement of Revenues, Expenses, and Changes in Net Position ............ 127 Combining Statement of Cash Flows ..................................................................... 128 Internal Service Funds: Internal Service Fund Descriptions ....................................................................... 129 Combining Statement of Net Position ................................................................... 130 Combining Statement of Revenues, Expenses, and Changes in Net Position ............ 131 Combining Statement of Cash Flows ..................................................................... 132 Internal Service Funds – Insurance Funds: Combining Statement of Net Position ...................................................... 133 Combining Statement of Revenues, Expenses, and Changes in Net Position ......................................................................................... 134 Combining Statement of Cash Flows ....................................................... 135 Fiduciary Funds: Fiduciary Fund Description ................................................................................... 136 Agency Funds: Combining Statement of Fiduciary Net Position ........................................ 137 Combining Statement of Changes in Assets and Liabilities ........................ 138 Investment Trust Funds: Combining Statement of Fiduciary Net Position ........................................ 139 Combining Statement of Changes in Fiduciary Net Position ...................... 140 General Fund - Detail Budgetary Comparison Schedules: Detail Schedule of Expenditures – Budget to Actual Comparison ............................ 141 The accompanying notes are an integral part of these financial statements. STATISTICAL SECTION (UNAUDITED) Statistical Section Table of Contents .............................................................................. 149 Net Position by Component ........................................................................................... 150 Changes in Net Position ................................................................................................ 151 Fund Balances, Governmental Funds ............................................................................. 153 Changes in Fund Balances, Governmental Funds ............................................................ 154 Estimated 30 Year Pension Liability Funding ................................................................... 156 Assessed Valuation ....................................................................................................... 157 Direct and Overlapping Property Tax Rates .................................................................... 158 Principal Property Taxpayers ......................................................................................... 159 Property Tax Levies and Collections ............................................................................... 160 Special Assessment Billings and Collections .................................................................... 161 Ratios of Total Debt Outstanding ................................................................................... 162 Ratios of General Bonded Debt Outstanding ................................................................... 163 Legal Debt Margin Information ...................................................................................... 164 Demographic and Economic Statistics ............................................................................ 165 Principal Employers ...................................................................................................... 166 Full Time Equivalent County Government Employees by Function .................................... 167 Operating Indicators by Function ................................................................................... 168 Capital Asset Statistics by Function ................................................................................ 169 The accompanying notes are an integral part of these financial statements. ________________________________________________________________ INTRODUCTORY SECTION ________________________________________________________________ COUNTY OF SAN LUIS OBISPO AUDITOR - CONTROLLER  TREASURER - TAX COLLECTOR James W. Hamilton, CPA Auditor-Controller  Treasurer-Tax Collector Lydia J. Corr, CPA Assistant Auditor-Controller  Treasurer-Tax Collector January 21, 2021 Honorable Board of Supervisors County of San Luis Obispo 1055 Monterey Street, Suite D430 San Luis Obispo, California 93408 To the Citizens of San Luis Obispo County and Your Honorable Board: The Comprehensive Annual Financial Report (CAFR) of the County of San Luis Obispo (County) for the fiscal year ended June 30, 2020, is hereby submitted as mandated by Sections 25250 and 25253 of the Government Code of the State of California. These statutes require that the County publish a complete set of financial statements audited in accordance with Generally Accepted Auditing Standards (GAAS) by a firm of licensed certified public accountants. The County prepares its financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The requirements for financial reporting in accordance with GAAP are established by the Governmental Accounting Standards Board (GASB). This report consists of management’s representations concerning County finances. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework designed to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the County’s financial statements in conformity with GAAP. The County’s comprehensive framework of internal controls has been designed to provide a reasonable, rather than an absolute assurance, that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The County’s financial statements have been audited by CliftonLarsonAllen LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide a reasonable assurance that the financial statements of the County for the fiscal year ended June 30, 2020, are free of any material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the County’s financial statements for the fiscal year ended June 30, 2020, are fairly presented and in conformity 1 with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the County’s financial statements was part of a broader, federally mandated “Single Audit” designed to meet the requirements imposed by federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports will be available in the County’s separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and the two should be read in conjunction with each other. The County’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government The County of San Luis Obispo, incorporated in 1850, is located on the central coast of the State of California, midway between Los Angeles and San Francisco. The County currently occupies a land area of 3,616 square miles and serves a population of 283,111 residents. Approximately 44% of the population resides in the unincorporated area. The seven incorporated cities in the County are Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo. A five-member County Board of Supervisors (Board) is the legislative authority and governance for the County. Each supervisor is elected to a four-year term in nonpartisan districts. The terms are staggered with two supervisors being elected then three supervisors being elected in alternating election years. The Board is responsible, among other things, for establishing ordinances, adopting the budget, appointing committees, and hiring the County Administrative Officer and non-elected department heads. The County Administrative Officer is responsible for carrying out the policies and ordinances of the Board and for overseeing the day-to-day operations of the County. The County has five elected department heads responsible for the offices of the County Clerk- Recorder, Assessor, Auditor-Controller-Treasurer-Tax Collector, District Attorney, and Sheriff-Coroner. The County provides a full range of services, including public safety and fire protection; construction and maintenance of highways, streets, and other infrastructure; health and social programs that promote the well-being of the community; and recreational activities and cultural events. 2 The annual budget serves as the foundation for the County’s financial planning and control. The County Budget Act, as presented in California Government Code Sections 29000 and 30200, provides the general provisions and requirements for preparing and approving the County budget. All County departments are required to submit budget requests to the County Administrative Officer. The budgets are then reviewed by the County Administrative Officer and compiled into a proposed budget with a County Administrative Officer’s recommendation. Public hearings are set in the month of June, with the Board of Supervisors adopting the final budget before the start of the next fiscal year. The proposed budget is prepared by fund, function (e.g., Public Safety), and department or division (e.g., Sheriff-Coroner). During the year, department heads may make transfers of appropriations within a division with the approval of the County Administrative Officer and Auditor-Controller-Treasurer-Tax Collector. Transfers of appropriations between departments or increases in the budget from new revenue sources, reserves and/or contingencies require Board of Supervisors’ approval. Monthly estimates for both revenues and expenditures are used to assist departments with budgetary control, and quarterly reports are submitted by each department to the County Administrative Officer and the Board on the status of the departmental budgets. Budget-to-actual comparisons are provided in the Comprehensive Annual Financial Report for each individual governmental fund for which an appropriated annual budget has been adopted. For the General Fund this comparison is presented as part of the required supplementary information immediately following the notes to the financial statements. For other governmental funds with appropriated annual budgets, this comparison is presented in the governmental funds subsection of the statements. The County has various blended component units which primarily provide utility and debt financing services. The County’s only discretely presented component unit is the Children and Families Commission of San Luis Obispo County (First 5), which allocates funds from the California Children and Families Trust Fund and advocates for quality programs and services, supporting children prenatal to age 5, to ensure that every child is healthy and ready to learn in school. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the County operates. 3 Employment: • Unemployment in the County, as of September 2020, was 7.2% which is lower than both the state rate of 11.0% and the national rate of 7.9%. During the same period last year, unemployment in the County was 2.4%. The rise in the County’s unemployment rate has closely followed the trend in unemployment at the state and national level and is primarily attributable to the COVID-19 pandemic. • The State of California has a major presence in the County of San Luis Obispo with California Men’s Colony, Atascadero State Hospital, Caltrans, and the California Polytechnic State University, making the State the largest employer in the County. Wages: • Average income increased by 5.8% to $51,011, from 2018 to 2019 (most recent data) for the residents of the County of San Luis Obispo whereas $80,000 average income for the state increased by 4.2% as reported by the $70,000 Bureau of Labor Statistics. $60,000 • As reported by the Bureau of Labor $50,000 Statistics, the highest earning 2019 occupational groups consisted of $40,000 psychiatrists, physicians and $30,000 surgeons, family and general healthcare practitioners, personal $20,000 financial advisors, architect and engineering managers, dentists, pharmacists, chief executives, first- line supervisors of police and detectives and industrial production managers. SRALLOD 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% AVERAGE ANNUAL INCOME* State County *SOURCE: US BUREAU OF LABOR STATISTICS EGATNECREP UNEMPLOYMENT RATES* National State County *SOURCE: US BUREAU OF LABOR STATISTICS 4 Retail Sales: • Sales and use tax revenue was $12.5 million for the FY 2019-20. While this is a 5.9% increase in sales $14,000,000 tax revenue from June 2019 to June 2020, it is forecasted that COVID-19 $12,000,000 will decrease sales tax revenues in $10,000,000 the subsequent year. $8,000,000 • With a wide variety of activities $6,000,000 offering year-round visitor appeal, $4,000,000 the County continues to benefit fiscally from the tourism industry. $2,000,000 Tourists spent approximately $305 $0 million in retail locally in 2019 which 2016 2017 2018 2019 2020 is an 8.5% increase in spending from 2018 as reported by the tourism marketing agency Visit SLO CAL. Real Estate and Property Taxes: The County’s median home price increased from $595,000 in August 2019 to $645,000 in August 2020. This is an 8.4% increase from the same period in the prior year. The increase in median home price demonstrates people’s continued desire to live in the area and a healthy local real estate market. • Discretionary property tax receipts were $140 million in FY 2019-20, an increase of 5.8% over the prior year. • The total tax levy on secured property, which excludes unsecured property, direct charges, and school bonds, was $573,449,410 for FY 2019-20, an increase of 4.3% from the previous year. • Property transfer tax is related to the value and number of real estate transactions during the year. In the County’s unincorporated areas property transfer taxes increased 35% to $3.8 million in FY 2019-20. • The property tax delinquency rate increased from 0.9% in FY 2018-19 to 1.6% in FY 2019-20. sralloD SALES TAX REVENUE - UNINCORPORATED* *Source: County's Enterprise Financial System $700,000 $600,000 $500,000 $400,000 $300,000 2016 2017 2018 2019 2020 sralloD MEDIAN HOME PRICES* *Source: Corelogic 5 Tourism: • Transient Occupancy Tax (TOT) collections in the unincorporated areas decreased 15% in FY 2019-20. This decrease is mainly due to the impact of the shelter-at-home orders related to the COVID-19 pandemic. $12,000,000 • The scenic coastline and rolling $10,000,000 vineyards continue to make San Luis Obispo a desired tourist destination. $8,000,000 From farm-to-table cuisine to mountainous hikes to beautiful walks on the beach, San Luis Obispo $6,000,000 County has an abundance of activities that appeal to tourists and $4,000,000 residents alike. Visit SLO CAL reported that tourists spent $1.94 $2,000,000 billion across all business sectors in San Luis Obispo County in the 2019 $0 calendar year, but due to COVID-19, 2016 2017 2018 2019 2020 are forecasting a $557 million reduction in spending for calendar year 2020. Long-term financial planning: • The County expects that COVID-19 will significantly impact the budget in the current and future years. As such, the County anticipates a multi-year budget strategy to achieve structural balance. The FY 2020-21 comprehensive budget authorized a $679 million governmental fund spending level, an increase over the $648 million budget for FY 2019-20. The budget provides support to the development of departmental programs and services and assists County operations in responding to continuously changing needs, including the health and safety of the community. The increase in property tax revenue and intergovernmental revenue allowed for an increase in the FY 2020-21 spending level. In FY 2020-21, the General Fund has $615.2 million appropriated to finance expenditures, including contingencies of $27.0 million. • The General Fund reports fund balance intended for a variety of long-term needs in classifications based on the extent to which the amounts are restricted for use. The General Reserve, established per Government Code §29127, is accessible only upon declaration of emergency by the Board of Supervisors. As of June 30, 2020, the General Reserve was $13.0 million. In addition to the General Reserve, sralloD TRANSIENT OCCUPANCY TAX* *Source: County's Enterprise Financial System 6 reserves exist for building replacement ($44.1 million), automation projects ($18.0 million), and tax-loss mitigation purposes ($44.3 million). Other classifications of General Fund balance are described in Footnote 11. • On March 13, 2020, the County Health Officer declared a public health emergency and the County Emergency Services Director proclaimed a local emergency due to the COVID-19 pandemic and the County used $7.5 million of contingency funds for immediate response costs and to establish the Cal Poly Alternate Care Site (CPACS). • Each year a 5-year Capital Improvement Program (CIP) is compiled. The CIP is a plan for short-range and long-range capital acquisition and development. It also includes plans to improve or rehabilitate County-owned roads and facilities. The plan provides the mechanism for estimating capital requirements; setting priorities; monitoring and evaluating the progress of capital projects; and informing the public of projected capital improvements and unfunded needs. While the CIP covers a five-year planning period, it is updated each year to reflect ongoing changes as new projects are added, existing projects are modified, and completed projects are removed from the plan document. The five-year CIP does not appropriate funds; rather it serves as a budgeting tool, identifying those capital project appropriations to be made through the adoption of the County’s annual budget. The budgeted capital expenditures for FY 2020-21 increased 20% from the prior year and are approximately $7 million. • In September 2018, Governor Jerry Brown signed Senate Bill 1090, a bipartisan bill that will provide $85 million in economic assistance to the community. The bill is an effort, in part, to lessen the effects of lost tax revenue that will result from the closure of the Diablo Canyon Nuclear Power Plant. PG&E plans to close the plant by fiscal year 2024-25. The County will receive it’s portion of annual installment payments for the economic assistance through FY 2024-25 and the payments will be used for economic development ($4.0 million), safety ($4.5 million), affordable housing ($6.4 million), infrastructure ($5.0 million), roads ($1.2 million), libraries ($2.0 million), and General Fund tax loss mitigation ($12.1 million). Relevant Financial Policies: • Balanced Budget: The County Administrative Officer shall present a balanced budget for all County operating funds on an annual basis. • Ongoing Budget Administration: The County Administrative Officer shall submit Quarterly Financial Status Reports to the Board of Supervisors. The reports shall provide expenditure and revenue projections and identify and clarify projected variances along with recommendations and proposed corrective actions. 7 • Budget Priorities: The budget is an effort to allocate resources in an effective and efficient manner in order to achieve the County’s vision of a Safe, Healthy, Livable, Prosperous, and Well-Governed Community. • Use of “One-Time” Funds: One-time revenue shall be dedicated for use for one- time expenditures. Annual budgets will not be increased to the point that ongoing operating costs become overly reliant upon cyclical or unreliable one-time revenues. • Adopt a Formal Debt Policy: A comprehensive Debt Management Policy was developed by the Auditor-Controller and approved by the Debt Advisory Committee. It was adopted by the Board of Supervisors on December 14, 2010. • Cost Recovery through Fees: Utilize fees to recover costs where reasonable and after all cost savings options have been explored. • Pension Cost: Governor Brown implemented a Public Employee Pension Reform Act (PEPRA) which took effect on January 1, 2013. In compliance with PEPRA the County established a Tier III retirement plan that complies with or exceeds the requirements of the pension reform legislation. In addition, the County and most labor units have adopted a 50/50 funding split between the County and the employees. As of December 31, 2019, approximately 49% of County employees fall under PEPRA. Major Initiatives • Countywide: The County has taken many actions to address the impacts of COVID-19 since a local health emergency was declared by the County Health Officer on March 13, 2020. The County purchased ventilators to treat patients in area hospitals and personal protective equipment (PPE) to protect County employees and local healthcare workers. A safe parking program was created to provide homeless individuals and families access to safe, clean spaces to park and sleep overnight. Food and prescription deliveries were made to self-isolating seniors, individuals with chronic medical conditions, and individuals required to self-isolate due to COVID-19 exposure or diagnosis. The County partnered with California Polytechnic State University, Dignity Health, and Tenet Healthcare to establish an alternate care site (ACS) at the university. Phase 1, which is 165 beds was completed on April 8, 2020. At full buildout, the ACS will be able to provide care to more than 900 patients. The County Public Health lab increased their testing capability to 300 samples per day. The County continues to monitor and address the needs of the community impacted by the COVID-19 pandemic. • Administrative Office: Standard & Poor Global Ratings (S&P) affirmed the County’s high bond ratings. S&P Global Ratings confirmed the County’s creditworthiness by affirming the County’s Pension Obligation Bonds rating at AAA and Lease 8 Revenue Bonds rating at AA+ with a stable outlook, both of which are the highest possible bond ratings in each category. Overall, S&P’s view is that the County is better positioned for long-term sustainability today than when S&P last conducted their review. The County’s Financial Management Team, made up of staff members from the Administrative Office and the Auditor-Controller-Treasurer-Tax Collector’s Office, presented S&P representatives with the County’s financial performance and fiscal policies as one of the steps to financing the Animal Services Facility project. • Animal Services: The County entered into a memorandum of understanding with all seven cities including Atascadero, Arroyo Grande, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo to authorize and fund a new $20 million animal services facility. This will replace the 43-year-old public animal shelter located off Highway 1. The new facility will incorporate design features to create a more sustainable, long-lasting facility, allow for the humane care of sheltered animals, and support the community’s already strong animal services’ volunteer program. • Behavioral Health: The County Behavioral Health Department celebrated one year of integrated physical health/behavioral health treatment through the SLO-HIP (Health Integration Program) project. Community Health Centers of the Central Coast (CHC) provided weekly physical health care screenings and treatment in the Adult Mental Health clinic in San Luis Obispo for a full year and has provided care to 183 patients in just six months; 43 of these individuals had not seen a primary care physician for years. SLO-HIP is funded by SAMHSA (Substance Abuse Mental Health Services Agency) to coordinate wellness activities and physical health screenings, and to encourage individuals with serious mental health concerns to engage in ongoing physical health care. National data has shown that individuals with serious mental health disorders die at least 25 years earlier than the general population. This project has served to build the culture of integrative health care with multiple agencies, such as CAPSLO and TMHA, while improving the health of the clients served. • Emergency Services: The County Office of Emergency Services launched a new one-stop resource in August 2019 for San Luis Obispo County residents and visitors focused on emergency preparedness and response. ReadySLO.org was designed as a partnership between the County, seven cities and other response partners to help ensure anyone in SLO County is better prepared to respond to a large-scale emergency. Providing all SLO County residents and visitors with an easy-to-remember and reliable source of emergency information has been a long- time goal of the County Office of Emergency Services. • Planning and Building: The Department of Planning and Building launched new online services. The County of San Luis Obispo now offers users the ability to apply for renewable energy permits, ePermits, schedule building inspections, look up permit details and pay fees online through the County’s Citizen Self-Service 9 (CSS) Portal. ePermits include instant permits such as a water heater replacement or electrical panel replacement. Renewable energy permits include, for example, solar/photovoltaic system or electric vehicle charging station permits that require plan review. • Public Works: The first solar projects in County-owned facilities were completed and represent a major sustainability milestone for the County. Solar parking canopies were constructed at the Department of Parks and Recreation's Dairy Creek Golf Course and the Department of Social Services on South Higuera Street. They are designed to supply over 80 percent of site electricity needs. These solar projects will generate over 850,000 kilowatt-hours of renewable energy per year- replacing an additional 625 metric tons of CO2 emissions, equivalent to removing 135 passenger vehicles from the road each year. The County is looking forward to more than a million dollars of energy expense savings over the next 20 years. • Sheriff: The County of San Luis Obispo was named a Stepping Up Innovator County for leading the way in reducing the number of people in jail who have a mental illness. Stepping Up is a national initiative to reduce the number of people with mental illnesses in jails. The County met key criteria to earn the distinction including screening every person who is booked into jail for mental illness using a nationally validated screening tool. This allows for timely treatment by jail health staff. The County plans to reduce the number of people with mental illness booked into the County Jail, reduce the length of stay in jail for people with mental illness, increase the percentage of people connected to treatment upon release, and reduce the rate of recidivism for people with mental illness. Awards and Acknowledgments Awards: • The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of San Luis Obispo for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2019. This was the thirty-fourth consecutive year that the County has received this prestigious award. In order to be awarded a Certificate of Achievement the County published an easily readable and efficiently organized Comprehensive Annual Financial Report (CAFR). This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. 10 • The Government Finance Officers Association presented the County with its Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning July 1, 2019. In order to receive this prestigious award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. • The County of San Luis Obispo earned the California State Controller’s Award for Counties Financial Transaction Reporting for the fiscal year ending June 30, 2019. This is the fourth consecutive year that the County has earned this award which recognizes the County’s professionalism in preparing an accurate and timely report. Acknowledgments: The preparation of the Comprehensive Annual Financial Report would not have been possible without the efficient and dedicated services of the staff of the Auditor- Controller-Treasurer-Tax Collector’s Office. We would like to acknowledge the special efforts of our Enterprise Financial System Operations Division and our independent auditors, CliftonLarsonAllen LLP, for their assistance in the report preparation. We would also like to express our appreciation to all County departments who assisted in this process and to the Board of Supervisors for its leadership responsibility and unfailing support to ensure the continued general fiscal health and integrity of the County. Respectfully submitted, James W. Hamilton, CPA Wade Horton Auditor-Controller-Treasurer-Tax Collector County Administrative Officer 11 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to County of San Luis Obispo California For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO 12 COUNTY OF SAN LUIS OBISPO LIST OF ELECTED AND APPOINTED OFFICIALS JUNE 30, 2020 Elected Officials Board of Supervisors District #1 ..................................................................................................... John Peschong District #2 .................................................................................................. Bruce S. Gibson District #3 ........................................................................................................... Adam Hill District #4 Chairperson .................................................................................... Lynn Compton District #5 ...................................................................................................... Debbie Arnold Other Elected Officials Assessor ............................................................................................. Tom J. Bordonaro Jr. Auditor-Controller-Treasurer-Tax Collector-Public Administrator .................. James W. Hamilton County Clerk-Recorder .................................................................................... Tommy Gong District Attorney .....................................................................................................Dan Dow Sheriff-Coroner ............................................................................................... Ian Parkinson Appointed Officials Agricultural Commissioner ......................................................................... Martin Settevendemie Director of Airports ................................................................................................ Kevin Bumen Behavioral Health Administrator ................................................................................ Anne Robin Central Services Director ............................................................................... Christopher Lopez Chief Probation Officer ............................................................................................ James Salio Director of Child Support Services ......................................................................... Natalie Walter County Administrative Officer ............................................................................... Wade Horton County Counsel ....................................................................................................... Rita L. Neal County Fire Chief .................................................................................................... Scott Jalbert Director of UC Cooperative Extension .................................................................. Katherine Soule Health Agency Director ............................................................................................ Michael Hill Human Resources Director ......................................................................... Tami Douglas-Schatz Director of Information Technology ........................................................................... Daniel Milei Library Director ......................................................................................... Christopher Barnickel Director of Parks and Recreation ................................................................................ Nick Franco Director of Planning and Building ............................................................................. Trevor Keith Public Health Officer ....................................................................................... Penny Borenstein Director of Public Works (Interim) ............................................................................. John Diodati County Social Services Director ............................................................................... Devin Drake Veterans’ Services Officer ....................................................................................... Morgan Boyd 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 Auditor- Controller- Agricultural Child Support County Airports Treasurer-Tax Commissioner Services Health Agency Counsel Collector-Public Public Health Mental Health Administrator* Drug & Alcohol Animal Services Medical Services UC Planning & Administrative County Fire** Cooperative Central Services Building Office Extension District Human Public Works Social Services Library Assessor* Attorney* Resources Emergency Veterans' Parks & Information Clerk-Recorder* Services Services Recreation Technology Probation Sheriff- Coroner* Public Defender** * Elected Officials **Contract 14 ________________________________________________________________ FINANCIAL SECTION ________________________________________________________________ INDEPENDENT AUDITORS’ REPORT To 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, 2020, 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. Auditors’ 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 which represent 60 percent of the assets and 2 percent of the total revenue/contributions of the aggregate remaining fund information and 100 percent of the assets and revenues of the discretely presented component unit, respectively. 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 discretely presented component unit and net pension trust fund, is 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 15 To the Honorable Board of Supervisors County of San Luis Obispo, California 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, 2020, and the respective changes in financial position, and where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of the County’s proportionate share of the San Luis Obispo County’s pension plan’s net pension liability, schedule of the County’s contributions to the San Luis Obispo County’s pension plan, other post-employment benefits (OPEB) plan schedule of changes in the County’s net OPEB liability and related ratios, other post-employment benefits (OPEB) plan schedule of actuarially determined plan contributions and related ratios, and budgetary comparison information for the General Fund, 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. 16 ________________________________________________________________ MANAGEMENT’S DISCUSSION AND ANALYSIS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2020 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, 2020. 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 36. All amounts, unless otherwise indicated, are expressed in thousands of dollars. FINANCIAL HIGHLIGHTS  The assets of the County exceeded its liabilities at the close of the most recent fiscal year by $1,365,858 (net position). The majority of this amount, $1,491,490 is the net investment in capital assets, while $66,655 is restricted for specific purposes (restricted net position). Unrestricted net position indicates the portion of net position which may be used to meet the County’s ongoing obligations to citizens and creditors; however, the recording of the County’s pension liability in accordance with GASB Statement No. 68 (GASB 68) and the County’s OPEB liability in accordance with GASB Statement No. 75 (GASB 75) created a negative unrestricted net position of $192,287 (Table A).  The County’s total net position decreased by $12,974. The decrease is the net result of a $27,163 reduction in governmental activities and a $14,189 increase in business-type activities. The change in the total net position is comprised of an increase in restricted net position offset by increased negative unrestricted net position caused by decreased revenues and increased expenses (Table B).  The $16.8 million increase in net investment in capital assets represents capital acquisitions during the year reduced by depreciation and increased by retirement of long-term debt (Table A).  As of June 30, 2020, the County’s governmental activities reported combined ending net position of $982,742, a decrease of $27,163 in comparison with the prior year. Due to the recording of the long-term pension and OPEB obligations, no amount of the governmental activities’ net position 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 $4,595 before general revenues, contributions and transfers from other funds, an increase of $508 when compared to net program income of $4,087 in the prior year. The difference from the prior year is a combination of decreases in capital grants of $3,139 for the Airport and $2,242 for Los Osos Wastewater and increases to operating grants and contributions of $4,821 for the Airport and increased water sale revenues for the General Flood Control Zone – Salinas Dam of $1,971. Additionally, most enterprise activities had increased charges for services. Overall expenses for business-type activities increased $780 thousand.  At the end of the fiscal year, the entire $324,530 fund balance of the General Fund was either nonspendable $18,734, restricted $10,915, committed $175,455 or assigned $119,426.  Consistent with the prior year, the County prepaid its $61.6 million employer retirement contribution to the San Luis Obispo County Pension Trust (Pension Trust) in July of 2020. The prior year prepayment was $55.0 million. The County will save an estimated $1.3 million by prepaying the employer retirement contribution. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are 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. 18 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) 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 presents information on all of the County’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, 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, recreation 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 SLO 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 36 to 38 of this report. 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. 19 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. The County maintains twenty-five 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-three governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor 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 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 nonmajor governmental funds is provided in the other supplementary information section of this report. The basic governmental fund financial statements can be found on pages 39 to 42 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, wastewater facility, 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 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 government-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, 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 seven 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 information section of this report. The basic proprietary fund financial statements can be found on pages 43 to 45 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 46 to 47 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 48 to 89 of this report. Required Supplementary Information - The notes to the basic financial statements are followed by a section of required supplementary information (RSI) that further explains and supports the information in the financial statements. 20 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The required supplementary information can be found on pages 90 to 97 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 including the County’s General Fund and special revenue funds budgetary schedules, and combining and individual fund statements and schedules. Combining and individual fund statements and schedules - The combining and individual fund statements and schedules referred to earlier provide information for nonmajor governmental funds, nonmajor enterprise funds, internal service funds, and fiduciary funds and are presented following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 98 to 107 and 125 to 140 of this report. Budgetary comparison schedules - The budgetary comparison schedules (other than the General Fund which is presented in the required supplementary information section) for the Capital Projects, Pension Obligation Bonds, San Luis Obispo County Public Facilities Corporation, SLO County Financing Authority, and nonmajor Special Revenue funds can be found on pages 108 to 124 of this report. Detail budgetary schedules demonstrating legal level of compliance with budgetary control for the General Fund are presented on pages 141 to 148 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS 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 of resources exceeded liabilities and deferred inflows of resources by $1,365,858 as detailed in the table below: Table A Statement of Net Position June 30, 2020 (in thousands) 2019- June 30, 2020 June 30, 2019 2020 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 $ 620,672 $ 160,246 $ 780,918 $ 589,848 $ 148,133 $ 737,981 5.8% Other noncurrent assets 21,957 10,375 32,332 3,386 10,236 13,622 137.4% Capital assets 1,227,138 589,280 1,816,418 1,214,459 596,352 1,810,811 0.3% Total assets 1,869,767 759,901 2,629,668 1,807,693 754,721 2,562,414 2.6% Deferred Outflows of Resources 81,473 5,151 86,624 176,881 5,843 182,724 (52.6%) Liabilities: Current liabilities 99,278 39,499 138,777 77,947 38,282 116,229 19.4% Long-term liabilities 810,625 340,909 1,151,534 872,051 352,460 1,224,511 (6.0%) Total liabilities 909,903 380,408 1,290,311 949,998 390,742 1,340,740 (3.8%) Deferred Inflows of Resources 58,595 1,528 60,123 24,671 895 25,566 135.2% Net position: Net investment in capital assets 1,202,709 288,781 1,491,490 1,188,830 285,888 1,474,718 1.1% Restricted 66,655 - 66,655 41,281 - 41,281 61.5% Unrestricted (286,622) 94,335 (192,287) (220,206) 83,039 (137,167) 40.2% Total net position $ 982,742 $ 383,116 $ 1,365,858 $ 1,009,905 $ 368,927 $ 1,378,832 (0.9%) 21 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Net Position The County’s total net position decreased by $12,974 or 0.9%. The total net position decrease was a combination of decreased deferred outflows of resources ($96.1 million), decreased total liabilities ($50.4 million), increased total assets ($67.3 million), and increased deferred inflows of resources ($34.6 million). Causes for the changes in each of these categories are detailed below. The overall $67.3 million increase in total assets, 2.6%, is primarily due to inflows of the governmental activities’ cash and restricted cash ($37.9 million) and an increase in governmental activities’ property tax receivables ($5 million). Business activities’ cash inflows also contributed $14.5 million to the increase. Within governmental activities, the significant cash increases occurred due to higher property tax revenue coupled with the County’s issuance of $20.4 million of lease revenue bonds for construction of a new Animal Services Facility and refunding the 2008 Series A Certificates of Participation. The increase in business activities’ cash resulted primarily from Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act money received by the Airport ($2.5 million), settlement damages received for leakage repair costs associated with the Nacimiento water pipeline ($2.6 million), and increased water sales by the State Water Project ($168 thousand) and General Flood Control Zone – Salinas Dam activities ($2.0 million). Of the $96.1 million, or 52.6%, decrease in deferred outflows of resources, $94.1 million was related to deferred pension resources and $1.8 million was related to deferred OPEB resources. The pension deferred outflows net decrease was caused primarily by a $109 million change in the net difference between projected and actual earnings on pension plan investments, slightly offset by a $3.3 million increase in County contributions subsequent to the measurement date. The OPEB deferred outflows decrease was primarily attributable to a $1.8 million decrease to changes in actuarial assumptions. Total liabilities of the County decreased $50,429, or 3.8%. The largest contributor to the decrease was a decrease in the County’s net pension obligation of $82.6 million. The overall decrease in liabilities was offset by a $12.1 million increase in accounts payable, a $4.3 million increase to salaries and benefits payable, a $6.9 million increase to compensated absences and a $5 million increase to deposits from others relating to a Public Work’s project. Deferred inflows of resources increased $34.6 million, or 135.2%. $32.1 million of the increase was related to deferred pension resources associated with the change in the net difference between projected and actual earnings on pension plan investments. Additionally, deferred inflows related to community development loans increased by $2.9 million over the prior year. Unrestricted net position indicates the portion of net position which may be used to meet the County’s ongoing obligations to citizens and creditors. The recording of the County’s pension liability, per the requirements of GASB 68, and the recording of the County’s OPEB liability per the requirements of GASB 75, caused the County’s unrestricted net position to remain negative indicating that the majority of the County’s net position is invested in capital assets or otherwise restricted for use. The most significant portion of the County’s net position is net investment of capital assets of $1,491,490. This amount reflects investment in capital assets (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. 22 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The remaining $66,655, or 4.9%, of the balance of the County’s net position 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 for business-type activities in all net position categories. In total, the County’s net position decreased $13.0 million. Total net position for governmental activities decreased $27.2 million and total net position for business-type activities increased $14.2 million due to normal operating activities. Net Investment in Capital Assets for business-type and governmental activities increased $16.8 million. Business- type activities net investment increased $2.9 million due to the Airport’s runway rehabilitation project that does not have related debt and the purchase of TopTracer Range technology for the Dairy Creek Golf Course. The remainder is comprised of an increase in State Water Project water rights and reduction to capital related debt from scheduled debt service principal payments. Governmental activities net investment increased $13.9 million. The increase is mostly due to Roads projects including the Geneseo Road Bridge ($3.3 million), River Grove Drive Bridge ($3.1 million), and Oceano stormwater drainage improvement ($4.9 million) projects. The retirement of capital related long-term debt also contributed to the increase. The $25,374, or 61.5% increase to Restricted net position for governmental activities is primarily comprised of increases to the General Government ($937 thousand), Public Protection ($1.4 million), Public Ways and Facilities ($895 thousand), and Debt Service ($22.1 million) functions. The General Government increases related to purchase obligations for professional services for Human Services and Talent Development as well as increased claims, contracts and other restrictions imposed by grantors or contributors. The Public Protection increase was driven by purchases of vehicles and equipment for fire protection services. Restricted net position increased slightly for the Recreation and Cultural Services function, was unchanged for the Public Assistance function, and decreased slightly for the Health and Sanitation, and Education functions. The increases and decreases are mostly due to fluctuations in purchase obligations. Restricted net position represents net position of the County which is subject to constraints imposed by creditors, grantors, contributors, laws, or regulations. There was a decrease of $55.1 million in Unrestricted net position reported in connection with the Total Primary Government. This category represents the portion of the County’s net position which is not subject to constraints imposed by creditors, grantors, contributors, laws, or regulations. When positive, this amount may be used to meet the County’s general obligations. The table on the next page indicates the changes in net position for governmental and business-type activities: 23 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table B Statement of Activities For the Year Ended June 30, 2020 (in thousands) June 30, 2020 June 30, 2019 2019-2020 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 $ 55,269 $ 55,206 $ 110,475 $ 58,501 $ 53,322 $ 111,823 (1.2%) Operating grants and contributions 261,619 4,666 226,285 254,589 386 254,975 4.4% Capital grants and contributions 19,884 3,123 23,007 16,516 7,999 24,515 (6.2%) General revenues: Property taxes 198,927 4,043 202,970 189,689 3,912 193,601 4.8% Other taxes 27,878 - 27,878 27,224 - 27,224 2.4% Interest and investment income 12,849 2,169 15,018 12,952 1,590 14,542 3.3% Grants not restricted to specific programs 3,845 - 3,845 2,115 - 2,115 81.8% Other revenues 1,144 2,889 4,033 35,445 574 36,019 (88.8%) Total revenues 581,415 72,096 653,511 597,031 67,783 664,814 (1.7%) Expenses: General government 53,926 - 53,926 54,434 - 54,434 (0.9%) Public protection 241,749 - 241,749 213,809 - 213,809 13.1% Public ways and facilities 33,199 - 33,199 34,202 - 34,202 (2.9%) Health and sanitation 113,463 - 113,463 119,259 - 119,259 (4.9%) Public assistance 132,868 - 132,868 131,432 - 131,432 1.1% Education 14,322 - 14,322 12,698 - 12,698 12.8% Recreation and cultural services 11,501 - 11,501 11,891 - 11,891 (3.3%) Interest on long-term debt 7,057 - 7,057 1,468 - 1,468 380.7% Airport - 10,133 10,133 - 8,398 8,398 20.7% Golf - 3,347 3,347 - 3,491 3,491 (4.1%) State Water Contract - 7,709 7,709 - 6,973 6,973 10.6% Nacimiento Water Contract - 13,257 13,257 - 14,318 14,318 (7.4%) Lopez Flood Control - 6,733 6,733 - 7,004 7,004 (3.9%) Lopez Park - 2 2 - 3 3 (33.3%) General Flood Control - 913 913 - 1,142 1,142 (20.1%) County Service Areas - 4,670 4,670 - 4,747 4,747 (1.6%) Los Osos Wastewater - 11,636 11,636 - 11,544 11,544 0.8% Total expenses 608,085 58,400 666,485 579,193 57,620 636,813 4.7% Excess/(deficiency) before transfers (26,670) 13,696 (12,974) 17,838 10,163 28,001 (146.2%) Transfers (493) 493 - (625) 625 - - Change in net position (27,163) 14,189 (12,974) 17,213 10,788 28,001 (146.2%) Net position - beginning of year 1,009,905 368,927 1,378,832 997,303 356,523 1,353,826 1.8% Prior Period Adjustment - - - (4,611) 1,616 (2,995) (100%) Net position - end of year $ 982,742 $ 383,116 $ 1,365,858 $ 1,009,905 $ 368,927 $ 1,378,832 (0.9%) 24 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Governmental and Business-type Activities Governmental Activities Governmental Activities decreased the County’s net position by $27.2 million compared to an increase of $12.6 million in the prior year. Overall, total revenues for governmental activities decreased $15.6 million, or 2.6%. Significant factors contributing to the overall decrease in revenues from the prior year are detailed below:  Other Revenues decreased by $34.3 million or 96.8% as a consequence of the prior year recognition of $34.9 million of economic impact mitigation funds for the impending closure of the Diablo Canyon Nuclear Power Plant.  Operating Grants and Contributions increased by $7.0 million, or 2.8%, due to state increases to funding for Social Services’ programs.  Capital Grants and Contributions increased by $3.4 million, or 20.4%, due to state and federal increases in roads funding.  Property Taxes rose $9.2 million, or 4.9% over the prior year, a function of the regular 2% increase in assessed property value allowed by California’s Proposition 13. Overall, total expenditures increased by $28.9 million, or 5.0%. Notable factors contributing to the overall increase in expenditures from the prior year are detailed below:  General Government expenditures decreased by $508 thousand from reduced expenditures for professional services and supplies due the completion of countywide automation projects in the prior fiscal year including the Integrated Document Management (IDM) upgrade, the Jail and Records Management System and the Assessor’s Recorded Documentation System replacement projects.  Public Protection increased expenditures by $27.9 million primarily due to increased salaries and wages across the majority of departments in the function ($9.4 million), purchases of services and supplies related to the County’s emergency response to COVID-19 ($4.5 million), and payments made to Templeton and Oceano Community Services Districts related to the Integrated Regional Water Management (IRWM) Grant Program ($3.1 million).  Public Ways and Facilities expenditures decreased $1.0 million due to the reduction of the County’s portion of the Paso Robles Water Basin Groundwater Sustainability Plan professional services cost.  Health and Sanitation expenditures decreased $5.8 million due to the combination of increased mental health professional services of $5.1 million and an overall net decrease in pension related expenditures of $10.7 million.  Public Assistance increased expenditures of $1.4 million resulted from an increase in the foster care and CalWORKs assistance programs’ participant costs.  The increase in Education expenditures of $1.6 million was due to computer purchases for the Driving Under the Influence Program and an increase in the Library’s professional services costs for modified patron services as a result of COVID-19 restrictions.  Interest expense on long-term debt increased by $5.6 million primarily attributable to interest payments on the 2003 Capital Appreciation Bonds. For FY 2019-20, the County was able to maintain its funding of General Fund contingencies at a level of 5%, while still making investments in the many programs and services provided to the community. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Business-type Activities Business-type activities increased the County’s net position by $14.2 million compared to an increase of $12.4 million in the previous year. Revenues exceeded expenses by $13.7 million, and a transfer of $493 thousand from governmental activities resulted in the total increase to net position. Key elements of current year business-type activity are as follows: Total revenue increased $4.3 million or 6.4% from the preceding year. The largest increase occurred in Operating Grants and Contributions ($4.3 million) related to the Airport receiving $4.5 million in CARES Act funding from the Federal Aviation Administration. Additionally, Other Revenues increased $2.3 million related to the receipt of settlement damages for leakage repairs associated with the Nacimiento water pipeline and Charges for Services increased $1.9 million attributable to increased water sales for General Flood Control – Salinas Dam activities. The increases were offset by decreases in Capital Grants and Contributions of $4.9 million. The Airport had decreased capital grants of $2.7 million related to the completion of the new airport terminal and Los Osos Wastewater had decreased capital grants of $2.2 million related to construction of the wastewater treatment plant. Expenses for business-type activities increased $780 thousand or 1.4% from the prior year. Within business-type activities, the largest increase, $1.7 million, was caused by professional services payments related to the Airport property appraisal and grant acquisitions. This increase was offset by the Nacimiento Water Contracts’ $1.0 million expense decline due to the decrease in utility expenses and litigation costs. FUND FINANCIAL STATEMENT ANALYSIS FINANCIAL ANALYSIS OF THE 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 beneficial 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, $18,738, decreased by $520 thousand, 2.7% from the prior year. Nonspendable fund balance represents amounts that are not spendable in form or are legally or contractually required to be maintained intact, and includes (1) inventories of $101, (2) prepaid items of $842, and (3) long-term receivables of $17,795. The decrease from the prior year primarily relates to the decline in prepaid items in the amount of $764 thousand, or 33%.  Restricted fund balance, $67,972, increased $22.2 million, or 48.5%, from the prior year. Restricted fund balance represents amounts that are subject to externally enforceable legal restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation. Significant components of this balance include amounts restricted for (1) Tax reduction reserves of $4,613, (2) General Public Protection programs of $3,219, (3) Mental Health Services Act funds of $2,774, (4) Public Facilities funds of $14,638, (5) Traffic impact programs of $10,613, and (6) Debt service of $31,770. The majority of the increase to restricted fund balance relates to an increase in amounts restricted in the various Nonmajor Governmental Funds. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  Committed fund balance, $243,048, increased $6.6 million, or 2.8%, from the prior year. Committed fund balance represents amounts with constraints imposed by the Board of Supervisors for specified purposes. Significant components of this balance include commitments for (1) Flood control programs, $21,296, (2) Tax reduction reserve, $44,271, (3) Automation projects, $18,014, (4) Roads, $16,182, (5) Building replacement, $44,103, (6) Solar plant mitigation, $5,579, (7) Capital projects, $17,278, and (8) Maintenance projects, $6,782. The increase is partly due to the County receiving the second installment of the economic impact mitigation funds for the impending closure of the Diablo Canyon Nuclear Power Plant ($10.2 million).  Assigned fund balance, $119,426, decreased $7.6 million, or 6.0%, from the prior year. Assigned fund balance represents amounts the County intends to use for specific purposes that are neither restricted nor committed. Significant components of this balance include (1) Behavioral Health programs, $16,160, (2) Tax reduction reserve, $19,709, (3) Sheriff-Coroner and Emergency Services programs, $6,936, and (4) Subsequent Fiscal Year Budget, $36,428. The largest changes in the assigned fund balance category were an increase in tax reduction reserves ($8.8 million) and decreases to general government programs ($10.5 million), Sheriff-Coroner and Emergency Services program ($4.8 million), foster care and adoption programs ($4.0 million), and Behavioral Health programs ($3.3 million). As of the end of the current fiscal year, the County’s governmental funds reported combined ending fund balance of $449,184, an increase of 4.8%, or $20,685 in comparison with the prior year. Approximately 80.7% of the total fund balance, or $362,474, 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 $305,796 while total fund balance reached $324,530. 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 $495 million. Spendable fund balance represents 61.8% of the total fund expenditures, while total fund balance represents 65.6% of the same amount, a 5.7% decrease from the prior year. During the current fiscal year, the fund balance of the General Fund decreased by $3.8 million. The following provides an explanation for significant contributors to the change in the General Fund’s fund balance.  Total revenues exceeded total expenditures by $18.5 million, which was a $46.3 million decrease from the prior year.  General Fund revenues ended the year with a decrease of $11.9 million or 2.7% less than the prior year. The largest revenue decrease occurred in Other Revenues, which decreased by $14.2 million. The decrease was due to the County having recognized economic impact mitigation funding for the impending closure of the Diablo Canyon Nuclear Power Plant in the prior year. Aid from other governments decreased by $2.2 million primarily due to reduced public safety state aid revenue. The largest increase was in Taxes with a $4.9 million increase due to property taxes which are allowed up to a 2% increase by California’s Proposition 13 and increases in sales tax.  Total expenditures in the General Fund increased $34.4 million, or 7.5%, from the prior year. Expenditures increased for the Public Protection, Health and Sanitation, Public Assistance, Education, and Recreation and Cultural Services functions; like the prior year, negotiated salaries and benefit raises increased costs in most functions and were the major component in the overall rise ($16.8 million). In addition, services and supplies related to the County’s emergency response to COVID-19 ($4.5 million) and expenditures related to social services ($6.4 million) contributed to the increase in expenditures. Expenditures decreased for the General Government and Public Ways and Facilities functions due to reduced professional services. 27 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Capital Projects The Capital Projects Fund handles construction projects for the County’s governmental funds. The fund ended the fiscal year with a total fund balance of $18.9 million. Capital outlay expenditures exceeded revenues by $6.4 million and net transfers totaled $6.6 million. The combination of these two factors resulted in a $167 thousand increase in fund balance for the current year. Funding for specific projects comes primarily from use of designations, public facilities fees, issuance of long-term debt, and aid from other government agencies. The General Fund transferred $6.9 million to the Capital Projects Fund of which $1.7 million was for design and construction of a new County Fire and Sheriff emergency dispatch facility and $779 thousand was for Los Osos Landfill remediation. The remainder was for general government, public health and parks projects. Significant current year activities of the Capital Projects Fund are discussed in the Capital Assets section under governmental activities. Governmental Fund Revenues Revenues for all governmental funds combined totaled $587.1 million in the current fiscal year and decreased by approximately 0.7%, or $4.0 million, from the prior fiscal year revenues of $591.1 million. The following table presents the amount of revenues from various sources and also displays increases or decreases from the prior year. Table C Revenues Classified by Source Governmental Funds Fund Financial Statements For the Year Ended June 30, 2020 (in thousands) 2019-2020 2018-2019 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount Change Revenues by Source: Taxes $ 223,041 38.0% $ 217,106 36.7% $ 5,935 2.7% Licenses, Permits, and Franchises 11,477 1.9% 12,133 2.1% (656) (5.4%) Fines, Forfeitures, and Penalties 3,916 0.7% 4,396 0.7% (480) (10.9%) Use of Money and Property 12,247 2.1% 12,268 2.1% (21) (0.2%) Aid from Governmental Agencies 277,267 47.2% 271,961 46.0% 5,306 2.0% Charges for Current Services 46,712 8.0% 47,957 8.1% (1,245) (2.6%) Other Revenues 12,396 2.1% 25,278 4.3% (12,882) (51.0%) Total $ 587,056 100% $ 591,099 100% $ (4,043) (0.7%) The following provides an explanation of revenues by source that changed significantly over the prior year in the governmental funds.  Taxes increased $5.9 million or 2.7% primarily due to the regular 2% increase in assessed property value allowed by California’s Proposition 13 and an increase in sales tax revenues.  Licenses, Permits, and Franchises decreased $656 thousand, or 5.4%. The decrease was driven by a decrease in land use and building plans review fees being collected for commercial buildings and residential additions. 28 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  Fines, Forfeitures, and Penalties decreased $480 thousand, or 10.9%. The decrease was primarily due to a decline in court fines and collections related to vehicle infractions.  Aid from Governmental Agencies increased $5.3 million, or 2.0%. The increase was primarily due to increased federal aid related to Mental and Behavioral Health and Roads.  Charges for Services decreased $1.2 million, or 2.6%. The decrease was the result of declines in Park’s revenue, including a $1.1 million decline in camping fee revenue and a $155 thousand reduction in group day use fees. Due to COVID-19 restrictions, campgrounds were closed for several months and park use was limited.  Other Revenues decreased $12.9 million, or 51.0%. The decrease is primarily attributable to community impact mitigation revenues related to the closure of the Diablo Canyon Nuclear Power Plant received in the prior year. 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 For the Year Ended June 30, 2020 (in thousands) 2019-2020 2018-2019 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount Change Expenditures by Function: General Government $ 54,078 9.1% $ 54,991 10.3% $ (913) (1.7%) Public Protection 205,162 34.7% 185,033 34.4% 20,129 10.9% Public Ways and Facilities 43,865 7.4% 35,267 6.6% 8,598 24.4% Health and Sanitation 108,158 18.3% 103,512 19.3% 4,646 4.5% Public Assistance 131,154 22.2% 121,327 22.7% 9,827 8.1% Education 12,769 2.2% 12,191 2.3% 578 4.7% Recreation and Cultural Services 11,637 2.0% 10,574 2.0% 1,063 10.1% Principal payments 10,561 1.8% 5,093 1.0% 5,468 107.4% Interest on Long-Term Debt 6,416 1.1% 1,204 0.2% 5,212 432.9% Capital outlay 7,645 1.3% 6,374 1.2% 1,271 19.9% Total $ 591,445 100% $ 535,566 100% $ 55,879 10.4% The following provides an explanation of the expenditures by function that changed significantly over the prior year.  Public Protection expenditures increased $20.1 million, or 10.9%. The increase related to increased salaries and services & supplies spread across multiple departments: specifically, increased billings from the State to County Fire increased due to negotiated labor and contact rates and increased County Fire vehicle replacement costs. Increased professional services expenditures for Public Defender occurred mid-year to fund an additional attorney on an ongoing basis. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  Public Ways and Facilities expenditures increased $8.6 million, or 24.4%. In addition to continued countywide microsurfacing, overlay, and chip seal projects, expenditures increased due to the start and completion of several large projects. These projects included the repairs and replacements of Santa Margarita Creek, Los Osos Creek, Jack Creek Road, Toro Creek Road, and the Arroyo Grande Creek bridges.  Public Assistance expenditures increased $9.8 million, or 8.1%. The increase was caused by increased supportive care costs for social services, foster care, and CalWORKs programs.  Principal and Interest Payments on Long-Term Debt increased by $10.7 million, or 170% due to beginning the repayment of the Nacimiento Water Project Revenue Refunding Bond, 2015 Series A and the payoff of the 2008 Series A Vineyard Drive Interchange Certificates of Participation.  Capital Outlay expenditures increased $1.3 million, or 19.9%. The increase is primarily due to the Jail’s roof replacement and the start of the Animal Services Facility 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 2019-20 fiscal year. Table E Statement of Revenues, Expenses and Results of Operations Proprietary Funds Fund Financial Statements For the Year Ended June 30, 2020 (in thousands) Major Nonmajor Funds Funds Total Nacimiento State Other Water Water Los Osos Enterprise Total Airport Contract Project Wastewater Funds Enterprise Operating revenues $ 8,651 $ 19,518 $ 7,825 $ 5,261 $ 17,152 $ 58,407 Operating expenses 10,356 6,012 7,606 8,209 14,246 46,429 Operating income (loss) (1,705) 13,506 219 (2,948) 2,906 11,978 Non-operating revenues (expenses), net 4,951 (6,412) 2,735 (3,224) 832 (1,118) Net income (loss) before contributions and transfers 3,246 7,094 2,954 (6,172) 3,738 10,860 Contributions and transfers, net 152 - - 2,345 1,119 3,616 Change in net position $ 3,398 $ 7,094 $ 2,954 $ (3,827) $ 4,857 $ 14,476 30 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) All the enterprise funds are expected to continue to meet their ongoing cost of operations and to be able to maintain sufficient reserves in the long-term.  The Airport Fund reported an operating loss of $1.7 million, a $2.4 million loss over the prior year operating income of $733 thousand. Operating revenues decreased $370 thousand as the result of California’s March 2020 Stay at Home Orders limiting non-essential travel. Passenger and enplanement activity decreased for the first time since the 2013-14 fiscal year, both declining by approximately 17% from the prior year. Net position increased by $3.4 million compared to an increase in net position of $4.4 million in the prior year. The net position increased despite the operating revenue decline as a result of the Federal Aviation Administration’s payment of CARES Act funds ($2.5 million) and Airport Improvement Program grants ($2.0 million) to the Airport in FY 2019-20.  The Nacimiento Water Contract Fund realized operating income of $13.5 million, an increase of $3.4 million from the prior year’s operating income of $10.1 million. The increase is primarily attributable to the receipt of a $2.6 million settlement for leak repairs to the Nacimiento water pipeline, combined with a decrease in operating expenses of $786 thousand. The increase in revenue and the decrease in expenses resulted in net position increasing $7.1 million.  The State Water Project Fund realized operating income of $219 thousand, a $629 thousand decrease from the prior year’s operating income of $845 thousand. The decrease is primarily attributable to a $795 thousand increase in operating expenses over the prior year but was offset slightly by $169 thousand in increased water sales. Overall, net position increased by $3.0 million, which is primarily attributable to property tax receipts.  The Los Osos Wastewater Fund reported an operating loss of $2.9 million, an increase of $80 thousand compare to the prior year. The wastewater plant began full-service operations in FY 2016-17 and both operating revenue and expense remained relatively similar to the prior year. Operating revenue decreased by $102 thousand and operating expenses decreased $22 thousand. Capital contributions decreased by $3.0 million and overall net position decreased $3.8 million, compared to a $721 thousand decrease in the prior year. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget for expenditures and transfers out increased by $40.0 million, or 7.4%, during the year, leading to the final amended budget. This increase was funded in part by increases to both budgeted revenues and transfers in totaling $27.6 million and the use of reserves and designations for the balance. Unanticipated revenues totaling $12.8 million in State, Federal, and Other Governmental Aid, $10.3 million in Other Revenue, $678 thousand in Interfund Revenues, $503 thousand in Charges for Current Services, $105 thousand in Fines, Forfeitures, and Penalties, and $3.2 million in Other Financing Sources financed the budget augmentations. The $14.0 million in the Public Protection function augmentations were primarily divided among Sheriff-Coroner programs, which received $5.1 million in augmentations, Probation program augmentations of $2.6 million, County Fire augmentations of $2.4 million, and Planning and Building program augmentations of $1.6 million. The $12.8 million in the General Government function augmentations were primarily for the maintenance and upgrade of County facilities. The $6.2 million increase in the Public Assistance function relates almost entirely to Social Services including foster care and adoption assistance, housing placement and supportive services. Health and Sanitation augmentations relate to Drug and Alcohol programs, which received $1.9 million, $1.4 for Public Health programs, $1.1 million for Mental Health Services Act programs, and Mental Health programs received $712 thousand. Public Ways and Facilities augmentations of $1.3 million for Development Services for outside agency projects, $1.2 million for the Sustainable Groundwater Management Act management, and $257 thousand for Services provided for Special District projects. At the close of the fiscal year, actual General Fund expenditures were 87.3% of the current budget, while General Fund revenues were realized at 98.3% of budget. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At June 30, 2020, the County had $1.8 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). This amount represents a net decrease (including additions and deductions) of $5.6 million or 0.3% from last year. Table F Capital Assets June 30, 2020 (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 2019 2020 2019 2020 2019 2020 Change Land $ 795,513 $ 795,532 $ 36,513 $ 36,513 $ 832,026 $ 832,045 - Water Rights - - 58,591 61,212 58,591 61,212 4.5% Other Property Non-Depreciable - - 1,968 1,968 1,968 1,968 - Construction-in- progress 28,891 35,171 2,097 3,997 30,988 39,168 26.4% Structures & Improvements 263,455 268,005 209,772 210,480 473,227 478,485 1.1% Equipment 103,034 104,901 10,164 10,317 113,198 115,218 1.8% Other Property Depreciable 980 1,258 554 554 1,534 1,812 18.1% Infrastructure Depreciable 412,682 434,516 381,471 381,692 794,153 816,208 2.8% Subtotal 1,604,555 1,639,383 701,130 706,733 2,305,685 2,346,116 1.8% Less Accumulated Depreciation (390,096) (412,245) (104,778) (117,453) (494,874) (529,698) 7.0% Total $ 1,214,459 $ 1,227,138 $ 596,352 $ 589,280 $ 1,810,811 $ 1,816,418 0.3% Major additions and future commitments in capital assets - Governmental Activities County Roads had the majority of additions in governmental activities with $20.5 million worth of assets. Microsurfacing, overlay, and chip seal projects throughout the County comprised most of the road additions. Other major roads projects included the replacement of a low water crossing on Geneseo Road with a new concrete bridge over Huerhuero Creek near the community of Creston ($3.3 million), the rehabilitation of the historic steel truss bridge over the Estrella River near Paso Robles ($3.1 million), and improving stormwater drainage in the community of Oceano ($4.9 million). Other notable capital asset additions during FY 2019-20 include design-build work beginning on the Sheriff-Coroner and County Fire co-located emergency dispatch facility ($1.7 million) and the new Animal Services Facility ($1.3 million). The County completed a new sports facility at Nipomo Community Park ($347 thousand) and roof improvements were made to both the Sheriff-Coroner’s Office ($537 thousand) and the San Luis Obispo Vet’s Hall ($301 thousand). 32 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Major additions and future commitments in capital assets - Business-type Activities Within business-type activities, the Dairy Creek Golf Course added TopTracer Range technology ($669 thousand) and the Airport began work on the runway rehabilitation project ($504 thousand). 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 $483 million. In July 2003, the County issued Pension Obligation Bonds to refund the Unfunded Actuarial Accrued Liability due to the Pension Trust. The balance remaining on the County’s Pension Obligation Bonds at the end of the FY 2019-20 was $93.7 million. Pension Obligation Bonds debt service payments are funded by County payroll benefits. The remainder of the County’s debt consists of $33.2 million in certificates of participation, which are repaid from a variety of revenues; $82.8 million in State loans; $74.0 million in assessment bonds relating to the Los Osos Wastewater project; $167.9 million in revenue bonds which are repaid with water service revenue; and $24.4 million in lease revenue bonds for the construction and equipping of an animal services facility and debt refunding. General Obligation Bonds totaling $7.6 million are backed by the full faith and credit of the County. Table G Outstanding Debt June 30, 2020 (in thousands) Business- Business- Type Type Governmental Governmental Activities Activities Total Total Total Activities Activities June 30, June 30, June 30, June 30, Percent June 30, 2019 June 30, 2020 2019 2020 2019 2020 Change Certificates of Participation $ 19,768 $ 13,076 $ 12,184 $ 11,299 $ 31,952 $ 24,735 (23.7%) Certificates of Participation from Direct Borrowings 5,762 5,636 2,922 2,871 8,684 8,507 (2.0%) Pension Obligation Bonds 96,903 93,733 - - 96,903 93,733 (3.3%) State Notes from Direct Borrowings 1,901 1,744 84,409 81,079 86,310 82,823 (4.0%) Lease Revenue Bonds - 24,403 - - - 24,403 - Revenue Bonds - - 172,628 167,918 172,628 167,918 (2.7%) General Obligation Bonds - - 8,162 7,645 8,162 7,645 (6.3%) Assessment Bonds - - 75,358 73,943 75,358 73,943 (1.9%) Total $ 124,334 $ 138,592 $ 355,663 $ 344,755 $ 479,997 $ 483,347 0.7% 33 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The increase from the prior year for the County’s certificates of participation, notes, and bonds payable was $3.3 million, or 0.7%. The increase was caused by the issuance of $20.4 million of lease revenue bonds which will be used to finance the construction and equipping of an animal services facility and refunding of the 2008 Series A Certificates of Participation. The issuance of the lease revenue bonds offset the $21.1 million of debt payments causing the overall slight increase in total debt. Additional information on the issuance of debt can be found in Note 10 to the financial statements. 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 $743.1 million. Other liabilities include compensated absences of $35.5 million for governmental activities and $513 thousand for business-type activities; landfill postclosure costs of $7.2 million; and a self-insurance liability of $20.1 million. More detailed information about the County’s long-term debt and other long-term liabilities is presented in Note 10 to the financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES  The County is committed to providing services with integrity, collaboration, professionalism, accountability and responsiveness, and these values are reflected in the Fiscal Year 2019-20 budget which represents conservative growth compared to the Fiscal Year 2018-19 budget. The County’s conservative approach to budgeting has ensured its ability to sustain fiscal health in recent years and will be central to the County’s ability to respond to potential changes in State and Federal policy.  The impacts COVID-19 will have to the County’s funding sources are not yet fully known, but the statewide and local shelter at home orders will have a significant economic impact, which will decrease the amount of funding available for vital County operations. However, the State’s adopted budget includes $28.3 million of federal Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, funding that will be passed through from the State to the County for COVID-19 public health and safety activities.  The In-Home Supportive Services (IHSS) program provides assistance and services to eligible older or disabled individuals to help them remain safely in their homes. Last year, the Governor’s FY 2019-20 Budget made several positive changes affecting the existing funding structure for IHSS, following the State’s 2017 decision to unwind the Coordinated Care Initiative and shift nearly $600 million in IHSS costs from the State to counties. No additional changes to the IHSS funding structure are proposed at this time; however, this issue will remain on the County’s list of State issues impacting our local budget, due to the fact that the continued expenditure growth for this program will have a material impact to both the State and the County’s budget over the next several years. The Governor’s Budget includes $14.9 billion in IHSS costs, with $5.2 billion coming from the State General Fund (representing growth of 16% over the current year). The proposed State budget also reflects an estimate that the average monthly caseload for this program will increase by 4.5% over the prior year projection, for a total of 586,000 program recipients in FY 2020-21. The expected cost for the County’s IHSS program in FY 2020- 21 is $7.5 million and represents a total expenditure increase of $339 thousand over the current year. While this increase in expense is manageable within the context of the County’s overall budget, this ongoing expense will continue to grow, and the County needs to fully support this program with General Fund support in the long-term. The Department of Social Services’ budget request includes the use of $689,792 of prior year caseload growth funding to support a portion of the $7.5 million of total IHSS expense. This is not an ongoing or sustainable funding source, and staff is looking at options to incrementally increase the amount of General Fund support to this program over the next year or two. 34 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  The closure of Diablo Canyon Power Plant (Diablo Canyon) in 2025 is expected to have significant ramifications to the local community. According to a 2013 study by the California Polytechnic State University in San Luis Obispo, Diablo Canyon, one of the largest employers in the county, contributes approximately $1 billion annually to the local economy. In addition to unitary taxes from the value of the plant, the County receives direct funding from PG&E for emergency preparedness and response activities. PG&E also initiates a variety of expenditures including emergency equipment, infrastructure and training providing sales tax, as well as general economic benefits to the community. The reduction in unitary taxes from Diablo Canyon will occur gradually as the assessed value of the plant declines leading up to the closure in 2025. Total unitary tax revenue, inclusive of Diablo Canyon, is budgeted to decrease by approximately $1.4 million in FY 2020-21, representing a 19% decrease compared to the current year adopted budget. In September 2018, Senate Bill 1090 approved the payment of $85 million by PG&E to the community to, in part, lessen the effects of lost tax revenue associated with Diablo Canyon’s closure. The County began receiving payment of it $34.9 million portion in FY 2018-19.  Economic indicators show signs of an unclear economy as COVID-19 continues to impact normal business activities.  Sales tax revenue for unincorporated areas came in at $12.5 million, or 5.9% higher than the preceding year. However, it is forecasted the sales tax revenues will decrease in the subsequent year due to COVID-19.  In calendar year 2019, Visit SLO CAL, the non-profit countywide marketing and management organization for San Luis Obispo County, reported tourists spent $1.94 billion across all business sectors. In calendar year 2020, Visit SLO CAL forecasts that tourism spending will decrease $557 million.  County assessed property tax valuations increased from $56.3 million to $59.5 million or 5.8%.  Transient Occupancy Tax collections were $10.0 million, which is a $1.7 million, or 14.6%, decrease from FY 2018-19. From March through June of 2020, transient occupancy tax dropped $1.8 million when compared to the same time period of the prior year. This decrease is directly attributable to COVID-19.  The Board of Supervisors adopted the FY 2020-21 budget in June 2020, with an $104.4 million fund balance in the General Fund, of which $36.4 million was appropriated to finance the current year’s expenditures including contingencies. $10 million was placed in general reserves, and $32.9 million was earmarked for designations. The total General Fund budget for FY 2020-21 is $579.7 million, a 4.0% 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. 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, Post Office Box 1149, San Luis Obispo, California 93406-1149. This report is also available online at www.slocounty.ca.gov. 35 ________________________________________________________________ BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO STATEMENT OF NET POSITION JUNE 30, 2020 (IN THOUSANDS) Primary Government Governmental Business-Type Component Unit Activities Activities Total First 5 ASSETS Current Assets: Cash and cash equivalents $ 486,072 $ 72,191 $ 558,263 $ 9 ,054 Accounts receivable, net 1 9,105 2,124 2 1,229 - Property taxes receivable 1 8,284 - 1 8,284 - Other receivables 1,856 106,544 108,400 - Due from other governments 4 3,080 2,672 4 5,752 696 Deposits with others 2 86 88 4 Internal balances 2 4,464 (24,464) - - Inventories 690 36 726 - Prepaid items 1,063 838 1,901 3 Loans receivable 2 6,056 219 2 6,275 - Total Current Assets 620,672 160,246 780,918 9,757 Noncurrent Assets: Restricted cash with fiscal agent 2 1,957 1 0,071 3 2,028 - Prepaid insurance - 304 304 - Capital Assets: Nondepreciable 830,702 103,690 934,392 - Depreciable, net 396,436 485,590 882,026 - Total Noncurrent Assets 1,249,095 599,655 1,848,750 - Total Assets 1,869,767 759,901 2,629,668 9,757 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 6 2,773 1,480 6 4,253 67 Deferred OPEB 1 8,700 225 1 8,925 - Deferred loss on refunding - 3,446 3,446 - Total Deferred Outflows of Resources 8 1,473 5,151 8 6,624 67 LIABILITIES Current Liabilities: Accounts payable 2 4,807 9,255 3 4,062 662 Salaries and benefits payable 1 6,817 180 1 6,997 15 Deposits from others 1 1,587 2,953 1 4,540 - Accrued interest 1,327 4,911 6,238 - Other current liabilities 2,083 - 2,083 - Unearned revenue 5,208 1 1,210 1 6,418 80 Bonds and notes payable 1 0,834 1 0,806 2 1,640 - Compensated absences 2 2,035 184 2 2,219 3 Landfill closure/postclosure costs 649 - 649 - Self-insurance payable 3,931 - 3,931 - Total Current Liabilities 9 9,278 3 9,499 138,777 760 Long-Term Liabilities: Net pension liability 618,962 6,297 625,259 84 Net OPEB liability 2 7,702 334 2 8,036 - Bonds and notes payable 127,758 333,949 461,707 - Compensated absences 1 3,484 329 1 3,813 14 Landfill closure/postclosure costs 6,510 - 6,510 - Self-insurance payable 1 6,209 - 1 6,209 - Total Long-Term Liabilities 810,625 340,909 1,151,534 98 Total Liabilities 909,903 380,408 1,290,311 858 DEFERRED INFLOWS OF RESOURCES Deferred pensions 3 1,707 1,164 3 2,871 3 Deferred OPEB 2,086 26 2,112 - Deferred bond refunding - 338 338 - Deferred community development loans 2 4,802 - 2 4,802 - Total Deferred Inflows of Resources 5 8,595 1,528 6 0,123 3 NET POSITION Net investment in capital assets 1,202,709 288,781 1,491,490 - Restricted for: General government 4,964 - 4,964 - Public protection 5,507 - 5,507 - Health and sanitation 47 - 47 - Public assistance 14 - 14 - Public ways and facilities 2 5,765 - 2 5,765 - Recreation and cultural services 189 - 189 - Education 2 - 2 - Debt service 3 0,167 - 3 0,167 - Unrestricted ( 286,622) 9 4,335 ( 192,287) 8,963 Total Net Position $ 982,742 $ 383,116 $ 1,365,858 $ 8 ,963 The accompanying notes are an integral part of these financial statements. 36 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Program Revenues Fees, Fines, Operating Capital and Charges Grants and Grants and Functions/Programs Expenses for Services Contributions Contributions Total Governmental activities: General government $ 53,926 $ 12,967 $ 685 $ - $ 13,652 Public protection 241,749 2 1,291 59,974 1,799 83,064 Public ways and facilities 3 3,199 4,797 11,302 1 7,732 33,831 Health and sanitation 113,463 8,571 74,699 - 83,270 Public assistance 132,868 1,155 114,525 - 115,680 Education 1 4,322 2,193 204 267 2,664 Recreation and cultural services 1 1,501 4,295 230 86 4,611 Interest on long-term debt 7,057 - - - - Total governmental activities 608,085 5 5,269 261,619 1 9,884 336,772 Business-type activities: Airport 1 0,133 8,300 4,644 505 13,449 Golf 3,347 2,750 - - 2,750 State Water Contract 7,709 7,825 14 - 7,839 Nacimiento Water Contract 1 3,257 16,732 - - 16,732 Lopez Flood Control 6,733 6,978 5 - 6,983 Lopez Park 2 - - - - General Flood Control - Salinas Dam 913 2,884 - - 2,884 County Service Areas 4,670 4,492 3 - 4,495 Los Osos Wastewater 1 1,636 5,245 - 2,618 7,863 Total business-type activities 5 8,400 55,206 4,666 3,123 62,995 Total primary government $ 666,485 $ 110,475 $ 266,285 $ 23,007 $ 399,767 Component unit: First 5 San Luis Obispo $ 2 ,530 $ - $ 2,451 $ - $ 2,451 The accompanying notes are an integral part of these financial statements. 37 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Net (Expense) Revenue and Changes in Net Position Governmental Business-Type Component Unit Functions/Programs Activities Activities Total First 5 Governmental activities: General government $ (40,274) $ - $ (40,274) Public protection (158,685) - (158,685) Public ways and facilities 632 - 632 Health and sanitation (30,193) - (30,193) Public assistance (17,188) - (17,188) Education (11,658) - (11,658) Recreation and cultural services (6,890) - (6,890) Interest on long-term debt (7,057) - (7,057) Total governmental activities (271,313) - (271,313) Business-type activities: Airport - 3,316 3,316 Golf - (597) (597) State Water Contract - 130 130 Nacimiento Water Contract - 3,475 3,475 Lopez Flood Control - 250 250 Lopez Park - (2) (2) General Flood Control - 1,971 1,971 County Service Areas - (175) (175) Los Osos Wastewater - (3,773) (3,773) Total business-type activities - 4,595 4,595 Total primary government $ (271,313) $ 4 ,595 $ (266,718) Component unit: First 5 San Luis Obispo $ (79) General Revenues: Taxes: Property taxes 198,927 4,043 202,970 - Sales and use taxes 1 2,535 - 12,535 - Transient occupancy taxes 9,956 - 9,956 - Transfer tax 3,863 - 3,863 - Other taxes 1,524 - 1,524 - Grants not restricted to specific programs 3,845 - 3,845 - Interest earnings not restricted to specific programs 1 2,849 2,169 15,018 173 Other revenues 1,144 2,889 4,033 12 Transfers (493) 493 - 112 Total General Revenues and Transfers 244,150 9,594 253,744 297 Change in net position (27,163) 1 4,189 (12,974) 218 Net position - beginning of year 1,009,905 368,927 1,378,832 8,745 Net position - end of year $ 982,742 $ 383,116 $ 1,365,858 $ 8 ,963 The accompanying notes are an integral part of these financial statements. 38 ________________________________________________________________ BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 329,060 $ 19,950 $ 87,990 $ 437,000 Restricted cash with fiscal agent - 1,604 20,353 21,957 Accounts receivable, net 18,961 - 136 19,097 Accrued property taxes receivable 18,284 - - 18,284 Other receivables 1,790 - 66 1,856 Due from other governments 36,224 1,499 5,357 43,080 Due from other funds - 911 400 1,311 Inventories 101 - - 101 Loans receivable - - 26,056 26,056 Advances to other funds 21,394 - 3,211 24,605 Prepaid items 838 - 4 842 Other assets - - 2 2 Total assets $ 426,652 $ 23,964 $ 143,575 $ 594,191 LIABILITIES Accounts payable $ 17,995 $ 3,076 $ 2,724 $ 23,795 Salaries and benefits payable 14,812 - 536 15,348 Due to other funds - - 1,211 1,211 Deposits from others 4,511 - 1,699 6,210 Unearned revenue 4,466 600 142 5,208 Other current liabilities 2,083 - - 2,083 Advances from other funds - - 3,660 3,660 Total liabilities 43,867 3,676 9,972 57,515 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 58,255 1,406 1,775 61,436 Deferred community development loans - - 26,056 26,056 Total deferred inflows of resources 58,255 1,406 27,831 87,492 FUND BALANCES Nonspendable 18,734 - 4 18,738 Restricted 10,915 1,604 55,453 67,972 Committed 175,455 17,278 50,315 243,048 Assigned 119,426 - - 119,426 Unassigned - - - - Total fund balances 324,530 18,882 105,772 449,184 Total liabilities, deferred inflows of resources, and fund balances $ 426,652 $ 23,964 $ 143,575 $ 594,191 The accompanying notes are an integral part of these financial statements. 39 COUNTY OF SAN LUIS OBISPO RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION – GOVERNMENTAL ACTIVITIES JUNE 30, 2020 (IN THOUSANDS) Total Fund Balances - Total Governmental Funds $ 449,184 Amounts reported for Governmental Activities in the Statement of Net Position were different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 1,213,561 Accrued property tax and grant revenues are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 61,436 Internal service funds are used by the County to charge the costs of vehicle fleet management, 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. (21,228) Adjustments for internal service funds are necessary to "close" those funds by charging additional amounts to participating business-type activities to completely cover the internal service funds' costs for the year. 3,419 Interest on long-term debt is recognized as it accrues, regardless of when it is due. (1,327) The pension liability of governmental funds is not due and payable in the current period, and therefore is not reported in the fund financial statements. (563,791) The other post-employment benefit (OPEB) of governmental funds is not due and payable in the current period, and therefore is not reported in the fund financial statements. (25,112) The unamortized portion of changes to the net pension liability, the net difference between projected and actual earnings on pension plan investments, and contributions subsequent to the pension liability measurement date are not reported in the fund financial statements for governmental funds. 28,298 The unamortized portion of changes to the net other post-employment benefit (OPEB) liability, the net difference between projected and actual earnings on OPEB investments, and contributions subsequent to the OPEB liability measurement date are not reported in the fund financial statements for governmental funds. 15,061 Repayment and issuance of community development loans are reported as revenue and expenditures in the fund statements which contribute to the change in fund balance. However, in the Statement of Net Position loan repayments and issuances change deferred inflows. 1,254 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 (18,712) Bonds and notes payable (119,879) Compensated absences (32,263) Landfill closure/postclosure costs ( 7,159) (178,013) Net Position of Governmental Activities $ 982,742 The accompanying notes are an integral part of these financial statements. 40 COUNTY OF SAN LUIS OBISPO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds REVENUES Taxes $ 2 06,173 $ - $ 16,868 $ 2 23,041 Licenses, permits, and franchises 11,477 - - 11,477 Fines, forfeitures, and penalties 2,984 340 592 3,916 Use of money and property 9,483 529 2,235 12,247 Aid from other governments 239,683 267 37,317 277,267 Charges for services 34,618 97 11,997 46,712 Other revenues 9,142 - 3,254 12,396 Total revenues 513,560 1,233 72,263 587,056 EXPENDITURES Current: General government 54,078 - - 54,078 Public protection 196,062 - 9,100 205,162 Public ways and facilities 3,381 - 40,484 43,865 Health and sanitation 105,060 - 3,098 108,158 Public assistance 130,496 - 658 131,154 Education 608 - 12,161 12,769 Recreation and cultural services 4,813 - 6,824 11,637 Debt service: Principal payments 282 - 10,279 10,561 Interest and fiscal charges 233 - 6,183 6,416 Capital outlay - 7,645 - 7,645 Total expenditures 495,013 7,645 88,787 591,445 Excess (deficiency) of revenues over (under) expenditures 18,547 (6,412) (16,524) (4,389) OTHER FINANCING SOURCES (USES) Debt Issued - - 24,407 24,407 Transfers in 2,903 7,924 25,976 36,803 Transfers out (25,271) (1,345) (9,520) (36,136) Total other financing sources (uses) (22,368) 6,579 40,863 25,074 Net change in fund balances (3,821) 167 24,339 20,685 Fund balances - beginning 328,351 1 8,715 81,433 428,499 Fund balances - ending $ 3 24,530 $ 18,882 $ 105,772 $ 4 49,184 The accompanying notes are an integral part of these financial statements. 41 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 FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Net Change in Fund Balances - Total Governmental Funds $ 20,685 Amounts reported for governmental activities in the Statement of Revenues, Expenditures, and Changes in Fund Balances were different because: Propertytax, intergovernmentalrevenueandother revenuein theStatement ofActivitiesthatdo not provide current financial resources are not reported as revenues in the funds. 9,288 Governmental funds report capital outlay as expenditures. These expenditures have no effecton net position. Capital outlay expenditures that have no effect on net position are reported in the following functional categories: Capital outlay $ 6,398 General government 2,450 Public protection 4,035 Public ways 20,538 Health and sanitation 473 Public assistance 10 Education 492 Recreation and cultural services 778 35,174 IntheStatementofActivities,thecostofcapitalassetsisallocatedovertheirestimatedusefullives and reported as depreciation expense. (22,214) Theneteffect of various miscellaneoustransactions involvingcapital assets(i.e., sales, trade-ins, and donations) is to decrease net position. (170) Bondproceedsarereportedasfinancingsourcesingovernmentalfundsandthuscontributetothe change in fund balance. In the Statement of Net Position, however, issuing debt increases long- termliabilitiesanddoesnotaffecttheStatementofActivities.Similarly,repaymentofprincipalisan expenditure in the governmental funds, but reduces the liability in the Statement of Net Position. Debt principal payments 10,561 Debt Issuance (24,407) SomeexpensesreportedintheGovernment-WideStatementofActivitiesdonotrequiretheuseof current financial resources. Therefore, they are not reported as expenditures in governmental funds: Change in compensated absences $ (6,381) Change in accrued interest payable (659) Change in landfill closure/postclosure costs (127) Change in net OPEB liability (570) Change in deferred OPEB outflows (1,674) Change in deferred OPEB inflows 351 Change in Net Pension Liability 69,998 Change in deferred pension outflows (57,233) Change in deferred pension inflows (55,544) Change in capital appreciation bond accretion (430) Amortization of debt premiums, discounts and issuance costs 18 (52,251) InternalservicefundswereusedbytheCountytochargethecostsofvehiclefleetmanagement, 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. (3,761) Repayment and issuance of community development loans are reported as revenue and expendituresinthefundstatementswhichcontributetothechangeinfundbalance. However,in theStatementofNetPositionloanrepaymentsandissuanceschangedeferredinflowsanddonot affect the Statement of Activities. (355) The net (revenue) expense allocable to business-type activities 287 Change in Net Position of Governmental Activities $ (27,163) The accompanying notes are an integral part of these financial statements. 42 COUNTY OF SAN LUIS OBISPO STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2020 (IN THOUSANDS) Business-Type Activities - Enterprise Funds Governmental Nacimiento Nonmajor Total Activities Water State Water Los Osos Enterprise Enterprise Internal Airport Contract Project Wastewater Funds Funds Service Funds ASSETS Current assets: Cash and investments $ 1 0,037 $ 2 1,475 $ 1 6,009 $ 5,761 $ 1 8,909 $ 7 2,191 $ 4 9,072 Accounts receivable, net 1 44 - 1,601 - 3 79 2,124 8 Other receivables 1 17 - - 1 06,427 - 1 06,544 - Due from other governments 2,672 - - - - 2,672 - Due from other funds - - - - 3 00 3 00 - Deposits with others - - - - 86 86 - Inventories - - - - 36 36 5 89 Loans receivable - - - 2 19 - 2 19 - Prepaid items - - - - 8 38 8 38 2 21 Total current assets 12,970 21,475 17,610 1 12,407 20,548 1 85,010 49,890 Noncurrent assets: Advances to other funds - - - - 79 79 - Restricted cash with fiscal agent - 9,583 - - 4 88 10,071 - Prepaid insurance - 3 04 - - - 3 04 - Capital assets: Nondepreciable: Land 24,030 3,259 - 5,406 3,818 36,513 - Construction in progress 6 39 3 34 - - 3,023 3,996 - Water rights - - 61,213 - 61,213 - Other property - - - - 1,968 1,968 - Depreciable: Infrastructure, net 4 62 1 44,994 24 1 67,592 23,165 3 36,237 - Structures and improvements, net 78,016 8,585 5,653 3,021 47,434 1 42,709 3 87 Equipment, net 5,237 10 2 1 50 7 49 6,148 13,190 Other property, net - - - - 4 96 4 96 - Total noncurrent assets 1 08,384 1 67,069 66,892 1 76,169 81,220 5 99,734 13,577 Total assets 1 21,354 1 88,544 84,502 2 88,576 1 01,768 7 84,744 63,467 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 8 03 - - - 6 77 1,480 12,965 Deferred OPEB 1 39 - - - 86 2 25 1,748 Deferred loss on refunding - 3,446 - - - 3,446 - Total deferred outflows of resources 9 42 3,446 - - 7 63 5,151 14,713 LIABILITIES Current liabilities: Accounts payable 2 64 1,016 6,396 60 1,519 9,255 1,012 Salaries and benefits payable 99 - - - 81 1 80 1,469 Interest payable 3 2,471 - 2,068 3 69 4,911 - Self-insurance payable - - - - - - 3,931 Deposits from others 79 5 02 1,954 3 4 15 2,953 5,378 Unearned revenue 83 8,597 2,456 - 74 11,210 - Due to other funds - - - - 4 00 4 00 - Accrued vacation and sick leave - current 89 - - - 95 1 84 2,139 Notes and bonds payable - current 69 4,510 - 3,317 2,910 10,806 - Total current liabilities 6 86 17,096 10,806 5,448 5,863 39,899 13,929 Noncurrent liabilities: Self-insurance liability - - - - - - 16,209 Advances from other funds 6,748 - - 12,755 1,521 21,024 - Accrued vacation and sick leave 1 73 - - - 1 56 3 29 1,117 Notes and bonds payable 3 09 1 63,407 - 1 36,270 33,963 3 33,949 - Net OPEB Liability 2 06 - - - 1 28 3 34 2,590 Net Pension Liability 3,415 - - - 2,882 6,297 55,171 Total noncurrent liabilities 10,851 1 63,407 - 1 49,025 38,650 3 61,933 75,087 Total liabilities 11,537 1 80,503 10,806 1 54,473 44,513 4 01,832 89,016 DEFERRED INFLOWS OF RESOURCES Deferred pensions 6 31 - - - 5 33 1,164 10,197 Deferred OPEB 16 - - - 10 26 1 95 Bond refunding - 3 38 - - - 3 38 - Total deferred inflows of resources 6 47 3 38 - - 5 43 1,528 10,392 NET POSITION Net investment in capital assets 1 08,006 1,956 66,892 68,068 43,859 2 88,781 13,577 Unrestricted 2,106 9,193 6,804 66,035 13,616 97,754 (34,805) Total net position $ 110,112 $ 1 1,149 $ 7 3,696 $ 134,103 $ 5 7,475 3 86,535 $ (21,228) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (3,419) Net Position of Business-Type Activities per Government-Wide Financial Statements $ 383,116 The accompanying notes are an integral part of these financial statements. 43 COUNTY OF SAN LUIS OBISPO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Business-Type Activities - Enterprise Funds Governmental Nacimiento Nonmajor Total Activities Water State Water Los Osos Enterprise Enterprise Internal Airport Contract Project Wastewater Funds Funds Service Funds OPERATING REVENUES: Charges for services $ 8,601 $ 16,732 $ 7,825 $ 5,245 $ 17,115 $ 55,518 $ 56,778 Other revenues 50 2,786 - 16 37 2,889 85 Total operating revenues 8,651 19,518 7,825 5,261 17,152 58,407 56,863 OPERATING EXPENSES: Salaries and benefits 2,753 - - - 1,780 4,533 31,413 Services and supplies 3,890 3,716 7,326 3,788 9,764 28,484 21,405 Other charges 28 - - - 3 31 - Insurance benefit payments - - - - - - 4,896 Depreciation 3,473 2,202 204 4,364 2,432 12,675 2,759 Countywide cost allocation 212 94 76 57 267 706 546 Total operating expenses 10,356 6,012 7,606 8,209 14,246 46,429 61,019 Operating income (loss) (1,705) 13,506 219 (2,948) 2,906 11,978 (4,156) NONOPERATING REVENUES (EXPENSES): Property taxes - - 2,339 - 1,704 4,043 - Interest income 321 796 438 152 462 2,169 1,196 Interest expense (14) (7,208) (56) (3,376) (1,342) (11,996) - Sale of capital assets - - - - - - 232 Aid from governmental agencies 4,644 - 14 - 8 4,666 - Other revenues - - - - - - 127 Total nonoperating revenues (expenses) 4,951 (6,412) 2,735 (3,224) 832 (1,118) 1,555 Income (loss) before contributions and transfers 3,246 7,094 2,954 (6,172) 3,738 10,860 (2,601) Capital contributions 505 - - 2,618 - 3,123 - Transfers in - - - - 1,176 1,176 - Transfers out (353) - - (273) (57) (683) (1,160) Change in net position 3,398 7,094 2,954 (3,827) 4,857 14,476 (3,761) Net position - beginning 106,714 4,055 70,742 137,930 52,618 (17,467) Net position - ending $ 1 10,112 $ 11,149 $ 73,696 $ 1 34,103 $ 57,475 $ (21,228) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (287) Change in Net Position of Business-Type Activities per Government-Wide Financial Statements $ 14,189 The accompanying notes are an integral part of these financial statements. 44 COUNTY OF SAN LUIS OBISPO STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Business-Type Activities - Enterprise Funds Governmental Nacimiento Nonmajor Total Activities Water State Water Los Osos Enterprise Enterprise Internal Airport Contract Project Wastewater Funds Funds Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and third parties $ 8,739 $ 1 9,039 $ 9,193 $ 5,261 $ 1 6,888 $ 5 9,120 $ - Receipts from interfund billings - - - - - - 56,866 Payments for goods and services (4,245) (2,937) (7,004) (3,902) (8,621) (26,709) (11,946) Payments to employees for services (1,930) - - - (1,601) (3,531) (30,582) Payments for insurance benefits - - - - - - (4,324) Payments for premiums - - - - - - (5,722) Net cash provided (used) by operating activities 2,564 16,102 2,189 1,359 6,666 28,880 4,292 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Property tax proceeds - - 2,339 - 1,704 4,043 - Grants and subsidies from other governmental agencies 5,174 - 14 - 8 5,196 - Advances from other funds (2,358) - - - 940 (1,418) - Due from other funds - - - - (300) (300) - Transfers from other funds - - - - 1,176 1,176 - Transfers to other funds (353) - - (273) (57) (683) (1,160) Net cash provided (used) by noncapital financing activities 2,463 - 2,353 (273) 3,471 8,014 (1,160) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases and construction of capital assets (510) (377) (2,623) - (2,091) (5,601) (2,538) Proceeds from sale of capital assets - - - - - - 249 Advances to other funds - - - - 18 18 - Advances from other funds (1,692) - - - - (1,692) - Capital contributions 505 - - 5,124 - 5,629 - Principal paid on capital debt (66) (4,121) - (3,236) (2,806) (10,229) - Interest paid on capital debt (93) (7,689) (56) (3,201) (1,454) (12,493) - Net cash provided (used) by capital and related financing activities (1,856) (12,187) (2,679) (1,313) (6,333) (24,368) (2,289) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 321 796 438 152 462 2,169 1,196 Net cash provided (used) by investing activities 321 796 438 152 462 2,169 1,196 Net increase (decrease) in cash and cash equivalents 3,492 4,711 2,301 (75) 4,266 14,695 2,039 CASH AND CASH EQUIVALENTS: Beginning of year 6,545 26,347 13,708 5,836 15,131 67,567 47,033 End of year $ 1 0,037 $ 3 1,058 $ 1 6,009 $ 5,761 $ 1 9,397 $ 8 2,262 $ 4 9,072 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ (1,705) $ 1 3,506 $ 219 $ (2,948) $ 2,906 $ 1 1,978 $ (4,156) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense 3,473 2,202 204 4,364 2,432 12,675 2,759 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: Receivables, net 79 - 2,345 - (31) 2,393 - Inventory - - - - 12 12 50 Prepaid items - - - - 91 91 6 Deferred outflows - pension 192 - - - 335 527 7,187 Deferred outflows - OPEB (25) - - - 9 (16) 193 Accounts payable (102) 729 397 (60) 1,287 2,251 12 Deposits from others (6) 144 (848) 3 29 (678) 4,290 Salaries and benefits payable 124 - - - 58 182 505 Deferred inflows - pension 373 - - - 273 646 5,029 Deferred inflows - OPEB 2 - - - (2) - (39) Net OPEB liability 55 - - - 2 57 32 Net pension liability 92 - - - (501) (409) (12,148) Unearned revenue 12 (479) (128) - (234) (829) - Self-insurance liability - - - - - - 572 Total adjustments 4,269 2,596 1,970 4,307 3,760 16,902 8,448 Net cash provided (used) by operating activities $ 2,564 $ 1 6,102 $ 2,189 $ 1,359 $ 6,666 $ 2 8,880 $ 4,292 The accompanying notes are an integral part of these financial statements. 45 COUNTY OF SAN LUIS OBISPO STATEMENT OF FIDUCIARY NET POSITION AGENCY AND INVESTMENT TRUST FUNDS JUNE 30, 2020 (IN THOUSANDS) SAN LUIS OBISPO PENSION TRUST FUND DECEMBER 31, 2019 (IN THOUSANDS) Investment San Luis Obispo Agency Trust County Funds Funds Pension Trust June 30, 2020 June 30, 2020 December 31, 2019 ASSETS Cash and cash equivalents $ 132,203 $ 433,472 $ 46,396 Contributions receivable - - 3,288 Accrued interest and dividends receivable - - 716 Accounts receivable - - 25 Securities sold - - 981 Prepaid benefits - - - Investments pension trust: Bonds and notes, at fair value - - 265,883 International fixed income, at fair value - - 148,272 Collateralized mortgage obligations, at fair value - - 5,983 Domestic equities, at fair value - - 298,422 International equities, at fair value - - 323,758 Alternative investments, at fair value - - 165,993 Real estate, at fair value - - 204,950 Prepaid Expenses - - 75 Capital assets-net of accumulated depreciation - - 7,407 Total assets $ 132,203 $ 433,472 $ 1 ,472,149 LIABILITIES Agency obligations $ 132,203 $ - $ - Securities purchased - - 3,432 Accrued liabilities - - 1,740 Prefunded contributions - - 27,973 Total liabilities $ 1 32,203 $ - $ 33,145 NET POSITION Net position held in trust for pool participants $ - $ 433,472 $ - Net position restricted for pensions - - 1,439,004 Total net position $ - $ 433,472 $ 1,439,004 The accompanying notes are an integral part of these financial statements. 46 COUNTY OF SAN LUIS OBISPO STATEMENT OF CHANGES IN FIDUCIARY NET POSITION AGENCY AND INVESTMENT TRUST FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) SAN LUIS OBISPO PENSION TRUST FUND FOR THE YEAR ENDED DECEMBER 31, 2019 (IN THOUSANDS) Investment San Luis Obispo Trust County Funds Pension Trust June 30, 2020 December 31, 2019 ADDITIONS Contributions: County contributions $ 1,049,435 $ - Employer contributions - 48,958 Member contributions - 32,983 Total contributions 1,049,435 81,941 Investment income: Realized and unrealized gains and losses - 181,521 Interest 7,300 4,450 Dividends - 11,372 Real estate management trust income - - Real estate operating income, net - 12 Other investment income, net - - Investment expenses - ( 3,633) Total investment income 7,300 193,722 Other Income - 18 Total additions 1,056,735 275,681 DEDUCTIONS Benefits: Monthly benefit payments - 101,221 Refunds of contributions - 3,292 Death benefits - 1 18 Total benefits - 104,631 Administrative expenses - 2,120 Prefunded discount amortization - 1,546 Total administrative expenses - 3,666 Distributions from investment pool 1 ,104,660 - Total deductions 1 ,104,660 1 08,297 Change in net position ( 47,925) 167,384 Net position - beginning 4 81,397 1,271,620 Net position - ending $ 4 33,472 $ 1,439,004 The accompanying notes are an integral part of these financial statements. 47 ________________________________________________________________ NOTES TO THE BASIC FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO NOTES TO THE BASIC FINANCIAL STATEMENTS (IN THOUSANDS) JUNE 30, 2020 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 California State 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, and 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) Statement Nos. 14, 61 and 80. 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 have governing bodies which 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, water delivery, water treatment and distribution services, and the construction of the Lopez Dam Seismic Remediation project. SLO County Financing Authority (the 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 (PFC) – 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-Treasurer-Tax Collector at 1055 Monterey, Room D290, San Luis Obispo, CA 93408. 48 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-Treasurer-Tax Collector 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 Children and Families Commission of San Luis Obispo County (First 5) – 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 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. Enterprise funds, reported as business-type activities, 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 an enterprise fund’s principal ongoing operation. The principal operating revenues of the County enterprise funds (Airport, Nacimiento Water Contract, State Water Project, Los Osos Wastewater, and nonmajor enterprise) are charges to customers for sales and services. Operating expenses for 49 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) enterprise 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. The County’s internal service funds also distinguish operating revenues and expenses from nonoperating items, receive revenue primarily from charges to customers, and have services, administrative expenses, and deprecation of capital assets as costs; however, the internal service funds are reported as governmental activities in the Government-wide financial statements because they principally serve internal County operations. 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, 2020, the County implemented the following Governmental Accounting Standards Board (GASB) Statements:  GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance (GASB 95). The requirements of this statement are effective for financial statement periods beginning after June 15, 2018 and later. GASB 95 postpones the effective dates of certain provisions in Statements and Implementation Guides and is intended to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. 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.  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 for state water into the County.  The Los Osos Wastewater Fund accounts for the construction, operation and maintenance of the wastewater treatment plant serving the community of Los Osos. 50 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued)  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, construction management services, and self-insurance programs such as workers’ compensation, long-term disability, employee benefits, and personal injury & property damage. The County reports the following Fiduciary Funds:  The Pension Trust Fund accumulates contributions from the County and its employees, as well as 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, 2019.  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 96 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 144 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, include property taxes, sales tax, transient occupancy taxes, grants, entitlements, and donations. On an accrual basis of accounting, revenues from property taxes are recognized in the fiscal year for which the taxes are levied. Revenues from sales and transient 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, prepaid items, such as rent expense, are recorded using the consumption method which recognizes expenses during the period benefited by the prepayment. 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. 51 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 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. Interfund services provided and used are not eliminated in the process of consolidation. 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, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, 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-Treasurer-Tax Collector, the 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, 2020. 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 99.83 percent. 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. Deferred Outflows and Inflows of Resources In addition to assets, the financial statements may report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net position or fund balance that is applicable to a future reporting period. In addition to liabilities, the financial statements may report a separate section for deferred inflows of resources which are defined as an acquisition of net position or fund balance that is applicable to a future reporting period. 52 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Property Tax The County is responsible for the assessment, collection, and apportionment of property taxes for all taxing jurisdictions within the County, including schools, 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. Property taxes are accounted for in the Unapportioned Property Tax and Interest Fund, an Agency Fund, until allocation and disbursement to the taxing jurisdictions. Beginning in fiscal year 1993-94, 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 2001-02 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 Activities 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” in the fund financial statements. Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in the 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, and the Public Works and 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 53 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 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 and capital assets received in a service concession arrangement are recorded at acquisition value. 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 Proprietary Funds and 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. 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. 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 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. 54 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources relating to pensions and pension expense, information about the fiduciary net position of the County’s pension plan with San Luis Obispo County Pension Trust (SLOCPT) and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by SLOCPT. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefits’ terms. Investments are reported at fair value. Other Postemployment Benefits (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the County’s OPEB Plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest‐earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. 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. 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 (CGC) 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 Fiscal Year (FY) 1994-95. Fitch reaffirmed the County Pool’s “AAAf/S1” rating on September 16, 2019. The County Pool’s “AAAf” fund credit quality rating reflects the “the highest underlying credit quality (or lowest vulnerability to default)”. The “f” suffix to the Fund Credit Quality Rating indicates a fund rather than an individual issue or issuer. The County Pool’s “S1” rating reflects the pool’s low sensitivity to market risk and capacity to return stable principal value to meet anticipated cash flow requirements, even in adverse interest rate environments. 55 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) The County Treasury Oversight Committee (CTOC) was created by the Board of Supervisors' Resolution and consists five members. The CTOC monitors and reviews quarterly, the management of public funds maintained in the investment pool in accordance with the CGC. 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. CGC 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 the County Auditor in conjunction with or in addition to work directed by CGC, independent certified public accountants (CPAs) selected to review the County’s Comprehensive Annual Financial Report, and independent CPAs as deemed appropriate. CLA (CliftonLarsonAllen LLP) was selected to perform an Annual Investment Program Compliance Audit for the FY ended June 30, 2020. The results of these audits have been presented to the Board of Supervisors on a yearly basis. All such audits from prior years have had no findings. Under CGC, the County may purchase as investments: 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; debt issuances guaranteed by the International Bank for Reconstruction (IBRD), International Finance Corporation (IFC), or the Inter-American Development Bank (IADB) that are eligible for purchase and sale within the United States; as well as other investments established by the CGC. CGC 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 CGC, the County IP prohibits these types of investments. The County maintains a combined pool of cash and investments which provides cash flow for the funding needs of the County, school districts, and other local agencies required by law to keep funds in the Treasury. The combined pool’s investments are stated at fair value and have a weighted-average maturity of 0.83 years. Interest is apportioned to the separate funds based on the individual fund's average daily balance. Securities are held in a customer-segregated safekeeping account during the fiscal year. A Cash Statement and Asset List is requested monthly from the appropriate institutions and verified against records maintained in the Treasury. The County’s combined pool has invested in the CalTRUST Short-Term Fund (CTSTF). CalTRUST is a Joint Powers Agency Authority created by local public agencies to provide a method for local public agencies to pool their assets for investment purposes. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasury and investment officers. The CalTRUST Board sets overall policies for the program and selects and supervises the activities of the investment manager, currently BlackRock. Public agencies invest in shares of beneficial interest with a Net Asset Value (NAV) that fluctuates. CalTRUST attempts to minimize NAV fluctuation. This type of investment is an authorized investment under CGC §53601 (p). As of June 30, 2020, the CTSTF NAV was $1.008 per $1.00 of investment. The County’s combined pool has invested in the State’s Local Agency Investment Fund (LAIF). This fund is not registered with the Securities and Exchange Commission as an investment company but is required to invest according to CGC. Market valuation is conducted quarterly. LAIF provided a fair value dollar factor of 1.004912795 for its portfolio as of June 30, 2020. 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, 2020, 3.37% of the LAIF pool includes Medium-term and Short-term 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, 2020, the County’s combined pool includes funds deposited in collateralized interest-bearing bank accounts known as Public Investment Money Market Accounts (PIMMAs) and FDIC Insured Placement Service Deposits. Per CGC §53631 et seq., PIMMAs are depository accounts, not investments, and are fully liquid and collateralized by eligible securities. Placement Service Deposits are when 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. Placement Service Deposits are not term deposits, and the full balance is available at any time on demand. PIMMAs and Placement Service Deposits are not investments by code, but they are included in the County’s combined pool and are treated internally as investments for tracking, management, and reporting purposes. 56 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 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, CalTRUST, and LAIF, except for instruments which are carried at amortized cost plus accrued interest. The County Treasury has provided a fair value dollar factor of 1.011121330918 in the Quarterly Report of Investments as of June 30, 2020, 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 table below identifies the investment types that are authorized for the County by the CGC. 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 CGC and all relevant laws. As of June 30, 2020, 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. Maximum Maximum Investment Type Percentage Maximum Investment in One Issuer Maturity of Portfolio Investment types utilized by the combined pool in FY 2019-20 U.S. Treasury Notes 4 years 100% N/A U.S. Treasury Bills Maximum 100% N/A issued U.S. Government Agencies: Federal Home Loan Bank 4 years 20% N/A U.S. Government Agencies: Farm Credit 4 years 20% N/A Local Agency Investment Fund (LAIF) N/A 15% N/A Money Market Mutual Funds (Shares of Beneficial Interest) 15% per issuer. Requires specific written issued by a Joint Powers Authority N/A 15% approval of County Treasurer for each type of investment. Supranationals 10% per issuer (IBRD, IFC, or IADB only). 4 years 20% Must have AAA/A-1+ by 1 of the 3 credit rating agencies. Public Investment Money Market Accounts (PIMMA) N/A 50% 20% FDIC Insured Placement Service Deposits N/A 15% Up to $250,00 per participating bank Investments authorized, but not utilized in FY 2019-20 U.S. Treasury Bonds 4 years 100% N/A CDARS 1 year 15% 1% Bankers’ Acceptances-Domestic 30 days 10% 4% Commercial Paper 30 days 5% 2% Collateralized Certificates of Deposit 1 year 5% 1% Tri-Party Repurchase Agreements 15% of all 30 days N/A repos Cash Management Bills Maximum 100% N/A issued Bonds, Notes, Warrants, other evidences of indebtedness of No more than 10% of issuer debt and any local agency within this state assets. Requires specific written approval 1 year 5% of County Treasurer for each type of investment. Bonds issued by a Local Agency Requires specific written approval of 1 year 5% County Treasurer for each type of investment. Registered State Warrants Requires specific written approval of 1 year 10% County Treasurer for each type of investment. 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. Investments not authorized in FY 2019-20 U.S. Government Agencies: Federal National Mortgage Assoc. U.S. Government Agencies: Federal Home Loan Mortgage Corp. 57 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Bankers’ Acceptances-Foreign Negotiable Certificates of Deposit Bi-Party Repurchase Agreements Medium-Term Notes Money Market Mutual Funds (Shares of Beneficial Interest) issued by diversified management companies Treasury Notes or Bonds of this state Registered Treasury Notes or Bonds of any of the other 49 United States Notes, Bonds, or other obligations that are at all times secured by a valid first priority security interest Mortgage Pass-Through Securities Investments not authorized in the County’s IP Reverse Repurchase Agreements Securities Lending Agreements Interest Rate Risk In accordance with its IP, 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. 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, 2020, the County did not have investments in medium-term notes. 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, 2020. Investment Type S&P Moody's % of Portfolio* U.S. Government Agencies AA+ Aaa 36.30% U.S. Treasuries AA+ Aaa 33.55% Supranationals AAA Aaa 6.69% CalTRUST-Short-Term Fund AAf/S1+ Not Rated 13.40% LAIF Not Rated Not Rated 10.06% Total 100.00% 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, 2020, the following investments exceeded the 5% disclosure threshold: Investment Type % of Portfolio* U.S. Government Agencies-Federal Home Loan Bank 16.59% U.S. Government Agencies-Farm Credit Bank 19.71% 58 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) At June 30, 2020, the County had the following investments and interest-bearing deposits (in thousands): Weighted Average Interest Rate Maturity Instrument Maturity Dates % Years Fair Value Cost Supranationals 8/5/20-4/19/22 1.562%-2.751% 0.92 $ 50,229 $ 49,309 U.S. Treasuries 7/31/20-11/30/22 1.527%-2.828% 1.15 252,152 246,315 U.S. Government Agencies 7/06/20-12/09/22 1.660%-2.903% 1.04 272,823 267,012 LAIF On Demand 2.033% - 75,638 75,000 CalTRUST On Demand 1.059% - 100,728 99,964 Total Investments in County Treasury 0.83 $ 751,570 $ 737,600 Deposits in Financial Institutions $ 387,025 $ 387,025 Cash on Hand 294 294 Total Cash held in Treasury 1,138,889 1,124,919 Deposits in Transit 5,070 5,070 Outstanding Warrants (14,570) (14,570) Total 1,129,389 1,115,419 Imprest Cash 1,224 1,224 Non-pool Cash Deposits 2,379 2,379 Other Cash Deposits 3,603 3,603 Total Cash and Cash Equivalents $ 1,132,992 $ 1,119,022 Restricted Cash with Fiscal Agent U.S. Government & Federal Agencies $ 30,423 $ 30,423 Certificates of Deposit & Money Market Accounts 1,605 1,605 Total 32,028 32,028 Total restricted and unrestricted cash and cash equivalents $ 1,165,020 $ 1,151,050 Total Cash and Investments Summary Fair Value Total Governmental Activities $ 508,029 Total Business-type Activities 82,262 Total Fiduciary Funds 565,675 Total Component Unit 9,054 Total Cash and Investments $ 1,165,020 The following represents a condensed statement of net position and changes in net position for the Treasurer's investment pool as of June 30, 2020 (in thousands): Fair Value Statement of Net Position: Net position held for pool participants $ 1,129,389 Equity of internal pool participants $ 695,917 Equity of external pool participants (voluntary and involuntary) 433,472 Total Equity $ 1,129,389 Statement of Changes in Net Position: Revenue $ 21,708 Investment costs (816) Net deposits (10,956) Change in fair value 8,600 Net change in pool net position 18,536 Net position at July 1, 2019 1,110,853 Net position at June 30, 2020 $ 1,129,389 59 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Fair Value Measurements The County categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is divided into 3 levels with each level based on the source used to measure the fair value of the asset. The County has the following recurring fair value measurements as of June 30, 2020: Fair Value Measurements Using Investments by fair value level Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Debt securities US Treasuries $ 252,152 $ 252,152 $ - $ - US Government Agencies 272,823 272,823 - - Supranationals 50,229 50,229 - - Total measured at fair value 575,204 575,204 - - Investments measured at amortized cost LAIF 75,638 - - - CalTRUST 100,728 - - - Total investments in County Treasury $ 751,570 $ - $ - $ - Restricted Cash with Fiscal Agent Cash and investments at June 30, 2020, 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 $ 30,139 Restricted interest on lease reserves 285 Restricted for contractor retentions 1,604 Total Restricted Cash $ 32,028 Cash Deposits Outside of the Treasury Pool At fiscal year-end, the carrying amount of the County's other cash deposits was $2,074,989 and the combined financial institutions' balance was $2,378,662. The difference of $303,673 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 $2,378,662 was covered by federal depository insurance or by collateral held by the County's agent in the County's name. 60 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 Activities Internal Nonmajor Special Service General Fund Revenue Funds Funds Accounts Receivable $ 18,961 136 8 Allowance for Doubtful Accounts - - - Net Accounts Receivable $ 18,961 136 8 Business-Type Activities Nonmajor State Water Enterprise Airport Contract Funds Accounts Receivable $ 144 1,601 379 Allowance for Doubtful Accounts - - - Net Accounts Receivable $ 144 1,601 379 4. CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2020, is as follows (in thousands): Balance Transfers & Balance Governmental Activities July 1, 2019 Additions Retirements Adjustments June 30, 2020 Capital assets, not being depreciated: Land $ 795,513 $ - $ - $ 19 $ 795,532 Construction in progress 28,891 15,192 - (8,912) 35,171 Total capital assets, not being depreciated 824,404 15,192 - (8,893) 830,703 Capital assets, being depreciated: Structures and improvements 263,455 2,608 - 1,942 268,005 Equipment 103,034 4,636 (2,977) 208 104,901 Infrastructure 412,682 15,091 - 6,743 434,516 Other property 980 278 - - 1,258 Total capital assets, being depreciated 780,151 22,613 (2,977) 8,893 808,680 Less accumulated depreciation for: Structures and improvements (96,319) (5,664) - - (101,983) Equipment (64,713) (8,551) 2,825 - (70,439) Infrastructure (229,017) (10,745) - - (239,762) Other property (47) (14) - - (61) (390,096) (24,974) 2,825 - (412,245) Total accumulated depreciation 390,055 (2,361) (152) 8,893 396,435 Total capital assets being depreciated, net $ 1,214,459 $ 12,831 $ (152) $ - $ 1,227,138 Governmental activities capital assets, net 61 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Balance Transfers & Balance Business-Type Activities July 1, 2019 Additions Retirements Adjustments June 30, 2020 Capital assets, not being depreciated: Land $ 36,513 $ - $ - $ - $ 36,513 Construction in progress 2,097 1,900 - - 3,997 Water rights 58,591 2,621 - - 61,212 Other property 1,968 - - - 1,968 Total capital assets, not being depreciated 99,169 4,521 - - 103,690 Capital assets, being depreciated: Infrastructure 381,471 221 - - 381,692 Structures and improvements 209,772 708 - - 210,480 Equipment 10,164 153 - - 10,317 Other property 554 - - - 554 Total capital assets, being depreciated 601,961 1,082 - - 603,043 Less accumulated depreciation for: Infrastructure (38,031) (7,426) - - (45,457) Structures and improvements (63,099) (4,668) - - (67,767) Equipment (3,590) (581) - - (4,171) Other property (58) - - - (58) (104,778) (12,675) - - (117,453) Total accumulated depreciation 497,183 (11,593) - - 485,590 Total capital assets being depreciated, net $ 596,352 $ (7,072) $ - $ - $ 589,280 Business-type activities capital assets, net Depreciation Expense Depreciation expense was charged to functions as follows (in thousands): Governmental Activities Amount General Government $ 5,462 Public Protection 4,071 Public Ways and Facilities 10,249 Health and Sanitation 613 Public Assistance 233 Education 423 Recreational and Cultural Services 1,164 Capital assets held by the County’s internal service funds are charged to the various functions based on their usage of the assets 2,759 Total Depreciation Expense - Governmental Activities $ 24,974 Business-Type Activities Amount Airport $ 3,473 Los Osos Wastewater 4,364 Nacimiento Water Contract 2,202 State Water Project 204 Nonmajor Enterprise 2,432 Total Depreciation Expense - Business-type Activities $ 12,675 62 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, 2020 (in thousands): Governmental Activities Expended to Committed Remaining Project June 30, 2020 Funds Budget Roads Infrastructure $ 18,247 $ 10,804 $ 18,827 AG Levee WMP Alta3a 3,033 - 1,759 CDF-SLO-Program for Co-located 2,362 - 1,728 Dispatch Health – COC – Animal Services Facility 2,260 493 17,596 New Storage Tanks – CSA 10 Water 2,086 1 4,882 Los Osos Landfill Remediation 1,522 119 - Sheriff JMS/RMS Implementation Project 788 3,411 - Templeton to Atlas Connector 657 - 256 AG Levee WMP Mod3C 554 - 2,184 Vets Hall Roof Replacement 446 20 - Sheriff Main Jail HVAC 418 100 280 Business-Type Activities Expended to Committed Remaining Project June 30, 2020 Funds Budget Airport Runway Rehab $ 626 $ - $ 514 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 55 years. The General Fund leases portions of the former County General Hospital. The original cost of these facilities was $12,313. As of June 30, 2020, they had a carrying value of $7,771 net of accumulated depreciation of $4,542. 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 rental payments to be received under these non-cancelable operating leases at June 30, 2020 (in thousands): Year Ending Governmental Business-Type June 30, Activities Activities 2021 $ 306 $ 945 2022 279 891 2023 222 699 2024 198 549 2025 162 415 Later Years 663 7,966 Total $ 1,830 $ 11,465 63 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Minimum future rental payments do not include contingent rental payments, 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 rental payments amounted to $3,069 for the fiscal year ended June 30, 2020. 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 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, 2020 totaled $4,603. The following rental costs represent future minimum payments under leases that have remaining non-cancelable terms as of June 30, 2020, for the next five years and for each five-year period thereafter (in thousands): Year Ending Minimum Lease June 30, Payments 2021 $ 3,906 2022 3,283 2023 2,718 2024 1,976 2025 1,842 2026-2030 5,283 2031-2035 2,338 2036-2040 401 Total $ 21,747 7. RISK MANAGEMENT The County is exposed to various risks of loss 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 no liability claim settlements and there were six 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 Public Risk Innovation, Solutions, and Management (PRISM). The County is a member of PRISM, 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 $ 199,166 maximum ----- Dental None - Funded by Employees ----- 64 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Annual actuarial valuations are obtained for the Workers' Compensation and the 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 also recorded at a discounted 85% confidence level. Beginning of the fiscal year Current year claims, Claim Balance at liability changes & estimates payments fiscal year-end 2018-19 $ 18,907 $ 5,093 $ 4,432 $ 19,568 2019-20 $ 19,568 $ 4,708 $ 4,136 $ 20,140 8. INTERFUND RECEIVABLES AND PAYABLES The composition of interfund balances at June 30, 2020, was (in thousands): Payable Fund (Due to Balance) Receivable Fund (Due from Balance) Amount Nonmajor Governmental Funds Capital Projects Fund $ 911 Nonmajor Enterprise Fund 300 1,211 Nonmajor Enterprise Funds Nonmajor Governmental Funds 400 Total $ 1,611 The SLO County Financing Authority owes the Capital Projects Fund $911 for bond proceeds for the Animal Services Facility. The Parks Fund owes the Golf Fund $300 for the construction of the TopTracer driving range technology installed at the Dairy Creek Golf Course. County Service Area 10 Enterprise Fund owes $400 to the County Service Area 10 Special Revenue Fund for costs relating to the Cayucos strand water tank project. Payable Fund (Advances from Balance) Receivable Fund (Advances to Balance) Amount Nonmajor Governmental Funds General Fund $ 3,581 Nonmajor Enterprise Funds 79 3,660 Nonmajor Enterprise Funds General Fund 1,115 Nonmajor Governmental Funds 406 1,521 Airport Fund General Fund 6,748 Los Osos Wastewater Fund General Fund 9,950 Nonmajor Governmental Funds 2,805 12,755 Total $ 24,684 65 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Advances related to the General Fund include an internal loan to the County Services Area 21 Special Revenue Fund of $36, a loan of $238 related to the restoration of the Cayucos Pier, an operating loan of $669 for Parks related to reduced revenues due to COVID-19, and an internal loan to the Roads Fund of $2,638 related to the Oceano water drainage improvement project. Nonmajor Governmental Funds’ advances from Nonmajor Enterprise Funds of $79 is for future debt payments from the Lopez Park Enterprise Fund to the Parks Special Revenue Fund. The Nonmajor Enterprise Funds advances of $1,521 represent internal loans received by the County Services Areas Enterprise Funds from the General Fund ($994), from the County Services Area 10 Special Revenue Fund ($255), and from the General Flood Control Zone Special Revenue Fund ($151). The Golf Fund also received $121 from the General Fund. The Airport owes the General Fund $6,748 for internal loans for various projects including the refinancing of a State loan for the construction of hangars and the new terminal. The Los Osos Wastewater Fund received a long-term operating loan from the General Flood Control Zone Special Revenue Fund of $2,805 and $9,950 from the General Fund. 9. TRANSFERS A reconciliation of transfers is detailed below (in thousands): Transfer From Transfer To Amount General Fund Nonmajor Governmental Funds $ 17,861 Capital Projects Fund 6,912 Nonmajor Enterprise Funds 498 25,271 Capital Projects Fund General Fund 1,345 1,345 Nonmajor Governmental Funds Nonmajor Governmental Funds 6,766 General Fund 1,064 Capital Projects Fund 1,012 Nonmajor Enterprise Funds 678 9,520 Airport Fund General Fund 281 Nonmajor Governmental Funds 72 353 Los Osos Wastewater Fund General Fund 202 Nonmajor Governmental Funds 71 273 Nonmajor Enterprise Funds Nonmajor Governmental Funds 55 General Fund 2 57 Internal Service Funds Nonmajor Governmental Funds 1,151 General Fund 9 1,160 Total Transfers $ 37,979 66 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) General Fund transfers to Nonmajor Governmental Funds included contributions to the following Special Revenue Funds: Roads ($6,219), Library ($667), Community Development ($524), and Parks ($10). The General Fund also transferred $10,441 to the Pension Obligation Bond Debt Service Fund to finance debt service payments, $498 for Golf Fund operations, and $6,912 to the Capital Projects Fund for various capital projects. The Capital Projects Fund transferred $1,345 to the General Fund for costs related to the new construction of the Sheriff and County Fire Co-Located Emergency Dispatch Facility. Nonmajor Governmental Funds’ transfers consist of contributions of Public Facilities Fees revenue from the Public Facilities Fees Special Revenue Fund to the General Fund for $391 of lease debt payments, $100 to the Capital Projects Fund for park maintenance projects, and $329 to the Parks Fund for various park projects. The Public Facilities Fee Special Revenue Fund ($200) and the Parks Fund ($300) transferred a combined $500 to the Golf Fund for the addition of TopTracer driving range technology at the Dairy Creek Golf Course. The Parks Fund transferred $166 to the General Fund for Templeton Pool repairs and transferred debt services payments to the Pension Obligation Bond Fund ($90), General Fund ($61), and Lopez Park Enterprise Fund ($2). The SLO County Financing Authority Fund transferred $910 to the Capital Projects Fund for the construction of the Animal Services Facility and $4,998 to the Public Financing Corporation for bond proceeds. The Roads Fund transferred $4 to Flood Control Zone 18 Special Revenue Fund for reimbursement of maintenance costs. The Road Impact Fee Special Revenue Fund transferred Impact Fees of $448 to the General Fund for debt service and $431 to the Roads Fund for capital and maintenance projects. The Library Fund ($252), Driving Under the Influence Fund ($33), and the Public Facilities Corporation Fund ($629) made transfers to the Pension Obligation Bond Debt Service Fund to finance debt service payments. The County Service Area Special Revenue Funds transferred $176 to County Service Area Enterprise Funds. The Airport Enterprise Fund transferred $281 to the General Fund and $72 to the Pension Obligation Bond Fund for debt service. The Los Osos Wastewater Fund transferred $202 to the General Fund and $71 to the Flood Control Zone Fund for debt service. Transfers from Nonmajor Enterprise Funds included $49 of transfers from the Golf Enterprise Fund to the Pension Obligation Bond Debt Service Fund and County Services Area 23 Enterprise Fund transferred $6 to County Service Area 21 Special Revenue Fund. County Services Area 23 Enterprise Fund transferred $2 in debt service payments to the General Fund. The Garage Internal Service Fund transferred $9 to the General Fund due to early vehicle retirement. The Public Works ($1,099) and the Garage ($52) Internal Service Funds made transfers to the Pension Obligation Bond Debt Service Fund for debt service. 67 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, 2020, is as follows (in thousands): Beginning Ending Balance Balance Due within Governmental Activities July 1, 2019 Adjustments Additions Reductions June 30, 2020 one year Bonds and notes payable: Certificates of participation (COP) $ 19,046 $ - $ - $ 6,678 $ 12,368 $ 1,096 Certificates of participation from 5,762 - - 126 5,636 130 direct borrowings Unamortized discount on COP (75) - - (75) - - Unamortized premium on COP 797 - - 89 708 - Unamortized premium on lease - - 4,027 4 4,023 - State notes from direct borrowings 1,901 - - 157 1,744 158 Pension obligation bonds 96,903 430 - 3,600 93,733 9,040 Lease revenue bonds - - 20,380 - 20,380 410 Total bonds and notes payable 124,334 430 24,407 10,579 138,592 10,834 Other liabilities: Compensated absences 28,718 - 25,198 18,397 35,519 22,035 Landfill postclosure costs 7,032 - 564 437 7,159 649 Self-insurance 19,568 - 4,708 4,136 20,140 3,931 Total other liabilities 55,318 - 30,470 22,970 62,818 26,615 Total Governmental Activities $ 179,652 $ 430 $ 54,877 $ 33,549 $ 201,410 $ 37,449 Beginning Ending Balance Balance Due within Business-Type Activities July 1, 2019 Adjustments Additions Reductions June 30, 2020 one year Bonds and notes payable: Certificates of participation (COP) $ 11,889 $ - $ - $ 852 $ 11,037 $ 889 Certificates of participation from 2,922 - - 51 2,871 53 direct borrowings Unamortized premium on COP 295 - - 33 262 - State notes from direct borrowings 84,409 - - 3,330 81,079 3,409 Revenue bonds 164,126 - - 4,285 159,841 4,510 Unamortized premium on revenue 8,502 - - 425 8,077 - bonds General obligation bonds 7,485 - - 460 7,025 485 Unamortized premium on general 677 - - 57 620 - obligation bonds Assessment bonds 75,358 - - 1,415 73,943 1,460 Total bonds and notes payable 355,663 - - 10,908 344,755 10,806 Other liabilities: Compensated absences 385 - 302 174 513 184 - Total other liabilities 385 302 174 513 184 Total Business-Type Activities $ 356,048 $ - $ 302 $ 11,082 $ 345,268 $ 10,990 68 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Annual debt service requirements for governmental activities as of June 30, 2020, are summarized as follows: Governmental Activities Certificates of Participation, Including Direct Borrowings Pension Obligation Bonds Unaccreted Year Ending June 30, Principal Interest Principal Appreciation Total 2021 $ 1,226 $ 730 $ 8,799 $ 241 $ 9,040 2022 1,279 680 8,863 757 9,620 2023 1,337 622 8,906 1,319 10,225 2024 1,391 563 8,931 1,919 10,850 2025 1,461 500 8,942 2,563 11,505 2026-2030 5,347 1,619 44,573 23,702 68,275 2031-2035 2,236 955 4,719 3,821 8,540 2036-2040 1,741 511 - - - 2041-2045 1,370 250 - - - 2046-2047 616 24 - - - Total $ 18,004 $ 6,454 $ 93,733 $ 34,322 $ 128,055 Governmental Activities (Continued) State Notes Lease Revenue Bonds Year Ending June 30, Principal Interest Principal Interest 2021 $ 158 $ 17 $ 410 $ 966 2022 160 15 590 787 2023 162 14 610 763 2024 163 12 635 738 2025 165 11 665 712 2026-2030 849 28 3,740 3,133 2031-2035 87 1 4,575 2,303 2036-2040 - - 4,490 1,354 2041-2045 - - 4,665 482 Total $ 1,744 $ 98 $ 20,380 $ 11,238 Business-Type Activities Certificates of Participation, Including Direct Borrowings State Notes Revenue Bonds Year Ending June 30, Principal Interest Principal Interest Principal Interest 2021 $ 942 $ 628 $ 3,409 $ 1,714 $ 4,510 $ 7,298 2022 989 584 3,488 1,635 4,745 7,064 2023 1,038 536 3,571 1,553 4,990 6,817 2024 1,087 484 3,479 1,470 5,250 6,558 2025 1,144 428 3,539 1,390 5,525 6,283 2026-2030 5,553 1,269 18,286 5,723 32,065 26,973 2031-2035 1,307 390 11,782 4,069 40,305 18,730 2036-2040 480 288 13,008 2,842 50,870 8,170 2041-2045 575 192 14,362 1,489 11,581 229 2046-2050 601 79 6,155 185 - - 2051-2053 192 11 - - - - Total $ 13,908 $ 4,889 $ 81,079 $ 22,070 $ 159,841 $ 88,122 Business-Type Activities (Continued) General Obligation Bonds Assessment Bonds Year Ending June 30, Principal Interest Principal Interest 2021 $ 485 $ 351 $ 1,460 $ 2,013 2022 510 327 1,505 1,972 2023 540 300 1,541 1,931 2024 565 271 1,587 1,888 2025 595 239 1,632 1,844 2026-2030 3,510 669 8,862 8,509 69 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 2031-2035 820 21 10,167 7,203 2036-2040 - - 11,674 5,703 2041-2045 - - 13,394 3,983 2046-2050 - - 15,361 2,009 2051-2052 - - 6,760 187 Total $ 7,025 $ 2,178 $ 73,943 $ 37,242 Long-term liabilities at June 30, 2020, consisted of the following: Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2020 Governmental Activities Certificates of Participation 2007 Series A 2/8/2007 2037 4% - 4.25% $304 - $308 $5,090 $3,675 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. Collateral for this debt are the Paso Robles Courthouse building and the County Department of Social Services building located in the City of San Luis Obispo. 2012 Series A 10/15/2012 2028 0.5% - 5.0% $1,034 - $1,289 14,427 8,693 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. Collateral for this debt are the County properties located in the City of San Luis Obispo namely the Old Courthouse, Courthouse Annex B and Courthouse Annex C. IBank Loan 10/01/2016 2046 3.75% $240 - $320 6,000 5,636 A direct borrowing from the California Infrastructure & Economic Development Bank (I-Bank) used for the final construction costs of the new terminal building at the San Luis Obispo County Regional Airport. The debt is backed by the General Fund and repaid using a combination of Passenger Facility Charges, Customer Facility Charges, and other local funding from Airport operations. Collateral for this debt are the 2nd floor office spaces and the subterranean level 1 (also known as P1) located at 1055 Monterey St., City of San Luis Obispo. $25,517 $18,004 State Note 2015 2030 1.00% $175 $2,197 $1,744 A direct borrowing from the California Energy Commission (CEC) is to be used for energy conservation projects. Projects to be implemented by the loan were identified through the Sustainable Solutions Turnkey program with PG&E. These projects will provide estimated long-term energy savings to the County of $140,000 annually. 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 C Capital Appreciation Bonds (CAB) 7/2/2003 2031 5.27% - 5.73% zero - $15,000 $44,199 $128,055 2003 Series C CABs Unaccreted Interest (34,322) $44,199 $93,733 Lease Revenue Bonds 2020 Lease Revenue Bonds Series A 3/01/2020 2044 4.0% $1,063 - $9,173 $16,145 $16,145 Used to finance the construction and equipping of an Animal Services Facility and pay certain costs of issuance associated with the 2020A Bonds. Debt service is provided by facility charges made by participating cities to the County and the County’s General Fund. Collateral for this debt consists of the County Government Center located at 1055 Monterey St., City of San Luis Obispo. 2020 Lease Revenue Refunding Bonds Series B 3/01/2020 2036 4.0% $2,132 - $2,646 4,235 4,235 Used to prepay and refund all of the $5,620 outstanding principal amount of County of San Luis Obispo Certificates of Participation (Vineyard Drive Interchange Improvements, 2008 Series A) and pay certain costs of issuance associated with the 2020B Bonds. Debt service is provided by development fees. Collateral for this debt consists of the County Government Center located at 1055 Monterey St., City of San Luis Obispo. $20,380 $20,380 70 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Original Date of Interest Semi Annual Issue Outstanding Issue Maturity Rates Installments Amount at 6/30/2020 Business-Type Activities Certificates of Participation US Department of Agriculture (USDA) 4/30/2009 2049 4.375% $6 - $86 $1,631 $1,423 2009 A direct borrowing from the USDA 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 5/12/2011 2030 2.0% - 5.5% $928 - $934 11,990 7,830 Remediation 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 Lopez Flood Control District for the use of the retrofitted facilities. 2012 Series A 10/15/2012 2028 0.5% - 5.0% $381 - $475 5,323 3,207 Lease Revenue Refunding Bonds used to refund the 2002 A Certificates of Participation. The original COP was partially used to finance the Dairy Creek Golf Course. Debt service is provided by semi-annual lease payments from the Dairy Creek Golf Course. Collateral for this debt are the County properties located in the City of San Luis Obispo namely the Old Courthouse, Courthouse Annex B and Courthouse Annex C. USDA 2013 07/01/2013 2053 2.75% $18 - $67 1,621 1,448 A direct borrowing from the USDA used to finance a water system improvement project in County Service Area 10A. Debt service is provided by water sales revenues. $20,565 $13,908 State Notes The County has directly 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 and water service revenue and hangar rental revenue. Cayucos Water Treatment Facility 1998 2023 3.0315% $174 $3,011 $494 Lopez Recreation Area 2004 2024 2.5132% $21 325 79 Lopez Water Treatment Plant Upgrade 2006 2028 2.60% $1,672 25,945 14,484 Airport Fuel Farm 2007 2025 4.6557% $86 1,000 378 Los Osos Wastewater Project 2012 2046 2.0% $336 - $598 69,461 65,644 $99,742 $81,079 Revenue Bonds 2018 Nacimiento Water Project Revenue Refunding Bonds Series A 5/07/2018 2040 3.0% - 5.0% $1,063 - $9,173 $27,045 $23,325 Used to refund all of the outstanding 2007 Nacimiento Water Project Revenue Bonds Series A which were 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. 2007 Nacimiento Pipeline Project Series B 9/26/2007 2040 5.2% - 5.6% $2,132 - $2,646 38,565 32,695 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. 2015 Nacimiento Water Project Revenue Refunding Bonds Series A 8/5/2015 2038 3.0%-5.0% $2,603 - $8,097 107,115 103,821 The 2007 bonds were 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. The 2015 Series A Nacimiento Water Project Revenue Refunding Bonds were issued to provide funds to advance refund certain 2007 Series A Nacimiento Water Project Revenue Bonds. $172,725 $159,841 General Obligation Bonds 2011 Refunding – Lopez Dam Remediation 5/12/2011 2030 2.0% - 5.5% $833 - $840 $10,760 $7,025 Used to refund the 2000 A general obligation (GO) issue. The original GO Bonds were used to improve and retrofit the Lopez Dam. Debt service is provided by applicable property taxes. 71 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Assessment Bonds 2012 2037 2.75% $1,609 - $3,245 $83,129 $73,943 Issued to the USDA to finance the construction of the Los Osos Wastewater Project. Debt service is provided by amounts levied against property owners who benefit from the project. Public Facilities Corporation The SLO County Public Facilities Corporation (PFC) was incorporated on September 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 August 22, 2000, as a joint exercise of powers authority between the County and the Lopez 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. 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, 2020, totaled $74,605 with interest rates from 2.52% to 5.45%. 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 $36,032 at June 30, 2020. 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. The liability for compensated absences is typically liquidated from the Parks, Driving Under the Influence Program, Library and General funds. 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 $743,126 with a margin of $736,101. Direct Placement Debt The County does not have any direct placement debt as of June 30, 2020. 72 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Direct Borrowings The County’s outstanding notes from direct borrowings related to governmental activities of $7,380 contain default provisions and where applicable (1) the entire obligation becomes due and payable if the County is unable to make installment/lease payments, and (2) the lessor terminates the lease or re-let the leased premises. The County’s outstanding notes from direct borrowings related to business-type activities of $83,950 contain a provision that if default continues after the cure period, entire obligation becomes due and payable. 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, 2020 had an arbitrage liability of $147. 11. NET POSITION/FUND BALANCES Net Position The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted and unrestricted. Net Investment in Capital Assets - This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category. Net Investment in Capital Assets at June 30, 2020, is as follows (in thousands): Amount Governmental activities $ 1,202,709 Business-type activities 288,781 Total $ 1,491,490 Restricted Net Position - This category presents net position with external restrictions imposed on its use 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, 2020, is $14,638 of Public Facility Fees and $10,613 of Road Impact Fees restricted due to enabling legislation. The remaining $41,404 of restricted net position is restricted due to restrictions imposed by creditors, grantors, or contributors. 73 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Restricted net position at June 30, 2020, for governmental activities is as follows (in thousands): Amount RESTRICTED FOR: General Government Purchase obligations for Non-Departmental related professional services $ 5 Purchase obligations for Assessor related equipment and professional services 21 Purchase obligations for Clerk-Recorder equipment and professional services 48 Purchase obligations for County Counsel professional services 15 Purchase obligations for Human Services professional services and software 171 Purchase obligations for Utilities Management software and professional services 19 Purchase obligations for building maintenance projects 81 Purchase obligations for Information Technology related equipment, software and professional 332 services Purchase obligations for Central Services related professional services 1 Purchase obligations for Auditor-Controller-Treasurer-Tax Collector related professional services 66 Purchase obligations for Talent Development professional services 147 Claims, contracts and other restrictions imposed by grantors or contributors 4,058 Total General Government 4,964 Public Protection Purchase obligations for Waste Management related professional services and software 112 maintenance Purchase obligations for Grand Jury related supplies 1 Purchase obligations for District Attorney software support and supplies 14 Purchase obligations for Sheriff-Coroner related training, professional services and supplies 3 Purchase obligations for Animal Services professional services 7 Purchase obligations for Probation related safety equipment and professional services 163 Purchase obligations for fire protection related vehicles and equipment 3,515 Purchase obligations for Planning and Building related professional services 1,180 Purchase obligations for flood control related engineering and environmental services 512 Total Public Protection 5,507 Health and Sanitation Purchase obligations for Behavioral Health related professional services 44 Purchase obligations for Public Health related professional services 3 Total Health and Sanitation 47 Public Ways and Facilities Purchase obligations for Public Works related software and professional services 514 Road impact fees restricted by enabling legislation for road maintenance and construction 10,613 Public facilities fees restricted by enabling legislation for public facilities 14,638 Total Public Ways and Facilities 25,765 Recreation and Cultural Services Parks equipment and maintenance services 189 Public Assistance Purchase obligations for Social Services related professional services 14 Education Library equipment 2 Debt Service 30,167 Total Restricted Net Position $ 66,655 74 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 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, 2020, is as follows (in thousands): Amount Governmental activities $ (286,622) Business-type activities 94,335 Total $ (192,287) The Public Works Internal Service Fund reported a deficit in net position of $32,217 at June 30, 2020. This deficit is mainly due to the fund’s net pension liability of $52,549 and the County plans to reduce the deficit with increased future charges. Fund Balance 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 No. 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-Treasurer-Tax Collector 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. 75 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Fund balances for all the major and nonmajor governmental funds as of June 30, 2020, are distributed as follows: Capital Nonmajor Projects Governmental General Fund Fund Funds Total Nonspendable: Inventories $ 101 $ - $ - $ 101 Prepaid items 838 - 4 842 Advances to other funds 17,795 - - 17,795 Subtotal 18,734 - 4 18,738 Restricted for: Tax reduction reserves 4,613 - - 4,613 General Government - - 309 309 programs Public Protection programs 3,219 - - 3,219 Mental Health Services Act 2,774 - - 2,774 Public facilities - - 14,638 14,638 Traffic impact programs - - 10,613 10,613 Wildlife and grazing - - 36 36 programs Debt service - 1,604 30,166 31,770 Subtotal 10,915 1,604 55,453 67,972 Capital Nonmajor Projects Governmental General Fund Fund Funds Total Committed to: Maintenance projects 6,782 - - 6,782 County Counsel services 915 - - 915 Human Resources services 307 - - 307 IT projects 332 - - 332 Other general government 9,732 - - 9,732 Fire equipment 6,249 - - 6,249 Planning programs 1,182 - - 1,182 Other public protection 582 - - 582 Public health programs 807 - - 807 Behavioral Health programs 48 - - 48 Social Services’ programs 14 - - 14 Law enforcement medical care 20 - - 20 services Public works engineering & 475 - - 475 consulting services Community parks programs 29 - - 29 Fish and game programs - - 186 186 Flood control programs - - 21,296 21,296 Lighting programs - - 492 492 Community development - - 1,009 1,009 programs Emergency medical services - - 701 701 Roads - - 16,182 16,182 76 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Community service areas - - 3,014 3,014 Driving under the influence - - 937 937 programs Library programs - - 5,152 5,152 Regional parks programs - - 1,338 1,338 Wildlife and grazing programs - - 8 8 General reserve 10,000 - - 10,000 SB1090 economic development 10,153 - - 10,153 COVID-19 services 7,282 - - 7,282 Internal financing 3,445 - - 3,445 Solar plant safety 843 - - 843 Solar plant mitigation 5,579 - - 5,579 Automation projects 18,014 - - 18,014 Prado Rd interchange project 1,435 - - 1,435 Talent development 1,822 - - 1,822 Building replacement 44,103 - - 44,103 Tax reduction reserve 44,271 - - 44,271 Lease financing 1,034 - - 1,034 Capital projects - 17,278 - 17,278 Subtotal 175,455 17,278 50,315 243,048 Capital Nonmajor Projects Governmental General Fund Fund Funds Total Assigned to: Tax reduction reserve 19,709 - - 19,709 General government 6,769 - - 6,769 Sheriff-Coroner and Emergency 6,936 - - 6,936 Services programs Probation programs 10,463 - - 10,463 District Attorney programs 4,598 - - 4,598 Waste Management programs 13 - - 13 Planning programs 2,079 - - 2,079 Other public protection 2,871 2,871 programs - - Foster Care & Social Services 9,122 - - 9,122 programs Law enforcement medical care 241 241 services - - Veterans’ Services programs 148 148 - - Public ways and facilities 2,517 - - 2,517 Behavioral Health programs 16,160 - - 16,160 Public Health programs 1,234 - - 1,234 Subsequent Fiscal Year Budget 36,428 - - 36,428 Imprest cash 138 - - 138 Subtotal 119,426 - - 119,426 Total $ 324,530 $ 18,882 $ 105,772 $ 449,184 77 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, 2020, to be reappropriated during the next fiscal year (in thousands): Fund Total Encumbrances General Fund $ 2,710 Capital Projects Fund 19,210 Nonmajor Governmental Fund 8,719 $ Total Lapsing Encumbrances 30,639 13. OTHER COMMITMENTS In 1965, San Luis Obispo County Flood Control and Water Conservation District (District) 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 $28,662 over the next 15 years. The estimated amounts vary by year. For example, the principal amount due in 2020 is $1,082 while $2,606 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. A proposed Delta conveyance would require a contract extension agreement for financing beyond 2035. 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, 2020. 15. 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 landowner, 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 costs as of June 30, 2020, is $7,159 (in 2020 dollars). Of this, $4,552 is for the Maintenance Cost and $2,607 is the Corrective Action Cost. The cost estimates were provided by a licensed professional geologist in the Post Closure Maintenance Plan dated May 2017 and revised cost dated May 29, 2018, and the Engineers Estimate of Corrective Action Update dated March 18, 2016. 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. 78 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) 16. TAX ABATEMENTS Tax abatements are agreements between the County and individuals or entities in which the County promises to forgo tax revenues and the individual or entity promises to take specific action that contributes to San Luis Obispo County’s economic development or otherwise benefits the county’s citizens. The County offers property tax abatements through the Agricultural Preserve Program (Program), as provided by the California Land Conservation Act of 1965 also known as the “Williamson Act”. The purpose of the Program is to protect agricultural lands and limited types of open space and outdoor recreation lands of statewide importance. Local agreements are administered under the County Rules of Procedure to Implement the Land Conservation Act of 1965, which were first adopted in 1972. Participation in the Program is voluntary; the agricultural preserve is established at the landowner’s request if Program criteria are met. Once a landowner enters into a contract with the County, the land is reassessed based on the agricultural income producing capability of the land, and the abatement is determined by specific dollar amount. To be eligible for the Program, individual properties must be within a rural use category and meet a minimum size requirement of 40-100 acres depending on the type of land being preserved. Landowners must agree to keep the land in large parcels ranging from 20-320 acres, not to create new parcels smaller than the applicable minimum, and not to create separate conveyance of an existing parcel that would result in separate ownership smaller than the agricultural preserve minimum parcel size. In return, the County will reassess the property on the basis of the agricultural income producing capacity of the land. The minimum term of a contract is 20 years, except for properties located within one mile of an urban reserve line or adjacent to a village reserve line which are eligible for a 10-year minimum term contract. Non-renewal is the most common method for a landowner to terminate a land conservation project; however, a property owner may request cancellation of a land conservation contract in order to terminate the contract on all or a portion of the property within one year after an application is accepted for processing. Under the nonrenewal process, the annual tax assessment increases over a defined period until the assessment reflects the Proposition 13 value, including the annual inflationary factor, of the property. Under the cancellation process, a significant one-time cancellation fee is assessed based upon a certain percentage of the current fair market value of the property. For the fiscal year ended June 30, 2020, the Agricultural Preserve Program tax abatements were $15,108. 17. DEFINED BENEFIT PENSION PLAN Description of the System that Administers the Pension Plan The Pension Trust is a public employee retirement system established by the County of San Luis Obispo on November 1, 1958. Ten years later the Board of Supervisors adopted the present By-Laws and the San Luis Obispo County Employees Retirement Plan (the “Plan”) to provide retirement benefits to the employees of the County. The Pension Trust is administered by the Board of Trustees to provide retirement, disability, death, and survivor benefits for its members. 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 multiple-employer cost sharing contributory defined benefit pension plan consisting of five employers: the County of San Luis Obispo (the “Employer”), the Superior Court in San Luis Obispo County, the San Luis Obispo Local Agency Formation Commission, the San Luis Obispo Air Pollution Control District and 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 79 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) (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. 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 has the sole authority to amend the Plan’s provisions. Participation in the Plan is mandatory for all regular employees. Participants are currently broken into 3 Tiers depending on date of hire: Tier 1 generally includes members hired before January 1, 2011. As of December 31, 2019, there were Tier 1 1,031 active County employed members in Tier 1. Tier 2 generally includes members hired on or after January 1, 2011 but before January 1, 2013. Tier 2 only applies to members hired after the date each bargaining unit adopted Tier 2. Members hired in Tier 2 a bargaining unit that did not adopt Tier 2 are considered Tier 1 members. As of December 31, 2019, there were 296 active County employed members in Tier 2. Tier 3 includes all members hired on or after January 1, 2013. As of December 31, 2019, there were Tier 3 1,268 active County employed members in Tier 3. 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 are issued for the Plan and are available at the County of San Luis Obispo Auditor-Controller-Treasurer-Tax Collector's office. The Plan’s financial statements are prepared on the accrual basis of accounting. All assets are invested and held pursuant to, and in accordance with, the Investment Policy of the Plan. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due pursuant to formal commitments and statutory or contractual requirements. Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Plan investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. All other securities are valued at the last reported market price at current exchange rates. Summary of Plans and Eligible Participants The active number of County employees and their respective tiers covered by the benefit terms as of December 31, 2019, are shown in the following table: Tiers Summary of Plan Active members Vested after accumulation of five years of Pension Trust service credit & 839 members Miscellaneous Tier 1 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & 248 members Miscellaneous Tier 2 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & 1,090 members Miscellaneous Tier 3 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 52. Vested after accumulation of five years of Pension Trust service credit & 75 members Probation Tier 1 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Probation Tier 2 N/A - Vested after accumulation of five years of Pension Trust service credit & 45 members Probation Tier 3 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. 80 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Vested after accumulation of five years of Pension Trust service credit & 117 members Safety Tier 1 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & 48 members Safety Tier 2 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & 133 members Safety Tier 3 eligible to receive a Service Retirement Allowance after vesting and attaining a minimum age of 50. Benefit Provisions Members terminating employment before accruing five years of Pension Trust service credit forfeit the right to receive retirement benefits unless they establish reciprocity with another public agency within the prescribed time- period. Non-vested members who terminate service are required to withdraw their accumulated contributions plus accrued interest. The employer contributions forfeited by non-vested members are absorbed back into the pension trust fund. Members who terminate after earning five years of Pension Trust service credit may leave their contributions on deposit and upon reaching age eligibility elect to take a retirement. Differences between expected and actual experience for vested or non-vested benefits may result in an increase or decrease to pension expense and net pension liability. Plan participants, upon vesting and attaining the minimum retirement age, 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, the member’s age, and the member’s bargaining unit. 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 also provides a death benefit of $1,000 (one-thousand) paid to a beneficiary or estate if a member dies after retirement. For members within Tier 1, final average salary is the average monthly salary based on the highest twelve consecutive months of earnings and may include a compensation pickup for various management bargaining units. For members with Tier 2 or Tier 3 benefits, final average salary is the average monthly salary based on the highest thirty-six consecutive months of earnings with no pickup. The retirement benefit for Tier 1, Tier 2, and Tier 3 members includes post-retirement cost-of-living adjustments (COLAs) based upon the Consumer Price Index. Tier 1 member COLAs are limited to a maximum of 3% annually. For Tier 2 and Tier 3 members, COLAs are limited to a maximum of 2% annually. There is no minimum COLA requirement, and COLAs must be approved by the Board of Trustees annually. Description of the terms of the plan’s deferred retirement option program (DROP) Deferred Retirement Option Program (DROP): A Tier 1 member age 50 or more with 5 or more years of service may elect to participate in the Pension Trust’s DROP. An equal amount to the amount that would have been paid had the member retired, is deposited into a DROP account monthly. The addition to the DROP account is increased each year by the Cost-of-Living Adjustment approved by the Board of Trustees not to exceed 3% per year. Members electing to enter DROP must participate a minimum of 6 months up to a maximum of 5 years. Upon actual retirement, the member may receive the accumulated DROP account balance in the form of a lump sum or as an annuity payment. Contributions Plan members are required by statue to contribute to the pension plan. Members’ contribution rates are formulated based on age at date of entry and the actuarially calculated future benefits. The County is required by statute to contribute the remaining amounts necessary to finance the estimated benefits accrued to its members. Member and employer contribution rates for each plan are as follows: 81 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) EMPLOYER EMPLOYEE CONTRIBUTION CONTRIBUTION PLAN RATES RATES Miscellaneous Tier 1 22.80-24.85% 15.65-24.10% Miscellaneous Tier 2 22.80-24.85% 7.26-17.20% Miscellaneous Tier 3 22.31-24.36% 5.64-17.96% Probation Tier 1 22.11-24.03% 20.83-29.35% Probation Tier 2 Not negotiated Not negotiated Probation Tier 3 23.53% 9.59-21.63% Safety Tier 1 33.97-40.84% 16.72-33.80% Safety Tier 2 36.42-40.84% 10.95-24.71% Safety Tier 3 30.38-40.23% 9.75-21.75% The County’s contributions to the Plan for the past three fiscal years were equal to the required contributions for each year and are noted in the chart below. County contributions Fiscal Year Ended (in thousands) June 30, 2018 $42,046 June 30, 2019 $43,432 June 30, 2020 $49,018 In addition, the County contributes towards post-employment benefits other than retirement (See Note 18). The San Luis Obispo County Employees Retirement Plan establishes the basic obligations for employer and member contributions and benefits to and of the retirement system. The actual employer and member contribution rates in effect each year are based on recommendations made by an independent actuary that are approved by the Board of Trustees and adopted by the San Luis Obispo County Board of Supervisors. The entire Plan is 65.3% funded as of January 1, 2020; since this is a multi-employer cost sharing plan, the funded status is the same for all employees across the board. In general, this indicates that for every dollar of benefits due, SLOCPT had approximately 65.3 cents available for payment. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Total pension liability represents the portion of the actuarial present value of projected benefit payments attributable to past periods of service for current and inactive employees. The County’s share of the total pension liability as of December 31, 2019, was $2,059,268. The County’s share of the Plan’s fiduciary net position was $1,407,345 as of the same date. As of December 31, 2019, the Plan’s fiduciary net position was 68.34% of the total pension liability. At June 30, 2020, the County reported a liability of $625,259 for its proportionate share of the net pension liability of the Plan. The net pension liability was measured as of December 31, 2019. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation date of January 1, 2019. The actuarial assumptions used in the January 1, 2019 valuation were based on the results of an actuarial experience study for the period January 1, 2013 through December 31, 2017. Measurements as of December 31, 2019, are based on the fair value of assets on that date, and the Total Pension Liability as of the valuation date, January 1, 2019. The actuarial assumptions were rolled forward to the Pension Trust Plan’s fiscal year-end of December 31, 2019. There were no significant events between the January 1, 2019 valuation date and the December 31, 2019 measurement date for the Pension Plan’s GASB Statement No. 67 valuation. 82 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) The County’s proportion of the net pension liability was based on a projection of the County’s long-term share of contributions to the Plan relative to the projected contributions of all the Plan’s participants, actuarially determined. At December 31, 2019, the County’s proportionate share was 93.80%, compared to 93.82% at December 31, 2018, a decrease of 0.02%. The General Fund, Parks Fund, Driving Under the Influence Program Fund, and Library Fund have typically been used to liquidate the net pension liability for governmental activities. For the year ended June 30, 2020, the County recognized pension expense of $92,850. Pension expense represents the change in the net pension liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, actuarial gain/loss, actuarial assumptions or method and plan benefits. At December 31, 2019, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources (in thousands) (in thousands) Deferred outflows of resources – change in proportion $ 1,757 $ 78 Deferred outflows and inflows of resources – difference between expected and actual experience 21,751 508 Deferred outflows of resources – changes in actuarial assumptions 15,708 - Deferred outflows of resources – net difference between projected and actual earnings on pension plan investments - 32,285 County contributions subsequent to the measurement date 25,037 - $ 64,253 $ 32,871 Deferred outflows of resources above represent the unamortized portion of changes to net pension liability, changes in actuarial assumptions, and the net difference between projected and actual earnings on pension plan investments along with deferred outflows of resources of $25,037 for contributions for the fiscal year ending June 30, 2020 made subsequent to the measurement date of December 31, 2019. The $25,037 of subsequent contributions will be recognized as reduction of the net pension liability in the fiscal year ending June 30, 2021. The difference between projected and actual investment earnings on pension plan investments is amortized over five years on a straight-line basis beginning in the year in which they occur. One- fifth was recognized in pension expense during the Plan’s measurement period, and the remaining difference will be amortized over the remaining four-year period. Changes in assumptions and difference between expected and actual experience are recognized over the average expected remaining service lives of all employees that are provided with pensions through the Plan, determined as of January 1, 2019, and is 4.9810 years. The difference between the actual employer contributions and the proportionate share of the employer contributions during the measurement period ended December 31, 2019 is also recognized over 4.9810 years. Amortizable amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in future pension expense as follows: Year Ending Future Recognition June 30, (in thousands) 2021 $ 11,254 2022 (2,569) 2023 15,381 2024 (18,961) 2025 1,240 Thereafter - Total $ 6,345 83 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Actuarial Assumptions The total pension liability in the January 1, 2019 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% Amortization growth rate Level percentage of payroll Salary increases 2.75% plus service-related merit component COLA increases 2.50% for Tier 1 and 2.00% for Tier 2 and Tier 3 Investment rate of return 7.00%, net of administrative expense Post-Retirement Mortality RP-2014 Mortality Tables with generational mortality improvements using scale MP-2017, a 105% multiplier for healthy males and 115% multiplier for healthy females, and white-collar adjustment applied to RP-2014 The actuarial assumptions used in the January 1, 2019 valuation were based on the results of an actuarial experience study for the period January 1, 2013 – December 31, 2017. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage, adjusted for expected inflation. The target allocation and best estimates of real rates of return for each major asset class are summarized in the following table: Weighted Average Long-Term Target Expected Real Asset Class Allocation Rate of Return Fixed Income 30% 1.30% Domestic Equities 20% 3.64% International Equities 20% 5.31% Alternative Investments 15% 4.53% Real Estate 15% 5.37% Discount Rate The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that Plan member contributions will be made at the current contribution rate and that Employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following table presents the County’s portion of the net pension liability calculated using the discount rate of 7.00%, as well as what the County’s portion of the net pension liability would be if it were calculated using a discount rate that is one percentage-point lower, 6.00%, or one percentage-point higher, 8.00%, than the current rate: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 6.00% 7.00% 8.00% County’s net pension liability as of $892,079 $625,259 $407,745 December 31, 2019 84 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Pension Plan Fiduciary Net Position Detailed information about the Plan’s fiduciary net position is available in the separately issued San Luis Obispo County Pension Trust CAFR. 18. POST-EMPLOYMENT HEALTHCARE BENEFITS General Information about the OPEB Plan Plan Description The County’s San Luis Obispo County Retiree Health Care Plan (the OPEB Plan), an agent multi-employer defined post-employment benefit (OPEB) plan is administered by the County utilizing an irrevocable trust. The OPEB Plan is funded solely funded by the County for the benefit of its employees. The County assists eligible retirees by paying a portion of their premiums for medical care. The County Board of Supervisors must approve any modification, alteration, or amendment of OPEB benefits. 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 is an IRS Section 115 trust fund administered by CalPERS. CalPERS issues a publicly available financial report consisting of financial statements and required supplementary information for the CERBT. The report may be obtained by writing to CalPERS, Lincoln Plaza North, 400 Q Street, Sacramento, CA 95811. Benefit Eligibility and Employees Covered To be eligible for benefits, a member must be eligible to retire, attain a minimum age of 50-52, depending on date of hire, and complete a minimum of 5 years of service with the County. In addition, the member must begin receiving their County pension within 120 days of termination of employment. Members receiving disability retirements are also eligible to receive the retirement reimbursement. In the event of a retirant’s death, qualified surviving spouses and dependents under the age of 23 are eligible to receive the OPEB benefit. At June 30, 2020, a total of 3,619 employees were covered by the OPEB Plan’s benefit terms: Active Plan Members 2,485 Inactive Plan Members 931 Inactive Plan members entitled to but not yet receiving benefits 203 3,619 Benefits Provided The County contracts with BCC to provide healthcare, vision, and dental benefits to eligible county retirees and their dependents. Through BCC, retirees are offered substantially the same health plans as active County employees as well as unique plans for retirees receiving Medicare benefits. Retirees who elect to participate in a County-sponsored health insurance plan are eligible to a monthly subsidy funded by the County’s OPEB benefit. The amounts the County contributes toward retiree medical premiums depends on bargaining unit. In FY 2019-20, the County provided the following to eligible retirees: Non-management Employees Management Employees Calendar Year 2019 $136 per month $139 per month Calendar Year 2020 $139 per month $139 per month 85 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Contributions The County makes all contributions to the trustee for investment and reinvestment pursuant to the terms of the agreement with the CERBT. Employees are not required to contribute to the plan. For the fiscal year ended June 30, 2020, the funding was a combination of direct premium payments to contracted medical, dental and vision providers, plus a contribution of $676 thousand to the CERBT. The County has selected the Actuarially Determined Contribution (ADC) funding method of contributing 100% of the ADC to fund the CERBT. Net OPEB Liability The County reported a net OPEB liability of $28.0 million as of June 30, 2020. The June 30, 2020 net OPEB Liability was determined by the actuary using a measurement date of June 30, 2019. 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. The total OPEB liability as of June 30, 2020 was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount Rate 6.5% Inflation 2.5% Health care cost trend rate 6.9% for FY 2019, gradually decreasing over several decades to an ultimate rate of 4.0% in FY 2076 and later years. Actuarial cost method Entry Age Normal Amortization method for investment gains and Straight-line amortization over a closed 5-year period losses Amortization method for effects of assumption Straight-line amortization over a period equal to the changes and experience gains and losses average of the expected remaining service lives of all members that are provided with OPEB through the plan Amortization method for ADC purposes Level percentage of payroll over a rolling amortization period of 14 years Reimbursement eligibility 40% of all retirants will apply for and receive the reimbursement Payroll growth rate 2.75% per annum Salary increases Inflation of 2.5% plus productivity increase rate of 0.25% plus an additional service-related merit component. Investment rate of return 6.5% 86 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Post-retirement mortality RP-2014 Mortality Tables with generational mortality improvements using scale MP-2017, and additional adjustments. The withdrawal, retirement, disability, mortality, and salary scale are based on an experience study for the five- year period ending December 31, 2017 completed for the San Luis Obispo County Pension Trust. Other assumptions were developed by the actuary based on County experience and actuarial standards. Discount Rate The actuarially assumed discount rate of 6.5% per annum, compounded annually, reflects the County’s current policy of pay-as-you-go plus additional funding of the OPEB liability, and the County’s ongoing selection of a “less conservative” (Strategy 1) portfolio invested by the CERBT. Per GASB guidance, the discount rate was determined by calculating the single rate that produces the same present value of expected benefit payments as (1) the expected long-term rate of return on plan assets during the period when projected assets are sufficient to pay future retiree benefits, and (2) the 20-year municipal bond rate after assets are projected to be exhausted. The CERBT Strategy 1 portfolio consists of the following assets managed internally by the California Public Employees Retirement System (CalPERS) and/or external advisors: Long-Term Expected Target Nominal Rate Asset Class Allocation Target Range of Return Global Equity 59% plus/minus 5% 7.26% Fixed Income 25% plus/minus 5% 4.51% Treasury Inflation-Protected Securities (TIPS) 5% plus/minus 3% 3.70% Global Real Estate Investment Trusts (REITs) 8% plus/minus 5% 7.03% Commodities 3% plus/minus 3% 4.89% The long-term expected real rate of return, net of expenses, for CERBT Strategy 1 is assumed to be 6.50%. Changes in the Net OPEB Liability The table below shows the changes in the total OPEB liability, the OPEB Plan fiduciary net position, and the net OPEB liability over the past fiscal year in thousands: Total Plan Net OPEB Fiduciary Net OPEB Liability Less Position Equals Liability Balances as of June 30, 2019 $45,502 $18,127 $27,375 Projected Changes for fiscal year-end June 30, 2020: Service Cost 1,538 - 1,538 Interest Cost 3,073 - 3,073 Differences between expected and actual experience - - - Actuarial Gains/Losses - - - Change in Assumptions 1,129 - 1,129 Net Investment Income - 1,161 (1,161) Benefit Payments (3,037) (3,037) - Employer Contributions - 3,922 (3,922) Administrative Expenses - (4) 4 Other Deductions - - - Net Projected Changes 2,703 2,042 661 Projected Balances as of June 30, 2020 $48,205 $20,169 $28,036 87 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) Total OPEB liability represents the portion of the actuarial present value of projected benefit payments to be provided to current and inactive employees that is attributable to the employees’ past periods of service. Plan fiduciary net position describes the resources available to pay for the cost of OPEB benefits. The Net OPEB liability is the amount remaining after the OPEB Plan’s fiduciary net position is offset against the County’s total OPEB liability. Governmental funds contributing towards liquidating the liability include the General Fund, Driving Under the Influence Fund, Library Fund, and Parks Fund. At June 30, 2020, the OPEB Plan’s fiduciary net position was 41.8% of the total OPEB liability. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Costs The following table presents the net OPEB liability calculated using the discount rate of 6.5%, as well as what the liability would be if it were calculated using a discount rate that is one percentage-point lower, 5.5%, or one percentage-point higher, 7.5%, than the current rate: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 5.5% 6.5% 7.7% Net OPEB Liability $33,720 $28,036 $23,296 The sensitivity of the Net OPEB liability to changes in healthcare trend rates is presented below: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) Net OPEB Liability $22,393 $28,036 $34,919 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2020, the County recognized OPEB expense of $4,675. OPEB expense represents the change in the net OPEB liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, actuarial gain/loss, actuarial assumptions or method and plan benefits. The County’s discretely presented component unit did not report any OPEB liability, expense or deferred outflows or inflows of resources. At June 30, 2020, the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources (in thousands) (in thousands) Deferred outflows and inflows of resources – difference between expected and actual experience $ - $ 2,062 Deferred outflows of resources – changes in actuarial assumptions 15,147 - Deferred outflows of resources – net difference between projected and actual earnings on pension plan investments - 50 County contributions subsequent to the measurement date 3,778 - $ 18,925 $ 2,112 88 NOTES TO THE BASIC FINANCIAL STATEMENTS (Continued) $3,778 reported as deferred outflows of resources related to OPEB resulting from County contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability for the fiscal year ending June 30, 2021. Amounts reported as deferred (inflows) outflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ending Future Recognition June 30, (in thousands) 2021 $ 2,429 2022 2,429 2023 2,429 2024 2,441 2025 2,444 Thereafter 864 Total $ 13,036 The Schedule of Changes in the County’s Net OPEB Liability and Related Ratios and the Schedule of Actuarially Determined Contributions and Plan Contributions and Related Ratios are included as Required Supplementary Information following the Notes to the Financial Statements and present multi-year trend information about the OPEB liability, OPEB Plan fiduciary net position, actuarially determined contributions, and covered-employee payroll. 19. SUBSEQUENT EVENTS Pension Obligation Prefunding Current provisions of the County’s Retirement Plan permit the County to prepay its obligation to the Pension Trust on an annual basis. On July 17, 2020, the County made an advance payment of $61.6 million representing the County’s FY 2020-21 employer retirement and employer paid portion of employee normal retirement contributions to the Pension Trust. The prepayment resulted in a savings of $1.3 million to the County. Coronavirus Aid, Relief, and Economic Security (CARES) Act As part of the State’s adopted FY 2020-21 budget, approximately $28.3 million in federal funding will be passed from the State to the County in order to support activities and expenditures that promote public health and safety in response to the COVID-19 public health emergency. 89 ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION ________________________________________________________________ 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 the County’s Proportionate Share of the San Luis Obispo County Pension Plan’s Net Pension Liability  Schedule of the County’s Contributions to the San Luis Obispo County Pension Plan  Other Post-Employment Benefits (OPEB) Plan Schedule of Changes in the County’s Net OPEB Liability and Related Ratios  Other Post-Employment Benefits (OPEB) Plan Schedule of Actuarially Determined Plan Contributions and Related Ratios  Budgetary Comparison Schedule – General Fund  Notes to Required Supplementary Information 90 COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE COUNTY’S PROPORTIONATE SHARE OF THE SAN LUIS OBISPO COUNTY PENSION PLAN’S NET PENSION LIABILITY FOR THE LAST 10 FISCAL YEARS* (in thousands) County’s proportionate County’s County’s share of the net Plan fiduciary Measurement proportion of proportionate pension liability net position as a Date the net share of the County’s (asset) as a percentage of December pension net pension covered percentage of the total 31st liability liability payroll covered payroll pension liability 2013 92.64% $354,823 $153,942** 230.49% 74.78% 2014 92.65% $391,423 $157,730** 248.16% 73.53% 2015 92.92% $506,626 $166,433** 304.40% 67.57% 2016 93.10% $602,805 $172,192** 350.08% 64.59% 2017 93.67% $529,033 $186,278** 284.00% 70.36% 2018 93.82% $707,815 $193,122 366.51% 62.76% 2019 93.80% $625,259 $194,717 321.11% 68.34% *In accordance with paragraph 81.a of GASB 68 effective June 30, 2014, employers must disclose a 10-year history of their proportionate share of the pension plan’s net pension liability. Additional years will be presented as they become available. **Restated in accordance with the GASB Statement No. 82 definition of covered payroll as the payroll on which contributions to a pension plan are based as of the measurement date. Changes to benefit terms None Changes of assumptions None 91 COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF THE COUNTY’S CONTRIBUTIONS TO THE SAN LUIS OBISPO COUNTY PENSION PLAN FOR THE LAST 10 FISCAL YEARS* (in thousands) Fiscal County’s actual Year Actuarially Contribution contributions as a ending required Actual deficiency County’s percentage of covered June 30th contributions contributions (excess) covered payroll payroll 2014 $30,956 $28,867^ $2,089 $155,754** 18.53% 2015 $30,687 $30,174^ $513 $162,273** 18.59% 2016 $32,839 $31,997^ $843 $170,552** 18.76% 2017 $35,066 $35,415^ ($349) $181,338** 19.53% 2018 $45,153 $42,046^ $3,107 $190,135 22.11% 2019 $48,198 $43,432 $4,766 $193,294 22.47% 2020 $53,675 $49,018 $4,658 $202,414 24.22% *In accordance with paragraph 81.a of GASB 68 effective June 30, 2014, employers must disclose a 10-year history of their contributions to the pension plan. Additional years will be presented as they become available. ^Restated to reflect a fiscal year measurement period. **Restated in accordance with the GASB Statement No. 82 definition of covered payroll as the payroll on which fiscal year contributions to a pension plan are based. Changes to benefit terms None Changes of assumptions None 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. 92 COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN SCHEDULE OF CHANGES IN THE COUNTY’S NET OPEB LIABILITY AND RELATED RATIOS FOR THE LAST 10 FISCAL YEARS* (in thousands) Fiscal Fiscal Fiscal Year Year Year 2017-18 2018-19 2019-20 Total OPEB liability: Service cost $ 688 $ 611 $ 1,538 Interest 1,949 2,007 3,073 Differences between expected and actual experience - (2,842) - Changes of assumptions - 19,530 1,129 Benefit payments (1,690) (1,526) (3,037) Net change in total OPEB liability 947 17,780 2,703 Total OPEB liability – beginning 26,775 27,722 45,502 Total OPEB liability – ending (a) $ 27,222 $ 45,502 $ 48,205 Plan Fiduciary net position: Employer contributions 1,707 2,521 3,922 Net investment income 1,155 1,286 1,161 Benefit payments (1,690) (1,526) (3,037) Administrative expense (7) (8) (4) Other deductions - (1,171) - Net change in plan fiduciary net position 1,165 1,102 2,042 Plan fiduciary net position – beginning 15,860 17,025 18,127 Plan fiduciary net position – ending (b) $ 17,025 $ 18,127 $ 20,169 County’s net OPEB liability – ending (a) – (b) $ 10,697 $ 27,375 $ 28,036 Plan fiduciary net position as a percentage of the total OPEB liability 61.4% 39.8% 41.8% Covered-employee payroll $ 190,136 $ 193,294 $ 202,414 County’s net OPEB liability as a percentage of covered- employee payroll 5.6% 14.2% 13.9% *In accordance with paragraphs 57.a and 57.b of GASB 75 effective June 30, 2018, employers must disclose a 10-year history of the OPEB information detailed above. Additional years will be presented as they become available. The County has elected to use the GASB 75 “lookback” method where assets and liabilities are measured as of the prior fiscal year, but applied to the current fiscal-year. Changes to benefit terms None Changes of assumptions The Discount rate decreased from 6.75% as of June 30, 2019 to 6.50% as of June 30, 2020. The investment rate of return decreased from 6.75% as of June 30, 2019 to 6.50% as of June 30, 2020. The Notes to RSI are integral to the above schedule. 93 COUNTY OF SAN LUIS OBISPO REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN SCHEDULE OF ACTUARIALLY DETERMINED AND PLAN CONTRIBUTIONS AND RELATED RATIOS FOR THE LAST 10 FISCAL YEARS* (in thousands) Actuarially Plan Annual Plan Contributions Fiscal Year Contributions Determined Contributions Covered- as a Percentage of Ended in relation to Contribution Over/(Under) Employee Covered-Employee June 30th the ADC (ADC) ADC Payroll Payroll (a) (b) (b-a) 2017 $ 1,621^ $ 1,682^ $ 61^ $ 181,338^ 0.93%^ 2018 $ 1,707 $ 2,521 $ 814 $ 190,136 1.33% 2019 $ 3,982 $ 3,925 $ (57) $ 193,294 2.03% 2020 $ 4,229 $ 3,778 $ (451) $ 202,414 1.87% *In accordance with paragraph 57.c of GASB 75 effective June 30, 2018, employers must disclose a 10-year history of the OPEB information detailed above. Additional years will be presented as they become available. ^Restated based on updated actuarial information. Changes to benefit terms None Changes of assumptions The Discount rate decreased from 6.75% as of June 30, 2019 to 6.50% as of June 30, 2020. The investment rate of return decreased from 6.75% as of June 30, 2019 to 6.50% as of June 30, 2020. The Notes to RSI are integral to the above schedule. 94 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, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 203,188 $ 203,188 $ 206,173 $ 2,985 Licenses, permits, and franchises 12,370 12,370 11,477 (893) Fines, forfeitures, and penalties 4,007 4,112 2,699 (1,413) Use of money and property 3,214 3,214 7,274 4,060 Aid from other governments 261,716 274,499 239,683 (34,816) Charges for services 32,978 34,159 34,618 459 Other revenue 4,907 15,228 7,620 (7,608) Total Revenues 522,380 546,770 509,544 (37,226) Expenditures: Current: General government 53,240 82,123 50,561 31,562 Public protection 195,522 209,521 196,062 13,459 Public ways and facilities 4,425 7,009 3,381 3,628 Health and sanitation 108,044 113,176 105,060 8,116 Public assistance 140,753 146,987 130,496 16,491 Education 631 639 608 31 Recreation and Culture 5,058 5,338 4,813 525 Contingencies 26,143 3,093 - 3,093 Total Expenditures 533,816 567,886 490,981 76,905 Excess (Deficiency) of Revenues Over (Under) Expenditures (11,436) (21,116) 18,563 39,679 Other Financing Sources (Uses): Transfers in 2,166 2,856 680 (2,176) Transfers out (20,532) (27,450) (22,734) 4,716 Total Other Financing Sources (Uses) (18,366) (24,594) (22,054) 2,540 Net change in fund balances (29,802) (45,710) (3,491) 42,219 Fund balances, beginning 264,135 264,135 264,135 - Fund balances, ending $ 234,333 $ 218,425 $ 260,644 $ 42,219 Continued 95 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, 2020 (in thousands) Explanation of Differences between Budgetary Inflows and Outflows and Accounting Principles Generally Accepted in the United States of America Revenues and Expenditures Sources/inflows of resources Actual amounts (budgetary basis) "Total Revenues" from the budgetary comparison schedule $ 509,544 Revenues for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 4,016 Total Revenues as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 513,560 Uses/outflows of resources Actual amounts (budgetary basis) "Total Expenditures" from the budgetary comparison schedule $ 490,981 Expenditures for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 4,032 Total Expenditures as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 495,013 Other financing sources/(uses) of resources Actual amounts (budgetary basis) "Total Other Financing Sources (Uses)" from the Budgetary Comparison Schedule $ (22,054) Other financing sources (uses) for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes (314) Total Other Financing Sources (Uses) as reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds $ (22,368) 96 COUNTY OF SAN LUIS OBISPO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2020 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 of San Luis Obispo (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 (the Board), 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, 2020 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 and Financing Authority debt service funds. 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. B. 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. 97 ________________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ________________________________________________________________ ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS ________________________________________________________________ NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS: Special revenue funds are used to account for revenues that are restricted by law or administrative actions to expenditures for specified purposes. Nonmajor special revenue funds used by the County are listed below: 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. 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. 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. 98 NONMAJOR GOVERNMENTAL FUNDS (Continued) 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. 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). SLO County Financing Authority The SLO County Financing Authority is a joint exercise of powers authority created to assist in the financing, construction, and equipping of public facilities for its members. 99 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 (IN THOUSANDS) Special Revenue Emergency Driving Under Community Medical the Influence Fish and Development Services Programs Game Assets Cash and cash equivalents $ 1,994 $ 254 $ 993 $ 187 Restricted cash with fiscal agent - - - - Accounts receivable, net - - - - Other receivables - - - - Due from other governments - 447 14 - Due from other funds - - - - Loans receivable 26,056 - - - Advances to other funds - - - - Prepaid items - - 4 - Other assets - - - - Total assets $ 2 8,050 $ 701 $ 1,011 $ 187 Liabilities Accounts payable $ 184 $ - $ 3 $ 1 Salaries and benefits payable - - 48 - Due to other funds - - - - Deposits from others 801 - 19 - Unearned revenue - - - - Advances from other funds - - - - Total liabilities 985 - 70 1 Deferred Inflows of Resources Unavailable revenue - - - - Deferred community development loans 26,056 - - - Total deferred inflows of resources 26,056 - - - Fund Balances Nonspendable - - 4 - Restricted - - - - Committed 1,009 701 937 186 Assigned - - - - Unassigned - - - - Total fund balances 1,009 701 941 186 Total liabilities, deferred inflows of resources, and fund balances $ 2 8,050 $ 701 $ 1,011 $ 187 100 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2020 (IN THOUSANDS) Special Revenue Road Public Impact Facilities Fees Library Parks Fees Assets Cash and cash equivalents $ 1 0,613 $ 5,608 $ 3,513 $ 1 4,638 Restricted cash with fiscal agent - - - - Accounts receivable, net - - 57 - Other receivables - - 66 - Due from other governments - - - - Due from other funds - - - - Loans receivable - - - - Advances to other funds - - - - Prepaid items - - - - Other assets - - - - Total assets $ 1 0,613 $ 5,608 $ 3,636 $ 1 4,638 Liabilities Accounts payable $ - $ 74 $ 282 $ - Salaries and benefits payable - 324 164 - Due to other funds - - 300 - Deposits from others - - 556 - Unearned revenue - 58 - - Advances from other funds - - 986 - Total liabilities - 456 2,288 - Deferred Inflows of Resources Unavailable revenue - - 10 - Deferred community development loans - - - - Total deferred inflows of resources - - 10 - Fund Balances Nonspendable - - - - Restricted 10,613 - - 14,638 Committed - 5,152 1,338 - Assigned - - - - Unassigned - - - - Total fund balances 10,613 5,152 1,338 14,638 Total liabilities, deferred inflows of resources, and fund balances $ 1 0,613 $ 5,608 $ 3,636 $ 1 4,638 101 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2020 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County Roads Grazing Districts Districts Service Areas Assets Cash and cash equivalents $ 17,650 $ 44 $ 18,862 $ 492 $ 2,418 Restricted cash with fiscal agent - - - - - Accounts receivable, net - - 73 2 4 Other receivables - - - - - Due from other governments 3,208 - 1,688 - - Due from other funds - - - - 400 Loans receivable - - - - - Advances to other funds - - 2,956 - 255 Prepaid items - - - - - Other assets 2 - - - - Total assets $ 20,860 $ 44 $ 23,579 $ 494 $ 3,077 Liabilities Accounts payable $ 1,633 $ - $ 524 $ - $ 23 Salaries and benefits payable - - - - - Due to other funds - - - - - Deposits from others 323 - - - - Unearned revenue 84 - - - - Advances from other funds 2,638 - - - 36 Total liabilities 4,678 - 524 - 59 Deferred Inflows of Resources Unavailable revenue - - 1,759 2 4 Deferred community development loans - - - - - Total deferred inflows of resources - - 1,759 2 4 Fund Balances Nonspendable - - - - - Restricted - 36 - - - Committed 16,182 8 21,296 492 3,014 Assigned - - - - - Unassigned - - - - - Total fund balances 16,182 44 21,296 492 3,014 Total liabilities, deferred inflows of resources, and fund balances $ 20,860 $ 44 $ 23,579 $ 494 $ 3,077 102 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2020 (IN THOUSANDS) Debt Service Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Financing Governmental Corporation Bonds Authority Funds Assets Cash and cash equivalents $ 3 $ 10,709 $ 1 2 $ 87,990 Restricted cash with fiscal agent - 6 20,347 20,353 Accounts receivable, net - - - 1 36 Other receivables - - - 66 Due from other governments - - - 5,357 Due from other funds - - - 4 00 Loans receivable - - - 26,056 Advances to other funds - - - 3,211 Prepaid items - - - 4 Other assets - - - 2 Total assets $ 3 $ 10,715 $ 20,359 $ 143,575 Liabilities Accounts payable $ - $ - $ - $ 2,724 Salaries and benefits payable - - - 5 36 Due to other funds - - 9 11 1,211 Deposits from others - - - 1,699 Unearned revenue - - - 1 42 Advances from other funds - - - 3,660 Total liabilities - - 9 11 9,972 Deferred Inflows of Resources Unavailable revenue - - - 1,775 Deferred community development loans - - - 26,056 Total deferred inflows of resources - - - 27,831 Fund Balances Nonspendable - - - 4 Restricted 3 10,715 19,448 55,453 Committed - - - 50,315 Assigned - - - - Unassigned - - - - Total fund balances 3 10,715 19,448 105,772 Total liabilities, deferred inflows of resources, and fund balances $ 3 $ 10,715 $ 20,359 $ 143,575 103 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Special Revenue Emergency Driving Under Community Medical the Influence Fish and Development Services Programs Game Revenues Taxes $ - $ - $ - $ - Licenses, permits, and franchises - - - - Fines, forfeitures, and penalties - 5 72 - 20 Use of money and property 28 6 26 1 Aid from other governments 2,212 - 72 - Charges for services - - 1,380 - Other revenues 8 77 - - - Total revenues 3,117 5 78 1,478 21 Expenditures Current: Public protection - - - 24 Public ways and facilities - - - - Health and sanitation 3,098 - - - Public assistance - 6 58 - - Education - - 1,480 - Recreation and cultural services - - - - Debt service: Principal payments - - - - Interest and fiscal charges - - - - Total expenditures 3,098 6 58 1,480 24 Excess (deficiency) of revenues over (under) expenditures 19 (80) (2) (3) Other financing sources (uses) Debt Issued - - - - Transfers in 5 24 - - - Transfers out - - (33) - Total other financing sources (uses) 5 24 - (33) - Net change in fund balances 5 43 (80) (35) (3) Fund balances - beginning 4 66 7 81 9 76 189 Fund balances - ending $ 1,009 $ 701 $ 941 $ 186 104 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Special Revenue Road Public Impact Facilities Fees Library Parks Fees Revenues Taxes $ - $ 9,920 $ - $ - Licenses, permits, and franchises - - - - Fines, forfeitures, and penalties - - - - Use of money and property 286 122 127 398 Aid from other governments - 116 306 - Charges for services 1,104 75 4,490 1,546 Other revenues - 786 7 - Total revenues 1,390 11,019 4,930 1,944 Expenditures Current: Public protection - - - - Public ways and facilities - - - - Health and sanitation - - - - Public assistance - - - - Education - 10,681 - - Recreation and cultural services - - 6,824 - Debt service: Principal payments - - - - Interest and fiscal charges - - - - Total expenditures - 10,681 6,824 - Excess (deficiency) of revenues over (under) expenditures 1,390 338 (1,894) 1,944 Other financing sources (uses) Debt Issued - - - - Transfers in - 667 339 - Transfers out (879) (252) (619) (1,020) Total other financing sources (uses) (879) 415 (280) (1,020) Net change in fund balances 511 753 (2,174) 924 Fund balances - beginning 10,102 4,399 3,512 13,714 Fund balances - ending $ 10,613 $ 5,152 $ 1,338 $ 14,638 105 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County Roads and Grazing Districts Districts Service Areas Revenues Taxes $ 1,932 $ - $ 3,933 $ 40 $ 1,043 Licenses, permits, and franchises - - - - - Fines, forfeitures, and penalties - - - - - Use of money and property 422 1 483 13 70 Aid from other governments 30,917 2 3,688 - 4 Charges for services 779 - 562 11 8 Other revenues 234 - 657 1 3 Total revenues 34,284 3 9,323 65 1,128 Expenditures Current: Public protection - 3 9,028 45 - Public ways and facilities 39,793 - - - 691 Health and sanitation - - - - - Public assistance - - - - - Education - - - - - Recreation and cultural services - - - - - Debt service: Principal payments - - - - - Interest and fiscal charges - - - - - Total expenditures 39,793 3 9,028 45 691 Excess (deficiency) of revenues over (under) expenditures (5,509) - 295 20 437 Other financing sources (uses) Debt Issued - - - - - Transfers in 6,650 - 76 - 6 Transfers out (4) - - - (176) Total other financing sources (uses) 6,646 - 76 - (170) Net change in fund balances 1,137 - 371 20 267 Fund balances - beginning 15,045 44 20,925 472 2,747 Fund balances - ending $ 16,182 $ 44 $ 21,296 $ 492 $ 3,014 106 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Debt Service Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Financing Governmental Corporation Bonds Authority Funds Revenues Taxes $ - $ - $ - $ 16,868 Licenses, permits, and franchises - - - - Fines, forfeitures, and penalties - - - 5 92 Use of money and property 5 2 06 41 2,235 Aid from other governments - - - 37,317 Charges for services 7 56 - 1,286 11,997 Other revenues - 6 89 - 3,254 Total revenues 7 61 8 95 1,327 72,263 Expenditures Current: Public protection - - - 9,100 Public ways and facilities - - - 40,484 Health and sanitation - - - 3,098 Public assistance - - - 6 58 Education - - - 12,161 Recreation and cultural services - - - 6,824 Debt service: Principal payments 5,765 3,601 9 13 10,279 Interest and fiscal charges 4 51 4,911 8 21 6,183 Total expenditures 6,216 8,512 1,734 88,787 Excess (deficiency) of revenues over (under) expenditures ( 5,455) (7,617) (407) (16,524) Other financing sources (uses) Debt Issued - - 24,407 24,407 Transfers in 4,997 12,717 - 25,976 Transfers out (629) - (5,908) (9,520) Total other financing sources (uses) 4,368 12,717 18,499 40,863 Net change in fund balances ( 1,087) 5,100 18,092 24,339 Fund balances - beginning 1,090 5,615 1,356 81,433 Fund balances - ending $ 3 $ 10,715 $ 19,448 $ 105,772 107 ________________________________________________________________ BUDGETARY COMPARISON SCHEDULES CAPITAL PROJECTS FUND SAN LUIS OBISPO COUNTY PUBLIC FACILITIES CORPORATION PENSION OBLIGATION BONDS FUND SLO COUNTY FINANCING AUTHORITY NONMAJOR GOVERNMENTAL FUNDS ________________________________________________________________ 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, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ - $ - $ 340 $ 340 Use of money and property - - 529 529 Aid from other governments - 1,316 267 (1,049) Charges for services 101 1,203 97 (1,106) Other revenues - - - - Total Revenues 101 2,519 1,233 (1,286) Expenditures: Capital outlay 5,893 38,707 7,645 31,062 Total Expenditures 5,893 38,707 7,645 31,062 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,792) (36,188) (6,412) 29,776 Other Financing Sources (Uses): Transfers in 5,792 35,446 7,924 (27,522) Transfers out - (1,345) (1,345) - Total Other Financing Sources (Uses) 5,792 34,101 6,579 (27,522) Net change in fund balances - (2,087) 167 2,254 Fund balances, beginning 18,715 18,715 18,715 - Fund balances, ending $ 18,715 $ 16,628 $ 18,882 $ 2,254 108 COUNTY OF SAN LUIS OBISPO Community Development Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 28 $ 28 Aid from other governments 2,941 7,089 2,212 (4,877) Charges for services - - - - Other revenues - 365 877 512 Total Revenues 2,941 7,454 3,117 (4,337) Expenditures: Current: Health and sanitation Services and supplies 928 927 924 3 Other charges 2,538 7,051 2,174 4,877 Contingencies 49 49 - 49 Total Expenditures 3,515 8,027 3,098 4,929 Excess (Deficiency) of Revenues Over (Under) Expenditures (574) (573) 19 592 Other Financing Sources (Uses): Transfers in 524 524 524 - Total Other Financing Sources (Uses) 524 524 524 - Net change in fund balances (50) (49) 543 592 Fund balances, beginning 466 466 466 - Fund balances, ending $ 416 $ 417 $ 1,009 $ 592 109 COUNTY OF SAN LUIS OBISPO Emergency Medical Services Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 800 $ 800 $ 572 $ (228) Use of money and property 1 1 6 5 Other revenues - - - - Total Revenues 801 801 578 (223) Expenditures: Current: Public assistance Services and supplies 801 1,135 658 477 Total Expenditures 801 1,135 658 477 Net change in fund balances - (334) (80) 254 Fund balances, beginning 781 781 781 - Fund balances, ending $ 781 $ 447 $ 701 $ 254 110 COUNTY OF SAN LUIS OBISPO Driving Under the Influence Program Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 6 $ 6 $ 26 $ 20 Charges for services 1,452 1,452 1,380 (72) Aid from other governments - 82 72 (10) Other revenues 40 40 - (40) Total Revenues 1,498 1,580 1,478 (102) Expenditures: Current: Education Salaries, wages, and benefits 1,005 1,026 993 33 Services and supplies 427 555 467 88 Other charges 20 20 20 - Capital outlay - - - - Contingencies 66 66 - 66 Total Expenditures 1,518 1,667 1,480 187 Excess (Deficiency) of Revenues Over (Under) Expenditures (20) (87) (2) 85 Other Financing Sources (Uses): Transfers out - - (33) (33) Total Other Financing Sources (Uses) - - (33) (33) Net change in fund balances (20) (87) (35) 52 Fund balances, beginning 976 976 976 -- Fund balances, ending $ 956 $ 889 $ 941 $ 52 111 COUNTY OF SAN LUIS OBISPO Fish and Game Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 20 $ 20 $ 20 $ - Use of money and property - - 1 1 Total Revenues 20 20 21 1 Expenditures: Current: Public protection Services and supplies 23 33 24 9 Total Expenditures 23 33 24 9 Net change in fund balances (3) (13) (3) 10 Fund balances, beginning 189 189 189 - Fund balances, ending $ 186 $ 176 $ 186 $ 10 112 COUNTY OF SAN LUIS OBISPO Road Impact Fees Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 286 $ 286 Charges for services - - 1,104 1,104 Total Revenues - - 1,390 1,390 Expenditures: Current: Public ways and facilities Services and supplies - - - - Total Expenditures - - - - Excess (Deficiency) of Revenues Over (Under) Expenditures - - 1,390 1,390 Other Financing Sources (Uses): Transfers out (1,199) (4,484) (879) 3,605 Total Other Financing Sources (Uses) (1,199) (4,484) (879) 3,605 Net change in fund balances (1,199) (4,484) 511 4,995 Fund balances, beginning 10,102 10,102 10,102 - Fund balances, ending $ 8,903 $ 5,618 $ 10,613 $ 4,995 113 COUNTY OF SAN LUIS OBISPO Library Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 9,745 $ 9,745 $ 9,920 $ 175 Use of money and property 46 46 122 76 Aid from other governments 118 123 116 (7) Charges for services 74 74 75 1 Other revenues 15 517 786 269 Total Revenues 9,998 10,505 11,019 514 Expenditures: Current: Education Salaries, wages, and benefits 6,804 7,014 6,713 301 Services and supplies 3,779 4,322 3,936 386 Other charges 5 223 32 191 Capital outlay - 152 - 152 Contingencies 574 364 - 364 Total Expenditures 11,162 12,075 10,681 1,394 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,164) (1,570) 338 1,908 Other Financing Sources (Uses): Transfers in 667 667 667 - Transfers out - - (252) (252) Total Other Financing Sources (Uses) 667 667 415 (252) Net change in fund balances (497) (903) 753 1,656 Fund balances, beginning 4,399 4,399 4,399 - Fund balances, ending $ 3,902 $ 3,496 $ 5,152 $ 1,656 114 COUNTY OF SAN LUIS OBISPO Parks Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 39 $ 220 $ - $ (220) Use of money and property 52 52 127 75 Aid from other governments 23 109 306 197 Charges for services 5,668 4,663 4,490 (173) Other revenues 26 26 7 (19) Total Revenues 5,808 5,070 4,930 (140) Expenditures: Current: Recreation and cultural services Salaries, wages, and benefits 2,787 2,808 2,692 116 Services and supplies 2,725 3,704 3,926 (222) Other charges - 652 139 513 Capital outlay 170 2,387 67 2,320 Contingencies 100 - - - Total Expenditures 5,782 9,551 6,824 2,727 Excess (Deficiency) of Revenues Over (Under) Expenditures 26 (4,481) (1,894) 2,587 Other Financing Sources (Uses): Transfers in - 1,920 339 (1,581) Transfers out (21) (601) (619) (18) Total Other Financing Sources (Uses) (21) 1,319 (280) (1,599) Net change in fund balances 5 (3,162) (2,174) 988 Fund balances, beginning 3,512 3,512 3,512 - Fund balances, ending $ 3,517 $ 350 $ 1,338 $ 988 115 COUNTY OF SAN LUIS OBISPO Public Facilities Fees Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 398 $ 398 Charges for services 1,967 1,967 1,546 (421) Total Revenues 1,967 1,967 1,944 (23) Expenditures: Current: General government Salaries, wages, and benefits - - - - Services and supplies - - - - Total Expenditures - - - - Excess (Deficiency) of Revenues Over (Under) Expenditures 1,967 1,967 1,944 (23) Other Financing Sources (Uses): Transfers out (400) (3,024) (1,020) 2,004 Total Other Financing Sources (Uses) (400) (3,024) (1,020) 2,004 Net change in fund balances 1,567 (1,057) 924 1,981 Fund balances, beginning 13,714 13,714 13,714 - Fund balances, ending $ 15,281 $ 12,657 $ 14,638 $ 1,981 116 COUNTY OF SAN LUIS OBISPO Roads Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,876 $ 1,876 $ 1,932 $ 56 Use of money and property 125 125 422 297 Aid from other governments 18,262 41,886 30,917 (10,969) Charges for services 184 788 779 (9) Other revenues - 918 234 (684) Total Revenues 20,447 45,593 34,284 (11,309) Expenditures: Current: Public ways and facilities Services and supplies 18,564 21,825 39,349 (17,524) Other charges 485 731 444 287 Capital outlay 9,080 50,168 - 50,168 Total Expenditures 28,129 72,724 39,793 32,931 Excess (Deficiency) of Revenues Over (Under) Expenditures (7,682) (27,131) (5,509) 21,622 Other Financing Sources (Uses): Transfers in 6,966 10,251 6,650 (3,601) Transfers out (4) (4) (4) - Total Other Financing Sources (Uses) 6,962 10,247 6,646 (3,601) Net change in fund balances (720) (16,884) 1,137 18,021 Fund balances, beginning 15,045 15,045 15,045 - Fund balances, ending $ 14,325 $ (1,839) $ 16,182 $ 18,021 117 COUNTY OF SAN LUIS OBISPO Wildlife and Grazing Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 1 $ 1 Aid from other governments 4 4 2 (2) Total Revenues 4 4 3 (1) Expenditures: Current: Public protection Services and supplies 11 11 3 8 Total Expenditures 11 11 3 8 Net change in fund balances (7) (7) - 7 Fund balances, beginning 44 44 44 - Fund balances, ending $ 37 $ 37 $ 44 $ 7 118 COUNTY OF SAN LUIS OBISPO Flood Control Districts Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 3,697 $ 3,697 $ 3,933 $ 236 Use of money and property 174 174 483 309 Aid from other governments 8,511 8,707 3,688 (5,019) Charges for services 552 552 562 10 Other revenues 1 879 657 (222) Total Revenues 12,935 14,009 9,323 (4,686) Expenditures: Current: Public protection Services and supplies 7,867 8,307 5,504 2,803 Other charges 3,290 4,091 3,524 567 Capital outlay 3,173 5,963 - 5,963 Total Expenditures 14,330 18,361 9,028 9,333 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,395) (4,352) 295 4,647 Other Financing Sources (Uses): Transfers in 171 171 76 (95) Transfers out (120) (120) - 120 Total Other Financing Sources (Uses) 51 51 76 25 Net change in fund balances (1,344) (4,301) 371 4,672 Fund balances, beginning 20,925 20,925 20,925 - Fund balances, ending $ 19,581 $ 16,624 $ 21,296 $ 4,672 119 COUNTY OF SAN LUIS OBISPO Lighting Districts Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 41 $ 41 $ 40 $ (1) Use of money and property 5 5 13 8 Charges for services 9 9 11 2 Other revenues - - 1 1 Total Revenues 55 55 65 10 Expenditures: Current: Public protection Services and supplies 64 64 45 19 Capital outlay - 59 - 59 Total Expenditures 64 123 45 78 Net change in fund balances (9) (68) 20 88 Fund balances, beginning 472 472 472 - Fund balances, ending $ 463 $ 404 $ 492 $ 88 120 COUNTY OF SAN LUIS OBISPO County Service Areas Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 998 $ 998 $ 1,043 $ 45 Use of money and property 22 22 70 48 Aid from other governments 2 2 4 2 Charges for services 4 4 8 4 Other revenues 17 17 3 (14) Total Revenues 1,043 1,043 1,128 85 Expenditures: Current: Public ways and facilities Services and supplies 872 983 691 292 Capital outlay 41 41 - 41 Total Expenditures 913 1,024 691 333 Excess (Deficiency) of Revenues Over (Under) Expenditures 130 19 437 418 Other Financing Sources (Uses): Transfers in 1,020 1,020 6 (1,014) Transfers out (336) (349) (176) 173 Total Other Financing Sources (Uses) 684 671 (170) (841) Net change in fund balances 814 690 267 (423) Fund balances, beginning 2,747 2,747 2,747 - Fund balances, ending $ 3,561 $ 3,437 $ 3,014 $ (423) 121 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, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 5 $ 5 Charges for services - - 756 756 Total Revenues - - 761 761 Expenditures: Debt Service: Principal payments - - 5,765 (5,765) Interest and fiscal charges - - 451 (451) Total Expenditures - - 6,216 (6,216) Excess (Deficiency) of Revenues Over (Under) Expenditures - - (5,455) (5,455) Other Financing Sources (Uses): Transfers in - - 4,997 4,997 Transfers out - - (629) (629) Total Other Financing Sources (Uses) - - 4,368 4,368 Net change in fund balances - - (1,087) (1,087) Fund balances, beginning 1,090 1,090 1,090 - Fund balances, ending $ 1,090 $ 1,090 $ 3 $ (1,087) 122 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, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ - $ - $ - $ - Use of money and property - - 206 206 Other revenues 12,300 12,300 689 (11,611) Total Revenues 12,300 12,300 895 (11,405) Expenditures: Debt Service: Principal payments 3,601 3,601 3,601 - Interest and fiscal charges 4,912 4,912 4,911 1 Total Expenditures 8,513 8,513 8,512 1 Excess (Deficiency) of Revenues Over (Under) Expenditures 3,787 3,787 (7,617) (11,404) Other Financing Sources (Uses): Transfers in 629 629 12,717 12,088 Total Other Financing Sources (Uses) 629 629 12,717 12,088 Net change in fund balances 4,416 4,416 5,100 684 Fund balances, beginning 5,615 5,615 5,615 - Fund balances, ending $ 10,031 $ 10,031 $ 10,715 $ 684 123 COUNTY OF SAN LUIS OBISPO Financing Authority Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2020 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 41 $ 41 Charges for services - - 1,286 1,286 Total Revenues - - 1,327 1,327 Expenditures: Debt Service: Principal payments - - 913 (913) Interest and fiscal charges - - 821 (821) Total Expenditures - - 1,734 (1,734) Excess (Deficiency) of Revenues Over (Under) Expenditures - - (407) (407) Other Financing Sources (Uses): Transfers out - - (5,908) (5,908) Debt issued - - 24,407 24,407 Total Other Financing Sources (Uses) - - 18,499 18,499 Net change in fund balances - - 18,092 18,092 Fund balances, beginning 1,356 1,356 1,356 - Fund balances, ending $ 1,356 $ 1,356 $ 19,448 $ 18,092 124 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR ENTERPRISE FUNDS ________________________________________________________________ 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 – Salinas Dam Accounts for the operation of the Salinas dam and pipeline used to deliver water to the City of San Luis Obispo from Santa Margarita Lake. Lopez Flood Control 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. 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. 125 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS JUNE 30, 2020 (IN THOUSANDS) General Flood Control Zone - Lopez County Salinas Dam Flood Control Golf Lopez Park Service Areas Total Assets Current assets: Cash and cash equivalents $ 3,192 $ 1 0,211 $ 750 $ 25 $ 4,731 $ 1 8,909 Accounts receivable, net - 10 53 - 316 379 Due from other funds - - 300 - - 300 Inventories - - 36 - - 36 Prepaid items - 63 775 - - 838 Deposits with others - - - - 86 86 Total current assets 3,192 10,284 1,914 25 5,133 20,548 Noncurrent assets: Restricted cash with fiscal agent - 1 487 - - 488 Advances to other funds - - - 79 - 79 Capital assets: Nondepreciable Land - 2,155 1,333 - 330 3,818 Construction in progress - - 221 - 2,802 3,023 Water rights - - - - - - Other property - 1,968 - - - 1,968 Depreciable Infrastructure, net - 21,528 6 - 1,631 23,165 Structures and improvements, net - 32,375 7,867 - 7,192 47,434 Equipment, net - 164 292 - 293 749 Other property, net - - - - 496 496 Total noncurrent assets - 58,191 10,206 79 12,744 81,220 Total assets 3,192 68,475 12,120 104 17,877 1 01,768 Deferred Outflows of Resources Deferred pensions - - 677 - - 677 Deferred OPEB - - 86 - - 86 Total deferred outflows of resources - - 763 - - 763 Liabilities Current liabilities: Accounts payable 22 25 848 - 624 1,519 Salaries and benefits payable - - 81 - - 81 Deposits from others - 249 - - 166 415 Interest payable - 320 30 - 19 369 Unearned revenue - 15 - - 59 74 Due to other funds - - - - 400 400 Accrued vacation and sick leave - current - - 95 - - 95 Notes and bonds payable - current - 2,329 349 19 213 2,910 Total current liabilities 22 2,938 1,403 19 1,481 5,863 Noncurrent liabilities: Advances from other funds - - 121 - 1,400 1,521 Accrued vacation and sick leave - noncurrent - - 156 - - 156 Notes and bonds payable - noncurrent - 27,630 3,120 60 3,153 33,963 Net OPEB Liability - - 128 - - 128 Net Pension Liability - - 2,882 - - 2,882 Total noncurrent liabilities - 27,630 6,407 60 4,553 38,650 Total liabilities 22 30,568 7,810 79 6,034 44,513 Deferred Inflows of Resources Deferred pensions - - 533 - - 533 Deferred OPEB - - 10 - - 10 Total deferred inflows of resources - - 543 - - 543 Net Position Net investment in capital assets - 28,231 6,250 - 9,378 43,859 Unrestricted 3,170 9,676 (1,720) 25 2,465 13,616 Total net position $ 3,170 $ 3 7,907 $ 4,530 $ 25 $ 1 1,843 $ 5 7,475 126 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) General Flood Control Zone - Lopez County Salinas Dam Flood Control Golf Lopez Park Service Areas Total Operating revenues Charges for services $ 2,884 $ 6,978 $ 2,750 $ - $ 4,503 $ 1 7,115 Other revenues 7 8 7 - 15 37 Total operating revenues 2,891 6,986 2,757 - 4,518 17,152 Operating expenses Salaries and benefits - - 1,780 - - 1,780 Services and supplies 886 3,981 968 - 3,929 9,764 Other charges - 3 - - - 3 Depreciation - 1,519 388 - 525 2,432 Countywide cost allocation 21 79 89 - 78 267 Total operating expenses 907 5,582 3,225 - 4,532 14,246 Operating income (loss) 1,984 1,404 (468) - (14) 2,906 Nonoperating revenues (expenses) Property taxes - 1,165 - - 539 1,704 Interest income 70 269 10 1 112 462 Interest expense - (1,117) (102) (2) (121) (1,342) Aid from governmental agencies - 5 - - 3 8 Total nonoperating revenues (expenses) 70 322 (92) (1) 533 832 Income (loss) before contributions and transfers 2,054 1,726 (560) (1) 519 3,738 Transfers in - - 998 2 176 1,176 Transfers out - - (49) - (8) (57) Change in net position 2,054 1,726 389 1 687 4,857 Net position - beginning 1,116 36,181 4,141 24 11,156 52,618 Net position - ending $ 3,170 $ 3 7,907 $ 4,530 $ 25 $ 1 1,843 $ 5 7,475 127 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) General Flood Control Zone - Lopez County Salinas Dam Flood Control Golf Lopez Park Service Areas Total Cash Flows From Operating Activities Receipts from customers and third parties $ 2,651 $ 6,992 $ 2,764 $ - $ 4,481 $ 1 6,888 Payments to employees for services - - (1,601) - - (1,601) Payments for goods and services (903) (4,137) (166) - (3,415) (8,621) Net cash provided (used) by operating activities 1,748 2,855 997 - 1,066 6,666 Cash Flows from Noncapital Financing Activities Property tax proceeds - 1,165 - - 539 1,704 Grants and subsidies from other governmental agencies - 5 - - 3 8 Advances from other funds - - - - 940 940 Due from other funds - - (300) - - (300) Transfers from other funds - - 998 2 176 1,176 Transfers to other funds - - (49) - (8) (57) Net cash provided (used) by noncapital financing activities - 1,170 649 2 1,650 3,471 Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets - 15 (734) - (1,372) (2,091) Proceeds from sale of capital assets - - - - - - Advances to other funds - - - 18 - 18 Advances from other funds - - - - - - Principal paid on capital debt - (2,245) (337) (18) (206) (2,806) Interest paid on capital debt - (1,192) (138) (2) (122) (1,454) Net cash provided (used) by capital and related financing activities - (3,422) (1,209) (2) (1,700) (6,333) Cash Flows from Investing Activities Interest received 70 269 10 1 112 462 Net cash provided (used) by investing activities 70 269 10 1 112 462 Net increase (decrease) in cash and cash equivalents 1,818 872 447 1 1,128 4,266 Cash and cash equivalents at beginning of year 1,374 9,340 790 24 3,603 15,131 Cash and cash equivalents at end of year $ 3,192 $ 1 0,212 $ 1,237 $ 25 $ 4,731 $ 1 9,397 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 1,984 $ 1,404 $ (468) $ - $ (14) $ 2,906 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense - 1,519 388 - 525 2,432 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net - 6 6 - (43) (31) Inventory - - 12 - - 12 Prepaid items - (5) 96 - - 91 Deferred outflows - pensions - - 335 - - 335 Deferred outflows - OPEB - - 9 - - 9 Increase (decrease) in: Accounts payable 4 (111) 789 - 605 1,287 Deposits from others - 41 - - (12) 29 Salaries and benefits payable - - 58 - - 58 Deferred inflows - pensions - - 273 - - 273 Deferred inflows - OPEB - - (2) - - (2) Net OPEB liability - - 2 - - 2 Net pension liability - - (501) - - (501) Unearned revenue (240) 1 - - 5 (234) Total adjustments (236) 1,451 1,465 - 1,080 3,760 Net cash provided (used) by operating activities $ 1,748 $ 2,855 $ 997 $ - $ 1,066 $ 6,666 128 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS ________________________________________________________________ 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: Garage Accounts for resources used to provide a vehicle fleet of cars, trucks, and law enforcement 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. 129 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2020 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Assets Current assets: Cash and cash equivalents $ 5,679 $ 20,293 $ 23,100 $ 49,072 Accounts receivable, net - 8 - 8 Inventories 14 5 75 - 5 89 Prepaid items - - 2 21 2 21 Total current assets 5,693 20,876 23,321 49,890 Noncurrent assets: Capital assets: Structures and improvements, net 1 29 2 58 - 3 87 Equipment, net 5,243 7,947 - 13,190 Total noncurrent assets 5,372 8,205 - 13,577 Total assets 11,065 29,081 23,321 63,467 Deferred Outflows of Resources Deferred pensions 6 16 12,349 - 12,965 Deferred OPEB 91 1,657 - 1,748 Total deferred outflows of resources 7 07 14,006 - 14,713 Liabilities Current liabilities: Accounts payable 3 04 5 36 1 72 1,012 Salaries and benefits payable 66 1,403 - 1,469 Self-insurance liability - - 3,931 3,931 Deposits from others - 5,378 - 5,378 Accrued vacation and sick leave 99 2,040 - 2,139 Total current liabilities 4 69 9,357 4,103 13,929 Noncurrent liabilities: Self-insurance liability - - 16,209 16,209 Accrued vacation and sick leave 71 1,046 - 1,117 Net OPEB liability 1 35 2,455 - 2,590 Net pension liability 2,622 52,549 - 55,171 Total noncurrent liabilities 2,828 56,050 16,209 75,087 Total liabilities 3,297 65,407 20,312 89,016 Deferred Inflows of Resources Deferred pensions 4 85 9,712 - 10,197 Deferred OPEB 10 1 85 - 1 95 Total deferred inflows of resources 4 95 9,897 - 10,392 Net Position Net investment in capital assets 5,372 8,205 - 13,577 Unrestricted 2,608 (40,422) 3,009 (34,805) Total net position $ 7,980 $ (32,217) $ 3,009 $ (21,228) 130 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Operating revenues Charges for services $ 6,643 $ 38,831 $ 11,304 $ 56,778 Other revenues 16 69 - 85 Total operating revenues 6,659 38,900 11,304 56,863 Operating expenses Salaries and benefits 1,450 29,660 3 03 31,413 Services and supplies 3,088 8,056 10,261 21,405 Insurance benefit payments - - 4,896 4,896 Depreciation 1,832 9 27 - 2,759 Countywide cost allocation 1 14 1 47 2 85 5 46 Total operating expenses 6,484 38,790 15,745 61,019 Operating income (loss) 1 75 1 10 (4,441) (4,156) Nonoperating revenues (expenses) Interest income 1 40 4 01 6 55 1,196 Sale of capital assets 2 11 21 - 2 32 Other revenues (expense) 1 27 - - 1 27 Total nonoperating revenues (expenses) 4 78 4 22 6 55 1,555 Income (loss) before capital contributions and transfers 6 53 5 32 (3,786) (2,601) Capital Contributions - - - - Transfers in - - - - Transfers out (61) (1,099) - (1,160) Change in net position 5 92 (567) (3,786) (3,761) Net position - beginning 7,388 (31,650) 6,795 (17,467) Net position - ending $ 7,980 $ (32,217) $ 3,009 $ (21,228) 131 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Cash Flows From Operating Activities Receipts from interfund billings $ 6,660 $ 38,900 $ 11,306 $ 56,866 Payments for goods and services ( 3,209) (3,868) (4,869) (11,946) Payments to employees for services ( 1,497) (28,554) (531) (30,582) Payments for insurance benefits - - (4,324) (4,324) Payments for premiums - - (5,722) (5,722) Net cash provided (used) by operating activities 1,954 6,478 (4,140) 4,292 Cash Flows from Noncapital Financing Activities Transfers from other funds - - - - Transfers to other funds (61) (1,099) - (1,160) Net cash provided (used) by noncapital financing activities (61) (1,099) - (1,160) Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets ( 1,456) (1,082) - (2,538) Proceeds from sale of capital assets 2 28 21 - 2 49 Net cash provided (used) by capital and related financing activities ( 1,228) (1,061) - (2,289) Cash Flows from Investing Activities Interest received 1 40 4 01 6 55 1,196 Net cash provided (used) by investing activities 1 40 4 01 6 55 1,196 Net increase (decrease) in cash and cash equivalents 8 05 4,719 (3,485) 2,039 Cash and cash equivalents at beginning of year 4,874 15,574 26,585 47,033 Cash and cash equivalents at end of year $ 5,679 $ 20,293 $ 23,100 $ 49,072 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 175 $ 110 $ (4,441) $ (4,156) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense 1,832 9 27 - 2,759 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net - - - - Inventory (2) 52 - 50 Prepaid expenses - 6 - 6 Deferred outflows - pensions 3 62 6,825 - 7,187 Deferred outflows - OPEB 15 1 78 - 1 93 Increase (decrease) in: - Accounts payable (4) 59 (43) 12 Deposits from others - 4,290 - 4,290 Salaries and benefits payable (5) 7 38 (228) 5 05 Deferred inflows - pensions 2 34 4,795 - 5,029 Deferred inflows - OPEB (3) (36) - (39) Net OPEB liability (5) 37 - 32 Net pension liability (645) (11,503) - (12,148) Self-insurance liability - - 5 72 5 72 Total adjustments 1,779 6,368 3 01 8,448 Net cash provided (used) by operating activities $ 1,954 $ 6,478 $ (4,140) $ 4,292 132 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS - INSURANCE JUNE 30, 2020 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Assets Current assets: Cash and cash equivalents $ 17,083 $ 4,423 $ 201 $ 1,186 $ 207 $ 23,100 Prepaid expenses 2 21 - - - - 2 21 Total current assets 17,304 4,423 2 01 1,186 2 07 23,321 Total assets 17,304 4,423 2 01 1,186 2 07 23,321 Liabilities Current liabilities: Accounts payable 1 26 5 - 41 - 1 72 Salaries and benefits payable - - - - - - Self-insurance liability 2,762 1,169 - - - 3,931 Total current liabilities 2,888 1,174 - 41 - 4,103 Noncurrent liabilities: Self-insurance liability 13,662 2,547 - - - 16,209 Total noncurrent liabilities 13,662 2,547 - - - 16,209 Total liabilities 16,550 3,721 - 41 - 20,312 Net Position Unrestricted 7 54 7 02 2 01 1,145 2 07 3,009 Total net position $ 754 $ 702 $ 201 $ 1,145 $ 207 $ 3,009 133 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, 2020 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Operating revenues Charges for services $ 3,536 $ 2,750 $ 410 $ 2,111 $ 2,497 $ 11,304 Total operating revenues 3,536 2,750 4 10 2,111 2,497 11,304 Operating expenses Salaries and benefits 3 03 - - - - 3 03 Services and supplies 4,280 4,031 31 1 93 1,726 10,261 Insurance benefit payments 2,387 2 21 2 85 1,327 6 76 4,896 Countywide cost allocation 1 34 1 51 - - - 2 85 Total operating expenses 7,104 4,403 3 16 1,520 2,402 15,745 Operating income (loss) ( 3,568) (1,653) 94 5 91 95 (4,441) Nonoperating revenues (expenses) Interest income 4 94 1 25 3 27 6 6 55 Total nonoperating revenues (expenses) 4 94 1 25 3 27 6 6 55 Income (loss) before transfers ( 3,074) (1,528) 97 6 18 1 01 (3,786) Transfers in - - - - - - Transfers out - - - - - - Change in net position ( 3,074) (1,528) 97 6 18 1 01 (3,786) Net position - beginning 3,828 2,230 1 04 5 27 1 06 6,795 Net position - ending $ 754 $ 702 $ 201 $ 1,145 $ 207 $ 3,009 134 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS - INSURANCE FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Cash Flows From Operating Activities Receipts from interfund billings $ 3,537 $ 2,750 $ 410 $ 2,112 $ 2,497 $ 11,306 Payments for goods and services ( 3,224) (1,405) (31) (186) (23) (4,869) Payments to employees for services (531) - - - - (531) Payments for insurance benefits ( 2,013) (23) (285) (1,327) (676) (4,324) Payments for premiums ( 1,227) (2,792) - - (1,703) (5,722) Net cash provided (used) by operating activities ( 3,458) (1,470) 94 5 99 95 (4,140) Cash Flows from Investing Activities Interest received 4 94 1 25 3 27 6 6 55 Net cash provided (used) by investing activities 4 94 1 25 3 27 6 6 55 Net increase (decrease) in cash and cash equivalents ( 2,964) (1,345) 97 6 26 1 01 (3,485) Cash and cash equivalents at beginning of year 20,047 5,768 1 04 5 60 1 06 26,585 Cash and cash equivalents at end of year $ 17,083 $ 4,423 $ 201 $ 1,186 $ 207 $ 23,100 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ (3,568) $ (1,653) $ 9 4 $ 591 $ 9 5 $ (4,441) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Changes in assets and liabilities: Increase (decrease) in: Accounts payable (36) (15) - 8 - (43) Salaries and benefits payable (228) - - - - (228) Self-insurance liability 3 74 1 98 - - - 5 72 Total adjustments 1 10 1 83 - 8 - 3 01 Net cash provided (used) by operating activities $ (3,458) $ (1,470) $ 9 4 $ 599 $ 9 5 $ (4,140) 135 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS FIDUCIARY FUNDS ________________________________________________________________ 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 Account 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 Special Districts, Courts, and Other Local Boards. 136 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION AGENCY FUNDS JUNE 30, 2020 (IN THOUSANDS) Clearing and 1915 Act Other Revolving Funds Service Funds Agency Funds (92 Funds) (17 Funds) (35 Funds) Total ASSETS Cash and cash equivalents $ 85,126 $ 843 $ 46,234 $ 132,203 Total assets $ 85,126 $ 843 $ 46,234 $ 132,203 LIABILITIES Assets held as agency for others $ 85,126 $ 843 $ 46,234 $ 132,203 Total liabilities $ 85,126 $ 843 $ 46,234 $ 132,203 137 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) Balance Balance July 01, 2019 Additions Deletions June 30, 2020 Clearing and Revolving Funds (92 Funds) Assets: Cash and cash equivalents $ 78,411 $ 1,382,675 $ 1,375,960 $ 85,126 Total assets $ 78,411 $ 1,382,675 $ 1,375,960 $ 85,126 Liabilities: Assets held as agency for others $ 78,411 $ 1,382,675 $ 1,375,960 $ 85,126 Total liabilities $ 78,411 $ 1,382,675 $ 1,375,960 $ 85,126 1915 Act Service Funds (17 Funds) Assets: Cash and cash equivalents $ 812 $ 154 $ 123 $ 843 Total assets $ 812 $ 154 $ 123 $ 843 Liabilities: Assets held as agency for others $ 812 $ 154 $ 123 $ 843 Total liabilities $ 812 $ 154 $ 123 $ 843 Other Agency Funds (35 Funds) Assets: Cash and cash equivalents $ 38,131 $ 463,421 $ 455,318 $ 46,234 Total assets $ 38,131 $ 463,421 $ 455,318 $ 46,234 Liabilities: Assets held as agency for others $ 38,131 $ 463,421 $ 455,318 $ 46,234 Total liabilities $ 38,131 $ 463,421 $ 455,318 $ 46,234 Total All Agency Funds Assets: Cash and cash equivalents $ 117,354 $ 1,846,250 $ 1,831,401 $ 132,203 Total assets $ 117,354 $ 1,846,250 $ 1,831,401 $ 132,203 Liabilities: Assets held as agency for others $ 117,354 $ 1,846,250 $ 1,831,401 $ 132,203 Total liabilities $ 117,354 $ 1,846,250 $ 1,831,401 $ 132,203 138 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS JUNE 30, 2020 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (39 Funds) (32 Funds) (6 Funds) (19 Funds) Total ASSETS Cash and cash equivalents $ 381,128 $ 21,690 $ 1,222 $ 29,432 $ 433,472 Total assets $ 381,128 $ 21,690 $ 1,222 $ 29,432 $ 433,472 NET POSITION Net position held in trust for pool participants $ 381,128 $ 21,690 $ 1,222 $ 29,432 $ 433,472 Total Net Position $ 381,128 $ 21,690 $ 1,222 $ 29,432 $ 433,472 139 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (39 Funds) (32 Funds) (6 Funds) (19 Funds) Total Additions Contributions to pooled investments $ 974,962 $ 1 3,475 $ 1 5,548 $ 4 5,450 $ 1,049,435 Interest 6,498 419 - 383 7,300 Total additions 9 81,460 13,894 15,548 45,833 1,056,735 Deductions Distributions from investment pool 1,033,310 11,214 16,195 43,941 1,104,660 Total deductions 1,033,310 11,214 16,195 43,941 1,104,660 Change in net position (51,850) 2,680 (647) 1,892 (47,925) Net position - beginning 4 32,978 19,010 1,869 27,540 4 81,397 Net position - ending $ 381,128 $ 2 1,690 $ 1,222 $ 2 9,432 $ 433,472 140 ________________________________________________________________ GENERAL FUND DETAIL BUDGETARY COMPARISON SCHEDULES ________________________________________________________________ COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget General Government - Expenditures Legislative and Administrative Administrative Office: Salaries, wages, and benefits $ 2,362 $ 2,726 $ 2,422 $ 304 Services and supplies 172 399 329 70 Other charges - 150 150 - Expenditure transfers and reimbursements (114) (114) (111) (3) Total 2,420 3,161 2,790 371 Board of Supervisors: Salaries, wages, and benefits 1,559 1,559 1,486 73 Services and supplies 220 220 167 53 Expenditure transfers and reimbursements (42) (42) (43) 1 Total 1,737 1,737 1,610 127 Clerk/Recorder: Salaries, wages, and benefits 2,360 2,218 2,050 168 Services and supplies 1,129 1,402 1,240 162 Capital outlay - 296 297 (1) Expenditure transfers and reimbursements - - (1) 1 Total 3,489 3,916 3,586 330 Communications & Outreach Salaries, wages, and benefits 131 131 117 14 Services and supplies 28 28 19 9 Total 159 159 136 23 Total Legislative and Administrative 7,805 8,973 8,122 851 Finance Assessor: Salaries, wages, and benefits 9,955 9,880 9,125 755 Services and supplies 1,066 1,287 1,255 32 Capital outlay - 8 8 - Total 11,021 11,175 10,388 787 Auditor-Controller-Treasurer-Tax Collector Public Administrator: Salaries, wages, and benefits 7,778 7,778 7,267 511 Services and supplies 725 790 579 211 Other charges - - - - Capital outlay 10 10 9 1 Expenditure transfers and reimbursements (20) (20) (17) (3) Total 8,493 8,558 7,838 720 Total Finance 19,514 19,733 18,226 1,507 continued 141 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget General Government - Expenditures (continued) Counsel County Counsel: Salaries, wages, and benefits $ 4,060 $ 4,060 $ 3,623 $ 437 Services and supplies 1,037 1,454 505 949 Total Counsel 5,097 5,514 4,128 1,386 Personnel Personnel: Salaries, wages, and benefits 5,072 5,072 4,865 207 Services and supplies 1,914 2,056 1,712 344 Expenditure transfers and reimbursement (1,033) (1,033) (1,017) (16) Total Personnel 5,953 6,095 5,560 535 Talent Development: Salaries, wages, and benefits 268 268 144 124 Services and supplies 526 526 346 180 Total Talent Development 794 794 490 304 Total Personnel 6,747 6,889 6,050 839 Property Management Facilities Management: Salaries, wages, and benefits 4,463 4,480 4,122 358 Services and supplies 4,367 4,462 4,016 446 Other charges - - - - Expenditure transfers and reimbursements (1,941) (1,941) (2,043) 102 Total 6,889 7,001 6,095 906 Maintenance Projects: Services and supplies 2,697 10,538 4,037 6,501 Total 2,697 10,538 4,037 6,501 Central Services Salaries, wages, and benefits 1,804 1,830 1,764 66 Services and supplies 2,907 2,908 2,854 54 Other charges 109 109 108 1 Capital outlay - 19 - 19 Expenditure transfers and reimbursements (541) (541) (572) 31 Total 4,279 4,325 4,154 171 Total Property Management 13,865 21,864 14,286 7,578 continued 142 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget General Government - Expenditures (continued) Other General Information Technology: Salaries, wages, and benefits $ 13,501 $ 13,501 $ 12,779 $ 722 Services and supplies 4,503 4,909 4,366 543 Capital outlay - 13 13 - Other charges 30 30 30 - Expenditure transfers and reimbursements (6,318) (6,318) (6,214) (104) Total 11,716 12,135 10,974 1,161 Non-Department Financing Uses: Services and supplies - 2,000 65 1,935 Other Charges - 192 192 - Expenditure transfers and reimbursements (14,120) (14,120) (13,969) (151) Total (14,120) (11,928) (13,712) 1,784 Contributions to Other Agencies: Services and supplies 1,982 2,590 1,940 650 Total 1,982 2,590 1,940 650 Non-Department Other: Services and supplies 634 15,633 441 15,192 Capital Outlay - 720 106 614 Expenditure transfers and reimbursements - - - - Total 634 16,353 547 15,806 Total Other General 212 19,150 (251) 19,401 Total General Government 53,240 82,123 50,561 31,562 Public Protection - Expenditures Judicial Court Operations Fund: Other charges 2,427 2,427 2,408 19 Total 2,427 2,427 2,408 19 District Attorney: Salaries, wages, and benefits 17,025 17,009 16,414 595 Services and supplies 2,077 2,204 2,028 176 Other charges 73 191 184 7 Capital outlay 6 37 21 16 Expenditure transfers and reimbursements (26) (26) (27) 1 Total 19,155 19,415 18,620 795 Child Support Services: Salaries, wages, and benefits 3,953 3,953 3,091 862 Services and supplies 922 982 828 154 Total 4,875 4,935 3,919 1,016 Grand Jury: Salaries, wages, and benefits 34 34 10 24 Services and supplies 95 96 61 35 Total 129 130 71 59 continued 143 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures (continued) Judicial (continued) Public Defender: Services and supplies $ 7,386 $ 7,420 $ 7,402 $ 18 Total 7,386 7,420 7,402 18 Total Judicial 33,972 34,327 32,420 1,907 Police Protection Sheriff-Coroner: Salaries, wages, and benefits 68,013 72,230 69,907 2,323 Services and supplies 13,970 14,061 13,554 507 Other charges - 70 29 41 Capital outlay 160 858 368 490 Expenditure transfers and reimbursements (767) (767) (1,003) 236 Total Police Protection 81,376 86,452 82,855 3,597 Detention and Correction Probation Department: Salaries, wages, and benefits 19,423 19,801 18,309 1,492 Services and supplies 5,381 7,537 5,136 2,401 Capital outlay - 35 - 35 Expenditure transfers and reimbursements (242) (242) (231) (11) Total Detention and Correction 24,562 27,131 23,214 3,917 Fire Protection County Fire: Salaries, wages, and benefits - 6 6 - Services and supplies 25,595 26,282 24,123 2,159 Other charges - 95 44 51 Capital outlay 1,480 3,409 1,359 2,050 Total Fire Protection 27,075 29,792 25,532 4,260 Protective Inspection Agricultural Commissioner: Salaries, wages, and benefits 5,544 5,622 5,423 199 Services and supplies 971 1,085 1,000 85 Other charges 33 33 29 4 Capital outlay 7 7 6 1 Expenditure transfers and reimbursements (2) (2) (2) - Total Protective Inspection 6,553 6,745 6,456 289 Other Protection Animal Services: Salaries, wages, and benefits 1,940 1,940 1,713 227 Services and supplies 930 936 853 83 Capital outlay - - - - Total 2,870 2,876 2,566 310 continued 144 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures (continued) Other Protection (continued) Emergency Services: Salaries, wages, and benefits $ 924 $ 978 $ 941 $ 37 Services and supplies 546 1,175 5,294 (4,119) Other charges 280 932 573 359 Capital outlay - 50 45 5 Total 1,750 3,135 6,853 (3,718) Planning Department: Salaries, wages, and benefits 13,104 13,146 11,945 1,201 Services and supplies 3,000 4,598 3,375 1,223 Capital outlay 6 6 - 6 Expenditure transfers and reimbursements - - (5) 5 Total 16,110 17,750 15,315 2,435 Waste Management: Services and supplies 1,244 1,303 841 462 Other charges 10 10 10 -- Total 1,254 1,313 851 462 Total Other Protection 21,984 25,074 25,585 (511) Total Public Protection 195,522 209,521 196,062 13,459 Public Ways and Facilities - Expenditures Public Works: Services and supplies 4,389 6,553 3,184 3,369 Other charges 36 456 197 259 Capital outlay - - - - Total 4,425 7,009 3,381 3,628 Total Public Ways and Facilities 4,425 7,009 3,381 3,628 Health and Sanitation - Expenditures Health Public Health: Salaries, wages, and benefits 23,243 22,481 21,462 1,019 Services and supplies 7,304 9,915 9,283 632 Other charges 1,299 2,061 1,182 879 Capital outlay 9 305 - 305 Expenditure transfers and reimbursements (2,627) (4,183) (4,746) 563 Total 29,228 30,579 27,181 3,398 continued 145 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget Health and Sanitation - Expenditures (continued) Health (continued) Behavioral Health: Salaries, wages, and benefits $ 36,506 $ 35,423 $ 33,641 $ 1,782 Services and supplies 42,003 45,629 42,855 2,774 Other charges 1,600 3,536 2,771 765 Capital outlay - 30 27 3 Expenditure transfers and reimbursements (1,293) (2,021) (1,415) (606) Total 78,816 82,597 77,879 4,718 Total Health 108,044 113,176 105,060 8,116 Total Health and Sanitation 108,044 113,176 105,060 8,116 Public Assistance - Expenditures Administration Department of Social Services: Salaries, wages, and benefits 53,185 53,185 48,961 4,224 Services and supplies 21,934 22,213 19,335 2,878 Other charges 18,143 21,015 13,294 7,721 Capital outlay 10 10 10 - Expenditure transfers and reimbursements (66) (66) (125) 59 Total Administration 93,206 96,357 81,475 14,882 Aid Programs Aid Foster Care Non-Fed: Services and supplies 92 92 92 - Other charges 27,355 28,548 27,618 930 Expenditure transfers and reimbursement (238) (238) (10) (228) Total 27,209 28,402 27,700 702 Calworks Assistance: Other charges 9,684 11,149 10,883 266 Total 9,684 11,149 10,883 266 Total Aid Programs 36,893 39,551 38,583 968 General Relief General Relief: Other charges 1,365 1,697 1,692 5 Total General Relief 1,365 1,697 1,692 5 continued 146 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget Public Assistance - Expenditures (continued) Veterans Service Veterans Service: Salaries, wages, and benefits $ 820 $ 820 $ 711 $ 109 Services and supplies 142 142 83 59 Other charges - 11 - 11 Total Veterans Service 962 973 794 179 Other Assistance Law Enforcement Med Care: Salaries, wages, and benefits 380 380 259 121 Services and supplies 8,170 8,252 7,922 330 Expenditure transfers and reimbursements (223) (223) (229) 6 Total Other Assistance 8,327 8,409 7,952 457 Total Public Assistance 140,753 146,987 130,496 16,491 Education - Expenditures Agricultural Education UC Cooperative Extension Salaries, wages, and benefits 511 519 499 20 Services and supplies 120 120 109 11 Capital outlay - - - - Total Agricultural Education 631 639 608 31 Total Education 631 639 608 31 Recreation and Culture - Expenditures Community Parks Salaries, wages, and benefits 3,016 2,964 2,762 202 Services and supplies 1,842 2,174 1,977 197 Capital outlay 55 55 19 36 Other Charges 152 152 57 95 Expenditure transfers and reimbursements (7) (7) (2) (5) Total Community Parks 5,058 5,338 4,813 525 Total Recreation and Culture 5,058 5,338 4,813 525 Total General Fund - Expenditures 507,673 564,793 490,981 73,812 (Before Contingencies) continued 147 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2020 Original Final Variance with Description Budget Budget Actual Final Budget Contingencies Appropriation for Contingencies Contingencies - General Fund: Appropriation for contingency $ 26,143 $ 3,093 $ - $ 3,093 Total 26,143 3,093 - 3,093 Total Appropriation for Contingency 26,143 3,093 - 3,093 Total Contingency 26,143 3,093 - 3,093 Total General Fund Expenditures $ 533,816 $ 567,886 $ 490,981 $ 76,905 Explanation of Differences between Budgetary Outflows and GAAP Expenditures Uses/outflows of resources Actual amounts (budgetary basis) from the Budget to Actual Comparison Schedule $ 490,981 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 4,032 Total expenditures as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 495,013 148 ________________________________________________________________ STATISTICAL SECTION ________________________________________________________________ COUNTY OF SAN LUIS OBISPO Statistical Section This part of the County of San Luis Obispo’s (County) 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 .………… 150 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 .……………………………………………………………………………………………………… 157 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 ..………………………………………………………………… 162 Demographic and 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 ………………………………………………………………….. 165 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 ………………………………………………………………… 167 149 County of San Luis Obispo Net Position by Component Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Governmental Activities Net investment in capital assets $ 1,084,978 $ 1,099,885 $ 1,103,924 $ 1,112,934 $ 1,130,241 $ 1,168,573 $ 1,178,967 $ 1,185,073 $ 1,188,830 $ 1,202,709 Restricted 36,258 31,477 28,863 43,109 37,722 41,230 64,822 29,836 41,281 66,655 Unrestricted 234,786 265,454 304,257 325,113 (150,074) (170,962) (226,970) (217,606) (220,206) (286,622) Total governmental activities net position $ 1,356,022 $ 1,396,816 $ 1,437,044 $ 1,481,156 $ 1,017,889 $ 1,038,841 $ 1,016,819 $ 997,303 $ 1,009,905 $ 982,742 Business-type Activities Net investment in capital assets $ 149,097 $ 153,801 $ 167,138 $ 188,485 $ 213,455 $ 237,157 $ 270,246 $ 283,410 $ 285,888 $ 288,781 Unrestricted 38,665 33,081 58,433 98,097 97,173 93,158 85,316 73,113 83,039 94,335 Total business-type activities net position $ 187,762 $ 186,882 $ 225,571 $ 286,582 $ 310,628 $ 330,315 $ 355,562 $ 356,523 $ 368,927 $ 383,116 Total Primary Government Net investment in capital assets $ 1,234,075 $ 1,253,686 $ 1,271,062 $ 1,301,419 $ 1,343,696 $ 1,405,730 $ 1,449,213 $ 1,468,483 $ 1,474,718 $ 1,491,490 Restricted 36,258 31,477 28,863 43,109 37,722 41,230 64,822 29,836 41,281 66,655 Unrestricted 273,451 298,535 362,690 423,210 (52,901) (77,804) (141,654) (144,493) (137,167) (192,287) Total primary government net position $ 1,543,784 $ 1,583,698 $ 1,662,615 $ 1,767,738 $ 1,328,517 $ 1,369,156 $ 1,372,381 $ 1,353,826 $ 1,378,832 $ 1,365,858 Note: With the implementation of GASB Statement No. 68, which required the presentation of the County's net pension obligation, Unrestricted Net Position became negative. Sources: Statement of Net Assets for FY 2010-2011 through 2011-2012 Statement of Net Position beginning in 2012-2013 and ongoing 150 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Expenses Governmental Activities General government $ 35,344 $ 35,231 $ 34,507 $ 36,866 $ 45,598 $ 53,282 $ 56,390 $ 56,858 $ 54,434 $ 53,926 Public protection 132,413 136,219 142,353 148,135 162,432 170,134 187,255 183,814 213,809 241,749 Public ways and facilities 27,365 27,120 28,474 28,253 34,136 33,418 32,098 41,606 34,202 33,199 Health and sanitation 66,657 65,799 69,222 74,313 78,137 88,326 99,150 103,822 119,259 113,463 Public assistance 98,841 96,435 97,929 99,449 110,470 118,089 125,102 122,753 131,432 132,868 Education 10,057 10,000 9,922 9,611 9,457 11,934 12,787 12,754 12,698 14,322 Recreation and cultural services 7,363 7,344 9,735 7,745 9,755 8,702 10,385 8,927 11,891 11,501 Interest on long term debt 6,787 6,620 6,041 5,270 5,124 4,602 4,555 11,840 1,468 7,057 Total Governmental Activities Expenses 384,827 384,768 398,183 409,642 455,109 488,487 527,722 542,374 579,193 608,085 Business-type Activities Expenses Airport 7,732 5,422 5,435 5,664 6,187 6,117 6,391 7,966 8,398 10,133 Golf 2,690 2,863 2,779 2,608 2,968 3,131 3,111 3,297 3,491 3,347 State Water Contract 6,705 6,761 5,536 5,992 6,351 5,848 5,571 5,909 6,973 7,709 Nacimiento Water Contract 11,844 11,901 14,738 13,840 15,776 14,888 14,191 14,044 14,318 13,257 Lopez Flood Control 6,499 5,752 6,548 6,116 6,128 6,220 6,387 7,072 7,004 6,733 Lopez Park - - - - 4 4 4 3 3 2 General Flood Control Zone - Salinas Dam 928 1,816 746 809 845 824 851 1,056 1,142 913 Transit 1,105 8 - - - - - - - - County Service Areas 3,877 3,836 3,779 3,857 4,194 4,065 4,218 4,445 4,747 4,670 Los Osos Wastewater 5 6,672 344 231 235 3,807 10,322 10,918 11,544 11,636 Total Business-type Activities Expenses 41,385 45,031 39,905 39,117 42,688 44,904 51,046 54,710 57,620 58,400 Total Primary Government Expenses $ 426,212 $ 429,799 $ 438,088 $ 448,759 $ 497,797 $ 533,391 $ 578,768 $ 597,084 $ 636,813 $ 666,485 Program Revenues Governmental Activities Fees, Fines, Charges for Services General government $ 13,971 $ 17,545 $ 16,575 $ 14,678 $ 12,407 $ 13,702 $ 14,839 $ 12,937 $ 13,484 $ 12,967 Public protection 20,843 15,679 16,352 23,035 20,774 20,768 21,231 23,666 22,946 21,291 Public ways and facilities 11,549 5,069 5,465 4,356 4,255 9,434 7,462 6,155 5,721 4,797 Health and sanitation 7,453 6,014 5,196 6,570 6,631 7,179 6,757 7,501 7,698 8,571 Public assistance 2,399 2,366 2,920 2,070 2,077 2,107 2,032 1,763 1,194 1,155 Education 2,037 2,545 3,583 1,723 2,998 1,952 1,644 2,006 1,943 2,193 Recreation and cultural services 3,714 3,952 4,435 4,537 5,056 4,975 5,127 5,592 5,515 4,295 Operating Grants and Contributions General Government 1,120 628 122 252 54 735 748 321 200 685 Public Protection 37,244 45,646 50,477 54,233 62,359 63,528 52,205 58,184 59,592 59,974 Public ways and facilities 9,446 11,813 15,018 14,688 14,145 11,025 9,918 11,506 10,485 11,302 Health and sanitation 48,567 44,741 55,064 57,344 62,338 61,950 67,626 76,494 76,211 74,699 Public assistance 86,479 85,505 87,912 89,640 94,775 98,414 102,784 105,848 107,758 114,525 Education 289 175 175 102 105 124 132 173 143 204 Recreation and cultural services 357 18 350 - 131 153 273 671 200 230 Capital Grants and Contributions General government 279 843 8 69 156 45 - 349 930 - Public protection - - - 3,315 9,701 4,420 7,820 656 1,197 1,799 Public ways and facilities 7,411 12,930 3,479 5,570 6,435 6,031 6,655 8,893 14,361 17,732 Health and sanitation - - - - - - - - - - Public assistance - - - - - - - - - 267 Recreation and cultural services 81 247 50 282 1,776 10,804 1,157 191 28 86 Total Governmental Activities Revenues 253,239 255,716 267,181 282,464 306,173 317,346 308,410 322,906 329,606 336,772 Source: Statement of Activities (continued) 151 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Business-type Activities Fees, Fines, Charges for Services Airport 3,888 3,719 4,053 4,493 4,883 5,165 5,662 7,158 8,947 8,300 Golf 2,590 2,690 2,639 2,779 2,967 2,589 2,291 2,584 2,717 2,750 State Water Contract 6,453 6,609 6,185 6,358 6,562 6,846 5,941 6,110 7,656 7,825 Nacimiento Water Contract 7,968 13,893 13,800 13,685 9,682 17,048 15,149 15,709 16,947 16,732 Lopez Flood Control 6,359 6,440 6,174 6,123 6,208 6,530 6,708 6,677 7,148 6,978 Lopez Park - - - - - - - - - - General Flood Control Zone - Salinas Dam 1,870 1,252 730 861 794 960 904 909 913 2,884 County Service Areas 3,090 3,186 3,352 3,312 3,408 - 2,301 3,662 3,894 4,492 Los Osos Wastewater - - - - - 3,551 3,620 4,467 5,100 5,245 Operating Grants and Contributions Airport 180 372 132 127 126 126 126 396 328 4,644 Golf - 5 - - 269 - 1,017 - - - State Water Contract 10 10 13 13 13 13 14 14 14 14 Nacimiento Water Contract 30 28 29 12 9 9 - 6 - - Lopez Flood Control 15 15 15 8 8 8 - 7 5 5 Lopez Park - - - - - - - - - - Transit 1,097 - - - - - - - - - General Flood Control Zone - Salinas Dam - - - - - - - - 26 - County Service Areas 3 3 3 3 211 295 3 3 13 3 Los Osos Wastewater - 35 1 - - 2,810 18 - - - Capital Grants and Contributions Airport 2,074 138 572 1,770 365 7,069 15,379 2,211 3,139 505 Nacimiento Water Contract - - - - - - - 24 - - County Service Areas 288 64 294 2 - - - - - - Los Osos Wastewater 9,357 9,127 35,717 57,507 26,385 4,157 10,086 2,982 4,860 2,618 Total Business-Type Activities Revenues 45,272 47,586 73,709 97,053 61,890 57,176 69,219 52,919 61,707 62,995 Total Primary Government Revenues $ 298,511 $ 303,302 $ 340,890 $ 379,517 $ 368,063 $ 374,522 $ 377,629 $ 375,825 $ 391,313 $ 399,767 Net (Expense)/Revenues Governmental Activities $ (131,588) $ (129,052) $ (131,002) $ (127,178) $ (148,936) $ (171,141) $ (219,312) $ (219,468) $ (249,587) $ (271,313) Business-Type Activities 3,887 2,555 33,804 57,936 19,202 12,272 18,173 (1,791) 4,087 4,595 Total Primary Government net expense $ (127,701) $ (126,497) $ (97,198) $ (69,242) $ (129,734) $ (158,869) $ (201,139) $ (221,259) $ (245,500) $ (266,718) General Revenue and Other Changes in Net Position Governmental Activities Property Taxes $ 139,214 $ 140,288 $ 143,182 $ 152,256 $ 155,374 $ 163,367 $ 173,153 $ 180,051 $ 189,689 $ 198,927 Other Taxes 14,393 16,330 23,940 22,088 22,984 21,953 23,072 25,708 27,224 27,878 Interest and investment income 986 1,202 733 599 3,174 4,401 3,289 3,171 12,952 12,849 Unrestricted Grants 3,520 3,978 3,537 1,727 13,327 3,140 63 2,740 2,115 3,845 Other revenues 172 - 4 - - - 5 2 35,445 1,144 Transfers 150 8,048 (166) (790) (2,676) (768) (2,292) 2,267 (625) (493) Special Item - - - (2,800) - - - - - Total Governmental Activities 158,435 169,846 171,230 173,080 192,183 192,093 197,290 213,939 266,800 244,150 Business-type Activities Property Taxes 3,841 3,799 4,145 4,402 4,782 4,782 3,814 3,858 3,912 4,043 Other Taxes 28 28 29 32 - - - - - - Interest and investment income 965 755 385 595 659 847 630 1,272 1,590 2,169 Other revenues 447 31 160 40 183 268 338 - 574 2,889 Transfers (150) (8,048) 166 790 2,676 768 2,292 (2,267) 625 493 Total Business-type Activities 5,131 (3,435) 4,885 5,859 8,300 6,665 7,074 2,863 6,701 9,594 Total Primary Government $ 163,566 $ 166,411 $ 176,115 $ 178,939 $ 200,483 $ 198,758 $ 204,364 $ 216,802 $ 273,501 $ 253,744 Change in Net Position Governmental Activities $ 26,847 $ 40,794 $ 40,228 $ 45,902 $ 43,247 $ 20,952 $ (22,022) $ (5,529) $ 17,213 $ (27,163) Business-Type Activities 9,018 (880) 38,689 63,795 27,502 18,937 25,247 1,072 10,788 14,189 Total Primary Government $ 35,865 $ 39,914 $ 78,917 $ 109,697 $ 70,749 $ 39,889 $ 3,225 $ (4,457) $ 28,001 $ (12,974) Source: Statement of Activities 152 County of San Luis Obispo Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 General Fund Nonspendable $ 3,333 $ 3,176 $ 3,092 $ 779 $ 5,089 $ 3,454 $ 3,535 $ 18,511 $ 19,222 $ 18,734 Restricted 7,113 6,682 4,005 3,214 2,945 2,872 2,649 10,083 12,276 10,915 Committed 62,380 68,880 96,365 116,940 138,140 168,619 164,492 152,501 169,846 175,455 Assigned - - 104,237 118,248 125,112 122,925 126,596 107,145 127,007 119,426 Unassigned 87,741 102,291 - - - - - - - - Total General Fund $ 160,567 $ 181,029 $ 207,699 $ 239,181 $ 271,286 $ 297,870 $ 297,272 $ 288,240 $ 328,351 $ 324,530 All Other Governmental Funds Nonspendable $ 352 $ 390 $ 596 $ - $ 920 $ 3,776 $ 3 $ 24 $ 36 $ 4 Restricted 22,065 19,788 18,311 20,164 20,563 21,317 24,192 24,750 33,496 57,057 Committed 55,446 61,144 65,903 74,240 78,508 61,926 94,904 62,307 66,616 67,593 Assigned 94 - - - - - - - - - Unassigned - - - - (486) - - (3,038) - - Total all other Governmental Funds $ 77,957 $ 81,322 $ 84,810 $ 94,404 $ 99,505 $ 87,019 $ 119,099 $ 84,043 $ 100,148 $ 124,654 Source: Balance Sheet - Governmental Funds 153 County of San Luis Obispo Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Revenues Taxes $ 155,419 $ 160,920 $ 171,771 $ 177,765 $ 178,740 $ 185,764 $ 196,822 $ 203,583 $ 217,106 $ 223,041 Licenses, permits, and franchises 7,413 7,863 9,247 10,694 10,452 10,539 11,446 11,140 12,133 11,477 Fines, forfeitures, and penalties 7,993 6,750 6,654 5,257 5,686 5,173 4,339 5,977 4,396 3,916 Revenues from use of money and property 1,242 2,273 1,475 1,373 3,864 4,939 3,984 3,779 12,268 12,247 Aid from governmental agencies 194,625 206,372 209,234 229,283 261,351 256,490 254,350 262,660 271,961 277,267 Charges for current services 56,486 45,538 41,690 50,071 43,530 46,308 49,460 49,793 47,957 46,712 Other revenues 6,531 8,451 11,342 6,235 9,110 11,504 8,481 6,869 25,278 12,396 Total revenues 429,709 438,167 451,413 480,678 512,733 520,717 528,882 543,801 591,099 587,056 Expenditures Current: General government 50,321 45,850 44,374 44,317 51,207 54,461 54,918 60,445 54,991 54,078 Public protection 135,636 138,579 143,832 148,155 157,783 156,096 164,839 175,175 185,033 205,162 Public ways and facilities 37,261 40,338 34,178 28,528 29,903 41,044 29,077 42,254 35,267 43,865 Health and sanitation 68,472 67,830 70,021 74,586 75,116 81,591 88,623 99,885 103,512 108,158 Public assistance 100,202 97,185 98,059 99,442 107,104 111,227 113,392 117,066 121,327 131,154 Education 10,191 9,973 9,901 12,205 11,388 10,534 11,560 11,640 12,191 12,769 Recreational and cultural services 7,187 6,998 7,538 7,993 10,104 9,888 9,963 10,358 10,574 11,637 Debt service: Principal payments 4,595 4,435 4,065 5,412 6,070 6,788 7,576 50,989 5,093 10,561 Interest and fiscal charges 6,464 6,289 5,863 5,419 5,209 4,687 4,639 11,666 1,204 6,416 Debt issuance costs - - 269 - - - - - - - Capital outlay 3,399 5,540 3,692 11,312 20,019 30,465 11,554 11,828 6,374 7,645 Total expenditures 423,728 423,017 421,792 437,369 473,903 506,781 496,141 591,306 535,566 591,445 Excess (deficiency) of revenues over (under) expenditures 5,981 15,150 29,621 43,309 38,830 13,936 32,741 (47,505) 55,533 (4,389) Source: Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds (continued) 154 County of San Luis Obispo Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Other Financing Sources Refunding certificates of participation issued - - 14,427 - - - - - - - Premium on refunding certificates of participation issued - - 1,418 - - - - - - - Proceeds of long-term debt - - - - - - - - - 20,384 Premium on lease revenue bonds issued - - - - - - - - - 4,023 Payment to refunded escrow agent - - (16,400) - - - - - - - Discount on certificates of participation issued - - - - - - - - - - Transfers in 34,421 35,815 48,113 26,502 33,299 35,803 57,668 54,782 31,633 36,803 Transfers out (33,595) (27,138) (47,021) (25,935) (34,924) (35,641) (58,927) (51,365) (30,950) (36,136) Total other financing sources (uses) 826 8,677 (15,308) 567 (1,625) 162 (1,259) 3,417 683 25,074 Special Item - - - - (2,800) - - - - - Net change in fund balances $ 6,807 $ 23,827 $ 14,313 $ 43,876 $ 34,405 $ 14,098 $ 31,482 $ (44,088) $ 56,216 $ 20,685 Debt Service as a percentage of non-capital expenditures 2.80% 2.73% 2.48% 2.61% 2.57% 2.54% 2.62% 11.25% 1.23% 3.05% Source: Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 155 San Luis Obispo County Estimated 30 Year Pension Liability Funding Schedule Based on January 1, 2020 Actuarial Valuation 6.875% Discount Rate Assumption - 6.875% Actual Returns 2.75% Payroll Growth Assumption (In Millions) Input Market Actual Total Actuarial Actuarial Value Valuation as of Return for Past Contribution Rate Compensation Determined Accrued of Assets Market Value of Funded Ratio January 1, Fiscal Year for Fiscal Year at Valuation Contribution Liability (AAL) (AVA) Unfunded AAL Funded Ratio Assets (MVA) Using MVA 2020 6.88% 42.98% $ 206 $ 88 $ 2,170 $ 1,417 $ 753 65.3% $ 1,439 66.3% 2021 6.88% 46.39% 211 98 2,248 1,497 751 66.6% 1,513 67.3% 2022 6.88% 47.46% 217 103 2,325 1,587 738 68.3% 1,596 68.6% 2023 6.88% 46.88% 223 105 2,402 1,663 739 69.2% 1,682 70.0% 2024 6.88% 46.85% 229 107 2,477 1,770 707 71.5% 1,770 71.5% 2025 6.88% 45.83% 236 108 2,551 1,860 691 72.9% 1,860 72.9% 2026 6.88% 45.55% 242 110 2,624 1,949 675 74.3% 1,949 74.3% 2027 6.88% 45.31% 249 113 2,695 2,041 654 75.7% 2,041 75.7% 2028 6.88% 45.09% 256 115 2,765 2,134 631 77.2% 2,134 77.2% 2029 6.88% 44.89% 263 118 2,834 2,229 605 78.7% 2,229 78.7% 2030 6.88% 44.72% 270 121 2,902 2,327 575 80.2% 2,327 80.2% 2031 6.88% 44.56% 277 124 2,969 2,428 541 81.8% 2,428 81.8% 2032 6.88% 44.43% 285 127 3,034 2,533 501 83.5% 2,533 83.5% 2033 6.88% 44.31% 293 130 3,099 2,641 458 85.2% 2,641 85.2% 2034 6.88% 44.19% 301 133 3,164 2,754 410 87.0% 2,754 87.0% 2035 6.88% 44.09% 309 136 3,227 2,871 356 89.0% 2,871 89.0% 2036 6.88% 44.00% 317 140 3,290 2,994 296 91.0% 2,994 91.0% 2037 6.88% 43.92% 326 143 3,353 3,123 230 93.1% 3,123 93.1% 2038 6.88% 43.86% 335 147 3,415 3,259 156 95.4% 3,259 95.4% 2039 6.88% 41.94% 344 144 3,478 3,403 75 97.8% 3,403 97.8% 2040 6.88% 16.62% 354 59 3,541 3,548 (7) 100.2% 3,548 100.2% 2041 6.88% 16.73% 364 61 3,605 3,610 (5) 100.1% 3,610 100.1% 2042 6.88% 16.84% 374 63 3,670 3,673 (3) 100.1% 3,673 100.1% 2043 6.88% 16.47% 384 63 3,736 3,738 (2) 100.1% 3,738 100.1% 2044 6.88% 17.15% 394 68 3,803 3,803 - 100.0% 3,803 100.0% 2045 6.88% 17.13% 405 69 3,873 3,873 - 100.0% 3,873 100.0% 2046 6.88% 17.11% 416 71 3,945 3,945 - 100.0% 3,945 100.0% 2047 6.88% 17.10% 428 73 4,019 4,019 - 100.0% 4,019 100.0% 2048 6.88% 17.09% 440 75 4,097 4,097 - 100.0% 4,097 100.0% 2049 6.88% 17.08% 452 77 4,177 4,177 - 100.0% 4,177 100.0% 2050 6.88% 17.08% 464 79 4,261 4,261 - 100.0% 4,261 100.0% Discussion: This schedule is prepared by the SLO County Pension Trust's actuary and is a supplement to the annual Actuarial Valuation Report. Its purpose is to estimate progress towards fully funding the Actuarial Accrued Liability (AAL) of the San Luis Obispo County Employees Retirement Plan. Current policy of the Plan Sponsor is to fund the Retirement Plan such that the Unfunded AAL reaches $0 over the 30 years ending in 2040. Notes: Funding policy of the Plan Sponsor subject to change annually. Assumes no actuarial gains and losses, other than from assets. Based on constant population. Tier 3 changes include no DROP, 2% COLA, pay limited to Social Security Taxable Wage Base ($117,000 for 2014), 3 year Final Average Compensation for members hired on or after January 1, 2013. Amounts in this schedule differ from those used for financial reporting. This schedule contains values based on a January 1, 2020 actuarial valuation report. Net Pension Liability and related amounts used for financial reporting are based on a June 30, 2020 actuarial valuation report. Source: Gabriel, Roeder, Smith, & Company Supplementary exhibit to the SLO County Pension Trust Actuarial Valuation Report For the Year Beginning January 1, 2020 156 County of San Luis Obispo Assessed Valuation* Last Ten Fiscal Years (In Thousands) (UNAUDITED) Fiscal Percentage Year Change Ended Net Assessed from Prior June 30, Secured Unsecured Exemptions Valuations Year Tax Rate 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 2014 42,900,845 1,195,631 (1,036,531) 43,059,945 3.0% 1.0040 2015 45,288,599 1,230,775 (1,093,212) 45,426,162 5.5% 1.0040 2016 48,037,099 1,257,845 (1,122,568) 48,172,375 6.0% 1.0037 2017 50,458,742 1,362,539 (1,173,683) 50,647,598 5.1% 1.0040 2018 53,278,739 1,386,183 (1,248,961) 53,415,961 5.5% 1.0040 2019 56,147,148 1,420,625 (1,305,110) 56,262,663 5.3% 1.0040 2020 58,382,427 2,345,033 (1,277,412) 59,540,048 5.8% 1.0040 Source: County Assessed Values, Exemptions and Growth % Book 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: County Assessed Values, Exemptions and Growth % Book tnecreP Total Net Assessed Value Increase from Prior Year Percent 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. 157 County of San Luis Obispo Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (per $100 of assessed values) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 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 0.00290 0.00300 0.00400 0.00400 0.00400 0.00374 0.00400 0.00400 0.00400 0.00400 Total Direct Rate 1.00290 1.00300 1.00400 1.00400 1.00400 1.00374 1.00400 1.00400 1.00400 1.00400 Cities, Schools, and Special Districts Combined Rates Arroyo Grande 0.0470 0.0477 0.0576 0.0580 0.0569 0.0756 0.0680 0.1085 0.1051 0.0965 Atascadero 0.0975 0.0442 0.0452 0.0452 0.0590 0.1373 0.1373 0.1373 0.1373 0.1373 Grover Beach 0.0389 0.0396 0.0495 0.0499 0.0509 0.0940 0.1023 0.1599 0.1901 0.1815 Morro Bay 0.0499 0.0501 0.0510 0.0510 0.0510 0.0688 0.0683 0.0683 0.0683 0.0683 Paso Robles 0.0389 0.0816 0.0815 0.0815 0.0782 0.0955 0.0828 0.0828 0.1291 0.1222 Pismo Beach 0.0389 0.0396 0.0495 0.0499 0.0509 0.0700 0.0680 0.1085 0.1051 0.0965 San Luis Obispo - - - - - 0.0683 0.0683 0.0683 0.0683 0.0683 Note: Rates shown represent the most common rates encountered for the tax rate areas within these cities. Source: County Property Tax Rate Book 158 County of San Luis Obispo Principal Property Taxpayers Current Year and Ten Years Ago (In Thousands) (UNAUDITED) Fiscal Year 2019-20 Fiscal Year 2010-11 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 $ 2,001,973 1 3.37% $ 2,504,614 1 5.96% High Plans Ranch II LLC Solar Ranch 823,210 2 1.38% - - - Phillips 66 Company Oil Refinery 164,954 3 0.28% - - - Southern California Gas Co. Utility 119,954 4 0.20% 62,345 7 0.15% Jamestown Premier Commercial 115,503 5 0.19% - - - CAP VIII - Mustang Village LLC Apartments 94,501 6 0.16% 74,801 3 0.18% E&J Gallo Winery/Vineyards Winery 93,204 7 0.16% - - - Treasury Wine Estates Winery 92,493 8 0.16% - - - Firestone Walker LLC Brewery 90,903 9 0.15% - - - Sierra Vista Hospital Hospital 78,296 10 0.13% 57,514 9 0.14% TOSCO Corp Petroleum & Gas - - - 152,407 2 0.36% Plains Exploration & Prod Co Petroleum & Gas - - - 73,502 4 0.17% Pacific Bell Telephone Co Communications - - - 67,993 5 0.16% Beringer Wine Estates Company Winery - - - 67,595 6 0.16% Martin Hotel Management Hotel - - - 60,804 8 0.14% Twin Cities Com. Hospital Hospital - - - 55,193 10 0.13% Total $ 3,674,991 6.18% $ 3,176,768 7.56% Total County Assessed Value $ 59,540,048 $ 42,037,910 Sources: Fiscal Year 2019-20 - County Property Tax System Fiscal Year 2010-11 - San Luis Obispo County CAFR 159 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 Year for the Collected % of Collections in Delinquent % of Ended June 30, Fiscal Year Amount Original Levy Subsequent Years* Amount Levy Delinquent 2011 $ 408,623 $ 397,830 97.36% N/A $ 10,793 2.64% 2012 403,472 396,238 98.21% N/A 7,234 1.79% 2013 405,225 399,807 98.66% N/A 5,418 1.34% 2014 421,140 416,450 98.89% N/A 4,690 1.11% 2015 447,088 442,330 98.94% N/A 4,758 1.06% 2016 470,629 466,465 99.12% N/A 4,164 0.88% 2017 495,277 490,890 99.11% N/A 4,387 0.89% 2018 522,528 517,777 99.09% N/A 4,751 0.91% 2019 549,869 544,994 99.11% N/A 4,874 0.89% 2020 573,449 564,422 98.43% N/A 9,027 1.57% Note: Amounts do not include tax collections for bonds or special sssessments Source: County Property Tax Booklet *Collections in subsequent years are not available from the County's current property tax system 160 County of San Luis Obispo Special Assessment Billings and Collections (In Thousands) (UNAUDITED) Special Special Fiscal Year Assessment Assessment Ended June 30, Billings (a) Collected (a) 2011 $ - $ 3,127 * √ 2012 3,664 3,786 * 2013 3,494 3,545 * 2014 3,497 3,630 2015 3,489 3,598 2016 3,496 3,633 2017 3,490 3,577 2018 5,063 5,196 2019 5,058 5,065 2020 5,063 5,106 Note: The billings and collections shown are for the Special Assessment Bonds related to the Los Osos project 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. Sources: a. County Property Tax System * Amounts restated √ In 2011 the special assessment collected source is Public Works by County Enterprise System. 161 County of San Luis Obispo Ratios of Total Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Governmental Activities Certificates of Participation $28,820 $27,895 $25,662 $24,640 $23,600 $22,527 $21,411 $26,135 $24,808 $18,004 Less deferred amounts: For issuance discounts: (107) (103) (99) (95) (91) (87) (83) (79) (75) - Add deferred amounts: For issuance premiums: - - 1,329 1,240 1,152 1,063 975 886 797 708 State notes - - - - - - - 2,056 1,901 1,744 Pension Obligation Bonds 122,689 119,429 115,624 111,234 146,219 145,291 143,890 99,407 96,903 93,733 Lease revenue bonds - - - - - - - - - 20,380 Add deferred amounts: For issuance premiums: - - - - - - - - - 4,023 Total bonds and notes payable 151,402 147,221 142,516 137,019 170,880 168,794 166,193 128,405 124,334 138,592 Business-Type Activities Certificates of Participation 19,897 19,060 17,920 18,257 17,745 17,194 16,470 15,678 14,811 13,908 Add deferred amounts: For issuance premiums: - - 492 459 426 393 361 328 295 262 State Note 31,024 35,884 34,399 46,529 72,774 86,611 85,674 87,667 84,409 81,079 Revenue Bonds 196,444 193,483 190,389 187,170 183,813 177,198 173,535 168,410 164,126 159,841 Add deferred amounts: For issuance premiums: 6,371 6,158 5,945 5,732 5,519 10,058 9,623 8,926 8,502 8,077 Unamortized outflow on Bond Refinancing - - - - - (4,171) (3,990) (3,808) - - General Obligation Bonds 10,760 10,245 9,890 9,530 9,155 8,760 8,350 7,925 7,485 7,025 Add deferred amounts: For issuance premiums: 1,128 1,072 1,015 959 902 846 790 733 677 620 Bond Anticipation Notes 8,677 - - - - Assessment Bonds - 15,364 39,527 76,438 79,829 79,396 78,089 76,746 75,358 73,943 Total bonds and notes payable 274,301 281,266 299,577 345,074 370,163 376,285 368,902 362,605 355,663 344,755 Total Outstanding Debt $425,703 $428,487 $442,093 $482,093 $541,043 $545,079 $535,095 $491,010 $479,997 $483,347 Percentage of Personal Income** 3.88% 3.57% 3.52% 3.76% 3.86% 3.76% 3.58% 3.13% 2.92% 2.80% Percentage of Assessed Value of Taxable Property* 1.03% 1.03% 1.03% 1.06% 1.12% 1.08% 1.00% 0.87% 0.81% 0.81% Net outstanding debt Per Capita $ 1,571.06 $ 1,578.32 $ 1,624.28 $ 1,770.08 $ 1,972.50 $ 1,960.88 $ 1,916.46 $ 1,753.31 $ 1,713.66 $1,707.27 Note: See the Demographic Statistics Schedule for detail information on personal income and population. Source: Notes to the Financial Statements, Note 10 ** Restated for FY 2010-11 through FY 2018-19 * 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; 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. 162 County of San Luis Obispo Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Certificates of Participation $17,075 $16,400 $14,427 $13,675 $12,915 $12,137 $11,326 $10,482 $9,606 $8,693 Less deferred amounts: For issuance discounts: - - (99) (95) (91) (87) (83) (79) (75) - Add deferred amounts: For issuance premiums: - - 1,330 1,240 1,152 1,063 975 886 797 708 Lease Revenue Bonds - - - - - - - - - 20,380 Less deferred amounts: For issuance premiums: - - - - - - - - - 4,023 General Obligation Bonds 10,760 10,245 9,890 9,530 9,155 8,760 8,350 7,925 7,485 7,025 Add deferred amounts: For issuance premiums: 1,128 1,072 1,015 959 902 846 790 733 677 620 State Notes - - - - - - - 2,056 1,901 1,744 Assessment Bonds - 15,364 39,527 76,438 79,829 79,396 78,089 76,746 75,358 73,943 Less resources restricted for principal repayment (2,848) (2,893) (2,684) (2,683) (2,683) (2,688) (2,692) (2,712) (8,061) (30,167) Net Total General Bonded Debt $ 26,115 $ 40,188 $ 63,406 $ 99,064 $ 101,179 $ 99,427 $ 96,755 $ 96,037 $ 87,688 $ 86,969 Percentage of Personal Income** 0.24% 0.33% 0.51% 0.77% 0.72% 0.69% 0.65% 0.61% 0.53% 0.50% Percentage of Assessed Value of Taxable Property1 0.06% 0.10% 0.15% 0.22% 0.21% 0.20% 0.18% 0.18% 0.15% 0.15% Net outstanding debt Per Capita $ 96.38 $ 148.03 $ 232.96 $ 363.73 $ 368.87 $ 357.68 $ 346.53 $ 342.93 $ 313.06 $ 307.19 Note: See the Demographic Statistics Schedule for detail information on personal income and population. Source: Notes to the Financial Statements, Note 10 1 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; 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. 163 County of San Luis Obispo Legal Debt Margin Information Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Assessed Value of Property (a) $ 42,037,909 $ 41,340,430 $ 41,796,283 $ 43,059,945 $ 45,426,163 $48,172,375 $50,647,598 $53,415,961 $56,262,663 $59,450,048 Debt Limit, 1.25% of Assessed Value 525,474 516,755 522,454 538,249 567,827 602,155 633,095 667,700 703,283 743,126 Amount of Debt Applicable to Limit General Obligation Bonds (b) 11,888 11,317 10,905 10,489 10,057 9,606 9,140 8,658 7,485 7,025 Less: Resources Restricted to Paying Principal - - - - - - - - - - Total Debt Applicable 11,888 11,317 10,905 10,489 10,057 9,606 9,140 8,658 7,485 7,025 Legal Debt Margin $ 513,586 $ 505,438 $ 511,549 $ 527,760 $ 557,770 $ 592,549 $ 623,955 $ 659,042 $ 695,798 $ 736,101 Total Debt Applicable as a Percentage of the Debt Limit 2.26% 2.19% 2.09% 1.95% 1.77% 1.60% 1.44% 1.30% 1.06% 0.95% Source: (a) Countywide Assessed Values & Exemptions (b) Footnote 10 Bonded Indebtedness and Long-Term Debt 164 County of San Luis Obispo Demographic and Economic Statistics Last Ten Fiscal Years (UNAUDITED) Personal Income Per Unemployment Calendar Population (in thousands) Capita Income Median Age School Enrollment Rate Year (1,a) (1,a) (1,a) (4,c) (3,b,d) (2,e) 2011 270,966 10,966,438 40,322 40.30 44,104 9.9 2012 271,483 12,008,355 43,698 39.20 43,022 8.5 2013 272,177 12,547,278 45,388 39.50 42,600 6.4 2014 272,357 12,823,005 45,947 39.50 42,911 5.3 2015 274,293 14,034,209 49,873 39.30 41,853 4.4 2016 277,977 14,552,207 51,442 39.00 43,117 4.5 2017 279,210 14,937,322 53,006 38.80 43,112 3.6 2018 280,048 15,700,229 55,580 39.60 42,713 3.2 2019 280,101 16,465,164 58,108 39.60 42,673 2.9 2020 283,111 17,270,828 61,004 40.00 42,556 11.5 Sources: 1. Bureau of Economic Analysis 2. Employment Development Department, Research Division, Los Angeles 3. California Department of Education & California Community Colleges Chancellor's Office 4. U.S. Census Bureau Notes: a. Data for prior calendar years b. Data includes kindergarten through grade 12 and Cuesta College c. Calendar year 2012 - 2016 figures are projections based on the American Community Survey 5-Year Estimates d. Data for school year ending in the stated calendar year e. Data as of June 30, 2020 165 County of San Luis Obispo Principal Employers Current Year and Ten Years Ago (UNAUDITED) 2020 2011 Number of Percentage of Total Number of Percentage of Total Employer Employees Rank County Employment Employees Rank County Employment Cal Poly State University, SLO 3,000 1 2.26% 2,426 1 1.76% County of San Luis Obispo 2,920 2 2.20% 2,601 1 1.88% Atascadero State Hospital 2,000 3 1.50% 2,200 3 1.59% Pacific Gas and Electric Company 1,866 4 1.40% 1,719 5 1.25% California Men's Colony 1,517 5 1.14% 1,768 4 1.28% Cal Poly Corporation 1,400 6 1.05% - - - Tenet Healthcare 1,305 7 0.98% 1,409 6 1.02% Compass Health Inc 1,200 8 0.90% - - - Lucia Mar Unified School District 1,000 9 0.75% 1,100 7 0.80% Paso Robles Public Schools 935 10 0.70% 831 9 0.60% San Luis Coastal Unified School District - - - 828 10 0.60% King Ventures - - - 850 8 - Total Employment Labor Force 132,900 138,000 Sources: 1. SLO Chamber of Commerce 2. State of California Employment Development Department 3. 2010-2011 San Luis Obispo County CAFR 166 County of San Luis Obispo Full Time Equivalent County Government Employees by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18* 2018-19* 2019-20* General Government 442.75 437.50 438.25 430.75 436.75 440.50 430.75 437.50 441.00 455.25 Public Protection 783.25 808.25 812.00 817.25 832.25 848.25 867.00 909.50 912.00 899.75 Public Ways and Facilities 194.25 193.75 193.75 188.75 190.75 207.75 234.75 237.75 246.75 247.75 Health and Sanitation 424.00 430.50 445.25 464.00 485.25 505.50 556.00 536.50 530.00 531.00 Public Assistance 424.75 425.75 428.00 478.00 500.75 524.00 524.00 523.00 522.00 523.50 Education 78.50 77.50 75.50 75.50 75.50 77.50 78.00 77.75 78.00 78.25 Recreation and Cultural Services 56.00 52.00 52.00 55.00 59.00 60.00 61.00 61.00 61.00 61.00 Total 2,403.50 2,425.25 2,444.75 2,509.25 2,580.25 2,663.50 2,751.50 2,783.00 2,790.75 2,796.50 Source: County Budget Report Notes: 2011-2017 Position allocation figures were calculated at the time of budget preparation for the following year. * Position allocation figures are calculated based on the adopted budgets. Figures include limited-term but do not include part-time or contract positions. 167 County of San Luis Obispo Operating Indicators by Function Last Ten Fiscal Years (UNAUDITED) Function / Department 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Recreation and Cultural Services Parks Day Use Passes 51,519 57,135 56,601 42,821 57,564 n/a n/a n/a n/a n/a Daily Passes* n/a n/a n/a 246,727 239,140 189,232 230,915 257,220 60,902 59,194 Annual Passes 1,992 2,357 2,406 2,998 3,137 n/a n/a n/a n/a n/a Annual Vehicle Passes* n/a n/a n/a 8,744 12,584 9,614 6,504 8,066 3,974 1,823 Daily Boat Launches* 15,602 16,133 14,809 26,110 23,706 16,001 16,312 24,340 9,664 11,210 Annual Boat Passes* 618 238 551 1,412 1,245 480 1,383 1,353 1,629 1,288 Public Protection Planning and Building Total Permits Issued 2,073 2,086 2,070 2,622 3,139 3,355 3,927 3,542 3,256 3,299 Number of New Affordable Housing ** 80 39 44 13 151 99 65 133 131 n/a Sheriff Jail bookings 12,682 12,966 13,273 12,583 11,375 11,018 11,774 11,324 10,246 8,144 Average daily population 558 679 717 780 679 603 632 621 636 552 Health and Sanitation Mental Health Day Treatment Days provided to youth in out-of-county group home facilities*** 2,937 1,588 1,885 1,764 1,613 1,381 604 n/a n/a n/a Public Health Percentage of the State allocated caseload enrolled in the Women, Infants & Children (WIC) Program 100 99 99 95 91 86 76 72 68 n/a Percentage of live born infants whose mothers received prenatal care in the first trimester. 79 82 80 79 79 80 78 78 84 86 Public Assistance Social Services Percentage of child abuse/neglect referrals where a response is required within 10 days that were timely 96.8 97.6 98.0 96.1 97.9 97.0 n/a n/a n/a n/a Percentage of child abuse/neglect referrals where a response is required within 10 days and where contact was made within the required period. n/a n/a n/a n/a n/a n/a 91 95 95 94 Education Library Annual number of items circulated per capita 10.0 10.1 10.1 9.8 9.6 10.5 10.3 11.6 12.1 12.1 Annual Expenditure per capita for total Library budget $ 35.35 $ 35.25 $ 34.35 $ 35.50 $ 36.13 $ 36.27 $ 38.10 $ 40.36 $ 40.57 $ 44.47 Public Ways and Facilities Roads Pavement Condition Rating for all County roads (70 = "good") 60 58 60 61 61 65 66 65 65 60 Airport Airport Takeoffs and Landings 80,556 80,158 71,428 66,696 71,001 71,181 71,001 77,917 82,110 68,067 Passenger Enplanements 139,909 134,244 132,315 147,105 149,558 155,744 180,141 226,588 259,481 215,900 Source: County Budget Performance Indicators * In FY 2018-19, the data tracking system was updated to more accurately collect the data. Data prior to FY 2018-19 is not comparable. ** This measure was revised in FY 2017-18 to include homeless set aside units provided and rehab units funded. *** Performance measure deleted in FY 2017-18 due to Continuum of Care Reform effective 1/1/2017. 168 County of San Luis Obispo Capital Asset Statistics by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Recreation and Cultural Services County golf courses 3 3 3 3 3 3 3 3 3 3 Park acreage 13,572 13,424 13,424 13,583 13,583 13,583 13,583 13,583 13,583 13,841 Public Protection Correction facility capacities (a) 689 637 717 797 797 797 909 909 * 909 909 Public Ways and Facilities Miles of county roads 1,332 1,333 1,335 1,336 1,336 1,338 1,338 1,339 1,339 1,349 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 * Fiscal Year 2017-18 facility capacity number restated by Sheriff's Department Source: County departments' management 169