Annual Comprehensive Financial Report, 2022-23

Ann ual Comprehensive Financial Report County of San Luis Obispo, California Fiscal Year Ended June 30, 2023 Prepared under the direction of James W. Hamilton, CPA Auditor-Controller Treasurer-Tax Collector Cover photo from Avila Beach Pier Laura Mullis, Auditor-Controller-Treasurer-Tax Collector’s Office COUNTY OF SAN LUIS OBISPO COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2023 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal.......................................................................................................... 1 Certificate of Achievement for Excellence in Financial Reporting...........................................9 List of Elected and Appointed Officials .............................................................................. 10 Organizational Chart ........................................................................................................ 11 FINANCIAL SECTION Independent Auditors’ Report ........................................................................................... 12 Management’s Discussion and Analysis ............................................................................. 16 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position............................................................................................. 35 Statement of Activities.................................................................................................. 36 Fund Financial Statements: Governmental Funds: Balance Sheet.............................................................................................................. 38 Reconciliation of Governmental Funds Balance Sheet to the Government- Wide Statement of Net Position – Governmental Activities ............................................. 39 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ................................................................................................... 40 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities – Governmental Activities.............................................................................. 41 Proprietary Funds: Statement of Fund Net Position ..................................................................................... 42 Statement of Revenues, Expenses, and Changes in Fund Net Position ............................. 43 Statement of Cash Flows .............................................................................................. 44 Fiduciary Funds: Statement of Fiduciary Net Position ............................................................................... 45 Statement of Changes in Fiduciary Net Position ............................................................. 46 Notes to Basic Financial Statements ...............................................................................47 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Required Supplementary Information Description ..................................................................................................................98 Schedule of the County’s Proportionate Share of the San Luis Obispo County Pension Plan’s Net Pension Liability .............................................................................. 99 Schedule of the County’s Contributions to the San Luis Obispo County Pension Plan ....... 100 Other Post-Employment Benefits (OPEB) Plan Schedule of Changes in the County’s Net OPEB Liability and Related Ratios........................................................... 101 Other Post-Employment Benefits (OPEB) Plan Schedule of Actuarially Determined Plan Contributions and Related Ratios ...................................................... 103 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Comparison - General Fund ............................................................. 104 Notes to Required Supplementary Information............................................................. 106 Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Nonmajor Governmental Fund Descriptions .......................................................... 107 Combining Balance Sheet ..................................................................................... 109 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................... 113 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual Comparison: Capital Projects................................................................................................... 117 Community Development ..................................................................................... 118 Emergency Medical Services ................................................................................ 119 Driving Under the Influence Programs .................................................................. 120 Fish and Game .................................................................................................... 121 Road Impact Fees............................................................................................... 122 Library................................................................................................................ 123 Parks.................................................................................................................. 124 Public Facilities Fees ............................................................................................ 125 Roads................................................................................................................. 126 Solid Waste Management .................................................................................... 127 Wildlife Grazing ................................................................................................... 128 Flood Control Districts ......................................................................................... 129 Lighting Control Districts ...................................................................................... 130 County Service Area Districts ............................................................................... 131 Public Facilities Corporation ................................................................................. 132 Pension Obligation Bonds .................................................................................... 133 SLO County Financing Authority........................................................................... 134 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Nonmajor Enterprise Funds: Nonmajor Enterprise Fund Descriptions................................................................ 135 Combining Statement of Net Position ................................................................... 136 Combining Statement of Revenues, Expenses, and Changes in Net Position ............ 137 Combining Statement of Cash Flows ..................................................................... 138 Internal Service Funds: Internal Service Fund Descriptions ....................................................................... 139 Combining Statement of Net Position ................................................................... 140 Combining Statement of Revenues, Expenses, and Changes in Net Position ............ 141 Combining Statement of Cash Flows ..................................................................... 142 Internal Service Funds – Insurance Funds: Combining Statement of Net Position...................................................... 143 Combining Statement of Revenues, Expenses, and Changes in Net Position ......................................................................................... 144 Combining Statement of Cash Flows....................................................... 145 Fiduciary Funds: Fiduciary Fund Description................................................................................... 146 Custodial Funds: Combining Statement of Fiduciary Net Position........................................ 147 Combining Statement of Changes in Fiduciary Net Position ...................... 148 Investment Trust Funds: Combining Statement of Fiduciary Net Position........................................ 149 Combining Statement of Changes in Fiduciary Net Position ...................... 150 General Fund - Detail Budgetary Comparison Schedules: Detail Schedule of Expenditures – Budget to Actual Comparison ............................ 151 The accompanying notes are an integral part of these financial statements. STATISTICAL SECTION (UNAUDITED) Statistical Section Table of Contents ..............................................................................159 Net Position by Component ...........................................................................................160 Changes in Net Position ................................................................................................161 Fund Balances, Governmental Funds .............................................................................163 Changes in Fund Balances, Governmental Funds ............................................................164 Assessed Valuation.......................................................................................................165 Direct and Overlapping Property Tax Rates ....................................................................166 Principal Property Taxpayers .........................................................................................167 Property Tax Levies and Collections ...............................................................................168 Special Assessment Billings and Collections ....................................................................169 Ratios of Total Debt Outstanding ...................................................................................170 Ratios of General Bonded Debt Outstanding ...................................................................171 Legal Debt Margin Information ......................................................................................172 Demographic and Economic Statistics ............................................................................173 Principal Employers ......................................................................................................174 Full Time Equivalent County Government Employees by Function ....................................175 Operating Indicators by Function ...................................................................................176 Capital Asset Statistics by Function ................................................................................177 The accompanying notes are an integral part of these financial statements. ________________________________________________________________ INTRODUCTORY SECTION ________________________________________________________________ COUNTY OF SAN LUIS OBISPO Office of James W. Hamilton, CPA Auditor-Controller Treasurer-Tax Collector Public Administrator Michael Stevens, Deputy Justin Cooley, Deputy December 12, 2023 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 Annual Comprehensive Financial Report of the County of San Luis Obispo (County) for the fiscal year ended June 30, 2023, 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, 2023, 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, 2023, are fairly presented and in conformity 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 are 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. 1 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 covers approximately 3,300 square miles and serves a population of 282,013 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. 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 the County Administrative Officer’s recommendation. Public hearings are set in the month of June, with the Board of Supervisors adopting the recommended 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 the same budget unit with the approval of the County Administrative Officer and Auditor-Controller-Treasurer-Tax Collector. Transfers of appropriations between budget units or increases in the budget from new revenue sources, reserves and/or contingencies require the 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 Annual Comprehensive 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 has one discretely presented component unit and one fiduciary component unit. The 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 five, to ensure that every child is healthy and ready to learn in school is discretely presented in the Government-Wide Financial Statements. The fiduciary component unit is the San Luis Obispo County Pension Trust which is an independent trust that administers the San Luis Obispo County Employees Retirement Plan on behalf of the County. The San Luis Obispo County Pension Trust is a fiduciary component unit and is presented in the Fiduciary Fund Financial Statements. 2 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. Employment: Unemployment in the County, as of September 2023, was 3.6% which is lower than both the state rate of 4.7% and the national rate of 3.8%. During the same period last year, unemployment in the County was 2.5%. San Luis Obispo County gained 4,200 jobs over the past year and ranks as the 8th lowest unemployment rate in the state. The State of California has a major presence in the County of San Luis Obispo with California Men’s Colony, Atascadero State Hospital, and the California Polytechnic State University, making the State one of the largest employers in the County. Wages: Average income increased by 1.2% to $57,477 from 2021 to 2022 (most recent data) for the residents of the County of San Luis Obispo whereas average income for the state decreased by 1.5% to $84,436 as reported by the Bureau of Labor Statistics. As reported by the Bureau of Labor Statistics, the highest earning 2022 occupational groups in the area consisted of physicians, psychiatrists, dentists, chief executives, architectural and engineering managers, computer and information systems managers, lawyers, financial managers, nurse practitioners, and pharmacists. 3 Retail Sales and Agriculture: Both retail sales and agriculture continue to be integral part of the County’s economy. Sales and use tax revenue within the unincorporated areas of the County was $15.6 million in FY 2022-23. According to Visit SLO CAL, tourists spent $2.15 billion in the calendar year 2022. The leading sectors for tourism spending were lodging ($765 million), food service ($510 million), retail ($267 million), and recreation ($190 million). Crop values for 2022 reached $1.1 billion, a slight increase of less than one percent over the previous year. The top three commodities by value were strawberries, wine grapes, and cattle and calves. Real Estate and Property Taxes: The County’s median price for a single-family home decreased from $905,000 in June 2022 to $865,000 in June 2023. This is a 4.4% decrease from the prior year. A combination of factors has led to less competition in the housing market in the last year, but the steady, high interest rates are largely responsible for this decline. Discretionary property tax receipts were $161.5 million in FY 2022-23, an increase of 7.5% over the prior year. The total tax levy on secured property, which excludes unsecured property, direct charges, and school bonds, was $661.4 million for FY 2022-23, an increase of 6.8% 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 decreased 29.0% to $3.2 million in FY 2022-23. The property tax delinquency rate increased from 0.9%, in FY 2021-22, to 1.0% in FY 2022-23. 4 Tourism: The scenic coastline, rolling vineyards, and abundance of outdoor activities continues to make San Luis Obispo County a tourist destination. Transient Occupancy Tax (TOT) collections in the unincorporated areas decreased 3.5% in FY 2022-23 to $16.5 million. Annual airline passenger travel at the San Luis Obispo County Airport increased by 24.5% during FY 2022-23, compared to FY 2021-22. The California Mid-State Fair in Paso Robles reported a 0.5% increase in attendance over last year’s fair. Unofficial attendance was estimated at 334,000 people. Long-Term Financial Planning: The FY 2023-24 recommended budget authorized a $838.8 million governmental fund spending level, an increase over the $807.0 million adopted budget for FY 2022-23. 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. This budget includes American Rescue Plan Act funding for multiple high priority projects to address health and safety needs, meet regulatory requirements, and replace aging infrastructure in the County’s water and wastewater systems. In FY 2023-24, the General Fund has $709.0 million appropriated to finance expenditures, including contingencies of $33.5 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, 2023, the General Reserve was $7.0 million. In addition to the General Reserve, reserves exist for building replacement ($51.2 million), automation projects ($21.5 million), and tax-loss mitigation purposes ($59.2 million). Other classifications of General Fund balance are described in Footnote 11. The County was awarded $55 million of Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act of 2021. In FY 2020-21, the County Board of Supervisors adopted broad expenditure categories for the use of the funds based on the US Department of Treasury’s defined eligible uses. As of June 30, 2023, $23.9 million of the funds had been spent to date. County Defined Use Category Allocation Expenditures Public Health $12.0 M $2.8 M Housing and Homeless $6.0 M $2.7 M Business, Childcare, Non-Profit Grants $9.0 M $4.5 M Water, Sewer, and Broadband $13.0 M $0.9 M Restoration of Government Services $15.0 M $13 M Total $55.0 M $23.9 M 5 • Each year a five-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 2023-24 increased 59% from the prior year and are approximately $11 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 had planned to close the plant by fiscal year 2024-25. However, Senate Bill 846, signed into law on September 2, 2022, by Governor Newsom, will allow the plant to operate until 2030, and in November 2023, PG&E submitted a license application to extend the lifetime of the plant by up to 20 years. The future operation of the plant is pending review by the Nuclear Regulatory Commission, but PG&E previously received approval to keep the plant operational during that review. The County will continue to receive its portion of annual installment payments for the economic assistance through FY 2024-25 and the total 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. • 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. • 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 split of pension rate increases between the County and the employees. As of December 31, 2022, approximately 64% of County employees fall under PEPRA. 6 Major Initiatives In December of 2022, a series of atmospheric rivers struck the state of California, bringing powerful winter storms and causing unprecedented damage to personal property, government facilities, and infrastructure throughout the County of San Luis Obispo. The County Emergency Operations Center (EOC) was activated on four separate occasions in early 2023 to support storm response activities, and Federal Disaster Declarations were issued for the storms on January 9, 2023, and March 9 and 10, 2023. As of November 2023, the estimated total cost of damage to the County is $67.6 million. To date, the County has currently requested $40.3 million for public assistance from the Federal Emergency Management Agency (FEMA) and $16 million from the Federal Highway Administration (Cal-Trans). Administrative Office: After multiple public hearings concerning the County’s district map adopted at the end of 2021, County Supervisors approved a settlement agreement with the San Luis Obispo County Citizens for Good Government, the League of Women’s Voters and three other plaintiffs who challenged the validity of the supervisorial district map adopted in December 2021. The settlement agreement was entered into effect as of March 21, 2023, and the previously approved map was repealed and replaced with a new district map by the Board of Supervisors on April 18, 2023. Parks and Recreation: After one year of construction, the County of San Luis Obispo opened the new Nipomo Skate Park on May 6, 2023. Funding for the project came from Parks Public Facility Fees and two grants from California State Parks through the Proposition 68 Parks Bond Act: $456,230 from the Per Capita Grant Program and $1,131,484 from the Regional Park Program. In October 2022, the County Board of Supervisors approved the issuance of bonds by the SLO County Financing Authority for an aggregate amount not to exceed $78.5 million. The bonds will be used to finance the acquisition and construction of a co-located Sheriff and County Fire emergency dispatch facility, a new Probation Department building, and rehabilitation of the Cayucos Veterans Memorial Hall. The Cayucos Veterans Memorial rehabilitation project will also utilize $7 million in grants and donations. 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 Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022. This was the thirty-seventh 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 Annual Comprehensive Financial Report. 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 Annual Comprehensive Financial Report 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. 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, 2022. 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, 2022. This is the seventh consecutive year that the County has earned this award which recognizes the County’s professionalism in preparing an accurate and timely report. 7 Acknowledgments: The preparation of the Annual Comprehensive 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 Rebecca Campbell Auditor-Controller-Treasurer-Tax Collector Acting County Administrative Officer 8 9 COUNTY OF SAN LUIS OBISPO LIST OF ELECTED AND APPOINTED OFFICIALS JUNE 30, 2023 Elected Officials Board of Supervisors Assessor ............................................................................................................................ Tom J. Bordonaro Jr. Auditor-Controller-Treasurer-Tax Collector-Public Administrator ................................................ James W. Hamilton County Clerk-Recorder ...................................................................................................................... Elaina Cano District Attorney .................................................................................................................................... Dan Dow Sheriff-Coroner ............................................................................................................................. Ian Parkinson Appointed Officials Agricultural Commissioner ................................................................................................... Martin Settevendemie Director of Airports ................................................................................................................... Courtney Johnson Behavioral Health Administrator ......................................................................................................... Anne Robin Central Services Director .......................................................................................................... Christopher Lopez Chief Probation Officer .................................................................................................................... Robert Reyes Director of Child Support Services ................................................................................................... Natalie Walter County Administrative Officer (Interim)................................................................................................. John Nilon County Counsel ................................................................................................................................ Rita L. Neal County Fire Chief .............................................................................................................................. John Owens Director of UC Cooperative Extension ........................................................................................... Katherine Soule Director of Groundwater Sustainability ........................................................................................... Blaine T. Reely Health Agency Director ................................................................................................................ Nicholas Drews Human Resources Director ................................................................................................... Tami Douglas-Schatz Director of Information Technology .................................................................................................... Daniel Milei Library Director .................................................................................................................. Christopher Barnickel Director of Parks and Recreation ................................................................................................ Tanya Richardson Director of Planning and Building....................................................................................................... Trevor Keith Public Health Officer ................................................................................................................. Penny Borenstein Director of Public Works .................................................................................................................... John Diodati County Social Services Director ........................................................................................................ Devin Drake Veterans Services Officer ................................................................................................................. Morgan Boyd 10 11 ________________________________________________________________ FINANCIAL SECTION ________________________________________________________________ CliftonLarsonAllen LLP CLAconnect.com INDEPENDENT AUDITORS’ REPORT The Honorable Board of Supervisors County of San Luis Obispo, California Report on the Audit of the Financial Statements Opinions 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 (the County), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. 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, 2023, 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. We did not audit the financial statements of First 5 San Luis Obispo and the San Luis Obispo County Pension Trust which represent the following percentages of assets, net position and revenues/additions of the opinion units shown below as of and for the year ended June 30, 2023: Opinion Unit Assets Net Position Revenues/Additions Discretely Presented Component Unit 100% 100% 100% Aggregate Remaining Fund Information 57% 62% (1%) Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for First 5 San Luis Obispo and the San Luis Obispo County Pension Trust, is based solely on the reports of the other auditors. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the County of San Luis Obispo and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer. 12 The Honorable Board of Supervisors County of San Luis Obispo, California Emphasis of Matter Change in Accounting Principle As discussed in Note 1 to the financial statements, effective July 1, 2022, the County adopted new accounting guidance for subscription-based information technology arrangements (SBITA). The guidance requires entities to recognize a right-to-use subscription asset and corresponding SBITA liability for all SBITAs with terms greater than twelve months. Our opinions are not modified in respect to this matter. Prior Period Adjustment As discussed in Note 19 to the financial statements, a prior period adjustment was recorded for the correction of an error in prior year financial statements. Our opinions are not modified in respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the County of San Luis Obispo’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. 13 The Honorable Board of Supervisors County of San Luis Obispo, California In performing an audit in accordance with GAAS and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 County of San Luis Obispo’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about County of San Luis Obispo’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. 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 be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 and other auditors have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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. 14 The Honorable Board of Supervisors County of San Luis Obispo, California Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County of San Luis Obispo’s basic financial statements. The combining and individual fund statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS by us and other auditors. In our opinion, based on our audit and the report of other auditors, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2023, on our consideration of the County of San Luis Obispo’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County of San Luis Obispo’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering County’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP Roseville, California December 12, 2023 15 ________________________________________________________________ MANAGEMENT’S DISCUSSION AND ANALYSIS ______________________________________________________________ COUNTY OF SAN LUIS OBISPO MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023 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, 2023. 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 35. All amounts, unless otherwise indicated, are expressed in thousands of dollars. FINANCIAL HIGHLIGHTS The assets and deferred outflows of the County exceeded its liabilities and deferred inflows at June 30, 2023, by $1,525,635 (net position). The majority of this amount, $1,522,954 is the net investment in capital assets, while $173,086 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 $170,405 (Table A). The County’s total net position decreased by $12,740, with governmental activities decreasing $16,985 and business-type activities increasing $5,400 (Table B). The $9.1 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, 2023, the County’s governmental activities reported combined ending net position of $1,105,182 a decrease of $16,985 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 a net program income loss of $13,336 before general revenues, contributions and transfers from other funds, a decrease of $31,369 when compared to net program income of $18,033 in the prior year. The majority of the difference relates to increased depreciation expense being recorded in the Airport Fund. Several capital assets belonging to the Airport Fund were either retired or had their useful lives reduced to align with Federal Aviation Administration guidelines. Due to these changes an additional $12.1 million in depreciation expense was recorded. At the end of the fiscal year, the entire $455,399 fund balance of the General Fund was either nonspendable ($6,773), restricted ($24,607), committed ($224,823) or assigned ($199,196). The County issued the 2022 Series A and B Lease Revenue Bonds for $71,615. The issuance will be used to refund the 2012 Series A Certificate of Participation debt and fund capital projects, including construction of a co-located emergency dispatch center, a new office building for the Probation Department, and rehabilitation of the Cayucos Veterans Hall. 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 supplementary information and other information in addition to the basic financial statements. 16 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 35 to 37 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. 17 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-six 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- four 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 and special revenue funds to demonstrate compliance with the budget and can be located in the required supplementary section of the report. Individual budgetary data for each of the 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 38 to 41 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 42 to 44 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 County also discretely presents the San Luis Obispo County Pension Trust which is an independent trust that administers the San Luis Obispo County Employees Retirement Plan on behalf of the County. The San Luis Obispo County Pension Trust is a fiduciary component unit and presented in the Fiduciary Fund Financial Statements. The basic fiduciary fund financial statements can be found on pages 45 to 46 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 47 to 97 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. 18 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The required supplementary information can be found on pages 98 to 106 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 107 to 116 and 135 to 150 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 117 to 134 of this report. Detail budgetary schedules demonstrating legal level of compliance with budgetary control for the General Fund are presented on pages 151 to 158 of this report. Statistical schedules provide financial, revenue capacity, debt capacity, demographic and economic, and operating trend information. These schedules are presented on pages 159 to 177 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 $1,525,635 as detailed in the table below: Table A Statement of Net Position June 30, 2023 (in thousands) June 30, 2023 June 30, 2022 2022‐2023 Total Total Govern‐ Business‐ Primary Govern‐ Business‐ Primary Total mental Type Govern‐ mental Type Govern‐ % Activities Activities ment Activities Activities ment Change Assets: Current assets $ 807,167 $ 181,010 $ 988,177 $ 800,870 $ 171,884 $ 972,754 1.6% Other noncurrent assets 74,215 26,181 100,396 6,637 26,757 33,394 200.6% Capital assets 1,402,161 575,699 1,977,860 1,349,875 590,446 1,940,321 1.9% Total assets 2,283,543 782,890 3,066,433 2,157,382 789,087 2,946,469 4.1% Deferred Outflows of Resources 289,045 6,182 295,227 144,216 4,614 148,830 98.4% Liabilities: Current liabilities 175,037 31,689 206,726 183,415 29,411 212,826 (2.9%) Long‐term liabilities 1,278,764 320,615 1,599,379 866,124 329,871 1,195,995 33.7% Total liabilities 1,453,801 352,304 1,806,105 1,049,539 359,282 1,408,821 28.2% Deferred Inflows of Resources 13,605 16,315 29,920 129,892 18,211 148,103 (79.8%) Net position: Net investment in capital assets 1,229,892 293,062 1,522,954 1,216,907 296,939 1,513,846 0.6% Restricted 173,086 ‐ 173,086 98,489 ‐ 98,489 75.7% Unrestricted (297,796) 127,391 (170,405) (193,229) 119,269 (73,960) 130.4% Total net position $ 1,105,182 $ 420,453 $ 1,525,635 $ 1,122,167 $ 416,208 $ 1,538,375 (0.8%) 19 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Net Position The County’s total net position decreased by $12.7 million, or 0.8%. The total net position decrease was a combination of increased total assets ($120.0 million), increased deferred outflows of resources ($146.4 million), increased total liabilities ($397.3 million), and decreased deferred inflow of resources ($118.6 million). Causes for the changes in each of these categories are detailed below. The overall $120.0 million increase in total assets, or 4.1%, is primarily due to inflows of cash and restricted cash ($88.1 million) and recording of lease assets ($31.7 million). The increase in cash is attributable to the issuance of the 2022 Series A and B Lease Revenue Bonds. This debt issuance increased restricted cash resulting in a net change in restricted cash in governmental activities by $67.1 million. Lease assets increased due to the County’s Department of Social Services entering into a new 35-year lease agreement to rent a 20,000 square foot office building. The County also implemented GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITA), which resulted in $2.8 million of SBITA assets being recorded. The $146.4 million increase, or 98.4%, in deferred outflows of resources was primarily the combination of an increase in deferred pension resources ($141.9 million) and an increase in deferred OPEB resources ($4.7 million). The increases are the combination of the changes in plan assumptions and in projected and actual earnings on plan investments from the prior year. Total liabilities of the County increased $397.3 million, or 28.2%. The main contributor to the increase was the County’s net pension liability. Due to reduced investment assets and changes to actuarial assumptions the net pension liability increased $326.3 million. Additionally, bonds and notes payable increased $45.2 million primarily due to the issuance of the 2022 Series A and B Lease Revenue Bonds. The debt issuance was used to refund the 2012 Certificate of Participation debt and fund the construction of co-located emergency dispatch center, a new probation building, and rehabilitation of the Cayucos Veterans Hall. Lastly, the lease liability increased $33.3 million due to the County’s Department of Social Serviecs entering into a new office building lease. Deferred inflows of resources decreased $118.2 million, or 79.8%. The decrease is primarily due to changes in the net difference between projected and actual earnings on pension plan investments from 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 $1,522,954. 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, and less any construction related payables. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. The remaining $173,086, or 11.3%, 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 $12.7 million. Total net position for governmental activities decreased $17.0 million and total net position for business-type activities increased $4.3 million due to normal operating activities. 20 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Net Investment in Capital Assets for governmental and business-type activities increased a net of $9.1 million. Governmental activities increased $13.0 million. The increase related to road microsurfacing, overlay, and chip seal projects as well as retrofitting the existing bridge on Lopez Drive over Lopez Lake ($1.8 million), reconfiguring of the Avila Beach Dr/Hwy 101 Interchange ($357 thousand) and replacing the existing bridge on Huasna Road over Arroyo Grande Creek ($251 thousand). Other notable governmental activity projects include construction of the Nipomo Skate Park ($2.7 million), continuing construction of the co-located emergency dispatch center ($2.2 million) and rehabilitation of the Cayucos Veterans Hall. Business-type activities net investment decreased $3.9 million primarily due to the Airport Fund adjusting the useful life or retiring several capital assets. Restricted net position represents net position of the County which is subject to constraints imposed by creditors, grantors, contributors, laws, or regulations. Total restricted net position was $173.1 million, a 75.7% increase over the prior year. The increase is primarily attributable to the issuance of the 2022 Series A and B Lease Revenue Bonds. The debt issuance increased restricted net position related to debt service by $72.9 million. The remaining change to net position was the net difference between the General Government, Public Protection, Health and Sanitation, Public Assistance, Public Ways and Facilities, Recreation and Cultural Services, and Education functions ($1.7 million). This change was primarily attributable to variance in purchase obligations, claims, contracts, and enabling legislation from the prior year. There was a decrease of $96.4 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: 21 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table B Statement of Activities For the Year Ended June 30, 2023 (in thousands) June 30, 2023 June 30, 2022 2022‐2023 Govern‐ Business‐ Total Govern‐ Business‐ Total Total mental Type Primary mental Type Primary % Activities Activities Government Activities Activities Government Change Revenues: Program revenues: Charges for services $ 64,978 $ 61,648 $ 126,626 $ 58,805 $ 58,252 $ 117,057 8.2% Operating grants and contributions 368,652 5,622 374,274 325,854 5,846 331,700 12.8% Capital grants and contributions 6,371 963 7,334 12,449 15,106 27,555 (73.4%) General revenues: Property taxes 235,064 4,944 240,008 216,107 4,380 220,487 8.9% Other taxes 37,417 ‐ 37,417 41,804 ‐ 41,804 (10.5%) Interest and investment income 13,395 1,814 15,209 (16,312) (1,333) (17,645) (186.2%) Grants not restricted to specific programs 5,334 ‐ 5,334 9,001 ‐ 9,001 (40.7%) Other revenues 306 5,282 5,588 1,424 1,148 2,572 117.3% Total revenues 731,517 80,273 811,790 649,132 83,399 732,531 10.8% Expenses: General government 37,088 ‐ 37,088 54,592 ‐ 54,592 (32.1%) Public protection 254,728 ‐ 254,728 204,993 ‐ 204,993 24.3% Public ways and facilities 55,375 ‐ 55,375 35,995 ‐ 35,995 53.8% Health and sanitation 152,565 ‐ 152,565 132,713 ‐ 132,713 15.0% Public assistance 201,741 ‐ 201,741 132,751 ‐ 132,751 52.0% Education 15,256 ‐ 15,256 11,930 ‐ 11,930 27.9% Recreation and cultural services 13,754 ‐ 13,754 12,310 ‐ 12,310 11.7% Interest on long‐term debt 11,299 ‐ 11,299 7,947 ‐ 7,947 42.2% Airport ‐ 26,498 26,498 ‐ 11,366 11,366 133.1% Golf ‐ 4,884 4,884 ‐ 4,231 4,231 15.4% State Water Contract ‐ 6,882 6,882 ‐ 5,924 5,924 16.2% Nacimiento Water Contract ‐ 14,170 14,170 ‐ 13,889 13,889 2.0% Lopez Flood Control ‐ 7,708 7,708 ‐ 6,941 6,941 11.1% Lopez Park ‐ ‐ ‐ ‐ ‐ ‐ ‐ General Flood Control ‐ 1,490 1,490 ‐ 1,521 1,521 (2.0%) County Service Areas ‐ 7,340 7,340 ‐ 5,636 5,636 30.2% Los Osos Wastewater ‐ 12,597 12,597 ‐ 11,663 11,663 8.0% Total expenses 741,806 81,569 823,375 593,231 61,171 654,402 25.8% Excess/(deficiency) before transfers (10,289) (1,296) (11,585) 55,901 22,228 78,129 (114.8%) Transfers (6,696) 6,696 ‐ (213) 213 ‐ ‐ Change in net position (16,985) 5,400 (11,585) 55,688 22,441 78,129 (114.8%) Net position ‐beginning of year, as restated 1,122,167 415,053 1,537,220 1,066,479 393,767 1,460,246 5.3% Net position ‐end of year $ 1,105,182 $ 420,453 $ 1,525,635 $ 1,122,167 $ 416,208 $ 1,538,375 (0.8%) 22 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Governmental and Business-type Activities Governmental Activities Governmental Activities decreased the County’s net position by $17.0 million compared to an increase of $55.7 million in the prior year. Overall, total revenues for governmental activities increased $82.4 million, or 12.7%. Significant factors contributing to the overall increase in revenues from the prior year are detailed below: Charges for Services increased $6.2 million, or 10.5%, due to cable, gas & electric, garbage, and petroleum franchise fee revenue increasing a combined 11.5%. Additionally, building permits and plan check revenue increased 27.4%. Total building permits issued for the year were 4,577 which was a 13.5% increase from the prior year, indicating increased housing construction activity in the County. Operating Grants and Contributions increased by $42.8 million, or 13.1%. The County recognized $17.3 million of American Rescue Plan Act (ARPA) revenue in FY 22-23: $8.2 million was spent on restoration of government services; $2.6 million was spent on public health; $2.6 million was spent on housing projects and homeless programs; and $3.0 million was spent on business, childcare, and non-profit grant programs. Total ARPA revenue recognized increased $10.6 million over the prior year. Additionally, Public Assistance revenue increased $13.3 million mainly due to the County receiving Homeless Housing, Assistance and Prevention (HHAP) grant program aid to address immediate homelessness challenges, develop a unified regional response to homelessness, and to continue efforts to end and prevent homelessness in our community. Property Taxes rose $19.0 million, or 8.8% over the prior year, a function of the regular 2% increase in assessed property value allowed by California’s Proposition 13 and increasing property values on new sales. Interest Earnings Not Restricted to Specific Programs increased $29.7 million primarily due to increased rates of return on County Treasury investments. Overall, total expenses for governmental activities increased $148.6 million, or 25.0%. Notable factors contributing to the overall increase in expenses from the prior year are detailed below: Changes to the County’s pension liability caused the largest increase in governmental activities expenses. The total increase in expenses caused by changes in net pension liability, deferred outflows, and deferred inflows was $55.1 million. The General Government increase was $9.4 million, the Public Protection increase was $28.5 million, the Health and Sanitation increase was $11.3 million, the Public Assistance increase was $15.2 million, and the Education increase was $2.1 million. Public Protection expenses increased $49.7 million, or 24.3%. Payments to local cities and community services districts funded through the Integrated Regional Water Management program totaled $2.3 million. These funds are to improve regional water self-reliance security and adapt to effects on water supply arising out of climate change. Additionally, negotiated salary increases across the function were $9.5 million and contracted fire services increased $4.2 million. Public Ways and Facilities expenses increased $19.4 million, or 53.8%. Rainstorms occurring between December 2022 and March 2023 caused unprecedented damage to County roads and other infrastructure. The increase in expenses related to repair costs caused by the storms. Public Assistance expenses increased $69.0 million, or 52.0%. Support services for housing and homeless programs as well as in-home support services both increased over the prior year. Professional services for the Department of Social Services increased $2.4 million and professional services for Law Enforcement Medical Care increased $1.7 million. Recreation and Cultural Services expenses increased $1.4 million, or 11.7%. The increase related to construction costs of the Nipomo Skate Park. 23 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) For FY 2022-23, 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. Business-type Activities Business-type activities increased the County’s net position by $5.4 million compared to an increase of $22.4 million in the previous year. Expenses exceeding revenues by $1.3 million, and net transfers of $6.7 million resulted in the total increase to net position. Key elements of current year business-type activity are as follows: Total revenue decreased $3.1 million, or 3.7% from the preceding year. Total Airport revenue decreased $10.1 million. The decrease was related the Airport Fund receiving federal aid in fiscal year 2021-22 of $12.3 million for the rehabilitation of the San Luis Obispo County Airport runway. Passenger enplanements increased 23.5% over the prior year which led to increased revenue for fuel flowage, ground transportation, parking fees, landing fees, passenger facility charges, and customer facility. Revenue for Fees, Fines, and Charges for Services increased $2.4 million from fiscal year 2021-22. The Nacimiento Water Contract Fund revenue decreased $1.1 million due to reduced water sales revenue. County Service Area Fund revenue increased $761 thousand due to increased water sales revenue. Expenses for business-type activities increased $20.4 million, or 33.3% from the prior year. Total Airport expenses increased $15.1 million. The majority of the difference relates to increased depreciation expense being recorded as several capital assets belonging to the Airport Fund were either retired or had their useful lives reduced to align with Federal Aviation Administration guidelines. Due to these changes an additional $12.1 million in depreciation expense was recorded. County Service Area Fund expenses increased $1.7 million due to increased operational costs to provide water services. 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, $6,782, increased $118 thousand, or 1.8% 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 $121, (2) prepaid items of $743, and (3) long-term receivables of $5,918. The increase from the prior year primarily relates to additional prepaid rent payments. Restricted fund balance, $154,279, increased $73.7 million, or 91.5%, 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 $3,990 (2) public protection programs of $11,253, (3) Mental Health Services Act funds of $2,774, (4) public facilities funds of $13,862, (5) traffic impact programs of $12,166, (6) automation projects of $2,344, and (7) debt service of $95,930. The increase is attributable to additional restricted cash for the 2022 Lease Revenue Bonds Series A and B issuance proceeds. 24 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Committed fund balance, $311,551, increased $816 thousand, or 0.3%, 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, $13,209, (2) tax reduction reserve, $59,160, (3) automation projects, $21,452, (4) roads, $20,010, (5) building replacement, $51,208, (6) solar plant mitigation, $15,640, (7) capital projects, $17,281, (8) SB 1090 economic development, $10,890 and (9) COVID-19 services, $5,529. The increase from the prior year was the combination of increased building replacement ($4.1 million) and tax reduction reserve commitments ($16.8 million) and decreased COVID-19 services commitments ($12.2 million) and general reserves ($6.0 million). Assigned fund balance, $199,196, increased $9.2 million, or 4.8%, 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, $22,431, (2) tax reduction reserve, $29,015, (3) general government, $8,621, (4) social services programs, $30,633, and (5) subsequent fiscal year budget, $50,788. The largest changes in the assigned fund balance category were increases to tax reductions reserves, public protection programs, and public assistance programs. As of the end of the current fiscal year, the County’s governmental funds reported combined ending fund balance of $671,808, an increase of 14.2%, or $83.8 million in comparison with the prior year. Approximately 76.0% of the total fund balance, or $510,747 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 (restricted, committed, and assigned) of the General Fund was $448,626 while total fund balance reached $455,399. 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 $638.7 million. Spendable fund balance represents 70.2% of the total fund expenditures, while total fund balance represents 71.3% of the same amount, a 5.7% decrease from the prior year. During the current fiscal year, the fund balance of the General Fund increased by $18.5 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 $23.8 million, which was a $14.6 million decrease from the prior year. General Fund revenues increased $56.4 million, or 9.3% over the prior year. The fund saw increases in every revenue category but the largest increases from the prior year were to taxes ($8.2 million), use of money and property ($21.0 million), and aid from other governments ($21.4 million). Increases in tax revenues was due to increases in assessed property values, resulting in increased property tax revenue. The increase in the use of money and property revenue resulted from rising interest rate returns on Treasury investments. The increase in governmental aid was due to the County recognizing $17.3 million in American Rescue Plan Act (ARPA), a $10.6 million increase in ARPA recognized revenue from the prior fiscal year. Additionally, the County recognized $2.9 million in FEMA claim reimbursement associated with COVID-19 expenditures and received $4.5 million in additional federal aid for welfare administration. Total expenditure in the General Fund increased $71.0 million, or 12.5%, from the prior year. The primary expenditure functions contributing to the increase were General Government, $11.5 million, Public Protection, $16.7 million, and Public Assistance, $55.4 million. These increases were offset by a decrease in Health and Sanitation expenditures of $17.7 million. The increase in General Government was primarily due to negotiated salary increases and payments to other agencies for ARPA program grants and a housing and homeless project grant. The increase in Public Protection expenditure was due to negotiated salary increase and additional costs associated with the County’s contract with Cal- Fire for fire protection services. The increase to Public Assistance is mainly due to the Department of Social Services entering into a new 35-year agreement for a 20,000 square foot office building and the decrease to Health and Sanitation was the recognition of lease agreements in the prior year. 25 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 $17.6 million. Capital outlay expenditures exceeded revenues by $10.1 million and net transfers totaled $9.3 million. The combination of these two factors resulted in a $738 thousand decrease in fund balance for the current year. Funding for specific projects comes primarily from the use of designations, public facilities fees, issuance of long-term debt, and aid from other government agencies. The General Fund transferred $4.7 million to the Capital Projects Fund for various capital projects including $1.4 million for roof renovations and $702 thousand for the Cuesta Peak communications tower. The Public Facilities Corporation Debt Service Fund transferred in $1.4 million of debt proceeds to offset construction costs for the new Animal Services Facility, co-located emergency dispatch center, Cayucos Veterans Hall rehabilitation, and new Probation Department office building. 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 $752.2 million in the current fiscal year, an increase of approximately 11.3%, or $76.3 million, from the prior fiscal year revenues of $675.9 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, 2023 (in thousands) 2022‐2023 2021‐2022 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount Change Revenues by Source: Taxes $ 270,790 36.0% $ 261,163 38.6% $ 9,627 3.7% Licenses, Permits, and Franchises 15,478 2.1% 12,597 1.9% 2,881 22.9% Fines, Forfeitures, and Penalties 4,297 0.6% 4,304 0.6% (7) (0.2%) Use of Money and Property 13,346 1.8% (14,773) (2.2%) 28,119 (190.3%) Aid from Governmental Agencies 378,339 50.2% 350,382 51.8% 27,957 8.0% Charges for Current Services 55,512 7.4% 49,498 7.4% 6,014 12.1% Other Revenues 14,429 1.9% 12,734 1.9% 1,695 13.3% Total $ 752,191 100.0% $ 675,905 100.0% $ 76,286 11.3% The following provides an explanation of revenues by source that changed significantly over the prior year in the governmental funds. Taxes increased $9.6 million, or 3.7% primarily due to the regular 2% increase in assessed property value allowed by California’s Proposition 13. Licenses, Permits, and Franchises increased slightly by $2.9 million, or 22.9%, over the prior year. This is largely due to a $1.5 million increase in revenue associated with permits for mechanical, electric, and plumbing. There were also large increases in franchise fee revenue for gas and electric as well as plot plans revenue. The remaining change was associated with various departmental fee revenue. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Use of Money and Property increased $28.1 million over the prior year. This increase is primarily due to investment interest earnings exceeding any changes in the fair market value of investments. Aid from Governmental Agencies increased $28.0 million, or 8.0%. The County received $5 million more in state aid and $22.6 million more in federal aid. Increased state aid was primarily for veteran’s affairs and waterway management programs, as well as state awarded grants. The increase in federal aid was primarily due to an increase in State and Local Fiscal Recovery Funds (SLFRF) that were received to respond to the COVID-19 Public Health emergency and to deal with negative economic impacts locally. There was also an increase in federal welfare administration revenue and federal pass-through grants. Charges for Services increased $6.0 million, or 12.1%. This increase is due to increased payments from other funds for debt services, capital assets, and other interfund services. The increase is also from increased payments from other various services. Governmental Fund Expenditures Expenditures for all governmental funds combined totaled $764.8 million in the current fiscal year an increase of approximately 14.4%, or $96.4 million, from the prior fiscal year expenditures of $668.4 million. The following table presents expenditures by function for Governmental Funds, as well as the increase or decrease from the prior year. Table D Expenditures by Function Including Capital Outlay Governmental Funds Fund Financial Statements For the Year Ended June 30, 2023 (in thousands) 2022‐2023 2021‐2022 Increase/(Decrease) Percent Percent Percent Amount of Total Amount of Total Amount Change Expenditures by Function: General Government $ 75,027 9.8% $ 63,569 9.5% $ 11,458 18.0% Public Protection 233,444 30.4% 212,388 31.6% 21,056 9.9% Public Ways and Facilities 58,016 7.6% 39,124 5.9% 18,892 48.3% Health and Sanitation 140,568 18.4% 157,490 23.6% (16,922) (10.7%) Public Assistance 188,616 24.7% 133,275 19.9% 55,341 41.5% Education 14,199 1.9% 15,712 2.4% (1,513) (9.6%) Recreation and Cultural Services 16,685 2.2% 12,420 1.9% 4,265 34.3% Principal payments 13,067 1.7% 9,137 1.4% 3,930 43.0% Interest on Long‐Term Debt 10,581 1.4% 7,895 1.2% 2,686 34.1% Capital outlay 14,563 1.9% 17,376 2.6% (2,813) (16.2%) Total $ 764,766 100.0% $ 668,386 100.0% $ 96,380 14.4% The following provides an explanation of the expenditures by function that changed significantly over the prior year. General Government increased $11.5 million, or 18.0%, primarily due to salary and wage increases. An additional $2.1 million in expenditure was also recorded for SBITA agreements. These SBITA agreements began being recorded with the implementation of GASB Statement No. 96, SBITA, in FY 2022-23. $3.1 million was also paid to external agencies, related to State and Local Fiscal Recovery Funds (SLFRF). Public Protection increased $21.1 million, or 9.9%, primarily due to salary and wage increases and increased costs associated with the County’s contract with Cal-Fire for fire protection services. An additional $2.3 million in expenditure was related to Integrated Regional Water Management (IRWM) payments. 27 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Public Ways and Facilities expenditures increased $18.9 million, or 48.3%. Expenditures primarily consist of various road improvement projects. The increase in expenditure is largely related to repairing roads that were damaged during the year from two large storms that had federal emergency declarations. Health and Sanitation expenditures decreased $16.9 million, or 10.7%. This is mainly due to Health Agency lease agreements that were recorded in the prior year due to the implementation of GASB Statement No. 87. Public Assistance expenditure increased $55.3 million, or 41.5%. Of which, $36.8 million is related to a new Social Services Department office building lease agreement. Additionally, support services for housing and homeless programs as well as in-home support services both increased over the prior year. Professional services for the Department of Social Services increased $2.4 million and professional services for Law Enforcement Medical Care increased $1.7 million. 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 2022-23 fiscal year. Table E Statement of Revenues, Expenses and Results of Operations Proprietary Funds Fund Financial Statements For the Year Ended June 30, 2023 (in thousands) Nonmajor Major Funds Funds Total Nacimiento State Other Water Water Los Osos Enterprise Total Airport Contract Project Wastewater Funds Enterprise Operating revenues $ 11,809 $ 20,296 $ 7,829 $ 7,431 $ 19,612 $ 66,977 Operating expenses 26,091 7,581 6,832 9,174 20,183 69,861 Operating income (loss) (14,282) 12,715 997 (1,743) (571) (2,884) Non‐operating revenues (expenses), net 5,813 (5,814) 2,980 (3,218) 1,443 1,204 Net income (loss) before contributions and transfers (8,469) 6,901 3,977 (4,961) 872 (1,680) Contributions and transfers, net (302) ‐ 6,281 1,129 551 7,659 Change in net position $ (8,771) $ 6,901 $ 10,258 $ (3,832) $ 1,423 $ 5,979 28 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 $14.3 million, a $12.3 million increase from the prior year’s operating loss of $2.0 million. Operating revenues increased by $2.4 million compared to the prior year, indicating strong demand for commercial passenger travel. Total passenger enplanement activity increased 23.7% over the prior year. Additionally, revenue for rents, concessions, and parking all increased over the prior year. The primary cause of the increase in operating loss was due to increased depreciation expense. Several capital assets either had their useful life reduced or were retired resulting in increased depreciation expense being recorded. Net position decreased by $8.8 million compared to an increase in net position of $15.4 million in the prior year. The Nacimiento Water Contract Fund realized operating income of $12.7 million, a $2.5 million increase from the prior year’s operating income of $10.2 million. The increase is primarily attributable to the receipt of a $4.7 million settlement for leak repairs to the Nacimiento water pipeline. The overall increase to operating income was partially reduced by decreased water sales of $1.1 million and increased operating and maintenance costs of $477 thousand. Overall net position increased $6.9 million compared to an increase in net position of $3.6 million in the prior year. The State Water Project Fund realized operating income of $1.0 million, a $400 thousand decrease from the prior year’s operating income of $1.4 million. While water sales increased $608 thousand, operating expenses also increased $943 thousand. The fund also received a $6.3 million transfer from the Flood Control Zone Special Revenue Fund for the sale of the unallocated portion of the Flood Control District’s State Water from 2008 to 2014. Overall, net position increased by $10.3 million, which is an increase of $6.4 million over the prior year. The Los Osos Wastewater Fund reported an operating loss of $1.7 million, an increase of $647 thousand when compared to the prior year’s operating loss of $1.1 million. The wastewater plant began full-service operations in FY 2016-17. While operating revenues remained relatively similar to the prior year, operating expenses to operate and maintain the plant increased $939 thousand. Overall net position decreased $3.8 million, which is $2.1 million more than the prior year’s decrease to net position of $1.8 million. GENERAL FUND BUDGETARY HIGHLIGHTS The original budget for expenditures and transfers out increased by $120.6 million, or 18.2%, during the year, leading to the final amended budget. This increase was funded by increases to both budgeted revenues and transfers-in ($73.0 million) and the uses of reserves and designations for the balance. Unanticipated revenues totaling $67.2 million in State, Federal, and Other Governmental Aid, $3.4 million in Other Revenue, $762 thousand in Interfund Revenues, $670 thousand in Charges for Current Services, $500 thousand in Licenses, Permits, and Franchises, $296 thousand in Fines, Forfeitures, and Penalties, and $162 thousand in Other Financing Sources financed the budget augmentations. General Government function augmentations of $58.2 million consisted of $15.3 million in American Rescue Plan Act (ARPA) augmentations, $17.2 million in augmentations toward capital projects and maintenance and upgrades to County facilities, $7.3 million in augmentations in payments to other agencies, and the remaining augmentations went to various General Fund departments for salaries and benefits and services and supplies. Public Protection function augmentations of $23.0 million were primarily divided among Sheriff-Coroner program augmentations of $7.4 million, County Fire which received $7.9 million in augmentations, Planning and Building program augmentations of $3.2 million, Office of Emergency Services program augmentations of $1.5 million, Probation program augmentations of $1.2 million, Waste Management program augmentations of $718 thousand, District Attorney program augmentations of $648 thousand, and the remaining smaller augmentations were for the Public Defender, Animal Services, and Agricultural Commissioner’s programs. Health and Sanitation function augmentations of $15.1 million were divided between Public Health program augmentations of $8.1 million and Behavioral Health program augmentations of $7.0 million. The $17.7 million increase in the Public Assistance function relates almost entirely to Social Services including CalWORKS assistance, law enforcement medical care and veteran services’ programs. Recreation augmentations totaling $4.3 million were primarily for Parks related capital projects. Public Ways and Facilities augmentations of $2.3 million were primarily for Development Services and Groundwater Sustainability payments. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) At the close of the fiscal year, actual General Fund expenditures were 81.9% of the current budget, while General Fund revenues were realized at 92.0% of budget. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets On June 30, 2023, the County had $2.0 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, water and sewer lines, and intangible right-to-use assets (see Table F). This amount represents a net increase (including additions and deductions) of $37.5 million, or 1.9%, from last year. Table F Capital Assets June 30, 2023 (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 2022 2023 2022 2023 2022 2023 Change Land $ 796,039 $ 796,050 $ 36,718 $ 36,718 $ 832,757 $ 832,768 0.0% Water Rights ‐ ‐ 68,244 72,319 68,244 72,319 6.0% Other Property Non‐Depreciable ‐ ‐ 1,968 1,968 1,968 1,968 ‐ Construction‐in‐ progress 67,532 65,871 3,489 4,974 71,021 70,845 (0.2%) Structures & Improvements 281,671 312,615 225,568 228,663 507,239 541,278 6.7% Equipment 108,959 112,616 11,134 12,629 120,093 125,245 4.3% Other Property Depreciable 1,258 1,258 554 554 1,812 1,812 ‐ Infrastructure Depreciable 457,561 465,617 385,272 385,317 842,833 850,934 1.0% Lease Assets 95,938 134,513 336 336 96,274 134,849 40.1% Subscription Assets ‐ 5,104 ‐ 297 ‐ 5,401 100.0% Subtotal 1,808,958 1,893,644 733,283 743,775 2,542,241 2,637,419 3.7% Less Accumulated Depreciation (454,095) (477,254) (142,750) (167,800) (596,845) (645,054) 8.1% Less Accumulated Amortization (4,988) (14,229) (87) (276) (5,075) (14,505) 185.8% Total $ 1,349,875 $ 1,402,161 $ 590,446 $ 575,699 $ 1,940,321 $ 1,977,860 1.9% The County implemented GASB Statement No. 96 and began reporting right-to-use subscription-based IT assets ($5.4 million) and accumulated amortization. The assets represent the County’s right-to-use underlying information technology software, alone or in combination with tangible capital assets, of software vendors. 30 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Major additions and future commitments in capital assets - Governmental Activities County Roads had the majority of additions in governmental activities with $14.2 million worth of assets. Microsurfacing, overlay, and chip seal projects throughout the County comprised most of the road additions. Other major roads projects include retrofitting the existing bridge on Lopez Drive over Lopez Lake ($1.8 million), reconfiguring of the Avila Beach Dr/Hwy 101 Interchange to reduce traffic delays ($357 thousand), replacing the existing bridge on Huasna Road over Arroyo Grande Creek ($251 thousand), and replacing Jack Creek Road Bridge in Templeton ($254 thousand). Other notable capital asset additions during fiscal year 2022-23 include construction of the Nipomo Skate Park ($2.7 million), continued construction of the co-located emergency dispatch project ($2.2 million), rehabilitation of the Cayucos Veterans Hall ($1.8 million), and migration to the CalMHSA (Mental Health Services Act) statewide electronic health record system ($1.5 million). Major additions and future commitments in capital assets - Business-type Activities The Airport completed work on resurfacing of the taxiway and apron ($4.6 million) and also purchased an aircraft rescue fire fighting crash truck to assist in rescue situations ($1.1 million). 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, bonds, and leases payable of $640.1 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 fiscal year 2022-23 was $79.5 million. The pension obligation bonds debt service payments are funded by County payroll benefits. The remainder of the County’s debt consists of $22.6 million in certificates of participation, which are repaid from a variety of revenues; $82.1 million in state and other loans; $69.7 million in assessment bonds, of which, $69.4 million related to the Los Osos Wastewater Project; $152.4 million in revenue bonds which are repaid with water service revenue; $126.5 million in lease agreements, $2.8 million in subscription-based IT arrangements, and $98.4 million in lease revenue bonds for debt refunding and construction of multiple capital projects, including an animal services facility, a co-located emergency dispatch center, a new probation building, and rehabilitation of the Cayucos Veterans Hall. General Obligation Bonds totaling $5.9 million are backed by the full faith and credit of the County. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table G Outstanding Debt June 30, 2023 (in thousands) Business‐ Business‐ Govern‐ Govern‐ Type Type mental mental Activities Activities Total Total Total Activities Activities June 30, June 30, June 30, June 30, Percent June 30, 2022 June 30, 2023 2022 2023 2022 2023 Change Certificates of Participation $ 10,657 $ 3,205 $ 9,409 $ 6,120 $ 20,066 $ 9,325 (53.5%) Certificates of Participation from Direct Borrowings 8,163 7,973 5,455 5,351 13,618 13,324 (2.2%) Pension Obligation Bonds 85,112 79,516 ‐ ‐ 85,112 79,516 (6.6%) State Notes from Direct Borrowings 1,426 1,264 84,528 80,701 85,954 81,965 (4.6%) Other Notes from Direct Borrowings ‐ ‐ 196 166 196 166 (15.3%) Lease Revenue Bonds 23,032 96,775 ‐ 1,639 23,032 98,414 327.3% Revenue Bonds ‐ ‐ 157,815 152,400 157,815 152,400 (3.4%) General Obligation Bonds ‐ ‐ 6,538 5,942 6,538 5,942 (9.1%) Assessment Bonds 344 294 70,978 69,437 71,322 69,731 (2.2%) Leases 92,248 126,334 250 164 92,498 126,498 36.8% SBITA ‐ 2,614 ‐ 199 ‐ 2,813 100.0% Total $ 220,982 $ 317,975 $ 335,169 $ 322,119 $ 556,151 $ 640,094 15.1% The increase from the prior year for the County’s certificates of participation, notes, bonds, and leases payable was $83.9 million, or 15.1%. During the fiscal year, the County issued the 2022 Series A and B Lease Revenue Bonds. The issuance will be used to fund capital projects as well as refund the 2012 Series A Certificate of Participation debt. The County’s liability for leases increased $34.0 million mainly due to the Department of Social Services entering into a new 35-year agreement for a 20,000 square foot office building. Additionally, the County implemented GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITA), which added $2.8 million in liabilities. Overall, total debt payments made in FY 2022-23 were $27.1 million. Detailed debt information can be found in Note 10. 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 $854.6 million. Other liabilities include compensated absences of $37.0 million for governmental activities and $579 thousand for business-type activities; landfill post-closure costs of $8.7 million; and a self-insurance liability of $23.5 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. 32 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) 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 2022-23 budget. The County has received various COVID-19 funding awards to support specific programs and to address issues related to the pandemic (including direct response). Significant awards and allocations include: $55.0 million in American Rescue Plan Act (ARPA) funds. Through June 30, 2023, $23.9 million has been spent, with $13.0 million being used towards restoration of government services, $4.5 million being used for business, childcare, and non-profit grants, $2.8 million for public health programs, $2.7 million used for housing and homeless services, and $900 thousand being used for water, sewer, and broadband projects. $28.3 million in Coronavirus Relief Funds through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. $8.1 million of Federal Emergency Management Agency (FEMA) expense reimbursement from the beginning of the pandemic through FY 2022-23. As a political subdivision of the State, County operations and budget are impacted by State issues and policies at the State level. As we develop the County’s FY 2023-24 budget, we are mindful of several issues at the State level that are likely to have impacts on local budgets. The Governor released his January 10, 2023, Proposed FY 2023-24 State Budget with expenditures totaling $297 billion and a $22.5 billion budget deficit. On January 13, 2023, the State’s Legislative Analyst’s Office (LAO) released a report on the Overview of the Governor’s FY 2023-24 Budget. In the report, the LAO stated, “The Governor’s budget also includes estimates of multiyear revenues and spending. Under those projections, and the Governor’s budget proposals, the State faces operating deficits of $9 billion in 2024-25, $9 billion in 2025-26, and $4 billion in 2026-27. These figures represent future budget problems. That is, if the Governor’s Budget projections are accurate, the State would have to address deficits of these amounts in each of these future years.” The LAO provided an update on February 15, 2023, reporting that it estimates that State revenues will likely be $10 billion lower for FY 2022-23 and FY 2023-24, and that the Governor’s Budget was likely unaffordable in future years. The County receives 39 percent of its General Fund Revenue from the State. Therefore, we are and will continue to be mindful of the State’s fiscal challenges and the consequential impacts on the County. The County is home to PG&E’s Diablo Canyon Nuclear Power Plant (Diablo Canyon), which produces enough energy to meet the needs of more than 3 million northern and central Californians. The plant was expected to close in 2025, however, Senate Bill 846, allows the plant to operate until 2030, and in November 2023, PG&E submitted a license application to extend the lifetime of the plant by up to 20 years. The future operation of the plant is pending review by the Nuclear Regulatory Commission, but PG&E previously received approval to keep the plant operational during that review. 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 which provide sales tax, as well as general economic benefits to the community. The reduction in unitary taxes from Diablo Canyon was expected to occur gradually as the assessed value of the plant declines leading up to the 33 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) original closure in 2025. To lessen the effects, in part, of lost tax revenue associated with Diablo Canyon’s closure Senate Bill 1090 was passed in September 2018 and approved the payment of $85 million by PG&E to the community. The County began receiving payment of its $34.9 million portion in FY 2018-19 and will continue to receive payments through FY 2024-25. Local economic indicators: Sales tax revenue for the unincorporated areas was $15.6 million, compared to $18.8 million in the prior year. County assessed property tax valuations increased from $64.3 million to $68.4 million, or 6.4%. Transient Occupancy Tax collections were $16.5 million, a 3.5% decrease from FY 2021-22. The Board of Supervisors adopted the FY 2023-24 budget in June 2023, with a $122.5 million fund balance in the General Fund, of which $50.8 million was appropriated to finance the current year’s expenditures including contingencies. $7.0 million was placed in general reserves, and $61.5 million was earmarked for designations. The total General Fund budget for FY 2023-24 is $713.7 million, a 6.2% 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 34 ________________________________________________________________ BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO STATEMENT OF NET POSITION JUNE 30, 2023 (IN THOUSANDS) Primary Government Component Unit Governmental Business-Type First 5 Activities Activities Total San Luis Obispo ASSETS Current Assets: Cash and cash equivalents $ 692,400 $ 88,498 $ 780,898 $ 9 ,160 Accounts receivable, net 8,113 3,726 1 1,839 - Property taxes receivable 1 5,357 - 1 5,357 - Other receivables 1,935 9 8,713 100,648 - Due from other governments 5 5,048 240 5 5,288 270 Interest receivable 1 16 17 - Leases receivable 265 651 916 - Deposits with others 57 86 143 4 Internal balances 1 1,829 (11,829) - - Inventories 860 84 944 - Prepaid items 753 424 1,177 4 Loans receivable (net of allowance for uncollectibles) 2 0,549 401 2 0,950 - Total Current Assets 807,167 181,010 988,177 9,438 Noncurrent Assets: Restricted cash with fiscal agent 7 2,585 1 0,198 8 2,783 - Leases receivable 1,630 1 5,727 1 7,357 - Prepaid insurance - 256 256 - Capital Assets: Nondepreciable 861,921 115,979 977,900 - Depreciable, net 414,852 459,363 874,215 - Lease assets, net 122,779 162 122,941 75 SBITA assets, net 2,609 195 2,804 - Total Noncurrent Assets 1,476,376 601,880 2,078,256 75 Total Assets 2,283,543 782,890 3,066,433 9,513 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 269,983 3,037 273,020 127 Deferred OPEB 1 9,062 243 1 9,305 - Deferred loss on refunding - 2,902 2,902 - Total Deferred Outflows of Resources 289,045 6,182 295,227 127 LIABILITIES Current Liabilities: Accounts payable 4 7,440 9,708 5 7,148 222 Salaries and benefits payable 6,153 83 6,236 2 Deposits from others 1 3,910 1,397 1 5,307 - Accrued interest 5,632 4,146 9,778 - Other current liabilities 1,741 - 1,741 - Unearned revenue 4 6,213 3,579 4 9,792 - Bonds and notes payable 1 4,095 1 2,281 2 6,376 - Lease liability 4,789 86 4,875 36 SBITA liability 2,411 113 2,524 - Compensated absences 2 6,268 296 2 6,564 6 Landfill closure/postclosure costs 1,269 - 1,269 - Self-insurance payable 5,116 - 5,116 - Total Current Liabilities 175,037 3 1,689 206,726 266 Long-Term Liabilities: Net pension liability 918,503 1 0,335 928,838 128 Net OPEB liability 2 7,036 358 2 7,394 - Bonds and notes payable 174,932 309,475 484,407 - Lease liability 121,545 78 121,623 36 SBITA liability 203 86 289 - Compensated absences 1 0,684 283 1 0,967 18 Landfill closure/postclosure costs 7,476 - 7,476 - Self-insurance payable 1 8,385 - 1 8,385 - Total Long-Term Liabilities 1,278,764 320,615 1,599,379 182 Total Liabilities 1,453,801 352,304 1,806,105 448 DEFERRED INFLOWS OF RESOURCES Deferred pensions 1,008 11 1,019 2 Deferred OPEB 1 0,330 137 1 0,467 - Deferred bond refunding 453 450 903 - Deferred amounts related to leases 1,814 1 5,717 1 7,531 - Total Deferred Inflows of Resources 1 3,605 1 6,315 2 9,920 2 NET POSITION Net investment in capital assets 1,229,892 293,062 1,522,954 3 Restricted for: General government 1 0,548 - 1 0,548 - Public protection 2 1,140 - 2 1,140 - Health and sanitation 1 8,706 - 1 8,706 - Public assistance 2,750 - 2,750 2 Public ways and facilities 2 6,634 - 2 6,634 - Recreation and cultural services 3,093 - 3,093 - Education 204 - 204 - Debt service 9 0,011 - 9 0,011 - Unrestricted ( 297,796) 127,391 ( 170,405) 9,185 Total Net Position $ 1,105,182 $ 420,453 $ 1,525,635 $ 9 ,190 35 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2023 (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 $ 37,088 $ 16,808 $ 19,120 $ 1,000 $ 36,928 Public protection 254,728 25,758 79,867 - 105,625 Public ways and facilities 5 5,375 4,974 22,753 4,516 32,243 Health and sanitation 152,565 8,130 107,717 - 115,847 Public assistance 201,741 901 137,154 - 138,055 Education 1 5,256 2,313 247 - 2,560 Recreation and cultural services 1 3,754 6,094 1,794 855 8,743 Interest on long-term debt 1 1,299 - - - - Total governmental activities 741,806 6 4,978 368,652 6,371 440,001 Business-type activities: Airport 2 6,498 1 1,724 5,599 - 17,323 Golf 4,884 4,738 - - 4,738 State Water Contract 6,882 7,367 14 - 7,381 Nacimiento Water Contract 1 4,170 15,596 - - 15,596 Lopez Flood Control 7,708 7,918 6 - 7,924 Lopez Park - - - - - General Flood Control - Salinas Dam 1,490 1,380 - - 1,380 County Service Areas 7,340 5,500 3 - 5,503 Los Osos Wastewater 1 2,597 7,425 - 963 8,388 Total business-type activities 8 1,569 61,648 5,622 963 68,233 Total primary government $ 823,375 $ 126,626 $ 374,274 $ 7 ,334 $ 508,234 Component unit: First 5 San Luis Obispo $ 2 ,098 $ - $ 1,629 $ - $ 1,629 36 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2023 (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 $ (160) $ - $ (160) Public protection (149,103) - (149,103) Public ways and facilities (23,132) - (23,132) Health and sanitation (36,718) - (36,718) Public assistance (63,686) - (63,686) Education (12,696) - (12,696) Recreation and cultural services (5,011) - (5,011) Interest on long-term debt (11,299) - (11,299) Total governmental activities ( 301,805) - (301,805) Business-type activities: Airport - (9,175) (9,175) Golf - (146) (146) State Water Contract - 499 499 Nacimiento Water Contract - 1,426 1,426 Lopez Flood Control - 216 216 Lopez Park - - - General Flood Control - (110) (110) County Service Areas - (1,837) (1,837) Los Osos Wastewater - (4,209) (4,209) Total business-type activities - (13,336) (13,336) Total primary government $ (301,805) $ (13,336) $ (315,141) Component unit: First 5 San Luis Obispo $ (469) General Revenues: Taxes: Property taxes 235,064 4,944 240,008 - Sales and use taxes 1 5,560 - 15,560 - Transient occupancy taxes 1 6,548 - 16,548 - Transfer tax 3,164 - 3,164 - Other taxes 2,145 - 2,145 - Grants not restricted to specific programs 5,334 - 5,334 - Interest earnings not restricted to specific programs 1 3,395 1,814 15,209 173 Other revenues 306 5,282 5,588 6 Transfers (6,696) 6,696 - - Total General Revenues and Transfers 284,820 18,736 303,556 179 Change in net position (16,985) 5,400 (11,585) (290) Net position - beginning of year, as restated 1,122,167 415,053 1,537,220 9,480 Net position - end of year $ 1,105,182 $ 420,453 $ 1,525,635 $ 9 ,190 37 ________________________________________________________________ BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2023 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 514,748 $ 18,978 $ 111,051 $ 644,777 Restricted cash with fiscal agent - - 72,585 72,585 Accounts receivable, net 7,904 - 189 8,093 Accrued property taxes receivable 1 5,357 - - 15,357 Other receivables 1,906 - 29 1,935 Due from other governments 45,420 2,606 7,022 55,048 Interest receivable 1 - - 1 Due from other funds - 286 - 286 Inventories 121 - - 121 Leases receivable 1,759 - 136 1,895 Loans receivable, net of allowance for uncollectibles - - 20,549 20,549 Advances to other funds 5,918 - 1,982 7,900 Deposits with others 5 - - 5 Prepaid items 734 - 9 743 Other assets - - 52 52 Total assets $ 593,873 $ 21,870 $ 213,604 $ 829,347 LIABILITIES Accounts payable $ 34,859 $ 1,737 $ 8,772 $ 45,368 Salaries and benefits payable 5,380 - 165 5,545 Due to other funds - - 286 286 Deposits from others 6,087 - 2,775 8,862 Unearned revenue 4 6,038 108 67 46,213 Other current liabilities 1,741 - - 1,741 Advances from other funds - - 571 571 Total liabilities 9 4,105 1,845 12,636 108,586 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 4 2,683 2,458 1,998 4 7,139 Deferred amounts related to leases 1,686 - 128 1,814 Total deferred inflows of resources 4 4,369 2,458 2,126 4 8,953 FUND BALANCES Nonspendable 6,773 - 9 6,782 Restricted 2 4,607 286 129,386 154,279 Committed 224,823 1 7,281 6 9,447 311,551 Assigned 199,196 - - 199,196 Unassigned - - - - Total fund balances 455,399 1 7,567 198,842 671,808 Total liabilities, deferred inflows of resources, and fund balances $ 593,873 $ 21,870 $ 213,604 $ 829,347 The accompanying notes are an integral part of these financial statements. 38 COUNTY OF SAN LUIS OBISPO RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Total Fund Balances - Total Governmental Funds $ 671,808 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. 1,263,151 Lease assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 122,017 SBITA assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 2,553 Accrued property tax and grant revenues are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 47,139 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. (30,622) 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. 4,500 Interest on long-term debt is recognized as it accrues, regardless of when it is due. (5,632) 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. (838,939) 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. (24,556) 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. 245,675 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. 7,920 Governmental funds report the effects of refundings when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. (453) 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 (11,178) Bonds and notes payable (177,849) Leases payable (125,542) SBITA payable ( 2,558) Compensated absences (33,507) Landfill closure/postclosure costs ( 8,745) (359,379) Net Position of Governmental Activities $ 1,105,182 The accompanying notes are an integral part of these financial statements. 39 COUNTY OF SAN LUIS OBISPO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds REVENUES Taxes $ 2 51,198 $ - $ 19,592 $ 2 70,790 Licenses, permits, and franchises 15,478 - - 15,478 Fines, forfeitures, and penalties 3,392 389 516 4,297 Use of money and property 9,409 302 3,635 13,346 Aid from other governments 333,654 1,855 42,830 378,339 Charges for services 37,218 1,871 16,423 55,512 Other revenues 12,101 60 2,268 14,429 Total revenues 662,450 4,477 85,264 752,191 EXPENDITURES Current: General government 75,027 - - 75,027 Public protection 224,449 - 8,995 233,444 Public ways and facilities 4,025 - 53,991 58,016 Health and sanitation 132,329 - 8,239 140,568 Public assistance 188,072 - 544 188,616 Education 596 - 13,603 14,199 Recreation and cultural services 6,204 - 10,481 16,685 Debt service: Principal payments 7,132 - 5,935 13,067 Interest and fiscal charges 848 - 9,733 10,581 Capital outlay - 1 4,563 - 14,563 Total expenditures 638,682 1 4,563 111,521 764,766 Excess (deficiency) of revenues over (under) expenditures 23,768 (10,086) (26,257) (12,575) OTHER FINANCING SOURCES (USES) Refunding bonds issued - - 70,033 70,033 Premium on refunding bonds issued - - 4,634 4,634 Payment to refunded bond escrow agent - - (5,724) (5,724) Leases 38,935 - - 38,935 SBITAs 305 - - 305 Transfers in 2,174 9,352 36,524 48,050 Transfers out (46,647) (4) (13,215) (59,866) Total other financing sources (uses) ( 5,233) 9,348 92,252 96,367 Net change in fund balances 18,535 (738) 65,995 83,792 Fund balances - beginning 436,864 1 8,305 132,847 588,016 Fund balances - ending $ 4 55,399 $ 17,567 $ 198,842 $ 6 71,808 The accompanying notes are an integral part of these financial statements. 40 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, 2023 (IN THOUSANDS) Net Change in Fund Balances - Total Governmental Funds $ 83,792 Amounts reported for governmental activities in the Statement of Revenues, Expenditures, and Changes in Fund Balances were different because: Property tax, intergovernmental revenue and other revenue in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 254 Governmental funds report capital outlay as expenditures. These expenditures have no effect on net position. Capital outlay expenditures that have no effect on net position are reported in the following functional categories: Capital outlay $ 13,165 General government 6 ,177 Public protection 2 ,492 Public ways 14,224 Health and sanitation 390 Public assistance 583 Education - Recreation and cultural services 3 ,872 40,903 Governmental funds report new leases as expenditures. These expenditures have no effect on net position. 38,935 In the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense. ( 22,971) In the Statement of Activities, the cost of right to use lease assets is allocated over their estimated useful lives and reported as amortization expense. (6,815) In the Statement of Activities, the cost of SBITA assets is allocated over their estimated useful lives and reported as amortization expense. (2,165) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (248) Debt proceeds and new leases are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the Statement of Net Position, however, issuing debt increases long-term liabilities and does not affect the Statement of Activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the Statement of Net Position. Refunding bonds issued ( 70,033) Premium on refunding bonds issued (4,634) Payment to escrow agent 5 ,724 Debt principal payments 5 ,759 Lease payments 4 ,521 Lease issuance ( 38,935) SBITA payments 2 ,465 SBITA issuance (305) Some expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources. Therefore, they are not reported as expenditures in governmental funds: Change in compensated absences $ ( 1,143) Change in accrued interest payable (782) Change in landfill closure/postclosure costs (573) Change in net OPEB liability 1 ,958 Change in deferred OPEB outflows 4 ,232 Change in deferred OPEB inflows (4,729) Change in Net Pension Liability (294,299) Change in deferred pension outflows 128,039 Change in deferred pension inflows 111,172 Change in capital appreciation bond accretion 2 ,046 Amortization of debt premiums and discounts and refunding 392 ( 53,687) Internal service funds were 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 net revenue or expenditure effect of internal service funds is reported with governmental activities. (124) The net (revenue) expense allocable to business-type activities 579 Change in Net Position of Governmental Activities $ (16,985) The accompanying notes are an integral part of these financial statements. 41 COUNTY OF SAN LUIS OBISPO STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2023 (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 $ 2 7,132 $ 1 6,065 $ 1 7,629 $ 6,484 $ 2 1,188 $ 8 8,498 $ 4 7,623 Accounts receivable, net - - 3,326 - 4 00 3,726 20 Other receivables 4 81 - 1,041 97,149 42 98,713 - Due from other governments 2 40 - - - - 2 40 - Interest receivable 16 - - - - 16 - Leases receivable 5 76 - - - 75 6 51 - Deposits with others - - - - 86 86 - Inventories - - - - 84 84 7 39 Loans receivable - - - 4 01 - 4 01 - Prepaid items - - - - 4 24 4 24 10 Total current assets 28,445 16,065 21,996 1 04,034 22,299 1 92,839 48,392 Noncurrent assets: Restricted cash with fiscal agent - 10,198 - - - 10,198 - Leases receivable 15,715 - - - 12 15,727 - Advances to other funds - - - - 20 20 - Prepaid insurance - 2 56 - - - 2 56 - Capital assets: Nondepreciable: Land 24,030 3,259 - 5,406 4,022 36,717 - Construction in progress 3,081 - - 1 67 1,727 4,975 - Water rights - 72,319 - - 72,319 - Other property - - - - 1,968 1,968 - Depreciable: Infrastructure, net 3 23 1 39,758 - 1 56,965 20,541 3 17,587 - Structures and improvements, net 73,316 8,213 5,078 6 43 47,394 1 34,644 4 32 Equipment, net 5,498 5 1 94 1,038 6,636 13,190 Other property, net - - - - 4 96 4 96 - Lease assets, net 57 - - - 1 05 1 62 7 62 SBITA assets, net 1 55 - - - 40 1 95 56 Total noncurrent assets 1 22,175 1 61,689 77,398 1 63,275 77,363 6 01,900 14,440 Total assets 1 50,620 1 77,754 99,394 2 67,309 99,662 7 94,739 62,832 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 1,841 - - - 1,196 3,037 23,387 Deferred OPEB 1 50 - - - 93 2 43 1,760 Deferred loss on refunding - 2,902 - - - 2,902 - Total deferred outflows of resources 1,991 2,902 - - 1,289 6,182 25,147 LIABILITIES Current liabilities: Accounts payable 1,913 3 03 6,795 82 6 15 9,708 2,072 Salaries and benefits payable 48 - - - 35 83 6 08 Interest payable - 2,230 - 1,631 2 85 4,146 - Self-insurance payable - - - - - - 5,116 Deposits from others 63 8 03 2 11 5 18 1,397 5,048 Unearned revenue 1 91 - 2,874 - 5 14 3,579 - Due to other funds - - - - - - - Accrued vacation and sick leave - current 1 62 - - - 1 34 2 96 2,473 Lease liability - current 10 - - - 76 86 1 16 SBITA liability - current 87 - - - 26 1 13 26 Notes and bonds payable -current 40 5,250 - 3,895 3,096 12,281 - Total current liabilities 2,514 8,586 9,671 5,619 5,299 31,689 15,459 Noncurrent liabilities: Self-insurance liability - - - - - - 18,385 Advances from other funds 5,233 - - 1,214 9 02 7,349 - Accrued vacation and sick leave 1 70 - - - 1 13 2 83 9 72 Lease liability 48 - - - 30 78 6 76 SBITA liability 72 - - - 14 86 30 Notes and bonds payable 1 26 1 47,149 - 1 35,755 26,445 3 09,475 - Net OPEB Liability 2 28 - - - 1 30 3 58 2,480 Net Pension Liability 6,263 - - - 4,072 10,335 79,564 Total noncurrent liabilities 12,140 1 47,149 - 1 36,969 31,706 3 27,964 1 02,107 Total liabilities 14,654 1 55,735 9,671 1 42,588 37,005 3 59,653 1 17,566 DEFERRED INFLOWS OF RESOURCES Deferred pensions 7 - - - 4 11 87 Deferred OPEB 87 - - - 50 1 37 9 48 Bond refunding - 2 87 - - 1 63 4 50 - Deferred amounts related to leases 15,630 - - - 87 15,717 - Total deferred inflows of resources 15,724 2 87 - - 3 04 16,315 1,035 NET POSITION Net investment in capital assets 1 04,416 11,498 77,398 52,249 47,501 2 93,062 13,187 Unrestricted 17,817 13,136 12,325 72,472 16,141 1 31,891 (43,809) Total net position $ 122,233 $ 24,634 $ 89,723 $ 124,721 $ 6 3,642 4 24,953 $ (30,622) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (4,500) Net Position of Business-Type Activities per Government-Wide Financial Statements $ 420,453 The accompanying notes are an integral part of these financial statements. 42 COUNTY OF SAN LUIS OBISPO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (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 $ 11,760 $ 15,596 $ 7,367 $ 7,425 $ 19,547 $ 61,695 $ 75,870 Other revenues 49 4,700 462 6 65 5,282 117 Total operating revenues 11,809 20,296 7,829 7,431 19,612 66,977 75,987 OPERATING EXPENSES: Salaries and benefits 3,957 - - - 2,413 6,370 41,778 Services and supplies 4,653 5,186 6,553 4,733 14,918 36,043 30,522 Other charges 32 - - - 3 35 - Insurance benefit payments - - - - - - 6 ,435 Depreciation 17,083 2,221 192 4,370 2,465 26,331 2 ,680 Amortization 98 - - - 91 189 151 Countywide cost allocation 268 174 87 71 293 893 575 Total operating expenses 26,091 7,581 6,832 9,174 20,183 69,861 82,141 Operating income (loss) (14,282) 12,715 997 (1,743) (571) (2,884) (6,154) NONOPERATING REVENUES (EXPENSES): Property taxes - - 2,779 - 2,165 4,944 - Investment income (expense) 469 675 188 116 366 1,814 569 Interest income (expense) (2) (6,489) - (3,334) (1,060) (10,885) ( 6) Sale of capital assets (253) - (1) - (37) (291) 225 Other revenues (expense) - - - - - - - Aid from governmental agencies 5,599 - 14 - 9 5,622 - Total nonoperating revenues (expenses) 5,813 (5,814) 2,980 (3,218) 1,443 1,204 788 Income (loss) before contributions and transfers (8,469) 6,901 3,977 (4,961) 872 (1,680) (5,366) Capital contributions - - - 963 - 963 122 Transfers in - - 6,281 207 608 7,096 6 ,673 Transfers out (302) - - (41) (57) (400) (1,553) Change in net position (8,771) 6,901 10,258 (3,832) 1,423 5,979 (124) Net position - beginning, as restated 131,004 17,733 79,465 128,553 62,219 ( 30,498) Net position - ending $ 122,233 $ 24,634 $ 89,723 $ 124,721 $ 63,642 $ (30,622) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (579) Change in Net Position of Business-Type Activities per Government-Wide Financial Statements $ 5,400 The accompanying notes are an integral part of these financial statements. 43 COUNTY OF SAN LUIS OBISPO STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (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 $ 1 1,490 $ 2 0,631 $ 5,825 $ 7,431 $ 2 0,104 $ 6 5,481 $ - Receipts from interfund billings - - - - - - 75,991 Payments for goods and services (3,874) (5,470) (6,602) (4,815) (14,981) (35,742) (23,401) Payments to employees for services (3,014) - - - (2,254) (5,268) (37,511) Payments for insurance benefits - - - - - - (5,194) Payments for premiums - - - - - - (7,199) Net cash provided (used) by operating activities 4,602 15,161 (777) 2,616 2,869 24,471 2,686 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Property tax proceeds - - 2,779 - 2,165 4,944 - Grants and subsidies from other governmental agencies 6,108 - 13 - 9 6,130 - Advances from other funds - - - - 382 382 - Due from other funds - - - - (400) (400) - Transfers from other funds - - 6,281 207 608 7,096 6,673 Transfers to other funds (302) - - (41) (57) (400) (1,553) Net cash provided (used) by noncapital financing activities 5,806 - 9,073 166 2,707 17,752 5,120 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases and construction of capital assets (6,705) - (4,074) (178) (993) (11,950) (2,879) Proceeds from sale of capital assets - - - - - - 240 Advances from other funds (139) - - (541) - ( 680) - Capital contributions - - - 5,112 - 5,112 122 Proceeds from issuance of long-term debt - - - - - - - Principal paid on capital debt (30) (4,827) - (3,804) (3,535) (12,196) ( 117) Interest paid on capital debt (1) (6,981) - (3,380) (1,299) (11,661) (8) Net cash provided (used) by capital and related financing activities (6,875) (11,808) (4,074) (2,791) (5,827) (31,375) (2,642) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 469 675 188 116 366 1,814 569 Net cash provided (used) by investing activities 469 675 188 116 366 1,814 569 Net increase (decrease) in cash and cash equivalents 4,002 4,028 4,410 107 115 12,662 5,733 CASH AND CASH EQUIVALENTS: Beginning of year 23,130 22,235 13,219 6,377 21,073 86,034 41,890 End of year $ 2 7,132 $ 2 6,263 $ 1 7,629 $ 6,484 $ 2 1,188 $ 9 8,696 $ 4 7,623 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ (14,282) $ 1 2,715 $ 997 $ (1,743) $ (571) $ (2,884) $ (6,154) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense 17,181 2,221 192 4,370 2,556 26,520 2,831 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net 342 334 (2,435) - 62 (1,697) 2 Inventory - - - - (38) (38) ( 127) Prepaid items - - - - 120 120 224 Deferred outflows - pension (1,071) - - - (617) (1,688) (12,129) Deferred outflows - OPEB (39) - - - (22) (61) ( 428) Leases (775) - - - (74) ( 849) - Increase (decrease) in: Accounts payable 1,095 ( 263) 38 (16) 126 980 903 Deposits from others (17) 154 (45) 5 36 133 ( 502) Salaries and benefits payable (4) - - - (75) (79) ( 723) Deferred inflows -pension (721) - - - (545) (1,266) (10,555) Deferred inflows - OPEB 48 - - - 25 73 473 Net OPEB liability 4 - - - (13) (9) ( 223) Net pension liability 2,727 - - - 1,404 4,131 27,854 Unearned revenue 114 - 476 - 495 1,085 - Self-insurance liability - - - - - - 1,240 Total adjustments 18,884 2,446 (1,774) 4,359 3,440 27,355 8,840 Net cash provided (used) by operating activities $ 4,602 $ 1 5,161 $ (777) $ 2,616 $ 2,869 $ 2 4,471 $ 2,686 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Leases $ - $ - $ - $ - $ 27 $ 27 $ - The accompanying notes are an integral part of these financial statements. 44 COUNTY OF SAN LUIS OBISPO STATEMENT OF FIDUCIARY NET POSITION CUSTODIAL AND INVESTMENT TRUST FUNDS JUNE 30, 2023 (IN THOUSANDS) SAN LUIS OBISPO PENSION TRUST FUND DECEMBER 31, 2022 (IN THOUSANDS) San Luis Obispo Investment County Trust Custodial Pension Trust Funds Funds December 31, 2022 June 30, 2023 June 30, 2023 ASSETS Cash and cash equivalents $ 84,237 $ 727,330 $ 117,881 Receivables: Contributions - - - Interest and dividends 525 - - Securities sold 1,067 - - Taxes for other governments - - 434 Investments at fair value: Bonds and notes 303,369 - - International fixed income 9 6,484 - - Collateralized mortgage obligations 2,829 - - Domestic equities 322,032 - - International equities 253,223 - - Alternative investments 313,798 - - Real estate 252,831 - - Other investments - - - Other assets 197 - 4,013 Capital assets, net 5,620 - 16 Total assets $ 1,636,212 $ 7 27,330 $ 122,344 LIABILITIES Other current liabilities $ 1 ,283 $ - $ 84,028 Prefunded contributions 3 7,737 - - Securities purchased 2,700 - - Other long-term liabilities - - 9 Total liabilities $ 4 1,720 $ - $ 8 4,037 NET POSITION Restricted for: Pensions $ 1,594,492 $ - $ - Pool Participants - 727,330 - Individuals, organizations and other governments - - 38,307 Total net position $ 1 ,594,492 $ 7 27,330 $ 3 8,307 The accompanying notes are an integral part of these financial statements. 45 COUNTY OF SAN LUIS OBISPO STATEMENT OF CHANGES IN FIDUCIARY NET POSITION CUSTODIAL AND INVESTMENT TRUST FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) SAN LUIS OBISPO PENSION TRUST FUND FOR THE YEAR ENDED DECEMBER 31, 2022 (IN THOUSANDS) San Luis Obispo Investment County Trust Custodial Pension Trust Funds Funds December 31, 2022 June 30, 2023 June 30, 2023 ADDITIONS Contributions: Contributions to pooled investments $ - $ 1,510,533 $ - Employer contributions 72,096 - - Member contributions 39,229 - - Total contributions 111,325 1,510,533 - Investment income: Realized and unrealized gains and losses (138,986) - - Interest 2,675 9,401 1,890 Dividends 6 ,814 - - Investment expenses (3,570) - - Total investment income (133,067) 9,401 1,890 Property taxes collected for other governments - - 230,113 Sales taxes collected for other governments - - 17,500 Other Income 47 - 16,011 Total additions (21,695) 1,519,934 2 65,514 DEDUCTIONS Benefits: Monthly benefit payments 124,133 - - Refunds of contributions 3,402 - - Death benefits 1,859 - - Total benefits 129,394 - - Administrative expenses 2,897 - 28 Distributions from pooled investments - 1,303,487 - Depreciation expense - - - Interest expenses - - 26,973 Payments to other local governments - - 1,697 Prefunded discount amortization 1,485 - - Property taxes distributed to other governments - - 234,522 Total deductions 1 33,776 1,303,487 263,220 Change in net position ( 155,471) 216,447 2,294 Net position -beginning 1 ,749,963 510,883 36,013 Net position - ending $ 1 ,594,492 $ 727,330 $ 38,307 The accompanying notes are an integral part of these financial statements. 46 ________________________________________________________________ NOTES TO THE BASIC FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO NOTES TO THE BASIC FINANCIAL STATEMENTS (IN THOUSANDS) JUNE 30, 2023 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). 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. 47 NOTES TO 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 Units 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. San Luis Obispo County Pension Trust (Pension Trust) – Pension Trust is an independent trust that administers the San Luis Obispo County Employees Retirement Plan on behalf of the County, is a fiduciary component unit which is presented in the Fiduciary Fund Financial Statements. 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 Countywide 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. 48 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 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, 2023, the County implemented the following Governmental Accounting Standards Board (GASB) Statements: GASB Statement No. 96, Subscription-Based Information Technology Arrangements (GASB 96). The requirements of this statement are effective for financial statement periods beginning after June 15, 2022. GASB 96 improves consistency in accounting and financial reporting for subscription-based information technology arrangements (SBITA) by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. Under this Statement, a government is required to report a subscription asset and subscription liability for a SBITA and to disclose essential information about the arrangement. 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 of state water into the County. 49 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The Los Osos Wastewater Fund accounts for the construction, operation and maintenance of the wastewater treatment plant serving the community of Los Osos. Additionally, the County reports on Internal Service Funds. Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the County or to other governments on a cost-reimbursement basis. Internal Service Funds account for the activities of fleet operations, 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, 2022. 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 Custodial Funds account for the resources held by the County in a custodial capacity on behalf of other agencies. 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 fiduciary 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. 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 leases are reported as other financing sources. 50 NOTES TO 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 In accordance with 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, 2023. 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 99.99 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 represents a consumption of net assets that applies to future periods. In addition to liabilities, the financial statements may report a separate section for deferred inflows of resources which represent an acquisition of net position that applies to future periods. 51 NOTES TO 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, a Custodial 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 is 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. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than purchased. 52 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Capital Assets Capital assets, which include land, structures and improvements, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activity columns in the Government-wide financial statements. Capital assets are defined as assets with an initial individual cost greater than the capitalization threshold for the specified type of asset and an estimated useful life beyond a single fiscal period. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets 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 Lease Assets $5,000 Lease term Subscription Assets $5,000 Subscription term Lease Asset Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life on the underlying asset, unless the lease contains a purchase option that the County has determined reasonably certain of being exercised. Subscription Asset Subscription assets are recorded at the amount of the initial measurement of the subscription liabilities and modified by any subscription payments made to the vendor at the commencement of the subscription term and any capitalizable initial implementation costs. The asset is reduced by any vendor incentives received at the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the shorter of the subscription term or the useful life of the underlying asset. 53 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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. 54 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 August 25, 2022. The County Pool’s “AAAf” fund credit quality rating reflects “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. The County Treasury Oversight Committee (CTOC) was created by the Board of Supervisors' Resolution and consists of 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 Annual Comprehensive 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, 2023. 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 1.34 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. 55 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, which as of June 30, 2023, was BlackRock Financial Management Inc. 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, 2023, the CTSTF NAV was $0.996 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 0.984828499 for its portfolio as of June 30, 2023. 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, 2023, 2.78% 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, 2023, 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. 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 0.973615827 in the Quarterly Report of Investments as of June 30, 2023, 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’s IP and the Treasurer’s written policies and procedures to reduce exposure to investment risks. The County’s 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’s IP and the Treasurer’s written policies and procedures within the limits of the CGC and all relevant laws. As of June 30, 2023, 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. 56 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Maximum Maximum Investment Type Percentage Maximum Investment in One Issuer Maturity of Portfolio Investment types utilized by the combined pool in FY 2022-23 U.S. Treasury Notes 4 years 100% N/A Maximum U.S. Treasury Bills 100% N/A issued U.S. Government Agencies: Federal Home Loan Bank 4 years 25% N/A U.S. Government Agencies: Farm Credit 4 years 25% N/A Local Agency Investment Fund (LAIF) N/A 15% N/A Joint Powers Authority Pool N/A 20% 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. 10% per issuer (IBRD, IFC, or IADB only). Supranationals 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 $250,000 per participating bank Bonds, Notes, Warrants, other evidences of indebtedness No more than 10% of issuer debt and of any local agency within this state assets. Requires specific written approval 1 year 10% of County Treasurer for each type of investment. Investments authorized, but not utilized in FY 2022-23 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% 15% of all Tri-Party Repurchase Agreements 30 days N/A repos Maximum Cash Management Bills 100% N/A issued Requires specific written approval of Bonds issued by a Local Agency 1 year 5% County Treasurer for each type of investment. Requires specific written approval of Registered State Warrants 1 year 10% County Treasurer for each type of investment. Per specific statutory provisions or in accordance with the ordinance, Pledged Funds held by a trustee or fiscal agent resolution, indenture, or agreement of a local agency providing for the issuance. Investments not authorized in FY 2022-23 U.S. Government Agencies: Federal National Mortgage Assoc. U.S. Government Agencies: Federal Home Loan Mortgage Corp. 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 County’s IP, the County manages 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. 57 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 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, 2023, 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, 2023. Investment Type S&P Moody's % of Portfolio U.S. Government Agencies AA+ Aaa 42.30% U.S. Treasuries AA+ Aaa 29.33% Supranationals AAA Aaa 18.54% CalTRUST-Short-Term Fund AAf/S1+ Not Rated 4.75% LAIF Not Rated Not Rated 5.08% 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, 2023, the following investments exceeded the 5% disclosure threshold: Investment Type % of Portfolio U.S. Government Agencies-Federal Home Loan Bank 21.34% U.S. Government Agencies-Farm Credit Bank 20.96% Supranationals – IADB 8.08% Supranationals – IBRD 6.57% At June 30, 2023, the County had the following investments and interest-bearing deposits (in thousands): Weighted Average Interest Rate Maturity Instrument Maturity Dates % Years Fair Value Cost U.S. Government Agencies 7/10/23-10/19/26 0.173%-5.150% 1.30 $ 619,934 $ 634,425 U.S. Treasuries 7/25/23-2/15/27 0.177%-5.126% 1.77 429,920 442,174 Supranationals 9/27/23-3/10/27 0.236%-4.749% 1.47 271,758 288,477 CalTRUST On Demand 4.500% - 69,541 69,773 LAIF On Demand 2.170% - 74,449 75,000 Total Investments in County Treasury $ 1,465,602 $ 1,509,849 58 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Deposits in Financial Institutions $ 205,374 $ 205,374 Cash on Hand 326 326 Total Cash held in Treasury 1,671,302 1,715,549 Deposits in Transit 5,125 5,125 Outstanding Warrants (11,691) (11,691) Total 1,664,736 1,708,983 Imprest Cash 1,649 1,649 Non-pool Cash Deposits 3,313 3,313 Other Cash Deposits 4,962 4,962 Total Cash and Cash Equivalents $ 1,669,698 $ 1,713,945 Restricted Cash with Fiscal Agent U.S. Government & Federal Agencies $ 82,783 $ 82,632 Certificates of Deposit & Money Market Accounts - - Total 82,783 82,632 Total restricted and unrestricted cash and cash equivalents $ 1,752,481 $ 1,796,577 Total Cash and Investments Summary Fair Value Total Governmental Activities $ 764,985 Total Business-Type Activities 98,696 Total Investment and Custodial Fiduciary Funds 845,211 Total Fiduciary Component Unit – SLO Pension Trust as of December 31, 2022 84,237 SLO Pension Trust Fund Perspective Difference 1 (49,808) Total Component Unit – First 5 9,160 Total Cash and Investments as of June 30, 2023 $ 1,752,481 1 Perspective amount represents the combination of the change in Total SLO Pension Trust cash from the Pension Trust's ACFR Reporting Date of 12/31/2022 to the County's ACFR Reporting Date of 6/30/2023 and the portion of Pension Trust’s cash held outside of the County’s financial system. The cash balance in the County’s Treasury for San Luis Obispo County Pension Trust as of 6/30/2023 is $34,429. The following represents a condensed statement of net position and changes in net position for the Treasurer's investment pool as of June 30, 2023 (in thousands): Fair Value Statement of Net Position: Net position held for pool participants $ 1,664,736 Equity of internal pool participants $ 937,408 Equity of external pool participants (voluntary and involuntary) 727,328 Total Equity $ 1,664,736 Statement of Changes in Net Position: Revenue $ 28,567 Investment costs (964) Net deposits 226,869 Change in fair value (5,300) Net change in pool net position 249,172 Net position at July 1, 2022 1,415,564 Net position at June 30, 2023 $ 1,664,736 59 NOTES TO 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, 2023: 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 U.S. Treasuries $ 429,920 $ 429,920 $ - $ - U.S. Government Agencies 619,934 619,934 - - Supranationals 271,758 271,758 - - Total measured at fair value 1,321,612 1,321,612 - - Investments measured at amortized cost LAIF 74,449 - - - CalTRUST 69,541 - - - Total investments in County Treasury $ 1,465,602 $ - $ - $ - Restricted Cash with Fiscal Agent Cash and investments at June 30, 2023, 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 $ 82,054 Restricted interest on lease reserves 729 Restricted for contractor retentions - Total Restricted Cash $ 82,783 Cash Deposits Outside of the Treasury Pool At fiscal year-end, the carrying amount of the County's other cash deposits was $3,289,033 and the combined financial institutions' balance was $3,313,427. The difference of $24,394 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 $3,313,427 was covered by federal depository insurance or by collateral held by the County's agent in the County's name. 60 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 3. RECEIVABLES Receivables at year-end for the County are as follows (in thousands): Nonmajor Special General Revenue Governmental Funds Fund Funds Accounts Receivable $ 7,904 $ 189 Lease Receivables 1,759 136 Other Receivables* 1,906 29 Loans Receivables - 27,481 Allowance for Doubtful - (6,932) Accounts Nacimiento State Water Water Los Osos Nonmajor Internal Airport Contract Project Wastewater Enterprise Service Proprietary Funds Fund Fund Fund Fund Funds Funds Accounts Receivable $ - $ - $ 3,326 $ - $ 400 $ 20 Lease Receivables 16,291 - - - 87 - Other Receivables* 481 - 1,041 97,149 42 - Loans Receivables - - - 401 - - Allowance for Doubtful - - - - - - Accounts *Other receivables primarily consist of accrued deposits; except for the Los Osos Wastewater Fund, which represents the special assessment receivable. 61 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 4. CAPITAL ASSETS A summary of changes in capital, lease assets, and subscription-based information technology arrangements for the year ended June 30, 2023, is as follows (in thousands): Restated Balance Transfers & Balance Governmental Activities July 1, 2022 Additions Retirements Adjustments June 30, 2023 Capital assets, non-depreciable: Land $ 796,039 $ - $ - $ 11 $ 796,050 Construction in progress 67,532 32,510 (118) (34,053) 65,871 Total capital assets, non-depreciable: 863,571 32,510 (118) (34,042) 861,921 Capital assets, depreciable Structures and improvements 281,671 4,696 (13) 26,261 312,615 Equipment 108,959 5,338 (2,535) 854 112,616 Infrastructure 457,561 1,129 - 6,927 465,617 Other property 1,258 - - - 1,258 Total capital assets, depreciable 849,449 11,163 (2,548) 34,042 892,106 Less accumulated depreciation for: Structures and improvements (113,809) (6,898) 13 - (120,694) Equipment (77,874) (7,178) 2,479 - (82,573) Infrastructure (262,316) (11,558) - - (273,874) Other property (96) (17) - - (113) Total accumulated depreciation (454,095) (25,651) 2,492 - (477,254) Total capital assets depreciable, net 395,354 (14,488) (56) 34,042 414,852 Lease assets, amortizable Land 198 311 - - 509 Structures and improvements 95,274 38,621 - - 133,895 Equipment 466 - (357) - 109 Total lease assets, amortizable 95,938 38,932 (357) - 134,513 Less accumulated amortization for: Land (46) (58) - - (104) Structures and improvements (4,846) (6,730) - - (11,576) Equipment (96) (65) 107 - (54) Total accumulated amortization (4,988) (6,853) 107 - (11,734) Total lease assets, amortizable net 90,950 32,079 (250) - 122,779 Subscription assets, amortizable 1 5,084 20 - - 5,104 Less accumulated amortization for subscription assets - (2,495) - - (2,495) Total subscription assets, amortizable net 5,084 (2,475) - - 2,609 Governmental activities capital assets, net $ 1,354,959 $ 47,626 $ (424) $ - $ 1,402,161 62 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Restated Balance Transfers & Balance Business-Type Activities Jul y 1, 2022 Ad ditions Reti rements Adju stments June 30, 2023 Capital assets, not being depreciated: Land $ 36,718 $ - $ - $ - $ 36,718 Construction in progress 3,489 3,434 (7) (1,942) 4,974 Water rights 68,244 4,075 - - 72,319 Other property 1,968 - - - 1,968 Total capital assets, not being depreciated: 110,419 7,509 (7) (1,942) 115,979 Capital assets, being depreciated Infrastructure 385,272 - (11) 56 385,317 Structures and improvements 225,568 2,737 (1,507) 1,865 228,663 Equipment 11,134 1,538 (64) 21 12,629 Other property 554 - - - 554 Total capital assets, being depreciated 622,528 4,275 (1,582) 1,942 627,163 Less accumulated depreciation for: Infrastructure (60,332) (7,411) 12 - (67,731) Structures and improvements (76,995) (18,230) 1,207 - (94,018) Equipment (5,365) (690) 62 - (5,993) Other property (58) - - - (58) Total accumulated depreciation (142,750) (26,331) 1,281 - (167,800) Total capital assets being depreciated, net 479,778 (22,056) (301) 1,942 459,363 Lease assets, amortizable Land 79 - - - 79 Equipment 257 - - - 257 Total lease assets, amortizable 336 - - - 336 Less accumulated amortization for: Land (11) (11) - - (22) Equipment (76) (76) - - (152) Total accumulated amortization (87) (87) - - (174) Total lease assets, amortizable net 249 (87) - - 162 Subscription assets, amortizable 1 270 27 - - 297 Less accumulated amortization for subscription assets - (102) - - (102) Total subscription assets, amortizable net 270 (75) - - 195 Business-type activities capital assets, net $ 590,716 $ (14,709) $ (308) $ - $ 575,699 1 Subscription assets beginning balance was restated with the implementation of GASB 96 in fiscal year 2022-23. Depreciation and amortization expense was charged to functions/funds of the primary government as follows: Depreciation Amortization Total Governmental Activities General Government $ 4,811 $ 4,971 $ 9,782 Public Protection 4,633 1,348 5,981 Public Ways and Facilities 11,056 137 11,193 Health and Sanitation 690 1,676 2,366 Public Assistance 230 1,123 1,353 Education 429 90 522 Recreational and Cultural Services 1,122 - 1,122 Capital assets held by the County’s Internal Service Funds are charged to the various functions based on their usage of assets 2,680 - 2,680 Total governmental activities depreciation/amortization expense $ 25,651 $ 9,348 $ 34,999 Business-type Activities Airport $ 17,083 $ 98 $ 17,181 Los Osos Wastewater 4,370 - 4,370 Nacimiento Water Contract 2,221 - 2,221 State Water Project 192 - 192 Nonmajor Enterprise 2,465 91 2,556 Total business-type activities depreciation/amortization expense $ 26,331 $ 189 $ 26,520 63 NOTES TO 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, 2023 (in thousands): Governmental Activities Expended to Committed Remaining Project June 30, 2023 Funds Budget Roads Infrastructure $ 28,099 $ 12,724 $ 25,081 Radio Modernization 5,577 523 - Women’s Jail 4,945 100 81 Fire and Sheriff Co-located Dispatch 5,408 - 34,261 Location Sheriff Jail Management and Records Management Systems Software 2,617 1,583 - Implementation Project Bob Jones Octagon/Ontario Park Trail 1,657 239 3,078 Extension Cayucos Vets Hall Rehab 2,433 26 8,746 Behavioral Health Cal Mental Health Services Authority Electronic Health 1,491 1,855 2 Records Project New Probation Office Building 1,473 - 38,411 Courthouse Annex 1,443 16 - Public Works Roof 1,384 - 59 Templeton to Atascadero Park Trail 1,269 - 315 Connector Business-Type Activities Expended to Committed Remaining Project June 30, 2023 Funds Budget Airport Terminal Redesign $ 1,787 $ - $ 476 6. LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS County as Lessor The County leases out several of its buildings and land. Lease terms vary, with current agreements going out until fiscal year 2055-2056. For agreements with renewal options the County included these renewal periods in the lease term when it is reasonably certain that the renewal option(s) will be exercised. For contracts that contain termination options for either party to exercise (cancellable period), these periods are excluded from the lease receivable calculation. The County’s lease arrangements do not contain any material residual value guarantees. When the borrowing rate is not stated in the contract, or readily available, the County uses the Treasury Quarterly Yield percentage to discount the lease payments. The agreements currently use a discount rate ranging from 0.71% to 2.01% to measure the present value of the lease payments expected to be received during the lease term period. 64 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Minimum lease payments receivable on leases of properties as of June 30, 2023, are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2024 $ 265 $ 12 $ 650 $ 114 2025 269 10 485 110 2026 238 9 420 107 2027 246 7 445 104 2028 211 5 466 101 2029-2033 666 10 2,511 449 2034-2038 - - 2,797 356 2039-2043 - - 3,441 245 2044-2048 - - 3,869 112 2049-2053 - - 942 25 2054-2058 - - 352 3 Total $ 1,895 $ 53 $ 16,378 $ 1,726 The total amount of revenue (inflows of resources) relating to leases recognized in the current fiscal year is as follows: Governmental Business-Type June 30, 2023 Activities Activities Lease revenue $ 314 $ 1,185 Lease interest 15 127 The County did not have any leases of assets that are investments, regulated leases, sublease transactions, sale- leaseback transactions, or lease-leaseback transactions requiring disclosure. County as Lessee The County entered into various contracts as lessee primarily for office space, land, equipment, and office equipment. Lease terms vary, with current agreements going out until fiscal year 2056-2057. For agreements with renewal options the County included these renewal periods in the lease term when it is reasonably certain that the renewal option(s) will be exercised. For contracts that contain termination options for either party to exercise (cancellable period), these periods are excluded from the lease liability calculation. The County’s lease contracts generally do not include restrictive financial or other covenants. Certain leases require additional payments for maintenance, which are expensed as incurred. The County’s lease arrangements do not contain any material residual value guarantees. When the borrowing rate is not stated in the contract, or readily available, the County uses the Treasury Quarterly Yield percentage to discount the lease payments. The agreements currently use a discount rate ranging from 0.51% to 2.01% to measure the present value of the lease payments expected to be paid during the lease term period. 65 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The future principal and interest lease payments as of June 30, 2023, are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2024 $ 4,790 $ 841 $ 86 $ 1 2025 4,920 805 37 - 2026 4,868 771 16 - 2027 4,809 737 12 - 2028 4,382 707 13 - 2029-2033 21,702 3,080 - - 2034-2038 20,133 2,379 - - 2039-2043 17,629 1,747 - - 2044-2048 19,141 1,127 - - 2049-2053 15,709 525 - - 2054-2058 8,251 124 - - Total $ 126,334 $ 12,843 $ 164 $ 1 The County did not have any sublease transactions, sale-leaseback transactions, or lease-leaseback transactions requiring disclosure. Subscription-Based Information Technology Arrangements The County entered into various subscription-based information technology arrangements (SBITA). SBITA terms vary, with current agreements going out until fiscal year 2026-2027. For agreements with renewal options the County included these renewal periods in the SBITA term when it is reasonably certain that the renewal option(s) will be exercised. For contracts that contain termination options for either party to exercise (cancellable period), these periods are excluded from the SBITA liability calculation. Certain SBITAs require additional payments for maintenance, which are expensed as incurred. When the borrowing rate is not stated in the contract, or readily available, the County uses the Treasury Quarterly Yield percentage to discount the lease payments. The agreements currently use a discount rate ranging from 0.73% to 2.01% to measure the present value of the SBITA payments expected to be paid during the SBITA term period. The future principal and interest SBITA payments as of June 30, 2023, are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2024 $ 2,410 $ 3 $ 113 $ 1 2025 96 1 86 - 2026 76 - - - 2027 32 - - - Total $ 2,614 $ 4 $ 199 $ 1 66 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 three liability claim settlements and there were five 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 $ 350,000 per occurrence Statutory Unemployment $ 492,454 maximum ----- Dental None–Funded by Employees ----- 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 PRISM 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 Current year claims, the fiscal year changes & Balance at fiscal liability estimates Claim payments year-end 2021-22 $ 21,016 $ 6,765 $ 5,521 $ 22,260 2022-23 $ 22,260 $ 6,817 $ 5,576 $ 23,501 8. INTERFUND RECEIVABLES AND PAYABLES The composition of interfund balances as of June 30, 2023, was (in thousands): Payable Fund (Due to Balance) Receivable Fund (Due from Balance) Amount Nonmajor Governmental Funds Capital Projects Fund $ 286 Total $ 286 67 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The SLO County Financing Authority owes the Capital Projects Fund $286 for bond proceeds for the Animal Services Facility. Payable Fund (Advances from Balance) Receivable Fund (Advances to Balance) Amount Nonmajor Governmental Funds General Fund $ 551 Nonmajor Enterprise Funds 20 571 Nonmajor Enterprise Funds General Fund 134 Nonmajor Governmental Funds 768 902 Airport Fund General Fund 5,233 Los Osos Wastewater Fund Nonmajor Governmental Funds 1,214 Total $ 7,920 The General Fund advanced $238 to the Parks Special Revenue Fund for the restoration of the Cayucos Pier and $313 for the Nipomo Skate Park Project. The Lopez Park Enterprise Fund advanced $20 to the Parks Special Revenue Fund for future debt payments. The County Service Areas Enterprise Funds received advances from the County Services Area 10 Special Revenue Fund for operational costs ($655), the General Flood Control Zone Special Revenue Fund for state water projects ($113), and the General Fund for debt and operational costs ($13). The Golf Enterprise Fund also received $121 from the General Fund for a water line replacement project. The Airport Fund owes the General Fund $5,233 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 $1,214. 68 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 9. TRANSFERS A reconciliation of transfers is detailed below (in thousands): Transfer From Transfer To Amount General Fund Nonmajor Governmental Funds $ 33,024 Capital Projects Fund 6,481 Internal Service Funds 6,673 Nonmajor Enterprise Funds 262 Los Osos Wastewater Fund 207 46,647 Capital Projects Fund General Fund 4 Nonmajor Governmental Funds Capital Projects Fund 2,871 Nonmajor Governmental Funds 1,985 General Fund 1,733 Nonmajor Enterprise Funds 345 State Water Project Fund 6,281 13,215 Airport Fund General Fund 199 Nonmajor Governmental Funds 103 302 Los Osos Wastewater Fund Nonmajor Governmental Funds 41 Nonmajor Enterprise Funds Nonmajor Governmental Funds 56 General Fund 1 57 Internal Service Funds Nonmajor Governmental Funds 1,316 General Fund 237 1,553 Total Transfers $ 61,819 General Fund Transfers General Fund transfers to Nonmajor Governmental Funds included contributions to the following Special Revenue and Debt Service Funds: Pension Obligation Bond Debt Service Fund ($12,005) to finance debt service payments. Roads ($6,329) to fund various road improvement projects and ($12,000) to repair storm damages sustained in the winter of 2023. Parks ($1,034) to repair storm damages sustained in the winter of 2023. Library ($651) for budget appropriated uses. Community Development ($40) for budget appropriated uses. Flood Control Zone ($248) for the water resource data enhancement project. Solid Waste Management ($717) for budget appropriated uses. General Fund transfers to the Capital Projects Fund ($6,481) were made for various capital projects including the Co-Located Emergency Dispatch Center, various roof repairs, and initial costs associated with the new Probation Department building. 69 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The General Fund transferred $6,500 to the Protected Self-Insurance ($3,600) and Workers Compensation ($2,900) Internal Service Funds (ISF) to increase fund reserve levels. The General Fund also transferred $173 in American Rescue Plan Act (ARPA) revenue funding for restorative purposes to the Public Works ISF ($4) and Workers Compensation ISF ($169). General Fund transfers to Nonmajor Enterprise Fund include the following contributions: County Service Areas ($249) in ARPA revenue funding for water projects. Golf Fund ($13) for budget appropriated uses. General Fund transfers to the Los Osos Wastewater Fund ($207) were made for ARPA revenue funding for sewer projects. Capital Projects Fund The Capital Projects Fund transferred $4 to the General Fund for debt service payments associated with Cayucos Veterans Hall rehabilitation project. Nonmajor Governmental Funds Public Facilities Fees (PFF) Fund transferred: $1,361 to the Parks Special Revenue Fund for the Biddle Park Gazebo ($19), Nipomo Skate Park ($821), Jack Ready Imagination Park ($494) and Cave Landing improvements ($27) projects. $1,448 to the Capital Projects Fund for library projects ($42), for parks trail projects ($184), and for a new Co-Located Emergency Dispatch Center funded by Fire PFF ($611) and Law Enforcement PFF ($611). $1,198 to the General Fund for debt service payments for the new Co-Located Emergency Dispatch Center, funded by Fire PFF ($698), Law Enforcement PFF ($107) and General Government PFF ($393). Parks Fund transferred: $101 to the Pension Obligation Bond Debt Service Fund to finance debt service payments. $8 to the General Fund for off-highway motor vehicle fees. $1 to the Lopez Park Enterprise Fund for debt service. Roads Fund transferred: • $4 to the Flood Control District Special Revenue Fund. • $110 to the General Fund for the Oceano community water drainage improvement project debt service payment. Roads Impact Fees Fund transferred: $213 to the Roads Fund for capital and maintenance projects. $344 to the General Fund for the 2020 Series B Lease Revenue Bond debt service payment. Library Fund transferred: $277 to the Pension Obligation Bond Debt Service Fund to finance debt service payments. $33 to the General Fund for budget appropriated uses. 70 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Flood Control Districts Fund transferred: $6,281 to the State Water Project Fund for the preliminary planning and design phase of the Department of Water Resources Delta Conveyance Project. Driving Under the Influence Programs Fund transferred $29 to the Pension Obligation Bond Debt Service Fund to finance debt service payments. County Service Area Funds transferred $344 to Enterprise County Service Area Funds for budget appropriated uses. Debt Service Financing Authority Fund transferred $1,423 to the Capital Projects Fund for 2020 Series A Lease Revenue bond proceeds for construction of the Animal Services Facility ($718) and for the new Co-Located Emergency Dispatch Center bond proceeds ($705). The Community Development Fund transferred $40 to the General Fund for budgeted appropriated uses. Major Enterprise Funds The Airport Fund transferred: $199 to the General Fund for debt service payments on construction of the new airport terminal. $103 to the Pension Obligation Bond Debt Service Fund to finance debt service payments. The Los Osos Wastewater Fund transferred $41 to the Flood Control Districts Fund for debt service payments. Nonmajor Enterprise Funds The Golf Fund transferred $55 to the Pension Obligation Bond Debt Service Fund to finance debt service payments. County Service Area Funds transferred: $1 to the Flood Control Districts Fund for debt service payments. $1 to the General Fund for debt service payments. Internal Service Funds (ISF) Both the Garage ISF and the Public Works ISF transferred to the Pension Obligation Bond Debt Service Fund to finance debt service payments. The Garage ISF transferred $54, and the Public Works ISF transferred $1,262. The Protected Self-Insurance ISF transferred $237 to the General Fund for an insurance reimbursement claim paid by the General Fund. 71 NOTES TO 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, 2023, is as follows (in thousands): Beginning Ending Balance Balance Due within Governmental Activities July 1, 2022 Adjustments Additions Reductions June 30, 2023 one year Bonds and notes payable: Certificates of participation (COP) $ 10,127 $ - $ - $ 6,922 $ 3,205 $ 170 Certificates of participation from 8,163 - - 190 7,973 196 direct borrowings Unamortized premium on COP 530 - - 530 - - Unamortized premium on lease - 3,652 4,634 314 7,972 - revenue bonds State notes from direct borrowings 1,426 - - 162 1,264 163 Pension obligation bonds 85,112 (2,046) - 3,550 79,516 10,552 Lease revenue bonds 19,380 - 70,033 610 88,803 2,961 Assessment bonds from direct 344 - - 50 294 53 borrowings Total bonds and notes payable 128,734 (2,046) 74,667 12,328 189,027 14,095 Leases 92,248 - 38,934 4,848 126,334 4,789 Subscription-based IT arrangements1 5,084 - 20 2,490 2,614 2,411 Other liabilities: Compensated absences 35,415 - 22,897 21,360 36,952 26,268 Landfill post-closure costs 8,172 - 1,284 711 8,745 1,269 Self-insurance 22,260 - 6,817 5,576 23,501 5,116 Total other liabilities 65,847 - 30,998 27,647 69,198 32,653 Total Governmental Activities $ 291,913 $ (2,046) $ 144,619 $ 47,313 $ 387,173 $ 53,948 72 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Beginning Ending Balance Balance Due within Business-Type Activities July 1, 2022 Adjustments Additions Reductions June 30, 2023 one year Bonds and notes payable: Certificates of participation (COP) $ 9,213 $ - $ - $ 3,093 $ 6,120 $ 630 Certificates of participation from 5,455 - - 104 5,351 107 direct borrowings Unamortized premium on COP 196 - - 196 - - State notes from direct borrowings 84,528 - - 3,827 80,701 3,737 Other notes from direct borrowings 196 - - 30 166 40 Revenue bonds 150,585 - - 4,990 145,595 5,250 Unamortized premium on revenue 7,230 - - 425 6,805 - bonds General obligation bonds 6,030 - - 540 5,490 565 Unamortized premium on general 508 - - 56 452 - obligation bonds Lease revenue bonds - - 1,582 - 1,582 365 Unamortized premium on lease - - 67 10 57 - revenue bonds Assessment bonds 70,978 - - 1,541 69,437 1,587 Total bonds and notes payable 334,919 - 1,649 14,812 321,756 12,281 Leases 250 - - 86 164 86 Subscription-based IT arrangements 1 270 - 27 98 199 113 Other liabilities: Compensated absences 485 - 338 244 579 296 Total other liabilities 485 - 338 244 579 296 Total Business-Type Activities $ 335,924 $ - $ 2,014 $ 15,240 $ 322,698 $ 12,776 1 Subscription-based IT arrangements beginning balance was restated with the implementation of GASB 96. 73 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Annual debt service requirements for governmental activities as of June 30, 2023, are summarized as follows: Governmental Activities Certificates of Participation, Including Direct Borrowings Pension Obligation Bonds Unaccreted Year Ended June 30, Principal Interest Principal Appreciation Total 2024 $ 365 $ 377 $ 10,552 $ 298 $ 10,850 2025 380 364 10,578 927 11,505 2026 392 349 10,588 1,597 12,185 2027 408 334 10,577 2,313 12,890 2028 419 319 10,566 3,059 13,625 2029-2033 2.352 1,338 26,655 11,459 38,115 2034-2038 2,521 850 - - - 2039-2043 1,625 500 - - - 2044-2048 1,569 214 - - - 2049-2053 411 86 - - - 2054-2058 449 49 - - - 2059-2062 287 10 - - - Total $ 11,178 $ 4,790 $ 79,516 $ 19,653 $ 99,170 Governmental Activities (Continued) State Notes, Assessment Bonds, Including Direct Borrowings Lease Revenue Bonds Including Direct Borrowings Year Ended June 30, Principal Interest Principal Interest Principal Interest 2024 $ 163 $ 12 $ 2,961 $ 4,325 $ 53 $ 15 2025 165 11 3,119 4,180 56 12 2026 166 9 3,260 4,027 58 8 2027 168 7 3,428 3,866 62 5 2028 170 6 2,390 3,728 65 2 2029-2033 432 7 13,755 16,808 - - 2034-2038 - - 17,065 13,170 - - 2039-2043 - - 20,130 8,858 - - 2044-2047 - - 22,695 5,207 - - Total $ 1,264 $ 52 $ 88,803 $ 64,169 $ 294 $ 42 74 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Business-Type Activities Certificates of Participation, Including Direct Borrowings State Notes Revenue Bonds Year Ended June 30, Principal Interest Principal Interest Principal Interest 2024 $ 737 $ 444 $ 3,737 $ 1,668 $ 5,250 $ 6,558 2025 775 405 3,800 1,584 5,525 6,283 2026 813 365 3,885 1,499 5,815 5,994 2027 860 322 3,972 1,413 6,120 5,689 2028 903 278 4,060 1,324 6,415 5,393 2029-2033 3,240 792 16,308 5,396 36,765 22,270 2034-2038 741 495 14,641 3,920 46,380 12,658 2039-2043 856 379 16,165 2,396 33,325 2,009 2044-2048 992 243 14,133 714 - - 2049-2053 777 113 - - - - 2054-2058 417 50 - - - - 2059-2062 360 13 - - - - Total $ 11,471 $ 3,899 $ 80,701 $ 19,914 $ 145,595 $ 66,944 Business-Type Activities (Continued) Other Notes General Obligation Bonds Assessment Bonds Including Direct Borrowings Year Ended June 30, Principal Interest Principal Interest Principal Interest 2024 $ 565 $ 271 $ 1,587 $ 1,888 $ 40 $ - 2025 595 239 1,632 1,844 40 - 2026 630 206 1,677 1,798 40 - 2027 665 170 1,722 1,751 40 - 2028 700 134 1,767 1,703 6 - 2029-2033 2,335 180 9,627 7,747 - - 2034-2038 - - 11,051 6,328 - - 2039-2043 - - 12,674 4,699 - - 2044-2048 - - 14,540 2,831 - - 2049-2052 - - 13,160 738 - - Total $ 5,490 $ 1,200 $ 69,437 $ 31,327 $ 166 $ - Business-Type Activities (Continued) Lease Revenue Bonds Year Ended June 30, Principal Interest 2024 $ 365 $ 70 2025 386 51 2026 405 31 2027 426 11 Total $ 1,582 163 75 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Long-term liabilities at June 30, 2023, consisted of the following: Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2023 Governmental Activities Certificates of Participation 2007 Series A 3/01/2007 2036 4% - 4.25% $7 - $307 $5,090 $3,205 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 is the County Department of Social Services building located in the City of San Luis Obispo. IBank Loan 10/01/2016 2046 3.75% $5 - $320 6,000 5,233 A direct borrowing from the California Infrastructure & Economic Development Bank (IBank) 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 is the County of San Luis Obispo Public Library and Office Building located at 6555 Capistrano Ave., Atascadero. Oceano Drainage Project 2/01/2021 2061 1.75% $1 - $98 2,841 2,740 A direct borrowing from the USDA used to finance a storm drain improvement project on Highway 1 & 13th street in Oceano, CA. Debt service is provided by the County’s General Fund. The loan is secured by a Certificate of Participation bond with first lien position in the amount of $2,841 fully registered as to both principal and interest in the name of the United States of America, acting through the United States Department of Agriculture. $28,358 $11,178 State Note 10/8/2015 2030 1.00% $88 $2,197 $1,264 A direct borrowing from the California Energy Commission (CEC) 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 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 2030 5.27% - 5.73% zero -$15,000 $44,199 $99,169 2003 Series C CABs Unaccreted Interest (19,653) $44,199 $79,516 Lease Revenue Bonds 2020 Lease Revenue Bonds Series A 3/05/2020 2044 4.0% $20 - $1,030 $16,145 $15,060 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 Revenues. 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 3/05/2020 2036 4.0% $7 - $347 $4,235 $3,710 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. 2022 Lease Revenue Bonds Series A 11/17/2022 2048 5.0%-5.5% $985 - $20,715 $62,220 $62,220 Used to finance the construction of multiple capital projects (Co-Located Dispatch Facility & Probation Department Building) and pay certain costs of issuance associated with the 2022A Bonds. Debt service is provided by semi-annual payments funded by public facility fees and County’s General Fund Revenues. Collateral for this debt consists of lease revenues from 5 facilities located in the City of San Luis Obispo and one located just outside the City of San Luis Obispo in the unincorporated area of the County. The facilities include County Government Center, Health Agency Building (Main), Health Agency Building (Mental Health), Central Services Building, Old Courthouse, and Animal Services Facility. 76 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 2022 Lease Revenue Bonds Series A Remediation 11/17/2022 2027 5.0% $986 - $1,153 $4,278 $4,278 Lease Revenue Refunding Bonds used to refund the 2012 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 public facility fees and County’s General Fund Revenues. Collateral for this debt consists of lease revenues from 5 facilities located in the City of San Luis Obispo and one located just outside the City of San Luis Obispo in the unincorporated area of the County. The facilities include County Government Center, Health Agency Building (Main), Health Agency Building (Mental Health), Central Services Building, Old Courthouse, and Animal Services Facility. 2022 Lease Revenue Bonds Series B 11/17/2022 2026 4.90%-5.05% $785 - $1,340 $3,535 $3,535 Used to finance the rehabilitation of Cayucos Veterans Hall and pay certain costs of issuance associated with the 2022B Bond. Debt service is provided by semi-annual payments funded by reservation fees and County’s General Fund Revenues. Collateral for this debt consists of lease revenues from 5 facilities located in the City of San Luis Obispo and one located just outside the City of San Luis Obispo in the unincorporated area of the County. The facilities include County Government Center, Health Agency Building (Main), Health Agency Building (Mental Health), Central Services Building, Old Courthouse, and Animal Services Facility. $90,413 $88,803 Assessment Bonds Sherwood Drive Underground Utility Assessment District Limited Obligation Improvement Bond, Series 2006 12/21/2006 2027 5.45% $2 - $67 $818 $294 A direct borrowing originally from Mission Community Bank (now Pacific Premier Bank) used to finance the replacement of overhead utility lines in the public right-of-way with an underground system, and removal of all overhead lines and supporting structures in the public right-of-way in the area of Sherwood Drive between Wedgewood Street and Lampton Street, including portions of Castle Street, Drake Street, Jean Street, and Kerwin Street, in the unincorporated community of Cambria. Debt service is provided by semi-annual payments from special assessments levied against all benefitted real property within the boundaries of the Sherwood Drive Underground Utility Assessment District. Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2023 Business-Type Activities Certificates of Participation US Department of Agriculture (USDA) 2009 4/30/2009 2048 4.375% $2 - $86 $1,631 $1,344 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 Remediation 6/08/2011 2030 2.0% - 5.5% $23 - $928 $11,990 $6,120 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. USDA 2013 7/01/2013 2053 2.75% $19 - $67 $1,621 $1,363 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. USDA Cayucos Water Tank Project 11/02/2021 2061 1.75% $1 - $93 $2,691 $2,644 A direct borrowing from USDA used to finance the Cayucos new water storage tanks which is part of the infrastructure improvement program for CSA 10A water system to address storage deficiencies, improve redundancy and reliability, and reduce overall system maintenance costs. Debt service is provided by funds from CSA 10A water sales revenues. $23,256 $11,471 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. One of the Los Osos Wastewater Project loans from the State of California Department of Water Resources was modified with an additional loan amount of $11,023 on 4/29/2021. Lopez Recreation Area 2004 2024 2.5132% $10 325 20 Lopez Water Treatment Plant Upgrade 2006 2030 2.60% $836 25,945 10,469 Los Osos Wastewater Project 2011 2046 2.0% $1,565-$2,147 80,484 70,212 $109,765 $80,701 77 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Revenue Bonds 2018 Nacimiento Water Project Revenue Refunding Bonds Series A 5/07/2018 2040 3.0% - 5.0% $158 - $9,173 $27,045 $22,720 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% $887 - $2,636 $38,565 $30,010 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 8/19/2015 2038 3.0%-5.0% $159 - $8,094 $107,115 $92,865 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 $145,595 General Obligation Bonds 2011 Refunding – Lopez Dam Remediation 6/08/2011 2030 2.0% - 5.5% $21 - $841 $10,760 $5,490 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. Lease Revenue Bonds 2022 Lease Revenue Bonds Series A Remediation 11/17/2022 2027 5.0% $365 - $427 $1,582 $1,582 Lease Revenue Refunding Bonds used to refund the 2012 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 consists of lease revenues from 5 facilities located in the City of San Luis Obispo and one located just outside the City of San Luis Obispo in the unincorporated area of the County. The facilities include County Government Center, health agency building (main), health agency building (mental health), central services building, old courthouse, and animal services facility. Assessment Bonds 5/24/2012 2051 2.75% $47 - $3,472 $83,129 $69,437 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. Other Notes 6/30/2022 2027 0.0% $20 $196 $166 A direct borrowing from PG&E through on-bill financing. The loan issued is an unsecured loan to fully or partially reimburse qualified PG&E customers for the costs they incur in connection with a qualified energy efficient retrofit project. These proceeds are being used to install lighting fixture upgrades at the San Luis Obispo County Airport. Debt service is provided by the general Airports revenues. This project will provide estimated long-term energy savings of $42,000 annually. 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. 78 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Description of Long-Term Lease Arrangements The County formed the Public Facilities Corporation and the Financing Authority for the purpose of issuing debt. On behalf of the County, these two entities issued all currently outstanding certificates of participation and the Lopez Dam remediation general obligation bond. Therefore, the County makes semi-annual lease payments in lieu of debt service to these entities from a variety of sources including State and Federal revenues, penalty assessments, golf course fees, water contract payments, and property taxes. For lease payment details, see above schedules for specific type of debt. Description of Special Assessment Bonds Special assessment debt has been issued to provide funds for the construction of streets, utility and water delivery systems. These bonds will be repaid from amounts levied against the property owners benefited by this construction. The County acts in an agent capacity for the assessment districts. In the event that a deficiency exists because of unpaid or delinquent special assessments at the time a debt service payment is due, the County must provide resources to cover the deficiency until other resources, for example, foreclosure proceeds, are received. Special assessment principal outstanding on June 30, 2023, totals $69,825 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 $37,531 on June 30, 2023. 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 $854,588 with a margin of $849,098. Direct Placement Debt The County does not have any direct placement debt as of June 30, 2023. Direct Borrowings The County’s outstanding notes from direct borrowings related to governmental activities of $9,531 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 $86,218 contain a provision that if default continues after the cure period, the entire obligation becomes due and payable. 79 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, 2023 had an arbitrage liability of $153. Debt Refunding On November 17, 2022, all the outstanding principal and interest due on the Certificates of Participation 2012 Series A were paid. Funding was provided by the issuance of the SLO County Financing Authority Lease Revenue Refunding Bonds 2022 Series A. The aggregate difference between the 2012 Series A and the 2022 Series A was $381. Using the effective interest rate method, the refunding resulted in an economic gain of $377. 11. NET POSITION/FUND BALANCES NET POSITION 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, 2023, is $13,862 of Public Facility Fees, $12,166 of Road Impact Fees, and $50 of Wildlife and Grazing programs restricted due to enabling legislation. The remaining $147,008 of restricted net position is restricted due to restrictions imposed by creditors, grantors, or contributors. Restricted net position at June 30, 2023, for governmental activities is as follows (in thousands): Amount RESTRICTED FOR: General Government Purchase obligations for Board of Supervisors professional services $ 8 Purchase obligations for Administrative Office related professional services 650 Purchase obligations for Clerk-Recorder equipment maintenance 12 Purchase obligations for Human Services professional services and software 213 Purchase obligations for Facilities Management related software 16 Purchase obligations for Building Maintenance projects 750 Purchase obligations for Information Technology related equipment and professional services 208 Purchase obligations for Auditor-Controller-Treasurer-Tax Collector related professional services 162 Purchase obligations for Talent Development professional services 17 Claims, contracts and other restrictions imposed by grantors or contributors 8,512 Total General Government 10,548 Public Protection Purchase obligations for Waste Management related professional services 210 Purchase obligations for Grand Jury related supplies 1 Purchase obligations for District Attorney related professional services 20 Purchase obligations for Sheriff-Coroner related equipment and professional services 105 Purchase obligations for Animal Services related equipment 31 Purchase obligations for Emergency Services related professional services 20 Purchase obligations for Probation related equipment and professional services 87 Purchase obligations for fire protection related vehicles and equipment 5,092 Purchase obligations for Planning and Building related professional services 2,237 Purchase obligations for flood control related engineering and environmental services 6,568 Wildlife and Grazing programs restricted by enabling legislation 50 Claims, contracts and other restrictions imposed by grantors or contributors 6,719 Total Public Protection 21,140 80 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Health and Sanitation Purchase obligations for Public Health related professional services and equipment 604 Purchase obligations for Behavioral Health related professional services and computer software 616 Claims, contracts and other restrictions imposed by grantors or contributors 17,486 Total Health and Sanitation 18,706 Public Assistance Claims, contracts and other restrictions imposed by grantors or contributors 2,750 Public Ways and Facilities Purchase obligations for Public Works related professional services 606 Road impact fees restricted by enabling legislation for road maintenance and construction 12,166 Public facilities fees restricted by enabling legislation for public facilities 13,862 Total Public Ways and Facilities 26,634 Recreation and Cultural Services Parks equipment and maintenance services 3,093 Education Library equipment and vehicles 9 Claims, contracts, and other restrictions imposed by grantors or contributors 186 Prepaid expenses 9 Total Education 204 Debt Service 90,011 Total Restricted Net Position $ 173,086 The Public Works Internal Service Fund reported a deficit in net position of $37,364 at June 30, 2023. This deficit is mainly due to the fund’s net pension liability of $76,674 and the County plans to reduce the deficit with increased future charges. The Workers’ Compensation and Protected Self-Insurance Internal Service Funds reported deficits in net position of $3,864 and $691, respectively, at June 30, 2023. The deficits are mainly due to increased payouts from each fund, without sufficient charges to users. Net position for each fund fluctuates and overtime aims to break-even. Should deficits continue, the amount charged to users will be increased to offset increasing costs. 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. 81 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. Fund balances for all the major and nonmajor governmental funds as of June 30, 2023, are distributed as follows: Capital Nonmajor General Projects Governmental Fund Fund Funds Total Nonspendable: Inventories $ 121 $ - $ - $ 121 Prepaid items 734 - 9 743 Advances to other funds 5,918 - - 5,918 Subtotal $ 6,773 $ - $ 9 $ 6,782 Restricted for: General Government $ 2,401 $ - $ - $ 2,401 programs & encumbrances Automation projects 2,344 - - 2,344 Tax reduction reserves 3,990 - - 3,990 Public Protection programs 11,253 - - 11,253 Public Ways and Facilities 401 - - 401 programs & encumbrances Health and Sanitation 1,220 - - 1,220 programs & encumbrances Mental Health Services Act 2,774 - - 2,774 Recreation programs 224 - - 224 Public facilities - - 13,862 13,862 Traffic impact programs - - 12,166 12,166 Flood Control Districts - - 6,568 6,568 services Library equipment & - - 9 9 maintenance services Driving Under the Influence - - 186 186 services Community Service Areas - - 138 138 road maintenance Wildlife and grazing programs - - 50 50 Parks equipment and - - 708 708 maintenance services Solid waste management - - 55 55 encumbrances Debt service - 286 95,644 95,930 Subtotal $ 24,607 $ 286 $ 129,386 $ 154,279 82 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Capital Nonmajor Projects Governmental General Fund Fund Funds Total Committed to: Maintenance projects $ 5,959 $ - $ - $ 5,959 County Counsel services 1,164 - - 1,164 IT projects 53 - - 53 Other general government 12,168 - - 12,168 Fire services and equipment 11,926 - - 11,926 Sheriff-Coroner programs 1,298 - - 1,298 Other public protection 100 - - 100 Public Health programs 935 - - 935 Social Services programs 32 - - 32 Public works engineering & 16 - - 16 consulting services Community parks programs 595 - - 595 Fish and Game programs - - 202 202 Flood Control programs - - 13,209 13,209 Lighting programs - - 458 458 Community Development - - 24,192 24,192 programs Emergency Medical Services - - 528 528 Roads - - 20,010 20,010 Community Service Areas - - 3,110 3,110 Driving Under the Influence - - 212 212 programs Library - - 6,156 6,156 Parks - - 1,095 1,095 Solid waste management - - 275 275 General reserve 7,000 - - 7,000 SB1090 Economic 10,890 - - 10,890 development COVID-19 services 5,529 - - 5,529 Internal financing 5,794 - - 5,794 Solar plant safety 843 - - 843 Solar plant mitigation 15,640 - - 15,640 Automation projects 21,452 - - 21,452 Prado Rd Interchange project 1,435 - - 1,435 Talent Development 1,822 - - 1,822 Project Homekey 2,600 - - 2,600 Rainy Day Fund 6,209 - - 6,209 Building replacement 51,208 - - 51,208 Tax reduction reserve 59,160 - - 59,160 Lease financing 995 - - 955 Capital Projects - 17,281 - 17,281 Subtotal $ 224,823 $ 17,281 $ 69,447 $ 311,551 83 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Capital Nonmajor Projects Governmental General Fund Fund Funds Total Assigned to: Tax reduction reserve $ 29,015 $ - $ - $ 29,015 Clerk-Recorder services 1,487 - - 1,487 IT projects 171 - - 171 General government 8,621 - - 8,621 Sheriff-Coroner & Emergency 19,416 - - 19,416 Services programs Probation programs 17,541 - - 17,541 District Attorney programs 5,074 - - 5,074 Planning programs 3,081 - - 3,081 Other public protection 1,235 - - 1,235 programs Foster Care & Social Services 30,633 - - 30,633 programs Other public assistance 88 88 programs - - Public ways and facilities 2,358 - - 2,358 Behavioral Health programs 22,431 - - 22,431 Public Health programs 7,115 - - 7,115 Other education programs 4 - - 4 Subsequent Fiscal Year 50,788 - - 50,788 Budget Imprest cash 138 - - 138 Subtotal $ 199,196 $ - $ - $ 199,196 Total $ 455,399 $ 17,567 $ 198,842 $ 671,808 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, 2023, to be reappropriated during the next fiscal year (in thousands): Fund Total Encumbrances General Fund $ 7,728 Capital Projects Fund 68,247 Nonmajor Governmental Funds 18,777 Total Lapsing Encumbrances $ 94,752 84 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 $23,138 over the next 12 years. The estimated amounts vary by year. For example, the principal amount due in 2023 is $1,344 while $2,431 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. The County is not aware of any potential claims against the County not covered by insurance, resulting from litigation that would materially affect the financial statements of the County at June 30, 2023. 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 the date of this report, the landfill closure is complete and only postclosure costs remain. The remaining estimated liability for landfill postclosure cost as of June 30, 2023, is $8,745 (in 2023 dollars). Of this, $5,131 is for the Maintenance Cost and $3,614 is the Corrective Action Cost. The cost estimates were provided by a licensed professional geologist in the Postclosure Maintenance Plan dated May 2017 and revised cost dated May 29, 2018, and the Engineers Estimate of Corrective Action Update dated July 27, 2021. 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. 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. 85 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, 2023, the Agricultural Preserve Program tax abatements were $17,850. 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 six 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, the San Luis Obispo County Pension Trust, and the San Luis Obispo Regional Transit Authority. The Plan exists, operates and is constituted under the authority of Section 53215 of Section 17 of Article XVI of the California Constitution and the Government Code Article 1.5 (Pension Trusts), of Chapter 2 (Officers and Employees), of Part 1 (Powers and Duties Common to Cities, Counties and Other Agencies), of Division 2 (Cities, Counties and Other Agencies), of Title 5 (Local Agencies) of the California Government Code. 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. 86 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, 2021, there Tier 1 were 707 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, 2021, there were 259 active County employed members in Tier 2. Tier 3 includes all members hired on or after January 1, 2013. As of December 31, 2021, there were Tier 3 1,685 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, 2022, are shown in the following table: Tiers Summary of Plan Active members Vested after accumulation of five years of Pension Trust service credit & Miscellaneous Tier 1 eligible to receive a Service Retirement Allowance after vesting and 560 members attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & Miscellaneous Tier 2 eligible to receive a Service Retirement Allowance after vesting and 213 members attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & Miscellaneous Tier 3 eligible to receive a Service Retirement Allowance after vesting and 1,456 members attaining a minimum age of 52. Vested after accumulation of five years of Pension Trust service credit & Probation Tier 1 eligible to receive a Service Retirement Allowance after vesting and 67 members attaining a minimum age of 50. Probation Tier 2 N/A - Vested after accumulation of five years of Pension Trust service credit & Probation Tier 3 eligible to receive a Service Retirement Allowance after vesting and 55 members attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & Safety Tier 1 eligible to receive a Service Retirement Allowance after vesting and 80 members attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & Safety Tier 2 eligible to receive a Service Retirement Allowance after vesting and 46 members attaining a minimum age of 50. Vested after accumulation of five years of Pension Trust service credit & Safety Tier 3 eligible to receive a Service Retirement Allowance after vesting and 174 members attaining a minimum age of 50. 87 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 88 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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: EMPLOYER EMPLOYEE CONTRIBUTION CONTRIBUTION PLAN RATES RATES Miscellaneous Tier 1 31.68-34.70% 15.15-26.47% Miscellaneous Tier 2 31.68-34.70% 6.76-19.57% Miscellaneous Tier 3 31.72-34.49% 5.14-18.93% Probation Tier 1 35.69-36.59% 25.43-31.13% Probation Tier 2 Not Negotiated Not Negotiated Probation Tier 3 35.19% 11.95-24.19% Safety Tier 1 46.02-54.14% 16.22-35.13% Safety Tier 2 48.24-54.14% 10.45-26.04% Safety Tier 3 43.89-53.53% 10.99-21.62% 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, 2021 $53,737 June 30, 2022 $62,935 June 30, 2023 $73,290 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 64.1% funded as of January 1, 2023; 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 64.1 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, 2022, was $2,426,976. The County’s share of the Plan’s fiduciary net position was $1,498,139 as of the same date. As of December 31, 2022, the Plan’s fiduciary net position was 61.73% of the total pension liability. At June 30, 2023, the County reported a liability of $928,838 for its proportionate share of the net pension liability of the Plan. The net pension liability was measured as of December 31, 2022. 89 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The total pension liability used to calculate the net pension liability was determined by an actuarial valuation date of January 1, 2022. The actuarial assumptions used in the January 1, 2022 valuation were based on the results of an actuarial experience study for the period January 1, 2017 through December 31, 2021. Measurements as of December 31, 2022, are based on the fair value of assets on that date, and the Total Pension Liability as of the valuation date, January 1, 2022. The actuarial assumptions were rolled forward to the Pension Trust Plan’s fiscal year-end of December 31, 2022. There were no significant events between the January 1, 2022 valuation date and the December 31, 2022 measurement date for the Pension Plan’s GASB Statement No. 67 valuation. 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, 2022, the County’s proportionate share was 93.96%, compared to 94.06% at December 31, 2022, a decrease of 0.10%. 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, 2023, the County recognized pension expense of $134,723. 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, 2022, 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 $ 1,734 $ 1,019 Deferred outflows and inflows of resources – difference between expected and actual experience 47,158 - Deferred outflows of resources – changes in actuarial assumptions 98,853 - Deferred outflows of resources – net difference between projected and actual earnings on pension plan investments 88,066 - County contributions subsequent to the measurement date 37,209 - $ 273,020 $ 1,019 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 $37,209 for contributions for the fiscal year ending June 30, 2023, made subsequent to the measurement date of December 31, 2022. The $37,209 of subsequent contributions will be recognized as reduction of the net pension liability in the fiscal year ending June 30, 2024. 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, 2022, and is 5 years. The difference between the actual employer contributions and the proportionate share of the employer contributions during the measurement period ended December 31, 2022 is also recognized over 5 years. 90 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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) 2024 $ 43,879 2025 63,018 2026 60,943 2027 66,953 Thereafter - Total $ 234,793 Actuarial Assumptions The total pension liability in the January 1, 2022, actuarial valuation was determined using the following actuarial assumptions: The actuarial assumptions used in the January 1, 2020, valuation were based on the results of an actuarial experience study for the period January 1, 2017 – December 31, 2021. 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 Cash Equivalents/Short Duration Govt 10% 1.10% Equities – Public Market 30% 4.88% Real Assets 15% 4.63% Private Markets 30% 6.30% US Treasury – Long Duration/TIPS 15% 1.44% Discount Rate The discount rate used to measure the total pension liability was 6.75%. 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. 91 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 6.75%, 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, 5.75%, or one percentage-point higher, 7.75%, than the current rate: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 5.75% 6.75% 7.75% County net pension liability as of December 31, 2022 $1,261,450 $928,838 $656,358 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 ACFR. Deferred Compensation Plan The Deferred Compensation Plan, also known as a 457(b), is a voluntary retirement savings plan offered by the County to enable employees to save for their future on a tax deferred basis. The County's Deferred Compensation Plan is established and administered pursuant to Section 457 of the Internal Revenue Code (IRC). Contributions are limited to an annual maximum dollar amount, as established under the IRC. For certain employee bargaining units, the County will match employee contributions up to $500 annually. Total employer matching contributions for year ended June 30, 2023, were $236 thousand. The plan is administered through a third-party administrator. The County does not perform the investing function and has no fiduciary accountability for the plan. Thus, plan assets and any related liability to the plan participants have been excluded from the County’s financial statements. 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 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. 92 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, 2023 a total of 4,027 employees were covered by the OPEB Plan’s benefit terms: Active Plan Members 2,755 Inactive Plan Members 1,056 Inactive Plan members entitled to but not yet receiving benefits 216 4,027 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. In FY 22-23 the County provided the following to eligible retirees: Employee Healthcare Benefit Calendar Year 2022 $149 per month Calendar Year 2023 $151 per month 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, 2023, the funding was a combination of direct premium payments to contracted medical, dental and vision providers, plus a contribution of $760 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 $27.4 million as of June 30, 2023. The June 30, 2023, net OPEB Liability was determined by the actuary using a measurement date of June 30, 2022. 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. 93 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The total OPEB liability as of June 30, 2023, was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount Rate 6.00% Inflation 2.30% Health care cost trend rate Based on the 2022 Getzen model that reflects actual premium change of 5.60% from 2022 to 2023 followed by 6.50% in 2023 decreasing gradually to an ultimate rate of 3.73% by 2075. 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 11 years Reimbursement eligibility 40% of all retirants will apply for and receive the reimbursement Payroll growth rate 2.50% per annum Salary increases 2.50% plus service-related merit component Investment rate of return 6.00% Post-retirement mortality Miscellaneous: Pub-2010 General Employees/Retirees Amount Weighted Above-Median Mortality Table projected fully generationally using Scale MP-2021. Probation and Safety: Pub-2010 Safety Employees/Retirees Amount Weighted Above-Median Mortality Table projected fully generationally using Scale MP-2021. The withdrawal, retirement, disability, mortality, and salary scale are based on an experience study for the five- year period ending December 31, 2021 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 6.00% 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. 94 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The CERBT Strategy 1 portfolio consists of the following assets managed internally by the California Public Employees Retirement System (CalPERS) and/or external advisors: Target Asset Class Allocation Target Range Global Equity 49% plus/minus 5% Fixed Income 23% plus/minus 5% Treasury Inflation-Protected Securities (TIPS) 5% plus/minus 3% Global Real Estate Investment Trusts (REITs) 20% plus/minus 5% Commodities 3% plus/minus 3% Cash - plus 2% The long-term expected real rate of return, net of expenses, for CERBT Strategy 1 is assumed to be 6.0%. 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 OPEB Plan Fiduciary Net OPEB Liability Less Net Position Equals Liability Balances as of June 30, 2022 $57,662 $28,078 $29,584 Projected Changes for fiscal year-end June 30, 2023: Service Cost 1,846 - 1,846 Interest Cost 3,604 - 3,604 Differences between expected and actual experience (10,638) - (10,638) Actuarial Gains/Losses - - - Change in Assumptions 3,599 - 3,599 Changes of Benefit Terms - - - Employee Contributions - - - Employer Contributions - 4,461 (4,461) Net Investment Income - (3,853) 3,853 Other Additions - - - Benefit Payments (3,758) (3,758) - Administrative Expenses - (7) 7 Other Deductions - - - Net Projected Changes (5,347) (3,157) (2,190) Projected Balances as of June 30, 2023 $52,315 $24,921 $27,394 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, 2023, the OPEB Plan’s fiduciary net position was 47.6% of the total OPEB liability. 95 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 6.0%, as well as what the liability would be if it were calculated using a discount rate that is one percentage-point lower, 5.0%, or one percentage-point higher, 7.0%, than the current rate: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 5.0% 6.0% 7.0% Net OPEB Liability $33,624 $27,394 $22,203 The sensitivity of the Net OPEB liability to changes in healthcare trend rates is presented below: 1% Trend 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 5.0% 6.0% 7.0% Net OPEB Liability $21,141 $27,394 $34,969 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2023, the County recognized OPEB expense of $928 thousand. 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, 2023, 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 $ 2,766 $ 10,467 Deferred outflows of resources – changes in actuarial assumptions 10,437 - Deferred outflows of resources – net difference between projected and actual earnings on pension plan investments 1,967 - County contributions subsequent to the measurement date 4,135 - $ 19,305 $ 10,467 $4,135 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, 2024. 96 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Amounts reported as deferred (inflows) outflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended Future Recognition June 30, (in thousands) 2024 $ 2,591 2025 2,594 2026 848 2027 748 2028 (1,076) Thereafter (1,002) $ 4,703 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. PRIOR PERIOD ADJUSTMENT The County recorded a prior period adjustment of $1.2 million in the State Water Project Fund to correct an adjusting entry made in FY 2021-22 that impacted the ending accounts receivable balance. The adjustment reduced net position to both the Statement of Revenues, Expenditures, and Changes in Fund Balance and the Governmentwide Statement of Activities. 97 ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION DESCRIPTION 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 98 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% 2020 93.64% $637,385 $211,200 301.79% 69.71% 2021 94.06% $602,555 $208,782 288.61% 73.20% 2022 93.96% $928,838 $219,410 423.33% 61.73% * 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 The inflation rate (Consumer Price Index) increased from 2.25% in FY 2021-22 to 2.50% in FY 2022-23. The salary increase assumption increased from 2.75% in FY 2021-22 to 3.00% in FY 2022-23. Post retirement cost-of-living adjustment (COLA) benefits increased from 2.50% in FY 2021-22 to 2.75% in FY 2022-23 for Tier 1 employees. Tier 2 and Tier 3 remained unchanged. 99 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 June 30th contributions contributions (excess) covered payroll covered 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% 2021 $52,724 $53,874 ($1,150) $204,688 26.32% 2022 $57,546 $62,935 ($5,389) $212,907 29.56% 2023 $67,739 $73,290 ($5,551) $229,810 31.89% ^ 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 The inflation rate (Consumer Price Index) increased from 2.25% in FY 2021-22 to 2.50% in FY 2022-23. The salary increase assumption increased from 2.75% in FY 2021-22 to 3.00% in FY 2022-23. Post retirement cost-of-living adjustment (COLA) benefits are assumed to increase from 2.50% in FY 2021-22 to 2.75% in FY 2022-23 for Tier 1 employees. Tier 2 and Tier 3 remained unchanged. 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. 100 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 YEARS1 (in thousands) June 30, June 30, June 30, June 30, June 30, Measurement Date 2017 2018 2019 2020 2021 For Fiscal Year Reporting Period 2017-18 2018-19 2019-20 2020-21 2021-22 Total OP EB liab ility: Service cost $ 688 $ 611 $ 1,538 $ 1,652 $ 1,796 Interest 1,949 2,007 3,073 3,140 3,525 Differences between expected and actual experience - (2,842) - 4,990 (650) Changes of assumptions - 19,530 1,129 1,269 - Benefit payments (1,690) (1,526) (3,037) (3,102) (3,166) Net change in total OPEB liability 947 17,780 2,703 7,949 1,505 Total OPEB liability – beginning 26,775 27,722 45,502 48,208 56,157 Total OPEB liability – ending (a) $ 27,222 $ 45,502 $ 48,205 $ 56,157 $ 57,662 Plan Fid uciary ne t po sition: Employer contributions 1,707 2,521 3,922 3,778 3,693 Net investment income 1,155 1,286 1,161 732 5,990 Benefit payments (1,690) (1,526) (3,037) (3,102) (3,166) Administrative expense (7) (8) (4) (10) (8) Other deductions - (1,171) - - - Net change in plan fiduciary net position 1,165 1,102 2,042 1,398 6,509 Plan fiduciary net position – beginning 15,860 17,025 18,127 20,172 21,570 Plan fiduciary net position – ending (b) $ 17,025 $ 18,127 $ 20,169 $ 21,570 $ 28,079 County’s net OPEB liability – ending (a) – (b) $ 10,697 $ 27,375 $ 28,036 $ 34,587 $ 29,583 Plan fiduciary net position as a percentage of the total OPEB liability 61.4% 39.8% 41.8% 38.4% 48.7% Covered-employee payroll 2 $ 181,338 $ 190,136 $ 193,294 $ 202,414 $ 204,688 County’s net OPEB liability as a percentage of covered-employee payroll 5.9% 14.4% 14.5% 17.1% 14.5% 1 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. 2 Contributions made to the OPEB plan are not based on measure of pay. 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 inflation rate increased from 2.25% in FY 2021-22 to 2.30% in FY 2022-23. The discount rate decreased from 6.25% in FY 2021-22 to 6.00% in FY 2022-23. The payroll growth rate decreased from 2.75% in FY 2021-22 to 2.50% in FY 2022-23. The Notes to RSI are integral to the above schedule. (continued) 101 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 (CONTINUED) FOR THE LAST 10 FISCAL YEARS1 (in thousands) June 30, Measurement Date 2022 For Fiscal Year Reporting Period 2022-23 Total OP EB liab ility: Service cost $ 1,846 Interest 3,604 Differences between expected and actual experience (10,638) Changes of ass umptions 3,599 Benefit payments (3,758) Net change in total OPEB liability (5,347) Total OPEB liability – beginning 57,662 Total OPEB liability – ending (a) $ 52,315 Plan Fid uciary ne t po sition: Employer con tributions 4,461 Net investment income (3,853) Benefit payments (3,758) Administrative expense (7) Other de ductions - Net change in plan fiduciary net position (3,157) Plan fiduciary net position – beginning 28,078 Plan fiduciary net position – ending (b) $ 24,921 County’s net OPEB liability – ending (a) – (b) $ 27,394 Plan fiduciary net position as a percentage of the total OPEB liability 47.6% Covered-employee payroll 2 $ 212,907 County’s net OPEB liability as a percentage of covered-employee payroll 12.9% 1 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. 2 Contributions made to the OPEB plan are not based on measure of pay. 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 inflation rate increased from 2.25% in FY 2021-22 to 2.30% in FY 2022-23. The discount rate decreased from 6.25% in FY 2021-22 to 6.00% in FY 2022-23. The payroll growth rate decreased from 2.75% in FY 2021-22 to 2.50% in FY 2022-23. The Notes to RSI are integral to the above schedule. 102 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 1 (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 2 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% 2021 $ 5,134 $ 3,691 $ (1,443) $ 204,688 1.80% 2022 $ 4,890 $ 4,462 $ (428) $ 212,907 2.10% 2023 $ 4,751 $ 4,135 $ (618) $ 229,810 1.80% 1 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. 2 Contributions made to the OPEB plan are not based on measure of pay. Changes to benefit terms None Changes of assumptions The inflation rate increased from 2.25% in FY 2021-22 to 2.30% in FY 2022-23. The discount rate decreased from 6.25% in FY 2021-22 to 6.00% in FY 2022-23. The payroll growth rate decreased from 2.75% in FY 2021-22 to 2.50% in FY 2022-23. The Notes to RSI are integral to the above schedule. 103 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 236,214 $ 236,214 $ 251,198 $ 14,984 Licenses, permits, and franchises 1 5,324 1 5,823 1 5,478 (345) Fines, forfeitures, and penalties 3,562 3,858 3,053 (805) Use of money and property 2,742 2,742 8,034 5,292 Aid from other governments 317,659 384,842 333,654 (51,188) Charges for services 3 6,984 3 8,418 3 6,798 (1,620) Other revenue 5,670 9,103 1 0,586 1,483 Total Revenues 618,155 691,000 658,801 (32,199) Expenditures: Current: General government 6 3,553 9 4,063 6 4,191 2 9,872 Public protection 227,804 250,846 224,449 2 6,397 Public ways and facilities 5,637 7,660 4,025 3,635 Health and sanitation 142,836 157,627 132,329 2 5,298 Public assistance 153,112 170,767 188,072 (17,305) Education 684 684 596 88 Recreation and Culture 5,772 1 0,082 6,204 3,878 Debt Service: Principal Payments - - 6,970 (6,970) Interest and Fiscal Charges - - 834 (834) Contingencies 3 1,693 2 2,882 - 2 2,882 Total Expenditures 631,091 714,611 627,670 86,941 Excess (Deficiency) of Revenues Over (Under) Expenditures (12,936) (23,611) 31,131 54,742 Other Financing Sources (Uses): Leases - - 3 8,935 3 8,935 SBITAs - - 305 305 Transfers in 272 435 518 83 Transfers out (31,007) (68,054) (44,950) 2 3,104 Total Other Financing Sources (Uses) (30,735) (67,619) (5,192) 62,427 Net change in fund balances (43,671) (91,230) 25,939 117,169 Fund balances, beginning 326,272 326,272 326,272 - Fund balances, ending $ 282,601 $ 235,042 $ 352,211 $ 117,169 Continued 104 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, 2023 (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 $ 658,801 Revenues for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 3,649 Total Revenues as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 662,450 Uses/outflows of resources Actual amounts (budgetary basis) "Total Expenditures" from the budgetary comparison schedule $ 627,670 Expenditures for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 11,012 Total Expenditures as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 638,682 Other financing sources/(uses) of resources Actual amounts (budgetary basis) "Total Other Financing Sources (Uses)" from the Budgetary Comparison Schedule $ (5,192) Other financing sources (uses) for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes (41) Total Other Financing Sources (Uses) as reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds $ (5,233) 105 COUNTY OF SAN LUIS OBISPO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2023 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, 2023 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. 106 ________________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ________________________________________________________________ ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS ________________________________________________________________ NONMAJOR GOVERNMENTAL FUNDS DESCRIPTIONS 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. Solid Waste Management Accounts for resources used to oversee proper management, disposal, and recovery of solid waste. Wildlife & Grazing Accounts for resources used to provide for range improvements and the control of predators. 107 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. 108 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2023 (IN THOUSANDS) Special Revenue Emergency Driving Under Community Medical the Influence Fish and Development Services Programs Game Assets Cash and cash equivalents $ 9,369 $ 261 $ 398 $ 202 Restricted cash with fiscal agent - - - - Accounts receivable, net - - - - Other receivables - - - - Due from other governments 78 267 - - Due from other funds - - - - Loans receivable, net of allowance for uncollectibles 20,549 - - - Leases receivable - - - - Advances to other funds - - - - Prepaid items - - 4 - Other assets - - - - Total assets $ 2 9,996 $ 528 $ 402 $ 202 Liabilities Accounts payable $ 3,725 $ - $ - $ - Salaries and benefits payable - - - - Due to other funds - - - - Deposits from others 2,079 - - - Unearned revenue - - - - Advances from other funds - - - - Total liabilities 5,804 - - - Deferred Inflows of Resources Unavailable revenue - - - - Lease revenue - - - - Total deferred inflows of resources - - - - Fund Balances Nonspendable - - 4 - Restricted - - 186 - Committed 24,192 528 212 202 Assigned - - - - Unassigned - - - - Total fund balances 24,192 528 402 202 Total liabilities, deferred inflows of resources, and fund balances $ 2 9,996 $ 528 $ 402 $ 202 109 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2023 (IN THOUSANDS) Special Revenue Road Public Solid Impact Facilities Waste Fees Library Parks Fees Management Assets Cash and cash equivalents $ 12,166 $ 6,344 $ 3,680 $ 13,862 $ 342 Restricted cash with fiscal agent - - - - - Accounts receivable, net - 1 9 - - Other receivables - - 29 - - Due from other governments - - 1,639 - - Due from other funds - - - - - Loans receivable, net of allowance for uncollectibles - - - - - Leases receivable - - 136 - - Advances to other funds - - - - - Prepaid items - 5 - - - Other assets - - - - - Total assets $ 12,166 $ 6,350 $ 5,493 $ 13,862 $ 342 Liabilities Accounts payable $ - $ 63 $ 797 $ - $ 12 Salaries and benefits payable - 117 48 - - Due to other funds - - - - - Deposits from others - - 558 - - Unearned revenue - - - - - Advances from other funds - - 571 - - Total liabilities - 180 1,974 - 12 Deferred Inflows of Resources Unavailable revenue - - 1,588 - - Lease revenue - - 128 - - Total deferred inflows of resources - - 1,716 - - Fund Balances Nonspendable - 5 - - - Restricted 12,166 9 708 13,862 55 Committed - 6,156 1,095 - 275 Assigned - - - - - Unassigned - - - - - Total fund balances 12,166 6,170 1,803 13,862 330 Total liabilities, deferred inflows of resources, and fund balances $ 12,166 $ 6,350 $ 5,493 $ 13,862 $ 342 110 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2023 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County Roads Grazing Districts Districts Service Areas Assets Cash and cash equivalents $ 19,224 $ 50 $ 18,750 $ 458 $ 2,600 Restricted cash with fiscal agent - - - - - Accounts receivable, net - - 173 1 5 Other receivables - - - - - Due from other governments 4,819 - 219 - - Due from other funds - - - - - Loans receivable, net of allowance for uncollectibles - - - - - Leases receivable - - - - - Advances to other funds - - 1,327 - 655 Prepaid items - - - - - Other assets 52 - - - - Total assets $ 24,095 $ 50 $ 20,469 $ 459 $ 3,260 Liabilities Accounts payable $ 3,868 $ - $ 300 $ - $ 7 Salaries and benefits payable - - - - - Due to other funds - - - - - Deposits from others 138 - - - - Unearned revenue 67 - - - - Advances from other funds - - - - - Total liabilities 4,073 - 300 - 7 Deferred Inflows of Resources Unavailable revenue 12 - 392 1 5 Lease revenue - - - - - Total deferred inflows of resources 12 - 392 1 5 Fund Balances Nonspendable - - - - - Restricted - 50 6,568 - 138 Committed 20,010 - 13,209 458 3,110 Assigned - - - - - Unassigned - - - - - Total fund balances 20,010 50 19,777 458 3,248 Total liabilities, deferred inflows of resources, and fund balances $ 24,095 $ 50 $ 20,469 $ 459 $ 3,260 111 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2023 (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 $ 2 0 $ 23,310 $ 1 5 $ 111,051 Restricted cash with fiscal agent 1 7 72,577 72,585 Accounts receivable, net - - - 1 89 Other receivables - - - 29 Due from other governments - - - 7,022 Due from other funds - - - - Loans receivable, net of allowance for uncollectibles - - - 20,549 Leases receivable - - - 1 36 Advances to other funds - - - 1,982 Prepaid items - - - 9 Other assets - - - 52 Total assets $ 2 1 $ 23,317 $ 72,592 $ 213,604 Liabilities Accounts payable $ - $ - $ - $ 8,772 Salaries and benefits payable - - - 1 65 Due to other funds - - 2 86 2 86 Deposits from others - - - 2,775 Unearned revenue - - - 67 Advances from other funds - - - 5 71 Total liabilities - - 2 86 12,636 Deferred Inflows of Resources Unavailable revenue - - - 1,998 Lease revenue - - - 1 28 Total deferred inflows of resources - - - 2,126 Fund Balances Nonspendable - - - 9 Restricted 21 23,317 72,306 129,386 Committed - - - 69,447 Assigned - - - - Unassigned - - - - Total fund balances 21 23,317 72,306 198,842 Total liabilities, deferred inflows of resources, and fund balances $ 2 1 $ 23,317 $ 72,592 $ 213,604 112 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (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 - 4 86 - 29 Use of money and property (7) 3 11 - Aid from other governments 10,721 - 32 - Charges for services - - 1,080 - Other revenues 7 - 49 - Total revenues 10,721 4 89 1,172 29 Expenditures Current: Public protection - - - 42 Public ways and facilities - - - - Health and sanitation 8,239 - - - Public assistance - 5 44 - - Education - - 1,194 - Recreation and cultural services - - - - Debt service: Principal payments - - - - Interest and fiscal charges - - - - Total expenditures 8,239 5 44 1,194 42 Excess (deficiency) of revenues over (under) expenditures 2,482 (55) (22) (13) Other financing sources (uses) Refunding bonds issued - - - - Premium on refunding bonds issued - - - - Payment to refunded bond escrow agent - - - - Transfers in 40 - - - Transfers out (40) - (29) - Total other financing sources (uses) - - (29) - Net change in fund balances 2,482 (55) (51) (13) Fund balances - beginning 21,710 5 83 4 53 215 Fund balances - ending $ 24,192 $ 528 $ 402 $ 202 113 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, 2023 (IN THOUSANDS) Special Revenue Road Public Solid Impact Facilities Waste Fees Library Parks Fees Management Revenues Taxes $ - $ 11,530 $ - $ - $ - Licenses, permits, and franchises - - - - - Fines, forfeitures, and penalties - - 1 - - Use of money and property 202 74 115 345 (5) Aid from other governments - 222 136 - 93 Charges for services 1,013 93 6,053 1,521 335 Other revenues - 1,227 8 - - Total revenues 1,215 13,146 6,313 1,866 423 Expenditures Current: Public protection - - - - 810 Public ways and facilities - - - - - Health and sanitation - - - - - Public assistance - - - - - Education - 12,409 - - - Recreation and cultural services - - 10,481 - - Debt service: Principal payments - 16 - - - Interest and fiscal charges - 1 - - - Total expenditures - 12,426 10,481 - 810 Excess (deficiency) of revenues over (under) expenditures 1,215 720 (4,168) 1,866 (387) Other financing sources (uses) Refunding bonds issued - - - - - Premium on refunding bonds issued - - - - - Payment to refunded bond escrow agent - - - - - Transfers in - 651 2,394 - 717 Transfers out (557) (310) (109) (4,005) - Total other financing sources (uses) (557) 341 2,285 (4,005) 717 Net change in fund balances 658 1,061 (1,883) (2,139) 330 Fund balances - beginning 11,508 5,109 3,686 16,001 - Fund balances - ending $ 12,166 $ 6,170 $ 1,803 $ 13,862 $ 330 114 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, 2023 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County Roads and Grazing Districts Districts Service Areas Revenues Taxes $ 2,181 $ - $ 4,626 $ 45 $ 1,210 Licenses, permits, and franchises - - - - - Fines, forfeitures, and penalties - - - - - Use of money and property 531 1 418 8 51 Aid from other governments 26,961 3 4,658 - 4 Charges for services 437 - 601 12 7 Other revenues 109 - 87 - 5 Total revenues 30,219 4 10,390 65 1,277 Expenditures Current: Public protection - 2 8,108 33 - Public ways and facilities 53,221 - - - 770 Health and sanitation - - - - - Public assistance - - - - - Education - - - - - Recreation and cultural services - - - - - Debt service: Principal payments 50 - - - - Interest and fiscal charges 17 - - - - Total expenditures 53,288 2 8,108 33 770 Excess (deficiency) of revenues over (under) expenditures (23,069) 2 2,282 32 507 Other financing sources (uses) Refunding bonds issued - - - - - Premium on refunding bonds issued - - - - - Payment to refunded bond escrow agent - - - - - Transfers in 18,543 - 294 - - Transfers out (114) - (6,284) - (344) Total other financing sources (uses) 18,429 - (5,990) - (344) Net change in fund balances (4,640) 2 (3,708) 32 163 Fund balances -beginning 24,650 48 23,485 426 3,085 Fund balances - ending $ 20,010 $ 50 $ 19,777 $ 458 $ 3,248 115 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, 2023 (IN THOUSANDS) Debt Service Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Financing Governmental Corporation Bonds Authority Funds Revenues Taxes $ - $ - $ - $ 19,592 Licenses, permits, and franchises - - - - Fines, forfeitures, and penalties - - - 5 16 Use of money and property - 2 06 1,682 3,635 Aid from other governments - - - 42,830 Charges for services 4 20 - 4,851 16,423 Other revenues - 7 76 - 2,268 Total revenues 4 20 9 82 6,533 85,264 Expenditures Current: Public protection - - - 8,995 Public ways and facilities - - - 53,991 Health and sanitation - - - 8,239 Public assistance - - - 5 44 Education - - - 13,603 Recreation and cultural services - - - 10,481 Debt service: Principal payments 2 16 3,548 2,105 5,935 Interest and fiscal charges 1 94 6,709 2,812 9,733 Total expenditures 4 10 10,257 4,917 111,521 Excess (deficiency) of revenues over (under) expenditures 10 ( 9,275) 1,616 (26,257) Other financing sources (uses) Refunding bonds issued - - 70,033 70,033 Premium on refunding bonds issued - - 4,634 4,634 Payment to refunded bond escrow agent - - ( 5,724) ( 5,724) Transfers in - 13,885 - 36,524 Transfers out - - ( 1,423) (13,215) Total other financing sources (uses) - 13,885 67,520 92,252 Net change in fund balances 10 4,610 69,136 65,995 Fund balances - beginning 11 18,707 3,170 132,847 Fund balances - ending $ 2 1 $ 23,317 $ 72,306 $ 198,842 116 ________________________________________________________________ BUDGETARY COMPARISON SCHEDULES CAPITAL PROJECTS FUND 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ - $ - $ 389 $ 389 Use of money and property - - 302 302 Aid from other governments - 10,410 1,855 (8,555) Charges for services 5 14 5,999 1,871 (4,128) Other revenues - 496 60 (436) Total Revenues 5 14 16,905 4,477 (12,428) Expenditures: Capital outlay 7,014 113,948 14,563 99,385 Total Expenditures 7,014 113,948 14,563 99,385 Excess (Deficiency) of Revenues Over (Under) Expenditures (6,500) (97,043) (10,086) 86,957 Other Financing Sources (Uses): Transfers in 6,377 97,000 9,352 (87,648) Transfers out - - (4) (4) Total Other Financing Sources (Uses) 6,377 97,000 9,348 (87,652) Net change in fund balances (123) (43) (738) (695) Fund balances, beginning 18,305 18,305 18,305 - Fund balances, ending $ 18,182 $ 18,262 $ 17,567 $ (695) 117 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ (7) $ (7) Aid from other governments 7,459 17,172 10,721 (6,451) Charges for services - - - - Other revenues 5 43 1,330 7 (1,323) Total Revenues 8,002 18,502 10,721 (7,781) Expenditures: Current: Health and sanitation Services and supplies 5 88 2,363 6 96 1,667 Other charges 7,454 16,832 7,543 9,289 Contingencies 17 17 - 17 Total Expenditures 8,059 19,212 8,239 10,973 Excess (Deficiency) of Revenues Over (Under) Expenditures (57) (710) 2,482 3,192 Other Financing Sources (Uses): Transfers in 39 693 40 (653) Transfers out (40) (40) (40) - Total Other Financing Sources (Uses) (1) 653 - (653) Net change in fund balances (58) (57) 2,482 2,539 Fund balances, beginning 21,710 21,710 21,710 - Fund balances, ending $ 21,652 $ 21,653 $ 24,192 $ 2,539 118 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 600 $ 600 $ 486 $ (114) Use of money and property 1 1 3 2 Total Revenues 6 01 601 489 (112) Expenditures: Current: Public assistance Services and supplies 6 43 858 544 314 Total Expenditures 6 43 858 544 314 Net change in fund balances (42) (257) (55) 202 Fund balances, beginning 5 83 583 583 - Fund balances, ending $ 541 $ 326 $ 528 $ 202 119 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 4 $ 4 $ 11 $ 7 Charges for services 1,506 1,506 1,080 (426) Aid from other governments 12 12 32 20 Other revenues - - 49 49 Total Revenues 1,522 1,522 1,172 (350) Expenditures: Current: Education Salaries, wages, and benefits 1,038 1,019 778 241 Services and supplies 4 09 494 395 99 Other charges 21 21 21 - Debt Service - - - - Contingencies 57 57 - 57 Total Expenditures 1,525 1,591 1,194 397 Excess (Deficiency) of Revenues Over (Under) Expenditures (3) (69) (22) 47 Other Financing Sources (Uses): Leases - - - - Transfers out - - (29) (29) Total Other Financing Sources (Uses) - - (29) (29) Net change in fund balances (3) (69) (51) 18 Fund balances, beginning 453 453 453 - Fund balances, ending $ 450 $ 384 $ 402 $ 18 120 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 5 2 $ 52 $ 29 $ (23) Use of money and property - - - - Total Revenues 52 52 29 (23) Expenditures: Current: Public protection Services and supplies 34 54 42 12 Total Expenditures 34 54 42 12 Net change in fund balances 18 (2) (13) (11) Fund balances, beginning 2 15 215 215 - Fund balances, ending $ 233 $ 213 $ 202 $ (11) 121 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 202 $ 202 Charges for services - - 1,013 1,013 Total Revenues - - 1,215 1,215 Expenditures: Current: Public ways and facilities Services and supplies - - - - Total Expenditures - - - - Excess (Deficiency) of Revenues Over (Under) Expenditures - - 1,215 1,215 Other Financing Sources (Uses): Transfers out (2,269) (6,299) (557) 5,742 Total Other Financing Sources (Uses) (2,269) (6,299) (557) 5,742 Net change in fund balances (2,269) (6,299) 658 6,957 Fund balances, beginning 11,508 11,508 11,508 - Fund balances, ending $ 9,239 $ 5,209 $ 12,166 $ 6,957 122 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 11,040 $ 11,040 $ 11,530 $ 490 Use of money and property 44 44 74 30 Aid from other governments 2 40 2,025 222 (1,803) Charges for services 54 54 93 39 Other revenues 15 486 1,227 741 Total Revenues 11,393 13,649 13,146 (503) Expenditures: Current: Education Salaries, wages, and benefits 7,770 7,800 7,454 346 Services and supplies 4,293 5,736 4,835 901 Other charges 8 2,032 120 1,912 Debt Service - - 17 (17) Contingencies 572 543 - 543 Total Expenditures 12,643 16,111 12,426 3,685 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,250) (2,462) 720 3,182 Other Financing Sources (Uses): Transfers in 621 621 651 30 Transfers out (33) (33) (310) (277) Total Other Financing Sources (Uses) 5 88 588 341 (247) Net change in fund balances (662) (1,874) 1,061 2,935 Fund balances, beginning 5,109 5,109 5,109 - Fund balances, ending $ 4,447 $ 3,235 $ 6,170 $ 2,935 123 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 3 1 $ 188 $ 1 $ (187) Use of money and property 52 52 115 63 Aid from other governments 23 729 136 (593) Charges for services 6,287 6,350 6,053 (297) Other revenues 7 7 8 1 Total Revenues 6,400 7,326 6,313 (1,013) Expenditures: Current: Recreation and cultural services Salaries, wages, and benefits 3,247 3,247 3,120 127 Services and supplies 3,046 4,673 6,835 (2,162) Other charges 42 468 376 92 Capital outlay 47 5,228 150 5,078 Contingencies 200 - - - Total Expenditures 6,582 13,616 10,481 3,135 Excess (Deficiency) of Revenues Over (Under) Expenditures (182) (6,290) (4,168) 2,122 Other Financing Sources (Uses): Transfers in - 3,391 2,394 (997) Transfers out (21) (21) (109) (88) Total Other Financing Sources (Uses) (21) 3,370 2,285 (1,085) Net change in fund balances (203) (2,920) (1,883) 1,037 Fund balances, beginning 3,686 3,686 3,686 - Fund balances, ending $ 3,483 $ 766 $ 1,803 $ 1,037 124 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 345 $ 345 Charges for services 1,064 1,064 1,521 4 57 Total Revenues 1,064 1,064 1,866 8 02 Expenditures: Current: General government Salaries, wages, and benefits - - - - Services and supplies - - - - Total Expenditures - - - - Excess (Deficiency) of Revenues Over (Under) Expenditures 1,064 1,064 1,866 802 Other Financing Sources (Uses): Transfers out (2,500) (15,526) (4,005) 11,521 Total Other Financing Sources (Uses) (2,500) (15,526) (4,005) 11,521 Net change in fund balances (1,436) (14,462) (2,139) 12,323 Fund balances, beginning 16,001 16,001 16,001 - Fund balances, ending $ 14,565 $ 1,539 $ 13,862 $ 12,323 125 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,948 $ 1,948 $ 2,181 $ 233 Use of money and property 1 50 1 50 5 31 3 81 Aid from other governments 21,055 45,940 26,961 (18,979) Charges for services 2 78 2 78 4 37 1 59 Other revenues 7 50 1 09 59 Total Revenues 23,438 48,366 30,219 (18,147) Expenditures: Current: Public ways and facilities Services and supplies 21,596 42,155 53,171 (11,016) Other charges 5 03 1,053 50 1,003 Capital outlay 9,480 52,029 - 52,029 Debt Service - - 67 (67) Total Expenditures 31,579 95,237 53,288 41,949 Excess (Deficiency) of Revenues Over (Under) Expenditures (8,141) (46,871) (23,069) 23,802 Other Financing Sources (Uses): Transfers in 8,254 24,284 18,543 (5,741) Transfers out (114) (114) (114) - Total Other Financing Sources (Uses) 8,140 24,170 18,429 (5,741) Net change in fund balances (1) (22,701) (4,640) 18,061 Fund balances, beginning 24,650 24,650 24,650 - Fund balances, ending $ 24,649 $ 1,949 $ 20,010 $ 18,061 126 COUNTY OF SAN LUIS OBISPO Solid Waste Management Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ (5) $ (5) Aid from other governments - 193 93 (100) Charges for services 4 97 4 97 335 (162) Total Revenues 4 97 6 90 423 (267) Expenditures: Current: Public protection Services and supplies 1,773 1,816 687 1,129 Other charges - 150 123 27 Total Expenditures 1,773 1,966 8 10 1,156 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,276) (1,276) (387) 8 89 Other Financing Sources (Uses): Transfers in 1,276 1,276 7 17 (559) Total Other Financing Sources (Uses) 1,276 1,276 7 17 (559) Net change in fund balances - - 330 330 Fund balances, beginning - - - - Fund balances, ending $ - $ - $ 330 $ 330 127 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, 2023 (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 3 (1) Total Revenues 4 4 4 - Expenditures: Current: Public protection Services and supplies 7 7 2 5 Total Expenditures 7 7 2 5 Net change in fund balances (3) (3) 2 5 Fund balances, beginning 48 48 48 - Fund balances, ending $ 45 $ 45 $ 50 $ 5 128 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 4,253 $ 4,253 $ 4,626 $ 373 Use of money and property 88 88 418 330 Aid from other governments 3,146 3,146 4,658 1,512 Charges for services 5 95 595 601 6 Other revenues 15 15 87 72 Total Revenues 8,097 8,097 10,390 2,293 Expenditures: Current: Public protection Services and supplies 9,144 11,900 5,744 6,156 Other charges 2,782 2,782 2,364 418 Capital outlay - - - - Total Expenditures 11,926 14,682 8,108 6,574 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,829) (6,585) 2,282 8,867 Other Financing Sources (Uses): Transfers in 376 476 294 (182) Transfers out - (6,510) (6,284) 226 Total Other Financing Sources (Uses) 376 (6,034) (5,990) 44 Net change in fund balances (3,453) (12,619) (3,708) 8,911 Fund balances, beginning 23,485 23,485 23,485 - Fund balances, ending $ 20,032 $ 10,866 $ 19,777 $ 8,911 129 COUNTY OF SAN LUIS OBISPO Lighting Control Districts Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 4 3 $ 43 $ 45 $ 2 Use of money and property 2 2 8 6 Charges for services 11 11 12 1 Other revenues - - - - Total Revenues 56 56 65 9 Expenditures: Current: Public protection Services and supplies 37 37 33 4 Capital outlay - - - - Total Expenditures 37 37 33 4 Net change in fund balances 19 19 32 13 Fund balances, beginning 426 426 426 - Fund balances, ending $ 445 $ 445 $ 458 $ 13 130 COUNTY OF SAN LUIS OBISPO County Service Areas Districts Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,120 $ 1,120 $ 1,210 $ 9 0 Use of money and property 12 12 51 39 Aid from other governments 3 3 4 1 Charges for services 4 4 7 3 Other revenues 1 1 5 4 Total Revenues 1,140 1,140 1,277 1 37 Expenditures: Current: Public ways and facilities Services and supplies 8 84 930 770 160 Total Expenditures 8 84 930 770 160 Excess (Deficiency) of Revenues Over (Under) Expenditures 2 56 210 507 297 Other Financing Sources (Uses): Transfers out (344) (344) (344) - Total Other Financing Sources (Uses) (344) (344) (344) - Net change in fund balances (88) (134) 1 63 297 Fund balances, beginning 3,085 3,085 3,085 - Fund balances, ending $ 2,997 $ 2,951 $ 3,248 $ 297 131 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Charges for services $ - $ - $ 420 $ 420 Total Revenues - - 420 4 20 Expenditures: Debt Service: Principal payments - - 216 (216) Interest and fiscal charges - - 194 (194) Total Expenditures - - 410 (410) Excess (Deficiency) of Revenues Over (Under) Expenditures - - 10 10 Other Financing Sources (Uses): Debt issued - - - - Transfers out - - - - Total Other Financing Sources (Uses) - - - - Net change in fund balances - - 10 10 Fund balances, beginning 11 11 11 - Fund balances, ending $ 1 1 $ 1 1 $ 2 1 $ 1 0 132 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, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 5 5 $ 55 $ 206 $ 151 Other revenues 13,575 13,575 7 76 (12,799) Total Revenues 13,630 13,630 9 82 (12,648) Expenditures: Debt Service: Principal payments 3,548 3,548 3,548 - Interest and fiscal charges 6,709 6,709 6,709 - Total Expenditures 10,257 10,257 10,257 - Excess (Deficiency) of Revenues Over (Under) Expenditures 3,373 3,373 (9,275) (12,648) Other Financing Sources (Uses): Transfers in - - 13,885 13,885 Total Other Financing Sources (Uses) - - 13,885 13,885 Net change in fund balances 3,373 3,373 4,610 1,237 Fund balances, beginning 18,707 18,707 18,707 - Fund balances, ending $ 22,080 $ 22,080 $ 23,317 $ 1,237 133 COUNTY OF SAN LUIS OBISPO SLO County Financing Authority Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2023 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 1,682 $ 1,682 Charges for services - - 4,851 4,851 Total Revenues - - 6,533 6,533 Expenditures: Debt Service: Principal payments - - 2,105 (2,105) Interest and fiscal charges - - 2,812 (2,812) Total Expenditures - - 4,917 (4,917) Excess (Deficiency) of Revenues Over (Under) Expenditures - - 1,616 1,616 Other Financing Sources (Uses): Debt issued - - 70,033 70,033 Premium on refunding debt issued - - 4,634 4,634 Payment to refunded bond escrow agent - - (5,724) (5,724) Transfers out - - (1,423) (1,423) Total Other Financing Sources (Uses) - - 67,520 67,520 Net change in fund balances - - 69,136 69,136 Fund balances, beginning 3,170 3,170 3,170 - Fund balances, ending $ 3,170 $ 3,170 $ 72,306 $ 69,136 134 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR ENTERPRISE FUNDS ________________________________________________________________ NONMAJOR ENTERPRISE FUNDS DESCRIPTIONS 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 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. 135 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS JUNE 30, 2023 (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 $ 3,033 $ 1 2,106 $ 1,661 $ 25 $ 4,363 $ 2 1,188 Accounts receivable, net - 4 27 - 369 400 Inventories - - 84 - - 84 Leases receivable - - 75 - - 75 Other receivables - 30 - - 12 42 Prepaid items - - 424 - - 424 Deposits with others - - - - 86 86 Total current assets 3,033 12,140 2,271 25 4,830 22,299 Noncurrent assets: Restricted cash with fiscal agent - - - - - - Leases receivable - - 12 - - 12 Advances to other funds - - - 20 - 20 Capital assets: Nondepreciable Land - 2,155 1,333 - 534 4,022 Construction in progress - 580 304 - 843 1,727 Water rights - - - - - - Other property - 1,968 - - - 1,968 Depreciable Infrastructure, net - 18,635 5 - 1,901 20,541 Structures and improvements, net - 30,894 6,959 - 9,541 47,394 Equipment, net - 168 386 - 484 1,038 Other property, net - - - - 496 496 Lease assets, net - - 105 - - 105 SBITA assets, net - - 40 - - 40 Total noncurrent assets - 54,400 9,144 20 13,799 77,363 Total assets 3,033 66,540 11,415 45 18,629 99,662 Deferred Outflows of Resources Deferred pensions - - 1,196 - - 1,196 Deferred OPEB - - 93 - - 93 Total deferred outflows of resources - - 1,289 - - 1,289 Liabilities Current liabilities: Accounts payable 48 334 139 - 94 615 Salaries and benefits payable - - 35 - - 35 Deposits from others - 321 47 - 150 518 Interest payable - 253 10 - 22 285 Unearned revenue - 506 - - 8 514 Due to other funds - - - - - - Accrued vacation and sick leave - current - - 134 - - 134 Lease liability - current - - 76 - - 76 SBITA liability -current - - 26 - - 26 Notes and bonds payable - current - 2,604 365 20 107 3,096 Total current liabilities 48 4,018 832 20 381 5,299 Noncurrent liabilities: Advances from other funds - - 121 - 781 902 Accrued vacation and sick leave - - 113 - - 113 Lease liability - - 30 - - 30 SBITA liability - - 14 - - 14 Notes and bonds payable - 19,926 1,275 - 5,244 26,445 Net OPEB liability - - 130 - - 130 Net pension liability - - 4,072 - - 4,072 Total noncurrent liabilities - 19,926 5,755 - 6,025 31,706 Total liabilities 48 23,944 6,587 20 6,406 37,005 Deferred Inflows of Resources Deferred pensions - - 4 - - 4 Deferred OPEB - - 50 - - 50 Bond Refunding - - 163 - - 163 Lease revenue - - 87 - - 87 Total deferred inflows of resources - - 304 - - 304 Net Position Net investment in capital assets - 31,870 7,183 - 8,448 47,501 Unrestricted 2,985 10,726 (1,370) 25 3,775 16,141 Total net position $ 2,985 $ 4 2,596 $ 5,813 $ 25 $ 1 2,223 $ 6 3,642 136 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) General Flood Control Zone - Lopez County Salinas Dam Flood Control Golf Lopez Park Service Areas Total Operating revenues Charges for services $ 1,380 $ 7,918 $ 4,738 $ - $ 5,511 $ 19,547 Other revenues - - 6 - 59 65 Total operating revenues 1,380 7,918 4,744 - 5,570 19,612 Operating expenses Salaries and benefits - - 2,413 - - 2,413 Services and supplies 1,459 5,266 1,761 - 6,432 14,918 Other charges - 3 - - - 3 Depreciation - 1,449 439 - 577 2,465 Amortization - - 91 - - 91 Countywide cost allocation 20 81 81 - 111 293 Total operating expenses 1,479 6,799 4,785 - 7,120 20,183 Operating income (loss) (99) 1,119 (41) - (1,550) (571) Nonoperating revenues (expenses) Property taxes - 1,528 - - 637 2,165 Investment expense 64 166 34 (1) 103 366 Interest expense - (854) (64) - (142) (1,060) Sale of capital assets - - - - (37) (37) Aid from governmental agencies - 6 - - 3 9 Total nonoperating revenues (expenses) 64 846 (30) (1) 564 1,443 Income (loss) before contributions and transfers (35) 1,965 (71) (1) (986) 872 Capital Contributions - - - - - - Transfers in - - 13 1 594 608 Transfers out - - (55) - (2) (57) Change in net position (35) 1,965 (113) - (394) 1,423 Net position -beginning 3,020 40,631 5,926 25 12,617 62,219 Net position - ending $ 2,985 $ 4 2,596 $ 5,813 $ 25 $ 1 2,223 $ 63,642 137 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (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 $ 1,379 $ 8,377 $ 4,738 $ - $ 5,610 $ 2 0,104 Payments for goods and services (1,692) (5,026) (1,741) - (6,522) (14,981) Payments to employees for services - - (2,254) - - (2,254) Net cash provided (used) by operating activities (313) 3,351 743 - (912) 2,869 Cash Flows from Noncapital Financing Activities Property tax proceeds - 1,528 - - 637 2,165 Grants and subsidies from other governmental agencies - 6 - - 3 9 Advances from other funds - - - - 382 382 Due from other funds - - - - (400) (400) Transfers from other funds - - 13 1 594 608 Transfers to other funds - - (55) - (2) (57) Net cash provided (used) by noncapital financing activities - 1,534 (42) 1 1,214 2,707 Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets - (224) (284) - (485) (993) Proceeds from issuance of long-term debt - - - - - - Principal paid on capital debt - (2,513) (748) (274) (3,535) Interest paid on capital debt - (934) (217) - (148) (1,299) Net cash provided (used) by capital and related financing activities - (3,671) (1,249) - (907) (5,827) Cash Flows from Investing Activities Interest received 64 166 34 (1) 103 366 Net cash provided (used) by investing activities 64 166 34 (1) 103 366 Net increase (decrease) in cash and cash equivalents (249) 1,380 (514) - (502) 115 Cash and cash equivalents at beginning of year 3,282 10,726 2,175 25 4,865 21,073 Cash and cash equivalents at end of year $ 3,033 $ 1 2,106 $ 1,661 $ 25 $ 4,363 $ 2 1,188 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ (99) $ 1,119 $ (41) $ - $ (1,550) $ (571) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense - 1,449 530 - 577 2,556 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net - (28) 57 - 33 62 Inventory - - (38) - - (38) Prepaid items - - 120 - - 120 Deferred outflows - pensions - - (617) - - (617) Deferred outflows - OPEB - - (22) - - (22) Leases - - (74) - - (74) Increase (decrease) in: Accounts payable (214) 288 12 - 40 126 Deposits from others - 36 20 - (20) 36 Salaries and benefits payable - - (75) - - (75) Deferred inflows -pensions - - (545) - - (545) Deferred inflows - OPEB - - 25 - - 25 Net OPEB liability - - (13) - - (13) Net pension liability - - 1,404 - - 1,404 Unearned revenue - 487 - - 8 495 Total adjustments (214) 2,232 784 - 638 3,440 Net cash provided (used) by operating activities $ (313) $ 3,351 $ 743 $ - $ (912) $ 2,869 Noncash Investing, Capital and Financing Activities Leases $ - $ - $ 27 $ - $ - $ 27 138 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS ________________________________________________________________ INTERNAL SERVICE FUND DESCRIPTIONS 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. 139 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2023 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Assets Current assets: Cash and cash equivalents $ 7,448 $ 19,483 $ 20,692 $ 47,623 Accounts receivable, net - 20 - 20 Inventories 15 7 24 - 7 39 Prepaid items - 10 - 10 Total current assets 7,463 20,237 20,692 48,392 Noncurrent assets: Capital assets: Structures and improvements, net 2 35 1 97 - 4 32 Equipment, net 5,256 7,934 - 13,190 Lease assets, net - 7 62 - 7 62 SBITA assets, net - 13 43 56 Total noncurrent assets 5,491 8,906 43 14,440 Total assets 12,954 29,143 20,735 62,832 Deferred Outflows of Resources Deferred pensions 8 49 22,538 - 23,387 Deferred OPEB 88 1,672 - 1,760 Total deferred outflows of resources 9 37 24,210 - 25,147 Liabilities Current liabilities: Accounts payable 7 43 1,018 3 11 2,072 Salaries and benefits payable 18 5 54 36 6 08 Interest payable - - - - Deposits from others - 5,048 - 5,048 Self-insurance liability - current - - 5,116 5,116 Lease liability - current - 1 16 - 1 16 SBITA liability - current - 13 13 26 Accrued vacation and sick leave - current 1 02 2,371 - 2,473 Total current liabilities 8 63 9,120 5,476 15,459 Noncurrent liabilities: Self-insurance liability - - 18,385 18,385 Lease liability - 6 76 - 6 76 SBITA liability - - 30 30 Accrued vacation and sick leave 64 9 08 - 9 72 Net OPEB liability 1 25 2,355 - 2,480 Net pension liability 2,890 76,674 - 79,564 Total noncurrent liabilities 3,079 80,613 18,415 102,107 Total liabilities 3,942 89,733 23,891 117,566 Deferred Inflows of Resources Deferred pensions 3 84 - 87 Deferred OPEB 48 9 00 - 9 48 Total deferred inflows of resources 51 9 84 - 1,035 Net Position Net investment in capital assets 5,176 8,011 - 13,187 Unrestricted 4,722 (45,375) (3,156) (43,809) Total net position $ 9,898 $ (37,364) $ (3,156) $ (30,622) 140 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Operating revenues Charges for services $ 8,295 $ 51,125 $ 16,450 $ 75,870 Other revenues 10 1 07 - 1 17 Total operating revenues 8,305 51,232 16,450 75,987 Operating expenses Salaries and benefits 1,746 39,167 8 65 41,778 Services and supplies 4,145 14,186 12,191 30,522 Insurance benefit payments - - 6,435 6,435 Depreciation 1,609 1,071 - 2,680 Amortization - 1 38 13 1 51 Countywide cost allocation 1 47 1 97 2 31 5 75 Total operating expenses 7,647 54,759 19,735 82,141 Operating income (loss) 6 58 (3,527) ( 3,285) ( 6,154) Nonoperating revenues (expenses) Investment income (expense) 89 2 32 2 48 5 69 Interest expense - (6) - (6) Sale of capital assets 2 25 - - 2 25 Other revenues (expense) - - - - Total nonoperating revenues (expenses) 3 14 2 26 2 48 7 88 Income (loss) before capital contributions and transfers 9 72 (3,301) ( 3,037) ( 5,366) Capital Contributions 1 22 - - 1 22 Transfers in - 4 6,669 6,673 Transfers out (54) (1,262) (237) ( 1,553) Change in net position 1,040 ( 4,559) 3,395 (124) Net position - beginning 8,858 (32,805) ( 6,551) (30,498) Net position - ending $ 9,898 $ (37,364) $ (3,156) $ (30,622) 141 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Cash Flows From Operating Activities Receipts from interfund billings $ 8,308 $ 51,234 $ 16,449 $ 75,991 Payments for goods and services ( 4,243) (13,993) ( 5,165) (23,401) Payments to employees for services ( 1,494) (35,191) (826) (37,511) Payments for insurance benefits - - (5,194) (5,194) Payments for premiums - - (7,199) ( 7,199) Net cash provided (used) by operating activities 2,571 2,050 (1,935) 2,686 Cash Flows from Noncapital Financing Activities Grants and subsidies from other governmental agencies - - - - Transfers from other funds - 4 6,669 6,673 Transfers to other funds (54) (1,262) (237) (1,553) Net cash provided (used) by noncapital financing activities (54) (1,258) 6,432 5,120 Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets ( 2,002) (864) (13) (2,879) Proceeds from sale of capital assets 2 40 - - 2 40 Capital contributions 1 22 - - 1 22 Principal paid on capital debt - (117) - (117) Interest paid on capital debt - (8) - (8) Net cash provided (used) by capital and related financing activities ( 1,640) (989) (13) (2,642) Cash Flows from Investing Activities Interest received 89 2 32 2 48 5 69 Net cash provided (used) by investing activities 89 2 32 2 48 5 69 Net increase (decrease) in cash and cash equivalents 9 66 35 4,732 5,733 Cash and cash equivalents at beginning of year 6,482 19,448 15,960 41,890 Cash and cash equivalents at end of year $ 7,448 $ 19,483 $ 20,692 $ 47,623 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 658 $ (3,527) $ (3,285) $ (6,154) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense 1,609 1,209 13 2,831 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net - 2 - 2 Inventory (2) (125) - (127) Prepaid expenses - (1) 2 25 2 24 Deferred outflows - pensions (469) (11,660) - (12,129) Deferred outflows - OPEB (22) (406) - (428) Leases - - - - Increase (decrease) in: Accounts payable 51 1,017 (165) 9 03 Deposits from others - (502) - (502) Salaries and benefits payable (58) (702) 37 (723) Deferred inflows - pensions (356) (10,199) - (10,555) Deferred inflows -OPEB 24 4 49 - 4 73 Net OPEB liability (10) (213) - (223) Net pension liability 1,146 26,708 - 27,854 Self-insurance liability - - 1,240 1,240 Total adjustments 1,913 5,577 1,350 8,840 Net cash provided (used) by operating activities $ 2,571 $ 2,050 $ (1,935) $ 2,686 142 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS - INSURANCE JUNE 30, 2023 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Assets Current assets: Cash and cash equivalents $ 14,712 $ 4,540 $ 479 $ 655 $ 306 $ 20,692 Prepaid expenses - - - - - - Total current assets 14,712 4,540 4 79 6 55 3 06 20,692 Noncurrent assets: SBITA assets, net - - - - 43 43 Total noncurrent assets - - - - 43 43 Total assets 14,712 4,540 4 79 6 55 3 49 20,735 Liabilities Current liabilities: Accounts payable 2 69 1 - 41 - 3 11 Salaries and benefits payable 36 - - - - 36 Self-insurance liability 3,593 1,523 - - - 5,116 SBITA liability - - - - 13 13 Total current liabilities 3,898 1,524 - 41 13 5,476 Noncurrent liabilities: Self-insurance liability 14,678 3,707 - - - 18,385 SBITA liability - - - - 30 30 Total noncurrent liabilities 14,678 3,707 - - 30 18,415 Total liabilities 18,576 5,231 - 41 43 23,891 Net Position Unrestricted (3,864) (691) 4 79 6 14 3 06 (3,156) Total net position $ (3,864) $ (691) $ 479 $ 614 $ 306 $ (3,156) 143 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, 2023 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Operating revenues Charges for services $ 6,267 $ 5,300 $ 509 $ 1,819 $ 2,555 $ 16,450 Total operating revenues 6,267 5,300 5 09 1,819 2,555 16,450 Operating expenses Salaries and benefits 8 65 - - - - 8 65 Services and supplies 4,523 5,440 80 2 75 1,873 12,191 Insurance benefit payments 3,680 21 2 91 1,683 7 60 6,435 Amortization - - - - 13 13 Countywide cost allocation 93 1 37 - 1 - 2 31 Total operating expenses 9,161 5,598 3 71 1,959 2,646 19,735 Operating income (loss) ( 2,894) (298) 1 38 (140) (91) (3,285) Nonoperating revenues (expenses) Investment income (expense) 2 23 3 2 14 6 2 48 Total nonoperating revenues (expenses) 2 23 3 2 14 6 2 48 Income (loss) before transfers ( 2,671) (295) 1 40 (126) (85) (3,037) Transfers in 3,069 3,600 - - - 6,669 Transfers out - (237) - - - (237) Change in net position 3 98 3,068 1 40 (126) (85) 3,395 Net position - beginning ( 4,262) ( 3,759) 3 39 7 40 3 91 (6,551) Net position - ending $ (3,864) $ ( 691) $ 479 $ 614 $ 306 $ (3,156) 144 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS - INSURANCE FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Cash Flows From Operating Activities Receipts from interfund billings $ 6,266 $ 5,300 $ 509 $ 1,819 $ 2,555 $ 16,449 Payments for goods and services ( 2,813) ( 1,961) (80) (301) (10) (5,165) Payments to employees for services (826) - - - - (826) Payments for insurance benefits ( 2,688) 2 28 (291) (1,683) (760) (5,194) Payments for premiums ( 1,520) (3,816) - - (1,863) (7,199) Net cash provided (used) by operating activities ( 1,581) (249) 1 38 (165) (78) (1,935) Cash Flows from Noncapital Financing Activities Grants and subsidies from other governmental agencies - - - - - - Transfers from other funds 3,069 3,600 - 6,669 Transfers to other funds - (237) - - - (237) Net cash provided (used) by noncapital financing activities 3,069 3,363 - - - 6,432 Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets - - - - (13) (13) Principal paid on capital debt - - - - - - Net cash provided (used) by capital and related financing activities - - - - (13) (13) Cash Flows from Investing Activities Interest received (paid) 2 23 3 2 14 6 2 48 Net cash provided (used) by investing activities 2 23 3 2 14 6 2 48 Net increase (decrease) in cash and cash equivalents 1,711 3,117 1 40 (151) (85) 4,732 Cash and cash equivalents at beginning of year 13,001 1,423 3 39 8 06 3 91 15,960 Cash and cash equivalents at end of year $ 14,712 $ 4,540 $ 479 $ 655 $ 306 $ 20,692 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ (2,894) $ ( 298) $ 138 $ ( 140) $ (91) $ (3,285) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense - - - - 13 13 Changes in assets and liabilities: (Increase) decrease in: Prepaid Items 2 25 - - - - 2 25 Increase (decrease) in: Accounts payable 60 (200) - (25) - (165) Salaries and benefits payable 37 - - - - 37 Self-insurance liability 9 91 2 49 - - - 1,240 Total adjustments 1,313 49 - (25) 13 1,350 Net cash provided (used) by operating activities $ (1,581) $ ( 249) $ 138 $ ( 165) $ (78) $ (1,935) 145 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS FIDUCIARY FUNDS ________________________________________________________________ FIDUCIARY FUND DESCRIPTION PENSION TRUST: The San Luis Obispo County Pension Trust is an independent trust that administers the San Luis Obispo County Employees Retirement Plan on behalf of the County. 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. CUSTODIAL FUNDS: These funds account for assets held by the County as an agent for various local governments. The County has the following types of Custodial 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. 146 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION CUSTODIAL FUNDS JUNE 30, 2023 (IN THOUSANDS) Clearing and 1915 Act Other Revolving Funds Service Funds Custodial Funds (92 Funds) (17 Funds) (35 Funds) Total ASSETS Cash and cash equivalents $ 98,376 $ 135 $ 19,370 $ 117,881 Taxes for other governments 4 34 - - 4 34 Other assets 3 - 4,010 4,013 Capital assets, net - - 16 16 Total assets $ 98,813 $ 135 $ 23,396 $ 122,344 LIABILITIES Other current liabilities $ 74,872 $ - $ 9,156 $ 84,028 Other long-term liabilities 9 - - 9 Total liabilities $ 7 4,881 $ - $ 9,156 $ 84,037 NET POSITION Restricted for: Individuals, organizations, and other governments $ 2 3,932 $ 135 $ 14,240 $ 38,307 147 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION CUSTODIAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (IN THOUSANDS) Clearing and 1915 Act Other Revolving Funds Service Funds Custodial Funds (92 Funds) (17 Funds) (35 Funds) Total ADDITIONS Interest $ 1,732 $ 1 $ 157 $ 1,890 Property taxes collected for other governments 2 30,064 49 - 2 30,113 Sales taxes collected for other governments - - 17,500 17,500 Other Income 11,561 - 4,450 16,011 Total additions 2 43,357 50 22,107 2 65,514 DEDUCTIONS Administrative expenses 27 - 1 28 Interest expenses 26,969 4 - 26,973 Payments to other local governments 1,697 - - 1,697 Property taxes distributed to other governments 2 10,658 45 23,819 2 34,522 Total deductions 2 39,351 4 9 23,820 263,220 Change in net position 4 ,006 1 (1,713) 2,294 Net position - beginning, as restated 19,926 134 15,953 36,013 Net position - ending $ 2 3,932 $ 1 35 $ 14,240 $ 38,307 148 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS JUNE 30, 2023 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (39 Funds) (32 Funds) (6 Funds) (19 Funds) Total ASSETS Cash and cash equivalents $ 666,060 $ 25,358 $ 1,309 $ 34,603 $ 727,330 Total assets $ 666,060 $ 25,358 $ 1,309 $ 34,603 $ 727,330 NET POSITION Net position held in trust for pool participants $ 666,060 $ 25,358 $ 1,309 $ 34,603 $ 727,330 Total Net Position $ 6 66,060 $ 25,358 $ 1,309 $ 34,603 $ 727,330 149 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS JUNE 30, 2023 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (39 Funds) (32 Funds) (6 Funds) (19 Funds) Total Additions Contributions to pooled investments $ 1,435,422 $ 1 2,998 $ 1 3,607 $ 4 8,506 $ 1,510,533 Interest 8,516 485 - 400 9,401 Total additions 1,443,938 13,483 13,607 48,906 1,519,934 Deductions Distributions from investment pool 1,222,823 22,192 13,799 44,673 1,303,487 Total deductions 1,222,823 22,192 13,799 44,673 1,303,487 Change in net position 2 21,115 (8,709) (192) 4,233 2 16,447 Net position - beginning 4 44,945 34,067 1,501 30,370 5 10,883 Net position - ending $ 666,060 $ 2 5,358 $ 1,309 $ 3 4,603 $ 727,330 150 ________________________________________________________________ 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, 2023 Original Final Variance with Description Budget Budget Actual Final Budget General Government -Expenditures Legislative and Administrative Administrative Office: Salaries, wages, and benefits $ 2,873 $ 2,873 $ 2,555 $ 318 Services and supplies 499 6 ,730 2 ,874 3,856 Other charges - 7 ,346 3 ,099 4,247 Expenditure transfers and reimbursements (116) (116) (131) 15 Total 3 ,256 16,833 8 ,397 8,436 Board of Supervisors: Salaries, wages, and benefits 1 ,671 1 ,755 1 ,676 79 Services and supplies 351 369 352 17 Expenditure transfers and reimbursements (60) (60) (60) - Total 1 ,962 2 ,064 1 ,968 96 Clerk/Recorder: Salaries, wages, and benefits 2 ,763 2 ,763 2 ,554 209 Services and supplies 1 ,425 1 ,747 1 ,615 132 Capital outlay - 399 11 388 Expenditure transfers and reimbursements (1) (1) - (1) Total 4 ,187 4 ,908 4 ,180 728 Communications & Outreach: Salaries, wages, and benefits 155 273 180 93 Services and supplies 35 55 41 14 Capital outlay - leases/SBITAs - - 42 (42) Total 190 328 263 65 Total Legislative and Administrative 9 ,595 24,133 14,808 9,325 Finance Assessor: Salaries, wages, and benefits 10,636 10,798 10,400 398 Services and supplies 1 ,139 985 902 83 Capital outlay - leases/SBITAs - - 67 (67) Total 11,775 11,783 11,369 414 Auditor-Controller-Treasurer-Tax Collector Public Administrator: Salaries, wages, and benefits 8 ,879 8 ,879 8 ,504 375 Services and supplies 735 924 616 308 Capital outlay - - - - Expenditure transfers and reimbursements (16) (16) (37) 21 Total 9 ,598 9 ,787 9 ,083 704 Total Finance 21,373 21,570 20,452 1,118 continued 151 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget General Government -Expenditures (continued) Counsel County Counsel: Salaries, wages, and benefits $ 4,392 $ 4,392 $ 4,097 $ 295 Services and supplies 1 ,678 2 ,186 1 ,011 1,175 Total Counsel 6 ,070 6 ,578 5 ,108 1,470 Personnel Personnel: Salaries, wages, and benefits 6 ,341 6 ,476 6 ,206 270 Services and supplies 2 ,746 3 ,049 2 ,676 373 Expenditure transfers and reimbursement (1,699) (1,699) (1,453) (246) Total Personnel 7 ,388 7 ,826 7 ,429 397 Talent Development: Salaries, wages, and benefits 240 240 204 36 Services and supplies 486 604 453 151 Expenditure transfers and reimbursement - - - - Total Talent Development 726 844 657 187 Total Personnel 8 ,114 8 ,670 8 ,086 584 Property Management Facilities Management: Salaries, wages, and benefits 5 ,132 5 ,049 4 ,868 181 Services and supplies 4 ,350 4 ,494 4 ,463 31 Expenditure transfers and reimbursements (1,983) (2,018) (2,101) 83 Total 7 ,499 7 ,525 7 ,230 295 Maintenance Projects: Services and supplies 2 ,056 9 ,625 2 ,686 6,939 Expenditure transfers and reimbursements - (23) (42) 19 Total 2 ,056 9 ,602 2 ,644 6,958 Central Services Salaries, wages, and benefits 2 ,358 2 ,358 2 ,358 - Services and supplies 3 ,419 3 ,717 1 ,445 2,272 Other charges 128 128 110 18 Expenditure transfers and reimbursements (547) (547) (731) 184 Total 5 ,358 5 ,656 3 ,182 2,474 Total Property Management 14,913 22,783 13,056 9,727 continued 152 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget General Government -Expenditures (continued) Other General Information Technology: Salaries, wages, and benefits $ 14,281 $ 15,008 $ 14,452 $ 556 Services and supplies 6 ,614 7 ,052 4 ,012 3,040 Other charges - 3 ,400 304 3,096 Capital outlay - 50 50 - Capital outlay - leases/SBITAs - - 311 (311) Expenditure transfers and reimbursements (3,499) (3,499) (3,529) 30 Total 17,396 22,011 15,600 6,411 Non-Department Financing Uses: Services and supplies - 1 ,938 1 ,031 907 Expenditure transfers and reimbursements ( 16,375) ( 16,375) ( 16,517) 142 Total ( 16,375) ( 14,437) ( 15,486) 1,049 Contributions to Other Agencies: Services and supplies 1 ,858 2 ,096 2 ,015 81 Other Charges - 50 50 - Total 1 ,858 2 ,146 2 ,065 81 Non-Department Other: Services and supplies 609 609 502 107 Total 609 609 502 107 Total Other General 3 ,488 10,329 2 ,681 7,648 Total General Government 63,553 94,063 64,191 29,872 Public Protection - Expenditures Judicial Court Operations Fund: Other charges 2 ,527 2 ,527 2 ,449 78 Total 2 ,527 2 ,527 2 ,449 78 District Attorney: Salaries, wages, and benefits 20,281 20,212 19,227 985 Services and supplies 2 ,611 3 ,081 2 ,911 170 Other charges - 232 62 170 Capital outlay - 15 15 - Expenditure transfers and reimbursements (26) (26) (22) (4) Total 22,866 23,514 22,193 1,321 Child Support Services: Salaries, wages, and benefits 4 ,174 4 ,174 3 ,498 676 Services and supplies 840 840 422 418 Total 5 ,014 5 ,014 3 ,920 1,094 Grand Jury: Salaries, wages, and benefits 41 41 25 16 Services and supplies 91 92 72 20 Expenditure transfers and reimbursements (5) (5) (11) 6 Total 127 128 86 42 continued 153 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures (continued) Judicial (continued) Public Defender: Services and supplies $ 8,143 $ 8,168 $ 8,117 $ 51 Total 8 ,143 8 ,168 8 ,117 51 Total Judicial 38,677 39,351 36,765 2,586 Police Protection Sheriff-Coroner: Salaries, wages, and benefits 79,446 83,908 79,886 4,022 Services and supplies 15,915 18,097 17,222 875 Other charges 115 776 477 299 Capital outlay 1 ,821 2 ,431 753 1,678 Capital outlay - leases/SBITAs - - 83 (83) Expenditure transfers and reimbursements (1,063) (1,532) (1,487) (45) Total Police Protection 96,234 103,680 96,934 6,746 Detention and Correction Probation Department: Salaries, wages, and benefits 22,281 22,281 20,650 1,631 Services and supplies 6 ,898 7 ,453 6 ,115 1,338 Other charges 161 787 485 302 Capital outlay - 24 18 6 Capital outlay - leases/SBITAs - - 170 (170) Expenditure transfers and reimbursements (262) (262) (265) 3 Total Detention and Correction 29,078 30,283 27,173 3,110 Fire Protection County Fire: Services and supplies 26,879 30,818 29,233 1,585 Other charges - 150 147 3 Capital outlay 2 ,040 5 ,856 789 5,067 Expenditure transfers and reimbursements - - - - Total Fire Protection 28,919 36,824 30,169 6,655 Protective Inspection Agricultural Commissioner: Salaries, wages, and benefits 6 ,643 6 ,765 6 ,423 342 Services and supplies 941 953 937 16 Other charges - 31 30 1 Capital outlay 6 47 6 41 Expenditure transfers and reimbursements (2) (2) (1) (1) Total Protective Inspection 7 ,588 7 ,794 7 ,395 399 Other Protection Animal Services: Salaries, wages, and benefits 2 ,322 2 ,125 1 ,889 236 Services and supplies 1 ,132 1 ,507 1 ,506 1 Capital outlay - 31 - 31 Total 3 ,454 3 ,663 3 ,395 268 continued 154 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget Public Protection - Expenditures (continued) Other Protection (continued) Emergency Services: Salaries, wages, and benefits $ 1,180 $ 1,440 $ 1,270 $ 170 Services and supplies 749 1 ,027 1 ,196 (169) Other charges 306 458 368 90 Capital outlay - 821 106 715 Expenditure transfers and reimbursements - - (1) 1 Total 2 ,235 3 ,746 2 ,939 807 Planning Department: Salaries, wages, and benefits 17,177 15,913 14,357 1,556 Services and supplies 2 ,810 7 ,089 3 ,128 3,961 Other Charges - 154 102 52 Expenditure transfers and reimbursements - - (17) 17 Total 19,987 23,156 17,570 5,586 Waste Management: Services and supplies 1 ,632 1 ,778 1 ,560 218 Other charges - 571 549 22 Total 1 ,632 2 ,349 2 ,109 240 Total Other Protection 27,308 32,914 26,013 6,901 Total Public Protection 227,804 250,846 224,449 26,397 Public Ways and Facilities - Expenditures Public Works: Services and supplies 3 ,943 5 ,316 2 ,822 2,494 Other charges - 299 25 274 Total 3 ,943 5 ,615 2 ,847 2,768 Groundwater Sustainability Salaries, wages, and benefits 499 499 241 258 Services and supplies 1 ,195 1 ,546 937 609 Total 1 ,694 2 ,045 1 ,178 867 Total Public Ways and Facilities 5 ,637 7 ,660 4 ,025 3,635 Health and Sanitation - Expenditures Health Public Health: Salaries, wages, and benefits 39,875 36,617 29,570 7,047 Services and supplies 16,407 21,207 9 ,799 11,408 Other charges 1 ,558 8 ,332 2 ,871 5,461 Capital outlay - 265 236 29 Capital outlay - leases/SBITAs - - 708 (708) Expenditure transfers and reimbursements ( 11,735) ( 12,012) (5,447) (6,565) Total 46,105 54,409 37,737 16,672 continued 155 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget Health and Sanitation - Expenditures (continued) Health (continued) Behavioral Health: Salaries, wages, and benefits $ 42,332 $ 41,072 $ 37,176 $ 3 ,896 Services and supplies 54,813 62,401 56,492 5,909 Other charges 2 ,070 2 ,229 2 ,068 161 Capital outlay - leases - - 1 ,008 (1,008) Expenditure transfers and reimbursements (2,484) (2,484) (2,152) (332) Total 96,731 103,218 94,592 8,626 Total Health 142,836 157,627 132,329 25,298 Total Health and Sanitation 142,836 157,627 132,329 25,298 Public Assistance - Expenditures Administration Department of Social Services: Salaries, wages, and benefits 62,588 64,449 60,896 3,553 Services and supplies 21,802 25,392 22,894 2,498 Other charges 14,048 23,834 15,795 8,039 Capital outlay 222 808 583 225 Capital outlay - leases/SBITAs - - 36,850 (36,850) Expenditure transfers and reimbursements (83) (83) (155) 72 Total Administration 98,577 114,400 136,863 (22,463) Aid Programs Aid Foster Care Non-Fed: Services and supplies 92 92 92 - Other charges 29,706 29,317 23,996 5,321 Expenditure transfers and reimbursement - - (145) 145 Total 29,798 29,409 23,943 5,466 Calworks Assistance: Other charges 13,185 13,451 13,451 - Total 13,185 13,451 13,451 - - Total Aid Programs 42,983 42,860 37,394 5,466 General Relief General Relief: Other charges 1 ,685 2 ,016 2 ,015 1 Total General Relief 1 ,685 2 ,016 2 ,015 1 continued 156 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget Public Assistance - Expenditures (continued) Veterans Service Veterans Service: Salaries, wages, and benefits $ 804 $ 974 $ 967 $ 7 Services and supplies 111 162 128 34 Expenditure transfers and reimbursements - (18) (31) 13 Total Veterans Service 915 1 ,118 1 ,064 54 Other Assistance Law Enforcement Med Care: Salaries, wages, and benefits 295 79 47 32 Services and supplies 8 ,894 10,531 10,926 (395) Expenditure transfers and reimbursements (237) (237) (237) - Total Other Assistance 8 ,952 10,373 10,736 (363) Total Public Assistance 153,112 170,767 188,072 (17,305) Education - Expenditures Agricultural Education UC Cooperative Extension Salaries, wages, and benefits 580 580 511 69 Services and supplies 104 104 85 19 Total Agricultural Education 684 684 596 88 Total Education 684 684 596 88 Recreation and Culture - Expenditures Community Parks Salaries, wages, and benefits 3 ,539 3 ,369 3 ,227 142 Services and supplies 2 ,129 2 ,546 2 ,685 (139) Capital outlay 77 4 ,127 407 3,720 Other Charges 109 122 31 91 Expenditure transfers and reimbursements (82) (82) (146) 64 Total Community Parks 5 ,772 10,082 6 ,204 3,878 Total Recreation and Culture 5 ,772 10,082 6 ,204 3,878 Debt Service Debt service: principal - - 6 ,970 (6,970) Debt service: interest - - 834 (834) Total Debt Service - - 7 ,804 (7,804) Total General Fund - Expenditures 599,398 691,729 627,670 64,059 (Before Contingencies) continued 157 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2023 Original Final Variance with Description Budget Budget Actual Final Budget Contingencies Appropriation for Contingencies Contingencies - General Fund: Appropriation for contingency $ 31,693 $ 22,882 $ - $ 2 2,882 Total 31,693 22,882 - 22,882 Total Appropriation for Contingency 31,693 22,882 - 22,882 Total Contingency 31,693 22,882 - 22,882 Total General Fund Expenditures $ 6 31,091 $ 7 14,611 $ 6 27,670 $ 86,941 Explanation of Differences between Budgetary Outflows and GAAP Expenditures Uses/outflows of resources Actual amounts (budgetary basis) from the Budget to Actual Comparison Schedule $ 6 27,670 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 11,012 Total expenditures as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 6 38,682 158 ________________________________________________________________ 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 .…………… 160 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..……………………………………………………..………………………………………………… 165 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 ..………………………………………..………………………… 170 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 ………………………………………………………………….. 173 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 ………………………………………………………………… 175 159 County of San Luis Obispo Net Position by Component Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-221 2022-23 Governmental Activities Net investment in capital assets $ 1,112,934 $ 1,130,241 $ 1,168,573 $ 1,178,967 $ 1,185,073 $ 1,188,830 $ 1,202,709 $ 1,210,972 $ 1,216,907 $ 1,229,892 Restricted 4 3,109 3 7,722 4 1,230 6 4,822 2 9,836 4 1,281 6 6,655 104,024 9 8,489 173,086 Unrestricted 325,113 ( 150,074) ( 170,962) ( 226,970) ( 217,606) ( 220,206) ( 286,622) ( 248,517) ( 193,229) ( 297,796) Total governmental activities net position $ 1,481,156 $ 1,017,889 $ 1,038,841 $ 1,016,819 $ 997,303 $ 1,009,905 $ 982,742 $ 1,066,479 $ 1,122,167 $ 1,105,182 Business-Type Activities Net investment in capital assets $ 188,485 $ 213,455 $ 237,157 $ 270,246 $ 283,410 $ 285,888 $ 288,781 $ 283,512 $ 296,939 $ 293,062 Unrestricted 9 8,097 9 7,173 9 3,158 8 5,316 7 3,113 8 3,039 9 4,335 110,255 118,114 127,391 Total business-Type activities net position $ 286,582 $ 310,628 $ 330,315 $ 355,562 $ 356,523 $ 368,927 $ 383,116 $ 393,767 $ 415,053 $ 420,453 Total Primary Government Net investment in capital assets $ 1,301,419 $ 1,343,696 $ 1,405,730 $ 1,449,213 $ 1,468,483 $ 1,474,718 $ 1,491,490 $ 1,494,484 $ 1,513,846 $ 1,522,954 Restricted 4 3,109 3 7,722 4 1,230 6 4,822 2 9,836 4 1,281 6 6,655 104,024 9 8,489 173,086 Unrestricted 423,210 (52,901) (77,804) ( 141,654) ( 144,493) ( 137,167) ( 192,287) ( 138,262) (75,115) ( 170,405) Total primary government net position $ 1,767,738 $ 1,328,517 $ 1,369,156 $ 1,372,381 $ 1,353,826 $ 1,378,832 $ 1,365,858 $ 1,460,246 $ 1,537,220 $ 1,525,635 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. 1 Business-type net position was restated in FY 2022-23. Source: Statement of Net Position 160 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-221 2022-23 Program Expenses Governmental Activities General government $ 36,866 $ 45,598 $ 53,282 $ 56,390 $ 56,858 $ 54,434 $ 53,926 $ 55,612 $ 54,592 $ 37,088 Public protection 148,135 162,432 170,134 187,255 183,814 213,809 241,749 204,861 204,993 254,728 Public ways and facilities 28,253 34,136 33,418 32,098 41,606 34,202 33,199 36,017 35,995 55,375 Health and sanitation 74,313 78,137 88,326 99,150 103,822 119,259 113,463 121,358 132,713 152,565 Public assistance 99,449 110,470 118,089 125,102 122,753 131,432 132,868 134,476 132,751 201,741 Education 9,611 9,457 11,934 12,787 12,754 12,698 14,322 14,213 11,930 15,256 Recreation and cultural services 7,745 9,755 8,702 10,385 8,927 11,891 11,501 10,497 12,310 13,754 Interest on long term debt 5,270 5,124 4,602 4,555 11,840 1,468 7,057 9,645 7,947 11,299 Total Governmental Activities Expenses 409,642 455,109 488,487 527,722 542,374 579,193 608,085 586,679 593,231 741,806 Business-Type Activities Expenses Airport 5,664 6,187 6,117 6,391 7,966 8,398 10,133 9,146 11,366 26,498 Golf 2,608 2,968 3,131 3,111 3,297 3,491 3,347 3,869 4,231 4,884 State Water Contract 5,992 6,351 5,848 5,571 5,909 6,973 7,709 6,928 5,924 6,882 Nacimiento Water Contract 13,840 15,776 14,888 14,191 14,044 14,318 13,257 14,816 13,889 14,170 Lopez Flood Control 6,116 6,128 6,220 6,387 7,072 7,004 6,733 7,087 6,941 7,708 Lopez Park - 4 4 4 3 3 2 1 - - General Flood Control Zone - Salinas Dam 809 845 824 851 1,056 1,142 913 1,170 1,521 1,490 County Service Areas 3,857 4,194 4,065 4,218 4,445 4,747 4,670 4,697 5,636 7,340 Los Osos Wastewater 231 235 3,807 10,322 10,918 11,544 11,636 11,581 11,663 12,597 Total Business-Type Activities Expenses 39,117 42,688 44,904 51,046 54,710 57,620 58,400 59,295 61,171 81,569 Total Primary Government Expenses $ 448,759 $ 497,797 $ 533,391 $ 578,768 $ 597,084 $ 636,813 $ 666,485 $ 645,974 $ 654,402 $ 823,375 Program Revenues Governmental Activities Fees, Fines, Charges for Services General government $ 14,678 $ 12,407 $ 13,702 $ 14,839 $ 12,937 $ 13,484 $ 12,967 $ 15,502 $ 14,414 $ 16,808 Public protection 23,035 20,774 20,768 21,231 23,666 22,946 21,291 23,552 23,648 25,758 Public ways and facilities 4,356 4,255 9,434 7,462 6,155 5,721 4,797 5,532 4,343 4,974 Health and sanitation 6,570 6,631 7,179 6,757 7,501 7,698 8,571 8,038 8,022 8,130 Public assistance 2,070 2,077 2,107 2,032 1,763 1,194 1,155 926 950 901 Education 1,723 2,998 1,952 1,644 2,006 1,943 2,193 1,622 1,315 2,313 Recreation and cultural services 4,537 5,056 4,975 5,127 5,592 5,515 4,295 5,714 6,113 6,094 Operating Grants and Contributions General government 252 54 735 748 321 200 685 789 2,058 19,120 Public protection 54,233 62,359 63,528 52,205 58,184 59,592 59,974 67,187 76,907 79,867 Public ways and facilities 14,688 14,145 11,025 9,918 11,506 10,485 11,302 11,073 14,279 22,753 Health and sanitation 57,344 62,338 61,950 67,626 76,494 76,211 74,699 91,988 107,891 107,717 Public assistance 89,640 94,775 98,414 102,784 105,848 107,758 114,525 113,555 123,834 137,154 Education 102 105 124 132 173 143 204 219 374 247 Recreation and cultural services - 131 153 273 671 200 230 271 511 1,794 Capital Grants and Contributions General government 69 156 45 - 349 930 - - - 1,000 Public protection 3,315 9,701 4,420 7,820 656 1,197 1,799 3,814 43 - Public ways and facilities 5,570 6,435 6,031 6,655 8,893 14,361 17,732 12,856 11,993 4,516 Health and sanitation - - - - - - - - - - Education - - - - - - 267 - - - Recreation and cultural services 282 1,776 10,804 1,157 191 28 86 189 413 855 Total Governmental Activities 282,464 306,173 317,346 308,410 322,906 329,606 336,772 362,827 397,108 440,001 Source: Statement of Activities (continued) 161 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-2018 2018-19 2019-20 2020-21 2021-221 2022-23 Business-Type Activities Fees, Fines, Charges for Services Airport $ 4,493 $ 4,883 $ 5,165 $ 5,662 $ 7,158 $ 8,947 $ 8,300 $ 6,140 $ 9,314 $ 11,724 Golf 2,779 2,967 2,589 2,291 2,584 2,717 2,750 4,376 4,843 4,738 State Water Contract 6,358 6,562 6,846 5,941 6,110 7,656 7,825 7,470 5,691 7,367 Nacimiento Water Contract 13,685 9,682 17,048 15,149 15,709 16,947 16,732 17,458 16,696 15,596 Lopez Flood Control 6,123 6,208 6,530 6,708 6,677 7,148 6,978 6,927 7,451 7,918 Lopez Park - - - - - - - - - - General Flood Control Zone - Salinas Dam 861 794 960 904 909 913 2,884 1,370 1,234 1,380 County Service Areas 3,312 3,408 - 2,301 3,662 3,894 4,492 4,702 4,739 5,500 Los Osos Wastewater - - 3,551 3,620 4,467 5,100 5,245 5,324 7,129 7,425 Operating Grants and Contributions Airport 127 126 126 126 396 328 4,644 7,580 5,823 5,599 Golf - 269 - 1,017 - - - 105 - - State Water Contract 13 13 13 14 14 14 14 15 14 14 Nacimiento Water Contract 12 9 9 - 6 - - - - - Lopez Flood Control 8 8 8 - 7 5 5 6 6 6 Lopez Park - - - - - - - - - - General Flood Control Zone - Salinas Dam - - - - - 26 - - - - County Service Areas 3 211 295 3 3 13 3 3 3 3 Los Osos Wastewater - - 2,810 18 - - - - - - Capital Grants and Contributions Airport 1,770 365 7,069 15,379 2,211 3,139 505 1,138 12,259 - Nacimiento Water Contract - - - - 24 - - 200 - - County Service Areas 2 - - - - - - - - - Los Osos Wastewater 57,507 26,385 4,157 10,086 2,982 4,860 2,618 2,546 2,847 963 Total Business-Type Activities Revenues 97,053 61,890 0 57,176 69,219 52,919 61,707 62,995 65,360 78,049 68,233 Total Primary Government Revenues $ 379,517 $ 368,063 0 $ 374,522 $ 377,629 $ 375,825 $ 391,313 $ 399,767 $ 428,187 $ 475,157 $ 508,234 Net (Expense)/Revenues Governmental Activities $ (127,178) $ (148,936) $ (171,141) 0 $ (219,312) $ (219,468) $ (249,587) $ (271,313) $ (223,852) $ (196,123) $ (301,805) Business-Type Activities 57,936 # 19,202 12,272 0 18,173 (1,791) 4,087 4,595 6,065 16,878 (13,336) Total Primary Government net expense $ (69,242) $ (129,734) $ (158,869) 0 $ (201,139) $ (221,259) $ (245,500) $ (266,718) $ (217,787) $ (179,245) $ (315,141) 2013-14 2014-15 2015-16 2016-17 2017-2018 2018-19 2019-20 2020-21 2021-22 2022-23 General Revenue and Other Changes in Net Position Governmental Activities Property taxes $ 152,256 $ 155,374 $ 163,367 $ 173,153 $ 180,051 $ 189,689 $ 198,927 $ 208,371 $ 216,107 $ 235,064 Other taxes 22,088 22,984 21,953 23,072 25,708 27,224 27,878 34,440 41,804 37,417 Interest and investment income 599 3,174 4,401 3,289 3,171 12,952 12,849 696 (16,312) 13,395 Unrestricted grants 1,727 13,327 3,140 63 2,740 2,115 3,845 41,157 9,001 5,334 Other revenues - - - 5 2 35,445 1,144 4,813 1,424 306 Transfers (790) (2,676) (768) (2,292) 2,267 (625) (493) 282 (213) (6,696) Special item (2,800) - - - - - - - - Total Governmental Activities 173,080 192,183 0 192,093 0 197,290 213,939 266,800 244,150 289,759 251,811 284,820 Business-Type Activities Property taxes 4,402 4,782 4,782 3,814 3,858 3,912 4,043 4,387 4,380 4,944 Other taxes 32 - - - - - - - - - Interest and investment income 595 659 847 630 1,272 1,590 2,169 405 (1,333) 1,814 Other revenues 40 183 268 338 - 574 2,889 76 1,148 5,282 Transfers 790 2,676 768 2,292 (2,267) 625 493 (282) 213 6,696 Total Business-Type Activities 5,859 0 8,300 0 6,665 7,074 2,863 6,701 9,594 4,586 4,408 18,736 Total Primary Government $ 178,939 $ 200,483 $ 198,758 $ 204,364 $ 216,802 $ 273,501 $ 253,744 $ 294,345 $ 256,219 $ 303,556 Change in Net Position Governmental Activities $ 45,902 $ 43,247 $ 20,952 $ (22,022) $ (5,529) $ 17,213 $ (27,163) $ 65,907 $ 55,688 $ (16,985) Business-Type Activities 63,795 27,502 18,937 25,247 1,072 10,788 14,189 10,651 21,286 5,400 Total Primary Government $ 109,697 $ 70,749 0 $ 39,889 0 $ 3,225 $ (4,457) $ 28,001 $ (12,974) $ 76,558 $ 76,974 $ (11,585) Source: Statement of Activities 1 Business-type change in net position was restated in FY 2022-23. 162 County of San Luis Obispo Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 General Fund Nonspendable $ 779 $ 5,089 $ 3,454 $ 3,535 $ 18,511 $ 19,222 $ 18,734 $ 9,861 $ 6,655 $ 6,773 Restricted 3,214 2,945 2,872 2,649 10,083 12,276 10,915 24,212 26,060 24,607 Committed 116,940 138,140 168,619 164,492 152,501 169,846 175,455 194,669 214,112 224,823 Assigned 118,248 125,112 122,925 126,596 107,145 127,007 119,426 173,558 190,037 199,196 Unassigned - - - - - - - - - - Total General Fund $ 239,181 $ 271,286 $ 297,870 $ 297,272 $ 288,240 $ 328,351 $ 324,530 $ 402,300 $ 436,864 $ 455,399 All Other Governmental Funds Nonspendable $ - $ 920 $ 3,776 $ 3 $ 24 $ 36 $ 4 $ 6 $ 9 $ 9 Restricted 20,164 20,563 21,317 24,192 24,750 33,496 57,057 58,106 54,520 129,672 Committed 74,240 78,508 61,926 94,904 62,307 66,616 67,593 88,636 96,623 86,728 Assigned - - - - - - - - - - Unassigned - (486) - - (3,038) - - - - - Total All Other Governmental Funds $ 94,404 $ 99,505 $ 87,019 $ 119,099 $ 84,043 $ 100,148 $ 124,654 $ 146,748 $ 151,152 $ 216,409 Source: Balance Sheet - Governmental Funds 163 County of San Luis Obispo Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Revenues Taxes $ 177,765 $ 178,740 $ 185,764 $ 196,822 $ 203,583 $ 217,106 $ 223,041 $ 243,406 $ 2 61,163 $ 270,790 Licenses, permits, and franchises 1 0,694 10,452 10,539 11,446 11,140 12,133 11,477 12,522 1 2,597 15,478 Fines, forfeitures, and penalties 5 ,257 5,686 5,173 4,339 5,977 4,396 3,916 4,352 4,304 4,297 Revenues from use of money and property 1 ,373 3,864 4,939 3,984 3,779 12,268 12,247 1,084 (14,773) 13,346 Aid from governmental agencies 229,283 261,351 256,490 254,350 262,660 271,961 277,267 348,093 350,382 378,339 Charges for current services 50,071 43,530 46,308 49,460 49,793 47,957 46,712 51,694 49,498 55,512 Other revenues 6,235 9,110 11,504 8,481 6,869 25,278 12,396 13,104 12,734 14,429 Total revenues 480,678 512,733 520,717 528,882 543,801 591,099 587,056 674,255 675,905 752,191 Expenditures Current: General government 44,317 51,207 54,461 54,918 60,445 54,991 54,078 64,686 63,569 75,027 Public protection 148,155 157,783 156,096 164,839 175,175 185,033 205,162 199,299 212,388 233,444 Public ways and facilities 28,528 29,903 41,044 29,077 42,254 35,267 43,865 37,099 39,124 58,016 Health and sanitation 74,586 75,116 81,591 88,623 99,885 103,512 108,158 117,359 157,490 140,568 Public assistance 99,442 107,104 111,227 113,392 117,066 121,327 131,154 129,141 133,275 188,616 Education 12,205 11,388 10,534 11,560 11,640 12,191 12,769 13,368 15,712 14,199 Recreational and cultural services 7,993 10,104 9,888 9,963 10,358 10,574 11,637 10,976 12,420 16,685 Debt service: Principal payments 5,412 6,070 6,788 7,576 50,989 5,093 10,561 5,289 9,137 13,067 Interest and fiscal charges 5,419 5,209 4,687 4,639 11,666 1,204 6,416 7,030 7,895 10,581 Debt issuance costs - - - - - - - - - - Capital outlay 11,312 20,019 30,465 11,554 11,828 6,374 7,645 13,795 17,376 14,563 Total expenditures 437,369 473,903 506,781 496,141 591,306 535,566 591,445 598,042 668,386 764,766 Excess (deficiency) of revenues over (under) expenditures 43,309 38,830 13,936 32,741 (47,505) 55,533 (4,389) 76,213 7,519 (12,575) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Other Financing Sources Refunding certificates of participation issued - - - - - - - - - - Premium on refunding certificates of participation issued - - - - - - - - - - Proceeds of long-term debt - - - - - - 20,384 2,841 - 70,033 Premium on lease revenue bonds issued - - - - - - 4,023 - - 4,634 Payment to refunded escrow agent - - - - - - - - - (5,724) Discount on certificates of participation issued - - - - - - - - - - Leases - - - - - - - - 30,950 38,935 Subscription-based IT arrangement* - - - - - - - - - 305 Transfers in 26,502 33,299 35,803 57,668 54,782 31,633 36,803 37,384 45,602 48,050 Transfers out (25,935) (34,924) (35,641) (58,927) (51,365) (30,950) (36,136) (36,094) (45,103) (59,866) Total other financing sources and uses 567 (1,625) 162 (1,259) 3,417 683 25,074 4,131 31,449 96,367 Special Item (2,800) - - - - - - - - - Net change in fund balances $ 41,076 $ 37,205 $ 14,098 $ 31,482 $ (44,088) $ 56,216 $ 20,685 $ 80,344 $ 38,968 $ 83,792 Debt Service as a percentage of non- 2.61% 2.57% 2.54% 2.62% 11.25% 1.23% 3.05% 2.20% 2.85% 3.27% capital expenditures GASB Statement No. 96 was implemented in FY 2022-23 Source: Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 164 County of San Luis Obispo Assessed Valuation Last Ten Fiscal Years (In Thousands) (UNAUDITED) Percentage Change Fiscal Year Net Assessed from Prior Ended, Secured Unsecured Exemptions Valuations Year Tax Rate 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) 59,450,048 5.7% 1.0040 2021 61,279,618 2,349,231 (1,428,237) 62,200,611 4.6% 1.0040 2022 63,459,055 2,281,455 (1,487,547) 64,252,963 3.3% 1.0040 2023 67,503,193 2,512,544 (1,648,668) 68,367,069 6.4% 1.0040 Total Net Assessed Value Change from Prior Year tnecreP 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Percent Change from Prior Year 1.0% 0.0% 4102 5102 6102 7102 8102 9102 0202 1202 2202 3202 Fiscal Year Discussion: 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. Source: County Assessed Values, Exemptions and Growth % Book 165 County of San Luis Obispo Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (per $100 of assessed values) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 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 .00400 0.00400 0.00374 0.00400 0.00400 0.00400 0.00400 0.00400 0.00400 0.00400 Total Direct Rate 1.00400 1.00400 1.00374 1.00400 1.00400 1.00400 1.00400 1.00400 1.00400 1.00400 Cities, Schools, and Special Districts Combined Rates Arroyo Grande 0 .0580 0.0569 0.0756 0.0680 0.1085 0.1051 0.0965 0.0827 0.0840 0.0648 Atascadero 0 .0452 0.0590 0.1373 0.1373 0.1373 0.1373 0.1373 0.1373 0.1373 0.1373 Grover Beach 0 .0499 0.0509 0.0940 0.1023 0.1599 0.1901 0.1815 0.1677 0.1690 0.1598 Morro Bay 0 .0510 0.0510 0.0688 0.0683 0.0683 0.0683 0.0683 0.0614 0.0582 0.0548 Paso Robles 0 .0815 0.0782 0.0955 0.0828 0.0828 0.1222 0.1222 0.1160 0.1198 0.1169 Pismo Beach 0 .0499 0.0509 0.0700 0.0680 0.1085 0.0965 0.0965 0.0827 0.0840 0.0648 San Luis Obispo - - 0.0683 0.0683 0.0683 0.0683 0.0683 0.0583 0.0583 0.0543 Note: Rates shown represent the most common rates encountered for the tax rate areas within these cities. Source: County Property Tax Rate Book 166 County of San Luis Obispo Principal Property Taxpayers Current Year and Ten Years Ago (In Thousands) (UNAUDITED) Fiscal Year 2022-23 Fiscal Year 2013-14 Percentage Percentage of Total of Total County County Assessed Assessed Taxpayer Industry Assessed Value Rank Value Assessed Value Rank Value Pacific Gas & Electric Co. Utility $ 1,281,887 1 1.88% $ 2,565,300 1 5.96% High Plans Ranch II LLC Solar Ranch 768,188 2 1.12% - - - Southern California Gas Co. Utility 178,395 3 0.26% 60,148 8 0.14% Jamestown Premier Commercial 156,329 4 0.23% - - - Phillips 66 Company Oil Refinery 138,067 5 0.20% - - - E&J Gallo Winery/Vineyards Winery 110,945 6 0.16% 63,115 6 0.15% Firestone Walker LLC Brewery 101,520 7 0.15% - - - CAP VIII - Mustang Village LLC Apartments 100,006 8 0.15% 78,423 4 0.18% Treasury Wine Estates Americas Co Winery 92,517 9 0.14% - - - Sierra Vista Hospital Hospital 8 3,107 10 0.12% - - - Beringer Wine Estates Company Winery - - 95,337 2 0.22% Plains Exploration & Prod Co Petroleum & Gas - - 82,999 3 0.19% Pacific Bell Telephone Co Communications - - 72,603 5 0.17% Martin Hotel Management Hotel - - 61,484 7 0.14% Pasquini Charles Jr Tre Etal Private - - 56,778 9 0.13% Twin Cities Comm Hospital Inc Hospital - - 54,445 10 0.13% Total $ 3,010,961 4.41% $ 3,190,632 7.41% Total County Assessed Value $ 68,367,069 $ 43,059,945 Sources: County Property Tax System 2013-14 San Luis Obispo County Annual Comprehensive Financial Report 167 County of San Luis Obispo Property Tax Levies and Collections Last Ten Fiscal Years (In Thousands) (UNAUDITED) Collected within the Fiscal Year of the Levy Collections in Fiscal Year Total Levy for Collected % of Original Subsequent Delinquent % of Levy Ended June 30, the Fiscal Year Amount Levy Years* Amount Delinquent 2014 $ 421,140 $ 416,450 98.89% N/A $ 4 ,690 1.11% 2015 4 47,088 442,330 98.94% N/A 4,758 1.06% 2016 4 70,629 466,465 99.12% N/A 4,164 0.88% 2017 4 95,277 490,890 99.11% N/A 4,387 0.89% 2018 5 22,528 517,777 99.09% N/A 4,751 0.91% 2019 5 49,869 544,994 99.11% N/A 4,874 0.89% 2020 5 73,449 564,422 98.43% N/A 9,027 1.57% 2021 5 99,508 592,847 98.89% N/A 6,660 1.11% 2022 6 19,518 614,110 99.13% N/A 5,408 0.87% 2023 6 61,387 654,754 99.00% N/A 6,632 1.00% Note: Amounts do not include tax collections for bonds or special assessments Source: County Property Tax Booklet *Collections in subsequent years are not available from the County's current property tax system. 168 County of San Luis Obispo Special Assessment Billings and Collections (In Thousands) (UNAUDITED) Special Special Year ended Assessment Assessment June 30, Billings Collected 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 2021 5,042 5,105 2022 5,061 5,163 2023 5,063 5,063 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. Source: County Property Tax System 169 County of San Luis Obispo Ratios of Total Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Governmental Activities Certificates of Participation $ 24,640 $ 23,600 $ 22,527 $ 21,411 $ 26,135 $ 24,808 $ 18,004 $ 1 9,619 $ 18,290 $ 11,178 Less deferred amounts: For issuance discounts: (95) (91) (87) (83) (79) (75) - - - - Add deferred amounts: For issuance premiums: 1,240 1,152 1,063 975 886 797 708 619 530 - State notes - - - - 2,056 1,901 1,744 1,586 1,426 1 ,264 Pension Obligation Bonds 111,234 146,219 145,291 143,890 99,407 96,903 93,733 89,825 85,112 79,516 Lease revenue bonds - - - - - - 20,380 19,970 19,380 88,803 Add deferred amounts: For issuance premiums: - - - - - - 4,023 3,837 3,652 7 ,972 Assessment Bonds from direct borrowings - - - - - - 436 391 344 294 Leases 1 - - - - - - - - 92,248 126,334 Subscription-based IT arrangements 2 - - - - - - - - - 2 ,614 Total bonds and notes payable 137,019 170,880 168,794 166,193 128,405 124,334 139,028 1 35,847 220,982 317,975 Business-Type Activities Certificates of Participation 18,257 17,745 17,194 16,470 15,678 14,811 13,908 12,966 14,668 11,471 Add deferred amounts: For issuance premiums: 459 426 393 361 328 295 262 229 196 - State Note 46,529 72,774 86,611 85,674 87,667 84,409 81,079 88,385 84,528 80,701 Other Notes - - - - - - - - 196 166 Revenue Bonds 187,170 183,813 177,198 173,535 168,410 164,126 159,841 1 55,330 150,585 145,595 Add deferred amounts: For issuance premiums: 5,732 5,519 10,058 9,623 8,926 8,502 8,077 7,653 7,230 6 ,805 Unamortized outflow on Bond Refinancing - - ( 4,171) ( 3,990) ( 3,808) - - - - - General Obligation Bonds 9,530 9,155 8,760 8,350 7,925 7,485 7,025 6,540 6,030 5 ,490 Add deferred amounts: For issuance premiums: 959 902 846 790 733 677 620 564 508 452 Lease Revenue Bonds - - - - - - - - - 1 ,582 Add deferred amounts: For issuance premiums: - - - - - - - - - 57 Assessment Bonds 76,438 79,829 79,396 78,089 76,746 75,358 73,943 72,483 70,978 69,437 Leases 1 - - - - - - - - 250 164 Subscription-based IT arrangements 2 - - - - - - - - - 199 Total bonds and notes payable 345,074 370,163 376,285 368,902 362,605 355,663 3 44,755 3 44,150 335,169 322,119 Total Outstanding Debt $ 4 82,093 $ 5 41,043 $ 5 45,079 $ 5 35,095 $ 4 91,010 $ 479,997 $ 483,783 $ 479,997 $ 556,151 $ 640,094 Percentage of Personal Income 3.76% 3.86% 3.76% 3.58% 3.13% 2.92% 2.80% 2.54% 2.90% N/A Percentage of Assessed Value of Taxable Property 3 1.12% 1.19% 1.13% 1.06% 0.92% 0.85% 0.81% 0.77% 0.87% 0.94% Net outstanding debt Per Capita $ 1 ,770.08 $ 1 ,972.50 $ 1 ,960.88 $ 1,916.46 $ 1,753.31 $ 1,713.66 $ 1,708.81 $ 1,700.62 $ 1,964.09 $ 2,269.73 Note: See the Demographic Statistics Schedule for detailed information on personal income and population. 1 GASB Statement 87 was implemented in FY 2021-22. Prior year leases were not recognized as capital leases pre-GASB 87. 2 GASB Statement 96 was implemented in FY 2022-23. Prior year subscription-based IT arrangements were not recognized as capital leases pre-GASB 96. 3 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. Source: Notes to the Financial Statements, Note 10 170 County of San Luis Obispo Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Certificates of Participation $ 13,675 $ 12,915 $ 12,137 $ 11,326 $ 10,482 $ 9,606 $ 8,693 $ 7,747 $ 6 ,757 $ 2 ,740 Less deferred amounts: For issuance discounts: (95) (91) (87) (83) (79) (75) - - - - Add deferred amounts: For issuance premiums: 1 ,240 1,152 1,063 975 886 797 708 619 530 - Lease Revenue Bonds - - - - - - 20,380 19,970 1 9,380 9 0,385 Add deferred amounts: For issuance premiums: - - - - - - 4,023 3,837 3,652 8,029 General Obligation Bonds 9 ,530 9,155 8,760 8,350 7,925 7,485 7,025 6,540 6,030 5,490 Add deferred amounts: For issuance premiums: 959 902 846 790 733 677 620 564 508 452 State Notes - - - - 2,056 1,901 1,744 1,586 1,426 1,264 Other Notes - - - - - - - - 196 166 Assessment Bonds 76,438 79,829 79,396 78,089 76,746 75,358 73,943 72,483 7 0,978 6 9,437 Leases 1 - - - - - - - - 9 2,498 126,498 Subscription-based IT arrangements 2 - - - - - - - - - 2,813 Less resources restricted for principal repayment (2,683) (2,683) (2,688) (2,692) (2,712) (8,061) (30,167) (23,110) (17,088) (90,011) Net Total General Obligation Debt $ 99,064 $ 101,179 $ 99,427 $ 96,755 $ 96,037 $ 87,688 $ 86,969 $ 90,236 $ 184,867 $ 217,263 Percentage of Personal Income 0.77% 0.72% 0.69% 0.65% 0.61% 0.53% 0.50% 0.48% 0.96% N/A Percentage of Assessed Value of Taxable Property1 0.23% 0.22% 0.21% 0.19% 0.18% 0.16% 0.15% 0.15% 0.29% 0.32% Net outstanding debt Per Capita $ 363.73 $ 368.87 $ 357.68 $ 346.53 $ 342.93 $ 313.06 $ 307.19 $ 319.70 $ 654.96 $ 770.40 Note: See the Demographic Statistics Schedule for detailed information on personal income and population. 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. 1 GASB Statement 87 was implemented in FY 2021-22. Prior year leases were not recognized as capital leases pre-GASB 87. 2 GASB Statement 96 was implemented in FY 2022-23. Prior year subscription-based IT arrangements were not recognized as capital leases pre-GASB 96. Source: Notes to the Financial Statements, Note 10 171 County of San Luis Obispo Legal Debt Margin Information Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Assessed Value of Property (a) $ 43,059,945 $ 45,426,163 $ 48,172,375 $ 50,647,598 $ 53,415,961 $ 56,262,663 $ 59,450,048 $ 62,200,611 $ 64,252,963 $ 68,367,069 Debt Limit, 1.25% of Assessed Value 538,249 567,827 602,155 633,095 667,700 703,283 743,126 777,508 803,162 854,588 Amount of Debt Applicable to Limit General Obligation Bonds (b) 10,489 10,057 9,606 9,140 8,658 7,485 7,025 6,540 6,030 5,490 Less: Resources Restricted to Paying Principal - - - - - - - - - - Total Debt Applicable 1 0,489 10,057 9,606 9,140 8 ,658 7,485 7,485 6,540 6,030 5,490 Legal Debt Margin $ 527,760 $ 557,770 $ 592,549 $ 623,955 $ 659,042 $ 695,798 $ 695,798 $ 770,968 $ 797,132 $ 849,098 Total Debt Applicable as a Percentage of the Debt Limit 1.95% 1.77% 1.60% 1.44% 1.30% 1.06% 0.95% 0.84% 0.75% 0.64% Source: (a) County Assessed Values, Exemptions and Growth % Book (b) Notes to the Financial Statements, Note 10 172 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) 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 2021 282,249 18,863,123 66,617 39.50 40,403 5.9 2022 283,159 19,162,980 67,951 40.20 39,857 2.6 2023 282,013 N/A N/A 41.10 39,833 3.5 Sources: 1. Bureau of Economic Analysis 2. State of California Employment Development Department 3. California Department of Education & California Community Colleges Chancellor's Office 4. U.S. Census Bureau Notes: N/A = not available a. Data for prior calendar years b. Data includes kindergarten through grade 12 and Cuesta College c. Calendar year 2014 - 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, 2023 173 County of San Luis Obispo Principal Employers Current Year and Ten Years Ago (UNAUDITED) 2023 2, 3 2014 1 Number of Percentage of Total Number of Percentage of Total Employer Employees Rank County Employment Employees Rank County Employment California Polytechnic State University 3,143 1 2.25% 2,573 2 1.81% County of San Luis Obispo 2,932 2 2.10% 2,800 1 1.97% Department of State Hospitals - Atascadero 2,000 3 1.43% 2,300 3 1.62% Lucia Mar Unified School District 1,573 4 1.13% 1,000 7 0.71% California Men's Colony 1,517 5 1.09% 2,000 4 1.41% Tenet Health Central Coast 1,425 6 1.02% 1,200 6 0.85% San Luis Coastal Unified School District 1,388 7 0.99% 902 10 0.64% Paso Robles Joint Unified School District 1,262 8 0.90% 935 8 0.66% Compass Health 1,200 9 0.86% - - - Cuesta College 892 10 0.64% - - - Pacific Gas and Electric Company - - - 1,700 5 1.20% Cal Poly Corporation - - - 906 9 0.64% Total Employment Labor Force 4 139,800 141,800 Sources: 1 2013-14 San Luis Obispo County Annual Comprehensive Financial Report 2 2022 Pacific Coast Business Times Book of Lists 3 2022-23 County Budget Report 4 State of California Employment Development Department 174 County of San Luis Obispo Full Time Equivalent County Government Employees by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2013-14 2014-15 2015-16 2016-17 2017-18* 2018-19* 2019-20* 2020-21* 2021-22* 2022-23* General Government 430.75 436.75 440.50 430.75 437.50 441.00 455.25 458.00 456.25 460.50 Public Protection 817.25 832.25 848.25 867.00 909.50 912.00 899.75 904.25 907.50 921.50 Public Ways and Facilities 188.75 190.75 207.75 234.75 237.75 246.75 247.75 248.75 249.75 253.75 Health and Sanitation 464.00 485.25 505.50 556.00 536.50 530.00 531.00 530.00 566.00 612.50 Public Assistance 478.00 500.75 524.00 524.00 523.00 522.00 523.50 526.75 527.25 543.25 Education 75.50 75.50 77.50 78.00 77.75 78.00 78.25 78.50 78.50 78.50 Recreation and Cultural Services 55.00 59.00 60.00 61.00 61.00 61.00 61.00 61.00 62.00 62.00 Total 2,509.25 2,580.25 2,663.50 2,751.50 2,783.00 2,790.75 2,796.50 2,807.25 2,847.25 2,932.00 Source: County Budget Report Notes: 2014-2017 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. 175 County of San Luis Obispo Operating Indicators by Function Last Ten Fiscal Years (UNAUDITED) Function / Department 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Recreation and Cultural Services Parks Day Use Passes 42,821 57,564 n/a n/a n/a n/a n/a n/a n/a n/a Daily Passes* 246,727 239,140 189,232 230,915 257,220 60,902 59,194 62,559 41,130 51,591 Annual Passes 2,998 3,137 n/a n/a n/a n/a n/a n/a n/a n/a Annual Vehicle Passes* 8,744 12,584 9,614 6,504 8,066 3,974 1,823 1,716 1,869 1,727 Daily Boat Launches* 26,110 23,706 16,001 16,312 24,340 9,664 11,210 11,810 6,242 6,134 Annual Boat Passes* 1,412 1,245 480 1,383 1,353 1,629 1,288 764 403 666 Public Protection Planning and Building Total Permits Issued 2,622 3,139 3,355 3,927 3,542 3,256 3,299 3,624 4,032 4,577 Number of New Affordable Housing ** 13 151 99 65 133 131 n/a n/a n/a n/a Sheriff Jail bookings 12,583 11,375 11,018 11,774 11,324 10,246 8,144 6,235 6,367 7,994 Average daily population 780 679 603 632 621 636 552 448 462 463 Health and Sanitation Mental Health Day Treatment Days provided to youth in out-of-county group home facilities** 1,764 1,613 1,381 604 n/a n/a n/a n/a n/a n/a Public Health Percentage of the State allocated caseload enrolled in the Women, Infants & Children (WIC) Program ** 95 91 86 76 72 68 n/a n/a n/a n/a Percentage of live born infants whose mothers received prenatal care in the first trimester *** 79 79 80 78 78 84 86 84 86 82 Public Assistance Social Services Percentage of child abuse/neglect referrals where a response is required within 10 days that were timely ** 96 98 97 n/a n/a n/a n/a n/a n/a n/a Percentage of child abuse/neglect referrals where a response is required within 10 days and where contact was made within the required period. *** n/a n /a n /a 9 1 9 5 9 5 94 9 2 9 4 9 2 Education Library Annual number of items circulated per capita 9.8 9.6 10.5 10.3 11.6 12.1 12.1 7.6 9.7 9.7 Annual Expenditure per capita for total Library budget *** $ 3 5.50 $ 36.13 $ 3 6.27 $ 38.10 $ 4 0.36 $ 40.57 $ 4 4.47 $ 4 6.78 $ 4 7.12 $ 51.51 Public Ways and Facilities Roads Pavement Condition Rating for all County roads (70 = "good") 61 61 65 66 65 65 60 59 59 60 Airport Airport Takeoffs and Landings 66,696 71,001 71,181 71,001 77,917 82,110 68,067 75,082 82,471 77,084 Passenger Enplanements 147,105 149,558 155,744 180,141 226,588 259,481 215,900 150,065 247,522 305,680 * 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. ** Performance measure no longer reported. *** FY 2021-22 performance measure restated Source: County Budget Performance Indicators 176 County of San Luis Obispo Capital Asset Statistics by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Recreation and Cultural Services County golf courses 3 3 3 3 3 3 3 3 3 3 Park acreage 13,583 13,583 13,583 13,583 13,583 13,583 13,841 13,841 13,841 13,841 Public Protection Correction facility capacities (a) 797 797 797 909 909 909 909 909 909 909 Public Ways and Facilities Miles of county roads 1,336 1,336 1,338 1,338 1,339 1,339 1,349 1,349 1,349 1,349 Airport Number of runways 2 2 2 2 2 2 2 2 2 2 Notes: The majority of County assets are in buildings and equipment, which are under the functional area of General Government (a) Amount is all holdings actual totals, including Main Jail, Women's Jail, West Housing, West Dorm, Honor Farm, and Weekender Barracks Source: County departments' management 177