Annual Comprehensive Financial Report, 2024-25

Annual Comprehensive Financial Report County of San Luis Obispo, California Fiscal Year Ended June 30, 2025 Prepared under the direction of James W. Hamilton, CPA Auditor-Controller  Treasurer-Tax Collector Cover photo of the Embarcadero and Morro Rock in Morro Bay Lena Cox, Auditor-Controller-Treasurer-Tax Collector’s Office COUNTY OF SAN LUIS OBISPO ANNUAL COMPREHENSIVE FINANCIAL REPORT JUNE 30, 2025 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 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Notes to Basic Financial Statements Note 1: Summary of Significant Accounting Policies ...................................................... 47 Note 2: Cash and Cash Equivalents.............................................................................. 56 Note 3: Receivables ................................................................................................... 62 Note 4: Capital Assets ................................................................................................ 63 Note 5: Construction in Progress and Related Commitments .......................................... 65 Note 6: Leases and Subscription-Based Information Technology Arrangements ............... 66 Note 7: Risk Management ........................................................................................... 68 Note 8: Interfund Receivables and Payables ................................................................. 69 Note 9: Transfers ....................................................................................................... 70 Note 10: Bond Indebtedness and Long-Term Debt ........................................................ 71 Note 11: Net Position / Fund Balances ......................................................................... 77 Note 12: Lapsing Encumbrances.................................................................................. 82 Note 13: Other Commitments ..................................................................................... 83 Note 14: Contingent Liabilities ..................................................................................... 83 Note 15: Landfill Postclosure Care Costs ...................................................................... 83 Note 16: Tax Abatements ........................................................................................... 83 Note 17: Defined Benefit Pension Plan ......................................................................... 84 Note 18: Post-Employment Healthcare Benefits ............................................................ 90 Note 19: Restatement of Net Position and Fund Balance ............................................... 96 Required Supplementary Information Description ................................................................................................................ 97 Schedule of the County’s Proportionate Share of the San Luis Obispo County Pension Plan’s Net Pension Liability ............................................................................ 98 Schedule of the County’s Contributions to the San Luis Obispo County Pension Plan ........ 99 Other Post-Employment Benefits (OPEB) Plan Schedule of Changes in the County’s Net OPEB Liability and Related Ratios.......................................................... 100 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Required Supplementary Information (Continued) Other Post-Employment Benefits (OPEB) Plan Schedule of Actuarially Determined Plan Contributions and Related Ratios .................................................... 101 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Comparison - General Fund ............................................................ 103 Notes to Required Supplementary Information ........................................................... 105 Other Supplementary Information: Combining and Individual Fund Statements and Schedules: Nonmajor Governmental Funds: Nonmajor Governmental Fund Descriptions ......................................................... 106 Combining Balance Sheet ................................................................................... 108 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ......................................................................................................... 112 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual Comparison: Capital Projects ................................................................................................. 116 Homeless and Affordable Housing ....................................................................... 117 Emergency Medical Services ............................................................................... 118 Fish and Game .................................................................................................. 119 Road Impact Fees ............................................................................................. 120 Library ............................................................................................................. 121 Parks................................................................................................................ 122 Public Facilities Fees .......................................................................................... 123 Roads............................................................................................................... 124 Wildlife Grazing ................................................................................................. 125 Flood Control Districts ........................................................................................ 126 Lighting Control Districts .................................................................................... 127 County Service Area Districts .............................................................................. 128 Pension Obligation Bonds ................................................................................... 129 The accompanying notes are an integral part of these financial statements. FINANCIAL SECTION (CONTINUED) Nonmajor Enterprise Funds: Nonmajor Enterprise Fund Descriptions ............................................................... 130 Combining Statement of Net Position .................................................................. 131 Combining Statement of Revenues, Expenses, and Changes in Net Position ........... 132 Combining Statement of Cash Flows ................................................................... 133 Internal Service Funds: Internal Service Fund Descriptions ...................................................................... 134 Combining Statement of Net Position .................................................................. 135 Combining Statement of Revenues, Expenses, and Changes in Net Position ........... 136 Combining Statement of Cash Flows ................................................................... 137 Internal Service Funds – Insurance Funds: Combining Statement of Net Position ..................................................... 138 Combining Statement of Revenues, Expenses, and Changes in Net Position ....................................................................................... 139 Combining Statement of Cash Flows ...................................................... 140 Fiduciary Funds: Fiduciary Fund Description ................................................................................. 141 Custodial Funds: Combining Statement of Fiduciary Net Position ....................................... 142 Combining Statement of Changes in Fiduciary Net Position ...................... 143 Investment Trust Funds: Combining Statement of Fiduciary Net Position ....................................... 144 Combining Statement of Changes in Fiduciary Net Position ...................... 145 General Fund - Detail Budgetary Comparison Schedules: Detail Schedule of Expenditures – Budget to Actual Comparison ............................ 146 The accompanying notes are an integral part of these financial statements. STATISTICAL SECTION (UNAUDITED) Statistical Section Table of Contents............................................................................. 154 Net Position by Component ......................................................................................... 155 Changes in Net Position .............................................................................................. 156 Fund Balances, Governmental Funds ............................................................................ 158 Changes in Fund Balances, Governmental Funds ........................................................... 159 Assessed Valuation ..................................................................................................... 160 Direct and Overlapping Property Tax Rates ................................................................... 161 Principal Property Taxpayers ....................................................................................... 162 Property Tax Levies and Collections ............................................................................. 163 Special Assessment Billings and Collections ................................................................... 164 Ratios of Total Debt Outstanding ................................................................................. 165 Ratios of General Bonded Debt Outstanding ................................................................. 166 Legal Debt Margin Information .................................................................................... 167 Demographic and Economic Statistics .......................................................................... 168 Principal Employers .................................................................................................... 169 Full Time Equivalent County Government Employees by Function ................................... 170 Operating Indicators by Function ................................................................................. 171 Capital Asset Statistics by Function .............................................................................. 172 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 29, 2025 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, 2025, 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, 2025, 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, 2025, 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 279,337 residents. Approximately 43% 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 Executive Officer (formerly County Administrative Officer) and non-elected department heads. The County Executive 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 Assessor, Auditor-Controller-Treasurer-Tax Collector-Public Administrator, Clerk-Recorder, 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 Executive Officer. The budgets are then reviewed by the County Executive Officer and compiled into a proposed budget with the County Executive 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 Executive 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 Executive 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 June 2025, was 4.8%, which is lower than the state rate of 5.4% and higher than the national rate of 4.1%. During the same period last year, unemployment in the County was 4.2%. San Luis Obispo County ranks as the 13th 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:  From 2023 to 2024, the average income in the County rose by 2.7% to $61,334. In comparison, the state’s average income increased by 5.2% to $92,145.  As reported by the Bureau of Labor Statistics, the highest earning 2024 occupational groups in the area consisted of physicians, psychiatrists, dentists, chief executives, architectural and engineering managers, training and development managers, computer and information systems managers, pharmacists, lawyers, family medicine physicians, financial managers, and nurse practitioners. 3 Retail Sales and Agriculture: Both retail sales and agriculture continue to be integral parts of the County’s economy.  Sales and use tax revenue within the unincorporated areas of the County was $16.2 million in FY 2024-25.  According to Visit SLO CAL, tourists spent $2.4 billion in the calendar year 2024. The leading sectors for tourism spending were lodging ($768 million), food service ($596 million), retail ($270 million), and recreation ($245 million).  Crop values for 2024 exceeded $1 billion, reflecting the strength and diversity of the County’s agricultural industry. 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 increased from $890,000 in FY 2023-24 to $941,000 in FY 2024-25. This is a 5.7% increase from the prior year. The local real estate market remains competitive, and home prices continue to trend upwards.  Discretionary property tax receipts were $176.5 million in FY 2024-25, an increase of 4.2% over the prior year.  The total tax levy on secured property, which excludes unsecured property, direct charges, and school bonds, was $732.6 million for FY 2024-25, an increase of 4.8% 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 increased 2.8% to $3.1 million in FY 2024-25.  The property tax delinquency rate increased from 1.26%, in FY 2023-24, to 1.28% in FY 2024-25. 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 were $16.0 million in FY 2024-25, a 3.7% decrease from the prior year.  In October 2024, the Airport welcomed the arrival of the largest passenger aircraft to date, a Boeing 737-800, with a seating capacity of 159, more than double the typical 76-passenger aircraft. This significant expansion of service marks a new chapter in the Airport’s ongoing growth, further enhancing travel options for the community. In FY 2024-25 annual airline passenger travel at the San Luis Obispo County Airport increased 13.5% compared to the prior year.  Attendance at the California Mid-State Fair in Paso Robles increased in 2025, drawing an estimated 366,216 visitors compared to 335,000 in 2024. Long-Term Financial Planning:  The FY 2025-26 recommended budget authorized a $972.6 million governmental fund spending level, an increase over the $871.8 million adopted budget for FY 2024-25. The budget provides support to the development of departmental programs and services and assists County operations in responding to continuously changing needs. In FY 2025-26, the General Fund has $817.1 million appropriated to finance expenditures, including contingencies of $37.3 million.  Starting in late summer of 2024, the County embarked on its Financial Rebalancing and Resilience Initiative to address a significant funding gap and better align expenditures with the projected revenue growth. To close the budget gap and support the County’s efforts to manage limited resources while maintaining alignment with our priorities, all departments were requested to submit reduction lists for FY 2025-26 focusing on discretionary services and activities. All departments were asked to submit reduction lists with a target of 15% of their FY 2024-25 Adopted General Fund support budget with the status quo budget submittal for FY 2025-26. Further, a few departments with substantial General Fund allocations to discretionary programs were asked to submit additional reductions above 15%. Additionally, the County conducted a comprehensive review of all programs across departments, assessing program impacts and efficacy to our community, costs, outcome tracking, and overall alignment with our Board Priorities. This Initiative ultimately recommended a budget that adjusts the County’s current spending intended to prevent recurring deficits and support the County’s long-term fiscal sustainability.  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, 2025, the General Reserve was $13.0 million. In addition to the General Reserve, reserves exist for building replacement ($60.3 million), automation projects ($26.0 million), and tax-loss mitigation purposes ($69.7 million). Other classifications of General Fund balance are described in Footnote 11. 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 2025-26 decreased 9% from the prior year and are approximately $5.8 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 received its final portion of annual installment payments for the economic assistance in 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 Executive Officer shall present a balanced budget for all County operating funds on an annual basis.  Ongoing Budget Administration: The County Executive 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. 6  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, 2024, approximately 71% of County employees fall under PEPRA. Major Initiatives  Executive Office and Health Agency: Continued implementation of Opioid Remediation Program Plan and funding allocations for the implementation of the Opioid Settlement Funds (OSF) program in San Luis Obispo County for the period of November 1, 2023, through June 30, 2026.  Clerk-Recorder: Redesigned the elections workspace to maximize efficiency, bolster security measures, and support the integrity of election operations.  Emergency Services: The County, in partnership with the seven cities within the county, launched AlertSLO, a new mass notification system that allows residents to register to receive important safety information directly via email, phone call, and text message.  Health Agency: In partnership with CenCal Health and Good Samaritan, the County opened a new Sobering Center. This twelve-bed, 3,645 square-foot facility offers 24-hour services to adult community members in need, providing medical supervision, counseling, and referral to ongoing treatment and support services.  Homeless and Affordable Housing: Completed 230 affordable housing units and partnered with 5Cities Homeless Coalition to open 30 additional units to provide shelter for up to 90 days for individuals experiencing homelessness as they work toward longer term solutions.  Parks and Recreation: Launched a new reservation system to enhance the customer experience by offering a more seamless and user-friendly online reservation process.  Public Works: Continued to make significant progress in addressing or fully repairing damaged sites sustained in the 2023 storms. In total, 879 damage or debris sites were identified.  Veteran Services: Utilized CalVet Mental Health Services Act grant funds to support behavioral health outreach to rural and senior living communities in the county. Veterans Services has reached 450 senior veterans and their families. Tax abatements The County administers its Agricultural Preserve Program under the California Land Conservation Act of 1965, also known as the Williamson Act. The purpose of the Williamson Act is the long-term conservation of agricultural and open space lands for farming and ranching uses. Conservation of agricultural and open space land benefits the general public by discouraging premature conversion of land to urban land uses, thereby curtailing sprawl, and promoting logical urban growth and provisions of urban services. The Agricultural Preserve Program both protects agriculture and retains open space for its scenic qualities and values as a wildlife habitat. Most directly, it contributes to the County’s agricultural economy and the availability of fresh, nutritious, varied, and affordable food. 7 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, 2024. This was the thirty-ninth 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, 2024. 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, 2024. This is the ninth consecutive year that the County has earned this award which recognizes the County’s professionalism in preparing an accurate and timely report. Acknowledgments: The preparation of the 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 Matthew P. Pontes Auditor-Controller-Treasurer-Tax Collector County Executive Officer 8 9 COUNTY OF SAN LUIS OBISPO LIST OF ELECTED AND APPOINTED OFFICIALS JUNE 30, 2025 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 and Sealer of Weights and Measures .......................................... Martin Settevendemie Director of Airports ............................................................................................................... Courtney Johnson Behavioral Health Administrator ...................................................................................................... Star Graber Central Services Director ....................................................................................................................... Vacant Chief Probation Officer ................................................................................................................. Robert Reyes Director of Child Support Services ................................................................................................ Natalie Walter County Administrative Officer ......................................................................................................... Matt Pontes County Counsel ..................................................................................................................... Jon Ansolabehere County Fire Chief .......................................................................................................................... John Owens Director of UC Cooperative Extension ......................................................................................... Shannon Kilsch Director of Groundwater Sustainability ......................................................................................... Blaine T. Reely Health Agency Director ............................................................................................................. Nicholas Drews Human Resources Director ........................................................................................................... Jamie Russell 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 (County), as of and for the year ended June 30, 2025, 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 the 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, 2025, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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, 2025: Opinion Unit Assets Net Position Revenues/Additions Discretely Presented 100% 100% 100% Component Unit Aggregate Remaining 57% 62% 10% Fund Information Those statements were audited by other auditors, whose report has been furnished to us, and our opinions, 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 Adoption of New Accounting Standard As discussed in Note 1 to the financial statements, effective July 1, 2024, the County adopted new accounting guidance for compensated absences. The guidance requires that liabilities for compensated absences be recognized for leave that has not been used and leave that has been used but has not yet been paid. Our opinions are not modified with respect to this matter. Restatement of Net Position As described 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 with 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. In performing an audit in accordance with GAAS and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit. 13 The Honorable Board of Supervisors County of San Luis Obispo, California  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, 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 29, 2025, 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 29, 2025 15 ________________________________________________________________ MANAGEMENT’S DISCUSSION AND ANALYSIS ______________________________________________________________ COUNTY OF SAN LUIS OBISPO MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2025 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, 2025. 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, 2025, by $1,669,781 (net position). The majority of this amount, $1,641,968 is the net investment in capital assets, while $150,646 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 $122,833 (Table A).  The County’s total net position increased by $80,888, with governmental activities increasing $58,736 and business-type activities increasing $22,152 (Table B).  The $75.1 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, 2025, the County’s governmental activities reported combined ending net position of $1,213,512 an increase of $67.3 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 gain of $7,609 before general revenues, contributions and transfers from other funds, an increase of $6,036 when compared to the prior year. The difference from the prior year is related to increased operating grants for the Airport’s Fund and increased water sales revenue in the State Water Project Fund and Nacimiento Water Contracts Fund.  At the end of the fiscal year, the entire $573,944 fund balance of the General Fund was either nonspendable ($22,040), restricted ($29,459), committed ($234,216), or assigned ($288,229). 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, 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 five, 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 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-five individual governmental funds organized according to their type: general, special revenue, debt service, and capital projects. Information is presented separately in the governmental funds’ balance sheet and in the governmental funds’ statement of revenues, expenditures, and changes in fund balances for the General Fund, and the Capital Projects Fund, which are considered to be major funds. Data from the remaining twenty-three governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements found in the other supplementary information section of this report. A budgetary comparison statement has been provided for the General Fund 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 96 of this report. 18 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) 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. The required supplementary information can be found on pages 97 to 105 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 106 to 115 and 130 to 145 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 and nonmajor Special Revenue funds can be found on pages 116 to 129 of this report. Detail budgetary schedules demonstrating legal level of compliance with budgetary control for the General Fund are presented on pages 146 to 153 of this report. Statistical schedules provide financial, revenue capacity, debt capacity, demographic and economic, and operating trend information. These schedules are presented on pages 154 to 172 of this report. 19 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) 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 $1,669,781 as detailed in the table below: Table A Statement of Net Position June 30, 2025 (in thousands) June 30, 2025 June 30, 2024 Govern- Business- Total Primary Govern- Business- Total Primary mental Type Govern- mental Type Govern- Total % Activities Activities ment Activities Activities ment Change Assets: Current assets $ 929,962 $ 191,484 $ 1,121,446 $ 8 58,941 $ 180,129 $ 1,039,070 7.9% Other noncurrent assets 5 0,261 3 6,983 8 7,244 7 3,914 3 4,624 1 08,538 (19.6%) Capital assets 1 ,519,972 5 74,879 2 ,094,851 1 ,424,753 5 77,105 2 ,001,858 4.6% Total Assets 2,500,195 8 03,346 3,303,541 2 ,357,608 791,858 3,149,466 4.9% Deferred outflows of resources 2 57,561 5 ,979 2 63,540 2 59,721 5 ,931 2 65,652 (0.8%) Liabilities: Current liabilities 172,886 30,834 2 03,720 1 84,459 31,142 215,601 (5.5%) Long-term liabilities 1,357,777 2 96,873 1,654,650 1 ,273,704 308,331 1,582,035 4.6% Total Liabilities 1,530,663 3 27,707 1,858,370 1 ,458,163 339,473 1,797,636 3.4% Deferred inflows of resources 1 3,581 2 5,349 3 8,930 1 2,984 2 4,020 3 7,004 5.2% Net Position: Net Investment in capital assets 1 ,323,930 3 18,038 1 ,641,968 1 ,259,302 3 07,522 1 ,566,824 4.8% Restricted 150,646 - 1 50,646 1 77,598 - 177,598 (15.2%) Unrestricted ( 261,064) 1 38,231 ( 122,833) ( 290,718) 126,774 ( 163,944) (25.1%) Total Net Position $ 1,213,512 $ 4 56,269 $ 1,669,781 $1 ,146,182 $ 434,296 $ 1,580,478 5.7% Analysis of Net Position The County’s total net position increased by $89.3 million, or 5.7%. The total net position increase was a combination of increased total assets ($154.1 million), decreased deferred outflows of resources ($2.1 million), increased total liabilities ($60.7 million), and increased deferred inflow of resources ($1.9 million). Causes for the changes in each of these categories are detailed below. Total assets increased by $154.1 million, a 4.9% increase. This includes a $63.3 million rise in cash and cash equivalents and a $93.0 million increase in capital assets. For more details on the capital assets, refer to Table F below and Note 4 in the Notes to the Basic Financial Statements. Total deferred outflows decreased by $2.1 million, or 0.8%. The decrease is primarily the combination of a decrease in deferred pension resources ($1.8 million) and a decrease in deferred OPEB resources ($133 thousand). Fluctuations in pension and OPEB deferred outflows occur due to changes in plan assumptions and in projected and actual earnings on plan investments from the prior year. The County's total liabilities increased by $60.7 million, or 3.4%. This change primarily reflects a $73.5 million increase to the County’s net pension liability, offset by a reduction in bonds and notes payable of $25.6 million. The decrease in bonds and notes payable is due to scheduled debt payments, with no new debt issued during the period. For more details on the County's debt, refer to Table G below and Note 10 in the Notes to the Basic Financial Statements. 20 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Total deferred inflows of resources increased $1.9 million, or 5.2%. The increase was driven by new and extended lessor agreements for County-owned property. 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 $1,641,968. 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 $150,646, or 9.0%, 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 increased $89.3 million. Total net position for governmental activities increased $67.3 million and total net position for business-type activities increased $22.0 million due to normal operating activities. Net Investment in Capital Assets for governmental and business-type activities increased a net of $75.1 million. Governmental activities increased $64.6 million and business-type activities increased $10.5 million. For more details on capital assets, refer to Table F below and Note 4 in the Notes to the Basic Financial Statements. 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 $150.6 million, a 15.2% decrease over the prior year. This decrease is attributed to reductions for amounts held for debt service. There was an increase of $41.1 million in Unrestricted net position reported in connection with the Total Primary Government. This category represents the portion of the County’s net position which is not subject to constraints imposed by creditors, grantors, contributors, laws, or regulations. When positive, this amount may be used to meet the County’s general obligations. 21 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table B Statement of Activities For the Year Ended June 30, 2025 (in thousands) June 30, 2025 June 30, 2024 Govern- Business- Total Primary Govern- Business- Total Primary mental Type Govern- mental Type Govern- Total % Activities Activities ment Activities Activities ment Chg Revenues: Program revenues: Charges for services $ 8 7,737 $ 7 7,627 $ 1 65,364 $ 6 3,960 $ 6 5,996 $ 1 29,956 27.2% Operating grants and contributions 385,732 5 ,067 3 90,799 399,594 2,368 401,962 (2.8%) Capital grants and contributions 59,864 2 ,226 62,090 14,800 2,333 1 7,133 262.4% General revenues: Property taxes 2 57,631 5 ,152 2 62,783 2 45,825 5 ,045 2 50,870 4.7% Other taxes 3 7,313 - 3 7,313 3 8,278 - 3 8,278 (2.5%) Interest and investment income 37,894 7 ,013 44,907 33,512 4,575 3 8,087 17.9% Grants not restricted to specific programs 3,236 - 3 ,236 5,567 - 5,567 (41.9%) Other revenues 3 94 5 60 9 54 5 58 9 65 1 ,523 (37.4%) Total revenues 869,801 9 7,645 9 67,446 802,094 81,282 883,376 9.5% Expenses: General government 7 6,983 - 7 6,983 6 7,933 - 6 7,933 13.3% Public protection 2 96,567 - 2 96,567 2 57,497 - 2 57,497 15.2% Public ways and facilities 4 8,039 - 4 8,039 5 0,230 - 5 0,230 (4.4%) Health and sanitation 1 78,230 - 1 78,230 1 74,990 - 1 74,990 1.9% Public assistance 1 67,421 - 1 67,421 1 68,272 - 1 68,272 (0.5%) Education 1 2,507 - 1 2,507 1 3,756 - 1 3,756 (9.1%) Recreation and cultural services 16,152 - 16,152 14,202 - 1 4,202 13.7% Interest on long-term debt 13,348 - 13,348 12,529 - 1 2,529 6.5% Airport - 1 8,380 1 8,380 - 1 5,333 1 5,333 19.9% Golf - 5 ,967 5 ,967 - 5 ,500 5 ,500 8.5% State Water Contract - 6 ,244 6 ,244 - 7 ,404 7 ,404 (15.7%) Nacimiento Water Contract - 1 4,075 14,075 - 12,571 1 2,571 12.0% Lopez Flood Control - 1 1,718 1 1,718 - 8 ,145 8 ,145 43.9% Lopez Park - - - - - - - General Flood Control - 1 ,815 1 ,815 - 1 ,847 1 ,847 (1.7%) County Service Areas - 6 ,796 6 ,796 - 6 ,463 6 ,463 5.2% Los Osos Wastewater - 1 2,316 1 2,316 - 1 1,861 1 1,861 3.8% Total expenses 809,247 7 7,311 8 86,558 759,409 69,124 828,533 7.0% Excess/(deficiency) before transfers 60,554 2 0,334 80,888 42,685 12,158 5 4,843 47.5% - Transfers ( 1,818) 1 ,818 - ( 1,685) 1 ,685 - - - Change in net position 5 8,736 2 2,152 8 0,888 4 1,000 1 3,843 5 4,843 47.5% - Net position - beginning, originally reported 1 ,146,182 4 34,296 1 ,580,478 1 ,105,182 4 20,453 1 ,525,635 3.6% Adoption of GASB 101 ( 11,574) ( 179) ( 11,753) - - - - Error Correction 2 0,168 - 2 0,168 - - - - Net position - beginning, as restated 1 ,154,776 4 34,117 1 ,588,893 - - - - Net position - ending $ 1 ,213,512 $ 4 56,269 $ 1 ,669,781 $ 1 ,146,182 $ 4 34,296 $ 1 ,580,478 5.7% 22 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Analysis of Governmental and Business-type Activities Governmental Activities Governmental Activities increased the County’s net position by $58.7 million compared to an increase of $41.0 million in the prior year. Overall, total revenues for governmental activities increased $67.7 million, or 8.4%. Significant factors contributing to the overall increase in revenues from the prior year are detailed below:  Public Ways and Facilities revenue increased $14.4 million, or 33.0%. This increase was primarily from revenues received for road projects, including: o Microsurfacing, overlay, and chip seal projects throughout the County. o Seismic retrofitting of the existing bridge on Lopez Drive over Lopez Lake. o Replacing the existing bridge on El Camino Real over Santa Margarita Creek. o Replacing the Dover Canyon Road Bridge over Jack Creek in Templeton. o Reconfiguring of the Avila Beach Dr/Hwy 101 Interchange to reduce traffic delays.  Public Protection revenue increased $14.5 million, or 13.3%. Significant revenue sources of the increase include: o $1.1 million from United States Department of Agriculture for property purchased under the Emergency Watershed Protection Program for flood control. o $1.1 million from the United States Department of Justice for the Community Oriented Policing Services (COPS) grant program. These funds were received by the Sheriff-Coroner’s Office to purchase new digital portable radios for patrol and custody divisions, and for new dispatch radio consoles, which will aid in direct communication with allied agency personnel. o $2.3 million in billings to several city police districts for County provided dispatch services. o $2.2 million for various Probation Department state and federal assistance.  Recreation and Cultural Services revenue increased $10.2 million, or 120.1%. The increase was primarily from capital contributions for the acquisition of land designated for parks, open space, and trails. Funding for the acquisition was provided by the Wildlife Conservation Board and California Coastal Conservancy.  Property Taxes rose $11.8 million, or 4.8%, 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 $4.4 million primarily due to increased rates of return on County Treasury investments. Overall, total expenses for governmental activities increased $49.8 million, or 6.6%. The majority of the increase occurred in Public Protection, which increased $39.1 million. The increase related to negotiated salary increases, as well as increase pension expense, which occurred due to an increase in the pension liability. Other increases related to capital outlay for new lease and subscription-based IT software agreements. For FY 2024-25, the County funded General Fund contingencies at a level of 4.75%, 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 $22.2 million, compared to an increase of $13.8 million in the prior year. Revenues exceeded expenses by $20.3 million, and net transfers were $1.8 million, which resulted in an increase to total net position. The County’s business-type activities provide the same type of information found in the Enterprise Fund financial statements. Additional financial information and analysis is available in the Proprietary Funds section below. 23 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The following chart presents the total expenses to total program revenue for each business-type activity. Program revenues include charges for services, operating grants and contributions, and capital grants and contributions. 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 Note 11 for additional detail):  Nonspendable fund balance, $22,058, increased $6.8 million, or 44.5%, 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 $220, (2) prepaid items of $649, and (3) long-term receivables of $21.2 million. The increase from the prior year primarily relates to loans made from the General Fund to the Roads Fund to repair road damage caused by winter storms.  Restricted fund balance, $133,471, decreased $18.4 million, or 12.1%, 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 $5,371, (2) public protection programs of $11,705, (3) Mental Health Services Act funds of $4,411, (4) public facilities funds of $5,232, (5) traffic impact programs of $13,392, and (6) debt service of $75,208. The decrease is attributable to Debt Service Fund bond proceeds being used for the Co-Located Emergency Dispatch Center, Probation Office Building, and rehabilitation of the Cayucos Veterans Hall. 24 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  Committed fund balance, $327,616, decreased $8.7 million, or 2.6%, 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, $5,690, (2) tax reduction reserve, $69,714, (3) automation projects, $26,010, (4) roads, $14,791, (5) building replacement, $60,272, (6) capital projects, $21,014, and (7) SB 1090 economic development, $10,564. The decrease from the prior year was the combination of decreased fire services and equipment ($1.8 million), flood control programs ($5.1 million), and roads ($4.0 million).  Assigned fund balance, $288,229, increased $87.6 million, or 43.6%, 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, $46,093, (2) tax reduction reserve, $34,355, (3) general government, $25,876, (4) social services programs, $46,982, and (5) subsequent fiscal year budget, $51,820. As of the end of the current fiscal year, the County’s governmental funds reported combined ending fund balance of $771,374, an increase of 9.6% in comparison with the prior year. Approximately 79.8% of the total fund balance, or $615,845, 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 $551,904 while total fund balance reached $573,944. 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 $680.6 million. Spendable fund balance represents 81.1% of the total fund expenditures, while total fund balance represents 84.3% of the same amount, an 8.1% increase from the prior year. During the current fiscal year, the fund balance of the General Fund increased by $67.3 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 $86.6 million, which was a $24.9 million increase from the prior year.  General Fund revenues increased $67.2 million, or 9.6% over the prior year.  Tax revenue increased $10.6 million, or 4.1%, due to increased assessed property values, including regular 2% increases allowed by California’s Proposition 13.  Use of money and property increased $3.8 million, or 17.2%, due to increased investment interest earnings and changes in the fair market value of investments.  Aid from governmental agencies increased $36.1 million, or 10.3%. State aid increased $11.8 million, or 4.7%. The County saw increased revenues for social services and family support through realignment funds and family support allocations. Federal aid increased $24.0 million, or 24.5%, primarily through increased Medi-Cal reimbursement revenues for health programs.  The County also made a $20.2 million restatement to beginning fund balance to recognize prior year Medi-Cal reimbursement revenue. Additional details on the restatement are available in Note 19, Restatement of Net Position and Fund Balance.  Total expenditures in the General Fund increased $42.3 million, or 6.6%. Salaries and benefits increased by 2.6%, and services and supplies increased by 4.7%, with increases occurring in most expenditure functions. The primary cause of the overall increase was additional costs for lease agreements and subscription-based IT software. Total spending on new and amended leases and software contracts amounted to $17.5 million. Notably, during the year, the County entered into a new three-year Microsoft Enterprise Agreement totaling $6.8 million, which supports Microsoft products used across all departments. The County also amended an existing lease for a Social Services office facility, extending the term of the agreement through 2039. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Capital Projects The Capital Projects Fund manages construction projects for the County’s governmental funds. The fund ended the fiscal year with a total fund balance of $21.0 million. During the year, capital outlay expenditures exceeded revenues by $40.6 million, while net transfers totaled $45.2 million. Together, these factors resulted in a $4.6 million increase in fund balance for the 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 $8.3 million to the Capital Projects Fund for several projects, including $1.5 million for replacements to the Health Agency Annex’s HVAC systems, $613 thousand for concrete and asphalt paving at the Heritage Ranch Fire Station, and $392 thousand for a secure parking lot for the District Attorney and Sheriff’s Offices to store evidence vehicles. The Public Facilities Corporation Debt Service Fund transferred in $32.1 million in debt proceeds to offset construction costs for the Co-Located Emergency Dispatch Center, rehabilitation of the Cayucos Veterans Hall, and construction of the new Probation Department office building. In addition, $4.2 million in public facilities fees were used during the year, with $3.8 million allocated to the construction of the Co-Located Emergency Dispatch Center. Governmental Fund Revenues Revenues for all governmental funds combined totaled $902.9 million in the current fiscal year, an increase of approximately 10.9%, or $88.6 million, from the prior fiscal year revenues of $814.3 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, 2025 (in thousands) 2024-25 2023-24 Increase/(Decrease) Percent of Percent of Percent Amount Total Amount Total Amount Change Revenues by Source: Taxes $ 292,717 32.4% $ 2 81,265 34.5% $ 11,452 4.1% Licenses, Permits, and Franchises 14,141 1.6% 14,351 1.8% ( 210) (1.5%) Fines, Forfeitures, and Penalties 5,385 0.6% 4 ,889 0.6% 496 10.1% Use of Money and Property 36,091 4.0% 32,133 3.9% 3,958 12.3% Aid from Governmental Agencies 456,721 50.6% 408,888 50.2% 47,833 11.7% Charges for Current Services 64,076 7.1% 58,506 7.2% 5,570 9.5% Other Revenues 33,800 3.7% 14,279 1.8% 19,521 136.7% Total $ 9 02,931 100.0% $ 8 14,311 100.0% $ 88,620 10.9% The following provides an explanation of revenues by source that changed significantly over the prior year in the governmental funds.  Taxes increased $11.5 million, or 4.1%, over the prior year. Increases in tax revenue related to regular 2% increase in assessed property value allowed by California’s Proposition 13.  Licenses, Permits, and Franchises decreased by $210 thousand, or 1.5%, over the prior year. This small decrease was primarily the net difference between decreased franchise fees and increased construction related permit revenue over the prior year.  Fines, Forfeitures, and Penalties increased $496 thousand, or 10.1%, over the prior year. The increase is related to payments received by the County as part of several various legal settlements. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  Use of Money and Property increased $4.0 million, or 12.3%, over the prior year. This increase is primarily due to investment interest earnings and changes in the fair market value of investments.  Aid from Governmental Agencies increased $47.8 million, or 11.7%. The County received $13.3 million more in state aid and $34.3 million more in federal aid. Increases to state aid include additional funding for social services programs, roads projects through the State Transportation Improvement Program (STIP) and other grants, and opioid settlement funds stemming from a federal lawsuit against opioid manufacturers, distributors, and pharmacies. These funds are used for opioid remediation activities focused on prevention, intervention, harm reduction, treatment, and recovery services. The increase in federal aid included an additional $8.6 million in CalTrans funding for road improvement projects and increased health program Medi-Cal reimbursement revenues.  Charges for Services increased $5.6 million, or 9.5%, over the prior year. This increase is due to additional road impact fees being collected on new developments to pay for the construction and expansion of public road infrastructure; an increase in billings of several city police districts for County provided dispatch services; and additional collections for election services.  Other Revenues increased $19.5 million, or 136.7%, over the prior year. The increase is primarily due to contributed capital for land located between Cayucos and Morro Bay, which the County acquired through grants from the Wildlife Conservation Board and the California Coastal Conservancy. The land will primarily be managed as open space, with grazing, until it can be opened for public access. In addition, the County acquired real property from the Oceano Community Services District as part of the approved divestiture of fire service responsibilities from the District to the County. Governmental Fund Expenditures Expenditures for all governmental funds combined totaled $873.6 million in the current fiscal year, an increase of approximately 11.6%, or $90.5 million, from the prior fiscal year expenditures of $783.1 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, 2025 (in thousands) 2024-25 2023-24 Increase/(Decrease) Percent of Percent of Percent Amount Total Amount Total Amount Change Expenditures by Function: General Government $ 86,478 9.9% $ 78,117 10.0% $ 8,361 10.7% Public Protection 269,059 30.8% 247,211 31.6% 21,848 8.8% Public Ways and Facilities 74,325 8.5% 53,698 6.9% 20,627 38.4% Health and Sanitation 172,187 19.7% 168,927 21.6% 3 ,260 1.9% Public Assistance 158,878 18.2% 156,910 20.0% 1 ,968 1.3% Education 13,156 1.5% 13,975 1.8% ( 819) (5.9%) Recreation and Cultural Services 21,364 2.4% 14,297 1.8% 7 ,067 49.4% Principal payments 15,117 1.7% 14,207 1.8% 910 6.4% Interest on Long-Term Debt 13,362 1.5% 12,762 1.6% 600 4.7% Capital outlay 49,700 5.7% 22,986 2.9% 26,714 116.2% Total $ 873,626 100.0% $ 7 83,090 100.0% $ 90,536 11.6% 27 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) The following provides an explanation of the expenditures by function that changed significantly over the prior year.  General Government expenditures increased $8.4 million, or 10.7%. The increase related to new lease and subscription-based IT software agreements.  Public Protection expenditures increased $21.8 million, or 8.8%. Salaries and benefits increased 6.2%, while services and supplies increased by 6.3%. The rise in services and supplies was primarily driven by storm response activities associated with the Arroyo Grande Creek channel restoration and rehabilitation project. During the year, work began on Phase 2 of the project, which includes re- grading the South Levee outer slopes and repairing approximately 3,000 square yards of turf- reinforcing mat. This critical project is intended to improve creek water flow characteristics by removing vegetation and sediment, thereby restoring channel capacity, and enhancing flood protection.  Public Ways and Facilities expenditures increased $20.6 million, or 38.4%. The increase is primarily driven by several major road improvement projects, including:  El Camino Real at Santa Margarita Creek Bridge Replacement Project, which replaces the existing two-lane bridge with a three-lane concrete bridge that includes a center turn-lane and eight-foot shoulders.  Lopez Drive Bridge No. 2 Seismic Retrofit Project, which retrofits the existing bridge over the Arroyo Grande Creek branch of Lopez Lake to resist seismic forces and prevent any overall bridge failure.  Avila Beach Drive Interchange Improvement Project, which constructs a single lane roundabout at the intersection of Avila Beach Drive and Shell Beach Road and the northbound offramp/southbound on and off ramps of the US 101 interchange.  Dover Canyon Road at Jack Creek Bridge Replacement Project, which replaces the existing steel bridge in Templeton with a new concrete bridge.  Health and Sanitation expenditures increased $3.3 million, or 1.9%. The increase is primarily related to higher behavioral health treatment costs. The Health Agency saw more patient placements in Institutes for Mental Disease, along with rising rates charged by residential treatment facilities. In addition, limited availability at the County Psychiatric Health Facility (PHF) resulted in increased use of out-of-county psychiatric hospitals, further contributing to the cost increase.  Capital Outlay expenditures increased $26.7 million, or 116.2%. This increase is attributed to new lease agreements and amendments to existing agreements for office space, as well as expanded subscription-based IT contracts. The County also incurred capital costs for the purchase of land designated for parks, open space, and trails. In addition, construction continued on several major projects, including the Co-Located Emergency Dispatch Center, rehabilitation of the Cayucos Veterans Hall, replacement of the Probation Department’s main office in San Luis Obispo, and the extension of the Bob Jones Trail. 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 2024-25 fiscal year. 28 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table E Statement of Revenues, Expenses and Results of Operations Proprietary Funds Fund Financial Statements For the Year Ended June 30, 2025 (in thousands) Nonmajor Major Funds Funds Total Nacimiento Other Water State Water Los Osos Enterprise Total Airport Contract Project Wastewater Funds Enterprise Operating revenues $ 17,030 $ 18,831 $ 12,917 $ 7,753 $ 21,718 $ 78,249 Operating expenses 18,328 8 ,097 6 ,218 9 ,125 25,410 67,178 Operating income (loss) (1,298) 10,734 6 ,699 (1,372) (3,692) 11,071 Non-operating revenues (expenses), net 5 ,779 (3,151) 3 ,970 (2,781) 3 ,492 7 ,309 Net income (loss) before contributions and transfers 4 ,481 7 ,583 10,669 (4,153) ( 200) 18,380 Contributions and transfers, net (327) - - 2 ,467 1 ,904 4 ,044 Change in net position $ 4,154 $ 7,583 $ 10,669 $ (1,686) $ 1,704 $ 22,424 All the enterprise funds are expected to continue to meet their ongoing cost of operations and to be able to maintain sufficient reserves in the long-term.  The Airport Fund reported an operating loss of $1.3 million, a $1.6 million change from the prior year’s operating gain of $275 thousand. The number of passengers using the airport increased 13.5%, resulting in higher landing fees, passenger facility charges, and customer facility charges revenue. However, these gains were offset by higher salary expenses and costs associated with the rental car stacking lot and Farmhouse Lane resurfacing projects. Non-operating revenue increased $2.1 million primarily from American Rescue Plan Act (ARPA) draws. Overall, net position increased by $4.2 million, compared to $3.6 million in the prior year.  The Nacimiento Water Contract Fund realized operating income of $10.7 million, a $1.3 million increase from the prior year’s operating income of $9.4 million. The increase was driven by an additional $3.1 million in water sales revenue, partially offset by higher operating expenses related to pipeline maintenance and emergency repairs at the Yerba Buena Creek crossing. Overall, net position increased $7.6 million, compared to a $4.3 million increase in the prior year.  The State Water Project Fund realized operating income of $6.7 million, a $5.8 million increase from the prior year’s operating income of $929 thousand. Operating revenues increased by $4.6 million compared to the prior year. This growth was primarily due to a one-year agreement with several Kern County Water Districts to transfer the County’s excess water supplies, which generated $5.6 million in additional revenue for the fund. Overall, net position increased by $10.7 million, up from a $4.8 million increase in the prior year.  The Los Osos Wastewater Fund reported an operating loss of $1.4 million, a slight increase from the $1.3 million loss in the prior year. Sewer charges revenue increased by $502 thousand, but this gain was offset by a $544 thousand increase to the plant’s operating and maintenance costs. Overall, net position decreased by $1.7 million, compared to a $1.6 million decrease in the previous year. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) GENERAL FUND BUDGETARY HIGHLIGHTS The original budget for expenditures and transfers out increased by $147.1 million, or 20.0%, during the year, leading to the final amended budget. This increase was funded by increases to both budgeted revenues and transfers-in ($106.7 million) and the uses of reserves and designations for the balance. Budget augmentations were financed through unanticipated revenues totaling $55.2 million in State, Federal, and Other Governmental Aid, $45.9 million in Other Revenue, $1.5 million in Charges for Current Services, $393 thousand in Interfund Revenues, $64 thousand in Fines, Forfeitures, and Penalties, and $3.6 million in Other Financing Sources. General Government function augmentations of $42.7 million consisted of $9.7 million in American Rescue Plan Act (ARPA) augmentations; $23.5 million in augmentations toward capital projects, maintenance, and upgrades to County facilities; $5.1 million in augmentations for operating transfers; $1.0 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 $67.0 million were primarily divided among County Fire ($8.6 million), Sheriff-Coroner ($12.7 million), Planning and Building ($39.9 million), Office of Emergency Services ($1.0 million), and Probation ($2.7 million). County Fire received augmentations primarily for equipment purchases. Sheriff- Coroner received augmentations for salaries and benefits ($2.6 million), equipment and capital outlay ($6.6 million), and services and supplies ($3.5 million). Planning and Building received augmentations for participation in the Central California Rural Regional Energy Network (CCR-REN), which supports an equitable and affordable clean energy transition for underserved communities. Office of Emergency Services received augmentations for Hazard Mitigation Grant Program funding and equipment purchases. Probation received augmentations for Providing Access and Transforming Health (PATH) Justice Involved Capacity Building Program funding and equipment purchases. The remaining smaller augmentations were for the Waste Management, District Attorney, Public Defender, Animal Services, and Agricultural Commissioner’s programs. Health and Sanitation function augmentations of $14.7 million were divided between Public Health program augmentations of $7.9 million and Behavioral Health program augmentations of $6.8 million. Public Assistance augmentations of $4.6 million were primarily for social services support care, CalWORKS assistance and employment services, and foster care and adoption assistance. Recreation augmentations totaling $11.0 million were primarily for Parks related capital projects and acquisition of real property situated between Morro Bay and Cayucos for park, open space, and trails. Public Ways and Facilities augmentations of $7.1 million were divided between Development Services and Groundwater Sustainability augmentations of $4.0 million and Public Works Special Services augmentations of $3.1 million. At the close of the fiscal year, actual General Fund expenditures were 78.9% of the current budget, while General Fund revenues were realized at 88.4% of budget. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets On June 30, 2025, the County had $2.1 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 $93.0 million, or 4.6%, from last year. 30 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Table F Capital Assets June 30, 2025 (in thousands) Governmental Business-Type Total Activities Activities Capital Assets Percent 2024-25 2023-24 2024-25 2023-24 2024-25 2023-24 Change Land $ 8 05,110 $ 7 96,050 $ 4 0,820 $ 4 0,820 $ 8 45,930 $ 8 36,870 1.1% Water Rights - - 8 0,435 7 6,435 8 0,435 7 6,435 5.2% Other Property Non-Depreciable - - 1 ,968 1 ,968 1 ,968 1 ,968 0.0% Construction in Progress 1 81,870 1 05,488 1 1,673 1 0,069 1 93,543 1 15,557 67.5% Structures & Improvements 3 29,309 3 16,980 2 35,942 2 31,047 5 65,251 5 48,027 3.1% Equipment 1 30,662 1 21,359 1 3,101 1 2,765 1 43,763 1 34,124 7.2% Other Property Depreciable 1 ,258 1 ,258 554 554 1 ,812 1 ,812 0.0% Infrastructure Depreciable 4 66,909 4 65,617 3 86,806 3 85,317 8 53,715 8 50,934 0.3% Right-to-Use Lease Assets 1 42,469 1 35,172 693 336 1 43,162 1 35,508 5.6% Right-to-Use Subscription Assets 1 4,427 5 ,799 297 297 1 4,724 6 ,096 141.5% Subtotal 2,072,014 1,947,723 7 72,289 7 59,608 2,844,303 2,707,331 5.1% Less Accumulated Depreciation (519,032) (499,230) (196,703) (182,028) (715,735) (681,258) 5.1% Less Accumulated Amortization (33,010) (23,740) ( 707) ( 475) (33,717) (24,215) 39.2% Total $ 1,519,972 $ 1,424,753 $ 574,879 $ 577,105 $ 2,094,851 $ 2,001,858 4.6% Major additions and future commitments in capital assets - Governmental Activities County Roads had had the majority of additions in governmental activities with $37.4 million worth of assets. Microsurfacing, overlay, and chip seal projects throughout the County comprised most of the road additions. Other major roads projects include seismic retrofitting the existing bridge on Lopez Drive over Lopez Lake ($5.0 million), replacing the existing bridge on El Camino Real over Santa Margarita Creek ($5.1 million), replacing the Dover Canyon Road Bridge over Jack Creek in Templeton ($2.5 million), and reconfiguring of the Avila Beach Dr/Hwy 101 Interchange to reduce traffic delays ($9.6 million). Other notable capital asset additions during fiscal year 2024-25 include continued construction of the Co-Located Emergency Dispatch Project ($19.8 million), rehabilitation of the Cayucos Veterans Hall ($2.0 million), replacement of the Probation Department’s main office in San Luis Obispo ($15.7 million), extension of the Bob Jones Trail ($972 thousand), and Phase II of the Arroyo Grande Creek Channel Emergency Levee Rehabilitation project ($5.0 million). Major additions and future commitments in capital assets - Business-type Activities The San Luis Obispo County Regional Airport projects include rehabilitation of the taxiway ($881 thousand) and surface lot improvements ($1.6 million) to a roughly four-acre parcel near the airport to address landside constraints affecting parking for customers, rental cars, and employees. Rehabilitation of the Oak Shores (CSA 7A) Wastewater System for $322 thousand. Project components include the installation of a continuous ventilation system to provide drier air in the underground lift station, a shade structure to protect and extend the service life of electrical components from heat and sun exposure, and an automatic power transfer switch. More detailed information about the County's capital assets is presented in Notes 4 and 5 in the financial statements. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued) Debt Administration At the end of the current fiscal year, the County of San Luis Obispo had total notes, bonds, leases, and subscription arrangements payable of $593.7 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 2024-25 was $64.7 million. The pension obligation bonds debt service payments are funded by County payroll benefits. The remainder of the County’s debt consists of $20.4 million in certificates of participation, which are repaid from a variety of revenues; $74.2 million in state and other loans; $66.4 million in assessment bonds, of which, $66.2 million related to the Los Osos Wastewater Project; $140.8 million in revenue bonds which are repaid with water service revenue; $125.5 million in lease agreements; $6.3 million in subscription-based IT arrangements; and $90.7 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 $4.7 million are backed by the full faith and credit of the County. Table G Outstanding Debt June 30, 2025 (in thousands) Governmental Business-Type Total Activities Activities Outstanding Debt Percent 2024-25 2023-24 2024-25 2023-24 2024-25 2023-24 Change Certificates of Participation $ 2 ,855 $ 3 ,035 $ 4 ,825 $ 5 ,490 $ 7 ,680 $ 8 ,525 (9.9%) Certificates of Participation from Direct Borrowings 7 ,578 7 ,778 5 ,134 5 ,244 1 2,712 1 3,022 (2.4%) Pension Obligation Bonds 6 4,715 7 2,966 - - 6 4,715 7 2,966 (11.3%) State Notes from Direct Borrowings 936 1 ,101 7 3,165 76,965 7 4,101 7 8,066 (5.1%) Other Notes from Direct Borrowings - - 86 126 86 126 (31.7%) Lease Revenue Bonds 8 9,883 9 3,408 860 1 ,260 9 0,743 9 4,668 (4.1%) Revenue Bonds - - 1 40,776 1 46,726 1 40,776 1 46,726 (4.1%) General Obligation Bonds - - 4 ,670 5 ,321 4 ,670 5 ,321 (12.2%) Assessment Bonds 185 241 6 6,218 6 7,850 6 6,403 6 8,091 (2.5%) Leases 1 25,235 1 22,129 290 78 1 25,525 1 22,207 2.7% SBITA 6 ,261 757 - 86 6,261 843 642.7% Total $2 97,648 $3 01,415 $2 96,024 $3 09,146 $5 93,672 $6 10,561 (2.8%) The decrease from the prior year for the County’s certificates of participation, notes, bonds, and leases payable was $16.9 million, or 2.8%. Total debt payments made were $20.9 million and no issuance of new debt was made in FY 2024-25. 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 $947.6 million. Other liabilities include compensated absences of $49.2 million for governmental activities and $935 thousand for business-type activities; landfill post-closure costs of $15.3 million; and a self-insurance liability of $26.8 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 2024-25 budget.  As a political subdivision of the State, County operations and budget are impacted by State issues and policies at the State level. In January, the Governor released his Proposed FY 2025-26 State Budget with expenditures totaling $322.2 billion. The budget includes the withdrawal of approximately $7.1 billion from the Budget Stabilization Account, also known as the Rainy Day Fund. The State’s Legislative Analyst’s Office report on the Overview of the Governor’s FY 2025-26 Budget indicates that the state’s budget remains roughly balanced, though future deficits are anticipated. While recent revenue gains appear reasonable, they are largely driven by the volatile stock market rather than economic improvements, making careful fiscal planning and continued momentum on addressing budget deficits essential. The Governor’s budget proposal indicates that further adjustments may be needed in the May Revision to keep the budget stable in the long term.  The recommended FY 2025-26 General Fund budget includes 35% (approximately $258 million) of its operating 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.  In addition, the recommended FY 2025-26 General Fund Budget includes another 15% (approximately $109 million) of its operating revenue from federal funds. Given this reliance, potential federal funding cuts could pose risks to county residents for essential safety net programs like Medi-Cal, CalWORKs, and CalFresh, which support healthcare, financial assistance, and food security.  Starting in late summer of 2024, the County embarked on its Financial Rebalancing and Resilience Initiative to address a significant funding gap and better align expenditures with the projected revenue growth. To close the budget gap and support the County’s efforts to manage limited resources while maintaining alignment with our priorities, all departments were requested to submit reduction lists for FY 2025-26 focusing on discretionary services and activities. All departments were asked to submit reduction lists with a target of 15% of their FY 2024-25 Adopted General Fund support budget with the status quo budget submittal for FY 2025-26. Further, a few departments with substantial General Fund allocations to discretionary programs were asked to submit additional reductions above 15%. Additionally, the County conducted a comprehensive review of all programs across departments, assessing program impacts and efficacy to our community, costs, outcome tracking, and overall alignment with our Board Priorities. This Initiative ultimately recommended a budget that adjusts the County’s current spending intended to prevent recurring deficits and support the County’s long-term fiscal sustainability.  Local economic indicators:  Sales tax revenue for the unincorporated areas was $16.2 million, a 0.9% decrease from the prior year.  County assessed property tax valuations increased from $72.3 billion to $75.8 billion, or 4.8%.  Transient Occupancy Tax collections were $16.0 million, a 3.7% decrease from the prior year. 33 MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)  The Board of Supervisors adopted the FY 2024-25 budget in June 2025, with a $124.3 million fund balance in the General Fund, of which $51.8 million was appropriated to finance the current year’s expenditures including contingencies. $13.0 million was placed in general reserves, and $33.4 million was earmarked for designations. The total General Fund budget for FY 2025-26 is $817.1 million, an 8.0% increase from the previous year. The County budget also includes community-wide results and indicators as well as department goals and performance measures that gauge how departments meet 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, 2025 (IN THOUSANDS) Primary Government Component Unit Governmental Business-Type First 5 Activities Activities Total San Luis Obispo ASSETS Current Assets: Cash and cash equivalents $ 781,127 $ 105,043 $ 886,170 $ 9 ,933 Accounts receivable, net 4,513 3,446 7,959 - Property taxes receivable 2 1,485 - 2 1,485 - Other receivables 2,205 9 2,379 9 4,584 - Due from other governments 7 0,977 1,278 7 2,255 909 Interest receivable 1 79 80 - Leases receivable 281 529 810 - Deposits with others 5,565 86 5,651 4 Internal balances 1 1,966 (11,966) - - Inventories 1,096 115 1,211 - Prepaid items 660 147 807 4 Loans receivable (net of allowance for uncollectibles) 3 0,086 348 3 0,434 - Total Current Assets 929,962 191,484 1,121,446 1 0,850 Noncurrent Assets: Restricted cash with fiscal agent 4 6,872 1 0,811 5 7,683 - Leases receivable 3,389 2 5,947 2 9,336 - Prepaid insurance - 225 225 - Capital Assets: Nondepreciable 986,980 134,896 1,121,876 - Depreciable, net 409,106 439,700 848,806 - Lease assets, net 117,452 283 117,735 - SBITA assets, net 6,434 - 6,434 - Total Noncurrent Assets 1,570,233 611,862 2,182,095 - Total Assets 2,500,195 803,346 3,303,541 1 0,850 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 243,213 3,210 246,423 98 Deferred OPEB 1 4,348 230 1 4,578 - Deferred loss on refunding - 2,539 2,539 - Total Deferred Outflows of Resources 257,561 5,979 263,540 98 LIABILITIES Current Liabilities: Accounts payable 4 2,702 9,613 5 2,315 1,250 Salaries and benefits payable 1 0,766 163 1 0,929 9 Deposits from others 1 3,241 810 1 4,051 - Accrued interest 6,688 3,806 1 0,494 - Other current liabilities 1,720 - 1,720 - Unearned revenue 3 7,627 2,701 4 0,328 - Bonds and notes payable 1 5,723 1 3,264 2 8,987 - Lease liability 5,009 128 5,137 - SBITA liability 2,851 - 2,851 - Compensated absences 2 9,536 349 2 9,885 17 Landfill closure/postclosure costs 1,453 - 1,453 - Self-insurance payable 5,570 - 5,570 - Total Current Liabilities 172,886 3 0,834 203,720 1,276 Long-Term Liabilities: Net pension liability 1,002,170 1 3,226 1,015,396 137 Net OPEB liability 2 6,815 429 2 7,244 - Bonds and notes payable 150,429 282,470 432,899 - Lease liability 120,226 162 120,388 - SBITA liability 3,410 - 3,410 - Compensated absences 1 9,650 586 2 0,236 6 Landfill closure/postclosure costs 1 3,822 - 1 3,822 - Self-insurance payable 2 1,255 - 2 1,255 - Total Long-Term Liabilities 1,357,777 296,873 1,654,650 143 Total Liabilities 1,530,663 327,707 1,858,370 1,419 DEFERRED INFLOWS OF RESOURCES Deferred pensions 1,000 13 1,013 - Deferred OPEB 8,781 140 8,921 - Deferred bond refunding 247 342 589 - Deferred amounts related to leases 3,553 2 4,854 2 8,407 - Total Deferred Inflows of Resources 1 3,581 2 5,349 3 8,930 - NET POSITION Net investment in capital assets 1,323,930 318,038 1,641,968 - Restricted for: General government 1 0,969 - 1 0,969 - Public protection 2 4,188 - 2 4,188 - Health and sanitation 2 1,250 - 2 1,250 - Public assistance 3,140 - 3,140 - Public ways and facilities 2 0,863 - 2 0,863 - Recreation and cultural services 1,635 - 1,635 - Education 81 - 81 - Debt service 6 8,520 - 6 8,520 - Unrestricted ( 261,064) 138,231 ( 122,833) 9,529 Total Net Position $ 1,213,512 $ 456,269 $ 1,669,781 $ 9 ,529 The accompanying notes are an integral part of these financial statements. 35 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2025 (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 $ 76,983 $ 16,156 $ 11,665 $ 1 ,968 $ 29,789 Public protection 296,567 3 1,545 9 1,133 1,154 123,832 Public ways and facilities 4 8,039 4,553 58 5 3,371 5 7,982 Health and sanitation 178,230 1 9,761 135,110 - 154,871 Public assistance 167,421 1,249 146,186 - 147,435 Education 1 2,507 460 350 - 810 Recreation and cultural services 1 6,152 1 4,013 1,230 3,371 1 8,614 Interest on long-term debt 1 3,348 - - - - Total governmental activities 809,247 8 7,737 385,732 5 9,864 533,333 Business-type activities: Airport 1 8,380 1 6,913 3,936 - 2 0,849 Golf 5,967 5,702 62 - 5,764 State Water Contract 6,244 1 2,502 14 - 1 2,516 Nacimiento Water Contract 1 4,075 1 8,831 - - 1 8,831 Lopez Flood Control 1 1,718 8,490 137 - 8,627 Lopez Park - - - - - General Flood Control - Salinas Dam 1,815 1,873 427 - 2,300 County Service Areas 6,796 5,571 491 - 6,062 Los Osos Wastewater 1 2,316 7,745 - 2,226 9,971 Total business-type activities 7 7,311 7 7,627 5,067 2,226 8 4,920 Total primary government $ 886,558 $ 165,364 $ 390,799 $ 62,090 $ 618,253 Component unit: First 5 San Luis Obispo $ 3,125 $ - $ 2 ,911 $ - $ 2,911 The accompanying notes are an integral part of these financial statements. 36 COUNTY OF SAN LUIS OBISPO STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2025 (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 $ (47,194) $ - $ (47,194) Public protection (172,735) - ( 172,735) Public ways and facilities 9,943 - 9,943 Health and sanitation (23,359) - (23,359) Public assistance (19,986) - (19,986) Education (11,697) - (11,697) Recreation and cultural services 2,462 - 2,462 Interest on long-term debt (13,348) - (13,348) Total governmental activities (275,914) - ( 275,914) Business-type activities: Airport - 2,469 2,469 Golf - (203) (203) State Water Contract - 6,272 6,272 Nacimiento Water Contract - 4,756 4,756 Lopez Flood Control - (3,091) (3,091) Lopez Park - - - General Flood Control - 485 485 County Service Areas - (734) (734) Los Osos Wastewater - (2,345) (2,345) Total business-type activities - 7,609 7,609 Total primary government $ (275,914) $ 7 ,609 $ (268,305) Component unit: First 5 San Luis Obispo $ (214) General Revenues: Taxes: Property taxes 257,631 5,152 262,783 - Sales and use taxes 1 6,248 - 1 6,248 - Transient occupancy taxes 1 5,959 - 1 5,959 - Transfer tax 3,063 - 3,063 - Other taxes 2,043 - 2,043 - Grants not restricted to specific programs 3,236 - 3,236 - Interest earnings not restricted to specific programs 3 7,894 7,013 4 4,907 491 Other revenues 394 560 954 64 Transfers (1,818) 1,818 - - Total General Revenues and Transfers 334,650 1 4,543 349,193 555 Change in net position 5 8,736 2 2,152 8 0,888 341 Net position - beginning, as originally reported 1,146,182 434,296 1,580,478 9,188 Change in accounting principle (11,574) (179) (11,753) - Correction of an error 20,168 - 2 0,168 - Net position - beginning, as restated 1,154,776 434,117 1,588,893 9,188 Net position - end of year $ 1,213,512 $ 456,269 $ 1,669,781 $ 9 ,529 The accompanying notes are an integral part of these financial statements. 37 ________________________________________________________________ BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS ________________________________________________________________ COUNTY OF SAN LUIS OBISPO BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2025 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 582,716 $ 24,588 $ 117,053 $ 724,357 Restricted cash with fiscal agent - - 46,872 46,872 Accounts receivable, net 4,430 - 57 4,487 Accrued property taxes receivable 21,485 - - 21,485 Other receivables 2,181 - 24 2,205 Due from other governments 46,779 1,742 22,456 70,977 Interest receivable 1 - - 1 Due from other funds - 6,019 - 6,019 Inventories 220 - - 220 Leases receivable 3,570 - 100 3,670 Loans receivable, net of allowance for uncollectibles - - 30,086 30,086 Advances to other funds 21,189 - 1,434 22,623 Deposits with others 5,559 - 6 5,565 Prepaid items 631 - 18 649 Total assets $ 688,761 $ 32,349 $ 218,106 $ 939,216 LIABILITIES Accounts payable $ 20,120 $ 9 ,957 $ 10,202 $ 40,279 Salaries and benefits payable 9,347 - 378 9,725 Due to other funds - - 6,019 6,019 Deposits from others 5,144 - 1,243 6,387 Unearned revenue 31,466 100 6,061 37,627 Other current liabilities 1,720 - - 1,720 Advances from other funds - - 15,626 15,626 Total liabilities 67,797 10,057 39,529 117,383 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 43,556 1,278 2,072 46,906 Deferred amounts related to leases 3,464 - 89 3,553 Total deferred inflows of resources 47,020 1,278 2,161 50,459 FUND BALANCES Nonspendable 22,040 - 18 22,058 Restricted 29,459 - 104,012 133,471 Committed 234,216 21,014 72,386 327,616 Assigned 288,229 - - 288,229 Total fund balances 573,944 21,014 176,416 771,374 Total liabilities, deferred inflows of resources, and fund balances $ 688,761 $ 32,349 $ 218,106 $ 939,216 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 JUNE 30, 2025 (IN THOUSANDS) Total Fund Balances - Total Governmental Funds $ 771,374 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. 1,376,857 Lease assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 116,940 SBITA assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 6,417 Accrued property tax and grant revenues are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 46,906 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. (35,590) 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. 4,969 Interest on long-term debt is recognized as it accrues, regardless of when it is due. (6,688) 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. (912,054) 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. (24,231) 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. 220,433 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. 5,031 Governmental funds report the effects of refundings when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. (247) Long-termliabilities, includingbondsand notespayable,arenotdueand payableinthecurrent period and, therefore, are not reported in the governmental funds as follows: Certificates of participation (10,433) Bonds and notes payable (155,719) Leases payable (124,679) SBITA payable ( 6,244) Compensated absences (44,255) Landfill closure/postclosure costs (15,275) (356,605) Net Position of Governmental Activities $ 1,213,512 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, 2025 (IN THOUSANDS) Nonmajor Total General Capital Projects Governmental Governmental Fund Fund Funds Funds REVENUES Taxes $ 2 71,225 $ - $ 21,492 $ 2 92,717 Licenses, permits, and franchises 14,141 - - 14,141 Fines, forfeitures, and penalties 4,277 396 712 5,385 Use of money and property 26,103 802 9,186 36,091 Aid from other governments 385,663 5,109 65,949 456,721 Charges for services 43,667 2,796 17,613 64,076 Other revenues 22,086 - 11,714 33,800 Total revenues 767,162 9,103 126,666 902,931 EXPENDITURES Current: General government 86,478 - - 86,478 Public protection 256,490 - 12,569 269,059 Public ways and facilities 5,612 - 68,713 74,325 Health and sanitation 151,354 - 20,833 172,187 Public assistance 157,957 - 921 158,878 Education 554 - 12,602 13,156 Recreation and cultural services 13,205 - 8,159 21,364 Debt service: Principal payments 7,992 - 7,125 15,117 Interest and fiscal charges 955 - 12,407 13,362 Capital outlay - 4 9,700 - 49,700 Total expenditures 680,597 4 9,700 143,329 873,626 Excess (deficiency) of revenues over (under) expenditures 86,565 (40,597) (16,663) 29,305 OTHER FINANCING SOURCES (USES) Leases 8,903 - 668 9,571 SBITAs 8,611 - 1 2 8,623 Transfers in 2,579 4 5,710 31,229 79,518 Transfers out (39,366) (470) (40,020) (79,856) Total other financing sources (uses) (19,273) 4 5,240 (8,111) 17,856 Net change in fund balances 67,292 4,643 (24,774) 47,161 Fund balances - beginning, as originally reported 486,484 1 6,371 201,190 704,045 Correction of an error 20,168 - - 20,168 Fund balances - beginning, as restated 506,652 16,371 201,190 724,213 Fund balances - ending $ 5 73,944 $ 21,014 $ 176,416 $ 7 71,374 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, 2025 (IN THOUSANDS) Net Change in Fund Balances - Total Governmental Funds $ 47,161 Amounts reported for governmental activities in the Statement of Revenues, Expenditures, and Changes in Fund Balances were different because: Propertytax,intergovernmentalrevenueandotherrevenueintheStatementofActivitiesthatdonotprovide current financial resources are not reported as revenues in the funds. (9,766) Governmentalfundsreportcapitaloutlayasexpenditures. Theseexpenditureshavenoeffectonnetposition. Capital outlay expenditures that have no effect on net position are reported in the following functional categories: Capital outlay $ 49,865 General government 1 ,714 Public protection 11,425 Public ways 37,455 Health and sanitation 1 ,878 Public assistance - Education 428 Recreation and cultural services 6 ,976 109,741 GovernmentalfundsreportnewleasesandSBITAsasexpenditures. Theseexpenditureshavenoeffectonnet position. 18,194 In the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense. ( 22,541) IntheStatementofActivities,thecostofrighttouseleaseassetsisallocatedovertheirestimatedusefullives and reported as amortization expense. (6,988) In the Statement of Activities, the cost of SBITA assets is allocated over their estimated useful lives and reported as amortization expense. (2,996) The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. (1,677) Debtproceedsandnewleasesarereportedasfinancingsourcesingovernmentalfundsandthuscontributeto the change in fund balance. In the Statement of Net Position, however, issuing debt increases long-term liabilitiesanddoesnotaffecttheStatementofActivities.Similarly,repaymentofprincipalisanexpenditurein the governmental funds, but reduces the liability in the Statement of Net Position. Debt principal payments 7 ,236 Lease payments 4 ,922 Lease issuance (9,570) SBITA payments 3 ,110 SBITA issuance (8,623) 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 $ (33) Change in accrued interest payable (643) Change in landfill closure/postclosure costs (6,062) Change in net OPEB liability (1,746) Change in deferred OPEB outflows (165) Change in deferred OPEB inflows 709 Change in Net Pension Liability ( 63,007) Change in deferred pension outflows (2,414) Change in deferred pension inflows 543 Change in capital appreciation bond accretion 4 ,735 Amortization of debt premiums and discounts and refunding 509 ( 67,574) 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,anddentalinsuranceprogramstoindividualfunds. Thenetrevenueorexpenditure effect of internal service funds is reported with governmental activities. (2,165) The net (revenue) expense allocable to business-type activities 272 Change in Net Position of Governmental Activities $ 58,736 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, 2025 (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 $ 3 4,167 $ 1 9,270 $ 2 5,968 $ 8,038 $ 1 7,600 $ 105,043 $ 5 6,770 Accounts receivable, net - 1 22 2,819 - 5 05 3,446 26 Other receivables 8 48 - - 91,531 - 92,379 - Due from other governments 3 06 - - - 9 72 1,278 - Interest receivable 79 - - - - 79 - Leases receivable 5 29 - - - - 5 29 - Deposits with others - - - - 86 86 - Inventories - - - - 1 15 1 15 8 76 Loans receivable - - - 3 48 - 3 48 - Prepaid items 2 - - - 1 45 1 47 11 Total current assets 35,931 19,392 28,787 99,917 19,423 2 03,450 57,683 Noncurrent assets: Restricted cash with fiscal agent - 10,810 - - 1 10,811 - Leases receivable 25,947 - - - - 25,947 - Prepaid insurance - 2 25 - - - 2 25 - Capital assets: Nondepreciable: Land 28,133 3,259 - 5,406 4,022 40,820 - Construction in progress 2,649 - 3 36 8 12 7,876 11,673 - Water rights - 8 0 , 4 3 5 - - 80,435 - Other property - - - - 1,968 1,968 - Depreciable: Infrastructure, net 2 31 1 35,662 - 1 48,478 19,900 3 04,271 - Structures and improvements, net 70,476 7,868 4,695 5 70 45,367 1 28,976 3 82 Equipment, net 4,547 3 1 1 00 1,306 5,957 18,847 Other property, net - - - - 4 96 4 96 - Lease assets, net 35 - - - 2 48 2 83 5 12 SBITA assets, net - - - - - - 17 Total noncurrent assets 1 32,018 1 57,827 85,467 1 55,366 81,184 6 11,862 19,758 Total assets 1 67,949 1 77,219 1 14,254 2 55,283 1 00,607 8 15,312 77,441 DEFERRED OUTFLOWS OF RESOURCES Deferred pensions 2,063 - - - 1,147 3,210 21,870 Deferred OPEB 1 49 - - - 81 2 30 1,382 Deferred loss on refunding - 2,539 - - - 2,539 - Total deferred outflows of resources 2,212 2,539 - - 1,228 5,979 23,252 LIABILITIES Current liabilities: Accounts payable 6 66 1 79 6,795 4 11 1,562 9,613 2,423 Salaries and benefits payable 99 - - - 64 1 63 1,041 Interest payable - 2,047 - 1,536 2 23 3,806 - Self-insurance payable - - - - - - 5,570 Deposits from others 92 4 - 13 7 01 8 10 6,854 Unearned revenue 1 01 - 2,595 - 5 2,701 - Accrued vacation and sick leave - current 2 15 - - - 1 34 3 49 2,729 Lease liability - current 12 - - - 1 16 1 28 1 26 SBITA liability - current - - - - - - 13 Notes and bonds payable - current 40 5,815 - 4,078 3,331 13,264 - Total current liabilities 1,225 8,045 9,390 6,038 6,136 30,834 18,756 Noncurrent liabilities: Self-insurance liability - - - - - - 21,255 Advances from other funds 4,941 - - 96 1,960 6,997 - Accrued vacation and sick leave 3 17 - - - 2 69 5 86 2,202 Lease liability 26 - - - 1 36 1 62 4 30 SBITA liability - - - - - - 4 Notes and bonds payable 47 1 34,961 - 1 27,691 19,771 2 82,470 - Net OPEB Liability 2 78 - - - 1 51 4 29 2,584 Net Pension Liability 8,499 - - - 4,727 13,226 90,116 Total noncurrent liabilities 14,108 1 34,961 - 1 27,787 27,014 3 03,870 1 16,591 Total liabilities 15,333 1 43,006 9,390 1 33,825 33,150 3 34,704 1 35,347 DEFERRED INFLOWS OF RESOURCES Deferred pensions 8 - - - 5 13 90 Deferred OPEB 91 - - - 49 1 40 8 46 Bond refunding - 2 53 - - 89 3 42 - Deferred amounts related to leases 24,854 - - - - 24,854 - Total deferred inflows of resources 24,953 2 53 - - 1 43 25,349 9 36 NET POSITION Net investment in capital assets 1 05,886 19,091 85,462 50,216 57,383 3 18,038 18,042 Unrestricted 23,989 17,408 19,402 71,242 11,159 1 43,200 (53,632) Total net position $ 129,875 $ 3 6,499 $ 104,864 $ 121,458 $ 6 8,542 4 61,238 $ (35,590) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (4,969) Net Position of Business-Type Activities per Government-Wide Financial Statements $ 456,269 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, 2025 (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 $ 16,962 $ 18,831 $ 12,502 $ 7,745 $ 21,649 $ 77,689 $ 89,118 Other revenues 68 - 415 8 69 560 213 Total operating revenues 17,030 18,831 12,917 7,753 21,718 78,249 89,331 OPERATING EXPENSES: Salaries and benefits 5,327 - - - 2,960 8,287 49,678 Services and supplies 7,065 5,754 5,906 4,648 19,428 42,801 32,737 Other charges 34 5 - - 3 42 - Insurance benefit payments - - - - - - 6 ,550 Depreciation 5,497 2,221 192 4,371 2,498 14,779 2 ,962 Amortization 80 - - - 151 231 138 Countywide cost allocation 325 117 120 106 370 1,038 855 Total operating expenses 18,328 8,097 6,218 9,125 25,410 67,178 92,920 Operating income (loss) (1,298) 10,734 6,699 (1,372) (3,692) 11,071 (3,589) NONOPERATING REVENUES (EXPENSES): Property taxes - - 2,876 - 2,276 5,152 - Investment income (expense) 1,868 2,794 1,080 372 899 7,013 2 ,401 Interest expense - (5,945) - (3,153) (793) (9,891) ( 4) Sale of capital assets (25) - - - (7) (32) 507 Aid from governmental agencies 3,936 - 14 - 1,117 5,067 - Total nonoperating revenues (expenses) 5,779 (3,151) 3,970 (2,781) 3,492 7,309 2 ,904 Income (loss) before contributions and transfers 4,481 7,583 10,669 (4,153) (200) 18,380 (685) Capital contributions - - - 2,226 - 2,226 - Transfers in - - - 310 1,978 2,288 - Transfers out (327) - - (69) (74) (470) (1,480) Change in net position 4,154 7,583 10,669 (1,686) 1,704 22,424 (2,165) Net position - beginning, as originally reported 125,799 28,916 94,195 123,144 66,939 438,993 ( 32,337) Change in accounting principle (78) - - - (101) (179) (1,088) Net position - beginning, as restated 125,721 28,916 94,195 123,144 66,838 438,814 ( 33,425) Net position - ending $ 1 29,875 $ 36,499 $ 1 04,864 $ 1 21,458 $ 68,542 $ (35,590) Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (272) Change in Net Position of Business-Type Activities per Government-Wide Financial Statements $ 22,152 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, 2025 (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 6,610 $ 1 8,709 $ 1 2,432 $ 7,756 $ 2 1,583 $ 7 7,090 $ - Receipts from interfund billings - - - - - - 89,817 Payments for goods and services (7,500) (7,232) (6,113) (4,456) (18,846) (44,147) (21,196) Payments to employees for services (3,919) - - - (2,559) (6,478) (40,902) Payments for insurance benefits - - - - - - (5,086) Payments for premiums - - - - - - (9,849) Net cash provided (used) by operating activities 5,191 11,477 6,319 3,300 178 26,465 12,784 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Property tax proceeds - - 2,876 - 2,276 5,152 - Grants and subsidies from other governmental agencies 3,649 - 18 - 9 8 3,765 - Advances from other funds - - - - 474 474 - Transfers from other funds - - - 310 1,978 2,288 - Transfers to other funds (327) - - (69) (74) (470) (1,480) Net cash provided (used) by noncapital financing activities 3,322 - 2,894 241 4,752 11,209 (1,480) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchases and construction of capital assets (4,819) - (4,297) (376) (3,082) (12,574) (6,015) Proceeds from sale of capital assets - - - - - - 517 Advances from (to) other funds (149) - - (580) - (729) - Capital contributions - - - 5,102 - 5,102 - Principal paid on capital debt (40) (5,361) - (3,986) (3,295) (12,682) (135) Interest paid on capital debt - (6,449) - (3,204) (839) (10,492) (4) Net cash provided (used) by capital and related financing activities (5,008) (11,810) (4,297) (3,044) (7,216) (31,375) (5,637) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 1,868 2,794 1,080 372 899 7,013 2,401 Net cash provided (used) by investing activities 1,868 2,794 1,080 372 899 7,013 2,401 Net increase (decrease) in cash and cash equivalents 5,373 2,461 5,996 869 (1,387) 13,312 8,068 CASH AND CASH EQUIVALENTS: Beginning of year 28,794 27,619 19,972 7,169 18,988 1 02,542 48,702 End of year $ 3 4,167 $ 3 0,080 $ 2 5,968 $ 8,038 $ 1 7,601 $ 115,854 $ 5 6,770 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ (1,298) $ 1 0,734 $ 6,699 $ (1,372) $ (3,692) $ 1 1,071 $ (3,589) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense 5,577 2,221 192 4,371 2,649 15,010 3,100 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net (1,769) (120) ( 352) - (4) (2,245) 486 Inventory - - - - (20) (20) 19 Prepaid items (2) - - - 149 147 - Deferred outflows - pension (221) - - - 8 (213) (403) Deferred outflows - OPEB (14) - - - (1) (15) (15) Leases 1,404 - - - (12) 1,392 - Increase (decrease) in: Accounts payable (102) (261) (87) 301 732 583 929 Deposits from others 2 8 (1,097) - - 105 (964) 1,597 Salaries and benefits payable 8 5 - - - 4 0 125 394 Deferred inflows - pension (3) - - - (3) (6) (49) Deferred inflows - OPEB 2 - - - (3) (1) (54) Net OPEB liability 4 8 - - - 1 4 62 242 Net pension liability 1,511 - - - 345 1,856 8,663 Unearned revenue (55) - ( 133) - (129) (317) - Self-insurance liability - - - - - - 1,464 Total adjustments 6,489 743 ( 380) 4,672 3,870 15,394 16,373 Net cash provided (used) by operating activities $ 5,191 $ 1 1,477 $ 6,319 $ 3,300 $ 178 $ 2 6,465 $ 1 2,784 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Leases $ - $ - $ - $ - $ 357 $ 357 $ - The accompanying notes are an integral part of these financial statements. 44 COUNTY OF SAN LUIS OBISPO STATEMENT OF FIDUCIARY NET POSITION SAN LUIS OBISPO PENSION TRUST FUND DECEMBER 31, 2024 (IN THOUSANDS) CUSTODIAL AND INVESTMENT TRUST FUNDS JUNE 30, 2025 (IN THOUSANDS) San Luis Obispo Investment County Trust Custodial Pension Trust Funds Funds December 31, 2024 June 30, 2025 June 30, 2025 ASSETS Cash and cash equivalents $ 113,591 $ 843,571 $ 142,233 Receivables: Interest and dividends 396 - - Accounts receivable 55 - - Taxes for other governments - - 826 Investments at fair value: Bonds and notes 314,354 - - International fixed income - - - Domestic equities 323,000 - - International equities 257,478 - - Alternative investments 603,650 - - Real estate 188,741 - - Other assets 227 - 4,372 Capital assets, net 4,391 - 15 Total assets $ 1,805,883 $ 843,571 $ 147,446 LIABILITIES Other current liabilities $ 925 $ - $ 88,127 Other long-term liabilities - - 9 Total liabilities $ 9 25 $ - $ 8 8,136 NET POSITION Restricted for: Pensions $ 1,804,958 $ - $ - Pool Participants - 843,571 - Individuals, organizations and other governments - - 59,310 Total Net Position $ 1 ,804,958 $ 8 43,571 $ 5 9,310 The accompanying notes are an integral part of these financial statements. 45 COUNTY OF SAN LUIS OBISPO STATEMENT OF CHANGES IN FIDUCIARY NET POSITION SAN LUIS OBISPO PENSION TRUST FUND FOR THE YEAR ENDED DECEMBER 31, 2024 (IN THOUSANDS) CUSTODIAL AND INVESTMENT TRUST FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) San Luis Obispo Investment County Trust Custodial Pension Trust Funds Funds December 31, 2024 June 30, 2025 June 30, 2025 ADDITIONS Contributions: Contributions to pooled investments $ - $ 1,607,937 $ - Employer contributions 90,489 - - Member contributions 41,077 - - Total contributions 131,566 1,607,937 - Investment income: Realized and unrealized gains and losses 107,103 - - Interest 3,659 24,764 4,593 Dividends 6,857 - - Investment expenses (2,972) - - Total investment income 114,647 24,764 4,593 Property taxes collected for other governments - - 2 59,929 Sales taxes collected for other governments - - 17,966 Other Income 39 - 29,111 Total additions 246,252 1,632,701 3 11,599 DEDUCTIONS Benefits: Monthly benefit payments 140,497 - - Refunds of contributions 5,637 - - Death benefits 441 - - Total benefits 146,575 - - Administrative expenses 3,182 - 38 Distributions from pooled investments - 1,551,501 - Interest expenses - - 34,801 Payments to other local governments - - 6,123 Property taxes distributed to other governments - - 2 64,803 Total deductions 1 49,757 1 ,551,501 3 05,765 Change in net position 9 6,495 8 1,200 5 ,834 Net position - beginning 1 ,708,463 7 62,371 5 3,476 Net position - ending $ 1 ,804,958 $ 8 43,571 $ 5 9,310 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, 2025 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. Separate financial statements may be obtained by contacting First 5 at 3220 South Higuera St., Suite 232, San Luis Obispo, CA 93401. 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. Separate financial statements may be obtained by contacting Pension Trust at 1000 Mill St., San Luis Obispo, CA 93408. 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. 48 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Amounts reported as program revenues include (1) fees, fines and charges to customers or applicants for goods or services offered by the programs, (2) operating grants and contributions that are restricted to meeting the operational requirements of a particular program, and (3) capital grants and contributions restricted to particular programs. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Enterprise funds, reported as business-type activities, distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund’s principal ongoing operation. The principal operating revenues of the County enterprise funds (Airport, Nacimiento Water Contract, State Water Project, Los Osos Wastewater, and nonmajor enterprise) are charges to customers for sales and services. Operating expenses for 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, 2025, the County adopted the following Governmental Accounting Standards Board (GASB) Statements: Statement No. 101 Compensated Absences This Statement updates the recognition and measurement guidance for compensated absences. Statement No. 102 Certain Risk Disclosures This Statement requires the disclosure of risks related to a government’s vulnerabilities due to certain concentrations or constraints. 49 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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.  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, 2024.  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.  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. 50 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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. 51 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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, 2025. 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. 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 Unportioned 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. 52 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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. 53 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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 - Equipment $5,000 Lease term Lease Assets – Structures $25,000 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 Assets 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 assets. 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. Additionally, the liability includes military leave and jury duty leave that has commenced as of June 30. To be considered part of the compensated absences liability the accrued leave must be (1) attributable to services already rendered, (2) the leave must accumulate, and (3) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. 54 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Accumulated benefits will be liquidated in future years as employees elect to use them. In the normal course of business, all payments of these accumulated benefits will be funded from appropriations in the year in which they are to be paid. 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, deferred outflows of resources and deferred inflows of resources related 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. 55 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 policy's objectives in order of priority are safety and preservation of capital, liquidity sufficient to meet scheduled cash flow needs, and 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 1, 2024. 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 that 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. CliftonLarsonAllen LLP (CLA) was selected to perform an Annual Investment Program Compliance Audit for the FY ended June 30, 2025. 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. 56 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 1.61 years. Interest is apportioned to the separate funds based on the individual fund's average daily balance. Securities are held in a customer-segregated safekeeping account during the fiscal year. A Cash Statement and Asset List is requested monthly from the appropriate institutions and verified against records maintained in the Treasury. The County’s combined pool has invested in the CalTRUST Liquidity Fund, which has a stable net asset value. 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, 2025, was State Street Global Advisors. This type of investment is an authorized investment under CGC §53601 (p). The County’s combined pool has invested in the State’s Local Agency Investment Fund (LAIF). This fund is not registered with the Securities and Exchange Commission as an investment company but is required to invest according to CGC. Market valuation is conducted quarterly. LAIF provided a fair value dollar factor of 1.001198310 for its portfolio as of June 30, 2025. 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, 2025, 3.81% 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, 2025, 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 1.00430632 in the Quarterly Report of Investments as of June 30, 2025, 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, 2025, 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. 57 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 2024-25 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 2024-25 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 2024-25 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 58 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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, 2025, 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, 2025. Investment Type S&P Moody's % of Portfolio U.S. Government Agencies AA+ Aaa 40.72% U.S. Treasuries AA+ Aaa 32.77% Supranationals AAA Aaa 16.96% CalTRUST-Liquidity Fund AAAm Not Rated 4.90% LAIF Not Rated Not Rated 4.65% 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, 2025, the following investments exceeded the 5% disclosure threshold: Investment Type % of Portfolio U.S. Government Agencies-Farm Credit Bank 24.04% U.S. Government Agencies-Federal Home Loan Bank 16.68% Supranationals – IADB 8.34% Supranationals – IBRD 6.21% 59 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) At June 30, 2025, the County had the following investments and interest-bearing deposits (in thousands): Weighted Average Maturity Instrument Maturity Dates Interest Rate % Years Fair Value Cost U.S. Government Agencies 7/23/24 - 3/10/28 0.349% - 5.245% 1.50 $ 664,695 $ 657,785 U.S. Treasuries 7/31/24 - 2/29/28 0.397% - 5.126% 1.76 534,812 517,801 Supranationals 8/28/24 - 1/12/28 0.318% - 4.859% 1.40 276,891 270,126 CalTRUST On Demand 4.580% - 80,000 80,000 LAIF On Demand 3.927% - 75,913 75,000 Total Investment in County Treasury $ 1,632,311 $ 1,600,712 Deposits in Financial Institutions $ 301,958 $ 301,958 Cash on Hand 5 72 5 72 Total Cash Held in Treasury 1,934,841 1,903,242 Deposits in Transit 3,644 3,644 Outstanding Warrants (27,158) (27,158) Total 1,911,327 1,879,728 Imprest Cash 2,487 2,487 Non-Pool Cash Deposits 5,687 5,687 Other Cash Deposits 8,174 8,174 Total Cash and Cash Equivalents $ 1,919,501 $ 1,887,902 Restricted Cash with Fiscal Agent U.S. Governmental & Federal Agencies $ 57,683 $ 57,514 Total 57,683 57,514 Total Restricted and Unrestricted Cash and Cash Equivalents $ 1,977,184 $ 1,945,416 Total Cash and Investments Summary Fair Value Total Governmental Activities $ 827,999 Total Business-Type Activities 115,854 Total Investment and Custodial Fiduciary Funds 985,804 Total Fiduciary Component Unit - SLO Pension Trust as of December 31, 2024 113,591 SLO Pension Trust Fund Perspective Difference1 (75,997) Total Component Unit - First 5 9,933 Total Cash and Investments as of June 30, 2025 $ 1,977,184 1 Perspective amount represents the combination of the change in Total SLO Pension Trust cash from the Pension Trust's ACFR Reporting Date of 12/31/2024 to the County's ACFR Reporting Date of 6/30/2025 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 6/30/2025 is $37,594. 60 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The following represents a condensed statement of net position and changes in net position for the Treasurer's investment pool as of June 30, 2025 (in thousands): Fair Value Statement of Net Position: Net position held for pool participants $ 1,911,327 Equity of internal pool participants $ 1,067,756 Equity of external pool participants (voluntary and involuntary) 843,571 Total Equity $ 1,911,327 Statement of Changes in Net Position: Revenue $ 67,625 Investment costs ( 1,012) Net deposits 81,586 Change in fair value 26,727 Net change in pool net position 174,926 Net position at July 1, 2024 1 ,736,401 Net position at June 30, 2025 $ 1,911,327 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, 2025: Fair Value Measurements Using Investments by fair value level Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Debt securities U.S. Treasuries $ 534,812 $ 534,812 $ - $ - U.S. Government Agencies 664,695 664,695 - - Supranationals 276,891 276,891 - - Total measured at fair value 1,476,398 1,476,398 - - Investments measured at amortized cost: LAIF 75,913 - - - CalTRUST 80,000 - - - Total investments in County Treasury $ 1,632,311 $ - $ - $ - 61 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Restricted Cash with Fiscal Agent Cash and investments at June 30, 2025, 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 $ 56,314 debt Restricted interest on lease reserves 1,369 Restricted for contractor retentions - Total Restricted Cash $ 57,683 Cash Deposits Outside of the Treasury Pool At fiscal year-end, the carrying amount of the County's other cash deposits was $5,582,909 and the combined financial institutions' balance was $5,686,898. The difference of $103,989 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 $5,686,898 was covered by federal depository insurance or by collateral held by the County's agent in the County's name. 3. RECEIVABLES Receivables at year-end for the County are as follows (in thousands): Nonmajor Special General Revenue Governmental Funds Fund Funds Accounts Receivable $ 4,430 $ 57 Lease Receivables 3,570 100 Other Receivables* 2,182 24 Loans Receivables - 36,882 Allowance for Doubtful - (6,796) Accounts Nacimiento State Water Los Osos Nonmajor Internal Airport Water Contract Project Wastewater Enterprise Service Proprietary Funds Fund Fund Fund Fund Funds Funds Accounts Receivable $ - $ 122 $ 2,819 $ - $ 505 $ 26 Lease Receivables 26,476 - - - - - Other Receivables* 848 - - 91,531 - - Loans Receivables - - - 348 - - Allowance for Doubtful - - - - - - Accounts * Other receivables primarily consist of accrued deposits; except for the Los Osos Wastewater Fund, which represents the special assessment receivable. 62 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 4. CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2025, is as follows (in thousands): Balance Transfers & Balance July 1, 2024 Additions Retirements Adjustments June 30, 2025 Governmental Activities Capital assets, non-depreciable: Land $ 796,050 $ 9,010 $ - $ 50 $ 805,110 Construction in progress 105,488 92,803 ( 1,006) ( 15,415) 181,870 Total capital assets, non-depreciable 901,538 101,813 ( 1,006) ( 15,365) 986,980 Capital assets, depreciable: Structures and improvements 316,980 4,709 (19) 7,639 329,309 Equipment 121,359 9,330 ( 6,451) 6,424 130,662 Infrastructure 465,617 - - 1,292 466,909 Other property 1,258 - - - 1,258 Total capital assets, depreciable 905,214 14,039 ( 6,470) 15,355 928,138 Less accumulated depreciation for: Structures and improvements ( 127,811) (7,601) 19 - (135,393) Equipment ( 85,866) (6,480) 5,672 10 ( 86,664) Infrastructure ( 285,423) ( 11,405) - - (296,828) Other property (130) (17) - - (147) Total accumulated depreciation (499,230) ( 25,503) 5,691 10 (519,032) Total capital assets depreciable, net 405,984 ( 11,464) (779) 15,365 409,106 Lease assets, amortizable: Land 509 - (152) - 357 Structures and improvements 134,554 9,620 ( 2,171) - 142,003 Equipment 109 - - - 109 Total lease assets, amortizable 135,172 9,620 ( 2,323) - 142,469 Less lease assets accumulated amortization for: Land (162) (58) - - (220) Structures and improvements ( 18,517) (7,055) 869 - ( 24,703) Equipment (77) (17) - - (94) Total accumulated lease asset amortization ( 18,756) (7,130) 869 - ( 25,017) Total lease assets, amortizable net 116,416 2,490 ( 1,454) - 117,452 Subscription assets, amortizable 5,799 8,628 - - 14,427 Less subscription assets accumulated amortization (4,984) (3,009) - - (7,993) Total subscription assets, amortizable net 815 5,619 - - 6,434 Governmental activities capital assets, net $ 1 ,424,753 $ 98,458 $ ( 3,239) $ - $ 1 ,519,972 63 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Balance Transfers & Balance July 1, 2024 Additions Retirements Adjustments June 30, 2025 Business-Type Activities Capital assets, non-depreciable: Land $ 40,820 $ - $ - $ - $ 40,820 Construction in progress 10,069 4,472 (396) ( 2,472) 11,673 Water rights 76,435 4,000 - - 80,435 Other property 1,968 - - - 1,968 Total capital assets, non-depreciable 129,292 8,472 (396) ( 2,472) 134,896 Capital assets, depreciable: Infrastructure 385,317 55 - 1,434 386,806 Structures and improvements 231,047 3,913 (56) 1,038 235,942 Equipment 12,765 420 (94) 10 13,101 Other property 554 - - - 554 Total capital assets, depreciable 629,683 4,388 (150) 2,482 636,403 Less accumulated depreciation for: Infrastructure ( 75,126) (7,409) - - (82,535) Structures and improvements ( 100,441) (6,550) 25 - (106,966) Equipment ( 6,403) (820) 89 (10) (7,144) Other property (58) - - - (58) Total accumulated depreciation (182,028) (14,779) 114 (10) (196,703) Total capital assets depreciable, net 447,655 (10,391) (36) 2,472 439,700 Lease assets, amortizable: Land 79 - - - 79 Equipment 257 357 - - 614 Total lease assets, amortizable 336 357 - - 693 Less lease assets accumulated amortization for: Land (33) (11) - - (44) Equipment (227) (139) - - (366) Total accumulated lease asset amortization (260) (150) - - (410) Total lease assets, amortizable net 76 207 - - 283 Subscription assets, amortizable 297 - - - 297 Less subscription assets accumulated amortization (215) (82) - - (297) Total subscription assets, amortizable net 82 (82) - - - Business-type activities capital assets, net $ 577,105 $ (1,794) $ (432) $ - $ 574,879 64 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Depreciation and amortization expense was charged to functions/funds of the primary government as follows: Total Depreciation Governmental Activities & Amortization General Government $ 8 ,890 Public Protection 7 ,020 Public Ways and Facilities 1 1,032 Health and Sanitation 2 ,378 Public Assistance 1 ,515 Education 548 Recreational and Cultural Services 1 ,297 Capital assets held by the County's Internal Service Funds are charged to the various functions based on their usage of assets 2 ,962 Total governmental activities depreciation/amortization expense $ 3 5,642 Business-Type Activities Airport $ 5 ,577 Los Osos Wastewater 4 ,371 Nacimiento Water Contract 2 ,221 State Water Project 192 Nonmajor Enterprise 2 ,650 Total business-type activities depreciation/amortization expense $ 1 5,011 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, 2025 (in thousands): Governmental Activities Expended to Committed Remaining Project June 30, 2025 Funds Budget Roads Infrastructure $ 7 8,753 $ 2 0,081 $ 46,600 Fire and Sheriff Co-located Dispatch Location 30,587 - 9,082 New Probation Building 20,577 - 19,199 Cayucos Vets Hall Rehabilitation 10,440 26 1,078 Arroyo Grande Creek Channel Emergency Levee Rehabilitation Phase 2 5,923 700 387 Bob Jones Octagon/Ontario Park Trail Extension 4,254 4,990 840 Sheriff Jail Management and Records Management Systems Software Implementation 2,624 1,175 94 Behavioral Health Cal Mental Health Services Authority Electronic Health Records 2,463 879 - Sheriff Radio Dispatch 1,827 449 - Templeton to Atascadero Park Trail Connector 1,430 - 266 65 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 2062-2063. 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 3.97% to measure the present value of the lease payments expected to be received during the lease term period. Minimum lease payments receivable on leases of properties as of June 30, 2025, are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2026 $ 281 $ 100 $ 5 29 $ 265 2027 290 96 489 259 2028 262 93 519 254 2029 255 89 555 247 2030 228 85 595 240 2031-2035 697 373 3 ,020 1,075 2036-2040 650 269 2 ,990 916 2041-2045 1 ,007 105 3 ,777 758 2046-2050 - - 3 ,667 563 2051-2055 - - 3 ,575 356 2056-2060 - - 3 ,922 192 2061-2065 - - 2 ,838 34 Total $ 3,670 $ 1,210 $ 26,476 $ 5,159 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, 2025 Activities Activities Lease revenue $ 279 $ 1,142 Lease interest 258 13 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. 66 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 3.65% to measure the present value of the lease payments expected to be paid during the lease term period. The future principal and interest lease payments as of June 30, 2025 are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2026 $ 5,009 $ 9 71 $ 1 28 $ 7 2027 5,063 924 128 3 2028 4,975 881 23 1 2029 5,070 834 11 - 2030 5,052 789 - - 2031-2035 23,725 3,294 - - 2036-2040 21,704 2,371 - - 2041-2045 19,498 1,574 - - 2046-2050 18,869 876 - - 2051-2055 11,862 338 - - 2056-2060 4,408 33 - - Total $ 125,235 $ 12,885 $ 2 90 $ 11 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 2028-2029. 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 3.65% to measure the present value of the SBITA payments expected to be paid during the SBITA term period. 67 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The future principal and interest SBITA payments as of June 30, 2025, are as follows: Governmental Activities Business-Type Activities Year Ending June 30, Principal Interest Principal Interest 2026 $ 2,851 $ 1 23 $ - $ - 2027 2,716 27 - - 2028 346 14 - - 2029 348 2 - - Total $ 6,261 $ 1 66 $ - $ - 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 two liability claim settlements and there were eleven 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 $ 500,000 per occurrence $ 25,000,000 Workers' Compensation $ 350,000 per occurrence Statutory Unemployment $ 750,677 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 Fiscal Year liability estimates Claim payments year-end 2023-24 $ 23,501 $ 9,014 $ 7,156 $ 25,359 2024-25 $ 25,359 $ 8,534 $ 7,068 $ 26,825 68 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 8. INTERFUND RECEIVABLES AND PAYABLES The composition of interfund balances as of June 30, 2025, was (in thousands): Payable Fund (Due to Balance) Receivable Fund (Due from Balance) Amount Nonmajor Governmental Funds Capital Projects Fund $ 6,019 Total $ 6,019 The SLO County Financing Authority owes the Capital Projects Fund $6,019 for bond proceeds for the construction of the new Probation Department building. Payable Fund (Advances from Balance) Receivable Fund (Advances to Balance) Amount Nonmajor Governmental Funds General Fund $ 15,626 Nonmajor Enterprise Funds Nonmajor Governmental Funds 1,839 General Fund 121 1,960 Airport Fund General Fund 4,941 Los Osos Wastewater Fund Nonmajor Governmental Funds 96 Total $ 22,623 The Parks Special Revenue Fund owes the General Fund $237 for the restoration of the Cayucos Pier and $574 for the Nipomo Skate Park Project. The Roads Special Revenue Fund owes the General Fund $14,815 for storm damage repairs. The County Service Areas Enterprise Fund owes the County Service Areas Special Revenue Fund $1,253 for operational costs and $500 for storm damage repairs. The County Service Areas Enterprise Fund also owes the General Flood Control Zone Special Revenue Fund $86 for state water projects. The Golf Enterprise Fund owes the General Fund $121 for a water line replacement project. The Airport Fund owes the General Fund $4,941 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 owes the General Flood Control Zone Special Revenue Fund $96 for a long-term operating loan. 69 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 9. TRANSFERS Transfers to/from other funds at June 30, 2025, are as follows: (in thousands): Transfers From Transfers To Amount Purpose General Fund Capital Projects Fund $ 6,958 General Government Maintenance and Building Replacement Projects Capital Projects Fund 1 ,520 Health Agency HVAC Capital Projects Fund 6 13 Communication Site Towers Capital Projects Fund 3 89 ARPA Funded Projects Nonmajor Governmental Funds 1 2,637 Debt Service Nonmajor Governmental Funds 7,204 Roads Projects Homeless Services and Affordable Nonmajor Governmental Funds 6 ,435 Housing Budgeted Appropriations Nonmajor Governmental Funds 5 64 Library Budgeted Appropriations Flood Control Districts Flood Mitigation Nonmajor Governmental Funds 5 00 Project Nonmajor Governmental Funds 2 59 Parks Budget Appropriations Nonmajor Governmental Funds 5 2 ARPA Distribution Los Osos Wastewater Fund 3 10 ARPA Distribution Nonmajor Enterprise Funds 1 ,914 ARPA Distribution Nonmajor Enterprise Funds 1 1 Golf Budgeted Appropriations 3 9,366 Capital Projects Fund General Fund 470 Facilities Maintenance Nonmajor Governmental Funds General Fund 900 Public Facilities Fees General Fund 4 57 Debt Service General Fund 3 71 Parks FEMA Reimbursement General Fund 1 89 Parks Registration System Project Capital Projects Fund 3 2,075 Capital Projects Debt Proceeds Capital Projects Fund 4 ,154 Public Facilities Fees Nonmajor Governmental Funds 5 10 Debt Service Nonmajor Governmental Funds 3 9 Public Facilities Fees Nonmajor Governmental Funds 1 ,272 Road Impact Fees County Service Area Budgeted Nonmajor Enterprise Fund 5 3 Appropriations 4 0,020 Airport Fund General Fund 1 89 Debt Service Nonmajor Governmental Fund 1 38 Debt Service 327 Los Osos Wastewater Fund Nonmajor Governmental Funds 6 9 Debt Service Nonmajor Enterprise Funds Nonmajor Governmental Funds 7 4 Debt Service Internal Service Funds Nonmajor Governmental Funds 1 ,480 Debt Service Total Transfers $ 8 1,806 70 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, 2025, is as follows (in thousands): Beginning Restatements Ending Balance & Balance Due within Governmental Activities July 1, 2024 Adjustments Additions Reductions June 30, 2025 one year Bonds and notes payable: Certificates of participation (COP) $ 3,035 $ - $ - $ 180 $ 2,855 $ 185 Certificates of participation from direct borrowings 7,778 - - 200 7,578 206 State notes from direct borrowings 1,101 - - 165 936 166 Pension obligation bonds 72,966 ( 4,735) - 3,516 64,715 11,847 Lease revenue bonds 85,842 - - 3,119 82,723 3,260 Unamortized premium on lease revenue bonds 7,566 - - 406 7,160 - Assessment bonds from direct borrowings 241 - - 56 185 59 Total bonds and notes payable 178,529 ( 4,735) - 7,642 166,152 15,723 Other liabilities: Leases 122,129 - 9,621 6,515 125,235 5,009 SBITA 757 - 8,629 3,125 6,261 2,851 Compensated absences 1 48,950 - 26,024 25,788 49,186 29,536 Landfill post-closure costs 9,213 - 7,181 1,119 15,275 1,453 Self-Insurance 25,359 - 8,534 7,068 26,825 5,570 Total other liabilities 206,408 - 59,989 43,615 222,782 44,419 Total Governmental Activities $ 384,937 $ ( 4,735) $ 59,989 $ 51,257 $ 388,934 $ 60,142 1 Compensated absences beginning balance was restated with the implementation of GASB 101. Beginning Restatements Ending Balance & Balance Due within Business-Type Activities July 1, 2024 Adjustments Additions Reductions June 30, 2025 one year Bonds and notes payable: Certificates of participation (COP) $ 5,490 $ - $ - $ 665 $ 4,825 $ 700 Certificates of participation from direct borrowings 5,244 - - 110 5,134 113 State notes from direct borrowings 76,965 - - 3,800 73,165 3,885 Other notes from direct borrowings 126 - - 40 86 40 Revenue bonds 140,345 - - 5,526 134,819 5,814 Unamortized premium on revenue bonds 6,381 - - 424 5,957 - General obligation bonds 4,925 - - 595 4,330 630 Unamortized premium on general obligation bonds 396 - - 56 340 - Lease revenue bonds 1,217 - - 386 831 405 Unamortized premium on lease revenue bonds 43 - - 14 29 - Assessment bonds 67,850 - - 1,632 66,218 1,677 Total bonds and notes payable 308,982 - - 13,248 295,734 13,264 Other liabilities: Leases 78 - 357 145 290 128 SBITA 86 - - 86 - - Compensated absences 1 842 - 483 390 935 349 Total other liabilities 1,006 - 840 621 1,225 477 Total Business-Type Activities $ 309,988 $ - $ 840 $ 13,869 $ 296,959 $ 13,741 1 Compensated absences beginning balance was restated with the implementation of GASB 101. 71 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Annual debt service requirements for governmental activities as of June 30, 2025, 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 2026 $ 391 $ 349 $ 11,847 $ 338 $ 12,185 2027 4 08 334 11,843 1 ,047 12,890 2028 4 20 319 11,830 1 ,795 13,625 2029 4 35 303 11,160 3 ,230 14,390 2030 4 53 286 11,776 3 ,409 15,185 2031-2035 2,536 1,152 6,259 2 ,281 8 ,540 2036-2040 2,069 681 - - - 2041-2045 1,727 389 - - - 2046-2050 1,007 131 - - - 2051-2055 4 26 72 - - - 2056-2060 4 64 33 - - - 2061-2065 97 2 - - - Total $ 10,433 $ 4,051 $ 64,715 $ 12,100 $ 76,815 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 2026 $ 166 $ 9 $ 3,260 $ 4,027 $ 59 $ 9 2027 1 68 7 3,428 3 ,866 61 5 2028 1 70 6 2,390 3 ,728 65 1 2029 1 72 4 2,495 3 ,614 - - 2030 1 73 2 2,625 3 ,494 - - 2031-2035 87 - 15,115 15,453 - - 2036-2040 - - 15,045 11,573 - - 2041-2045 - - 17,650 7 ,062 - - 2046-2050 - - 20,715 2 ,848 - - Total $ 936 $ 28 $ 82,723 $ 55,665 $ 185 $ 15 Business-Type Activities Certificates of Participation, Including Direct Borrowings State Notes Revenue Bonds Year Ended June 30, Principal Interest Principal Interest Principal Interest 2026 $ 813 $ 365 $ 3,885 $ 1,499 $ 5,815 $ 5,994 2027 860 322 3 ,971 1,413 6,120 5,689 2028 903 278 4 ,060 1,324 6,415 5,393 2029 947 235 4 ,151 1,233 6,710 5,097 2030 990 189 4 ,043 1,140 7,005 4,800 2031-2035 1,587 578 13,797 4,765 40,305 18,730 2036-2040 785 451 15,233 3,329 50,870 8,170 2041-2045 908 327 16,818 1,743 11,579 229 2046-2050 964 183 7 ,207 217 - - 2051-2055 588 82 - - - - 2056-2060 431 35 - - - - 2061-2065 183 3 - - - - Total $ 9 ,959 $ 3,048 $ 73,165 $ 16,663 $ 134,819 $ 54,102 72 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Business-Type Activities (continued) Other Notes, General Obligation Bonds Assessment Bonds Including Direct Borrowings Year Ended June 30, Principal Interest Principal Interest Principal Interest 2026 $ 630 $ 206 $ 1,677 $ 1,798 $ 40 $ - 2027 6 65 170 1 ,722 1 ,751 4 0 - 2028 7 00 134 1 ,767 1 ,703 6 - 2029 7 35 98 1 ,821 1 ,654 - - 2030 7 80 61 1 ,875 1 ,603 - - 2031-2035 8 20 21 10,167 7 ,203 - - 2036-2040 - - 11,674 5 ,703 - - 2041-2045 - - 13,394 3 ,983 - - 2046-2050 - - 15,361 2 ,009 - - 2051-2055 - - 6 ,760 188 - - Total $ 4,330 $ 690 $ 66,218 $ 27,595 $ 86 $ - Business-Type Activities (continued) Lease Revenue Bonds Year Ended June 30, Principal Interest 2026 $ 405 $ 3 1 2027 4 26 11 Total $ 831 $ 4 2 Long-term liabilities at June 30, 2025, consisted of the following: Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2025 Governmental Activities Certificates of Participation 2007 Series A 3/01/2007 2036 4% - 4.25% $7 - $307 $5,090 $2,855 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 $4,941 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 $2,637 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. $13,931 $10,433 State Note 10/8/2015 2030 1.00% $88 $2,197 $936 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. 73 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 $76,815 2003 Series C CABs Unaccreted Interest (12,100) $44,199 $64,715 Lease Revenue Bonds 2020 Lease Revenue Bonds Series A 3/05/2020 2044 4.0% $20 - $1,030 $16,145 $14,170 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 $3,300 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 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 Refunding Bonds Series A 11/17/2022 2027 5.0% $986 - $1,153 $4,278 $2,248 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 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 $785 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 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 $82,723 Assessment Bonds Sherwood Drive Underground Utility Assessment District Limited Obligation Improvement Bond, Series 2006 12/21/2006 2027 5.45% $2 - $67 $818 $185 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. 74 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Original Date of Semi Annual Issue Outstanding Issue Maturity Interest Rates Installments Amount at 6/30/2025 Business-Type Activities Certificates of Participation US Department of Agriculture (USDA) 2009 4/30/2009 2048 4.375% $2 - $86 $1,631 $1,285 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 $4,825 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 $1,302 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 $2,547 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. $17,933 $9,959 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 Water Treatment Plant Upgrade 2006 2030 2.60% $836 $25,945 $7,615 Los Osos Wastewater Project 2011 2046 2.0% $1,565-$2,147 80,484 65,550 $106,429 $73,165 Revenue Bonds 2018 Nacimiento Water Project Revenue Refunding Bonds Series A 5/07/2018 2040 3.0% - 5.0% $158 - $9,173 $27,045 $22,260 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 $27,955 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 $84,604 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 $134,819 General Obligation Bonds 2011 Refunding – Lopez Dam Remediation 6/08/2011 2030 2.0% - 5.5% $21 - $841 $10,760 $4,330 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. 75 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Lease Revenue Bonds 2022 Lease Revenue Refunding Bonds Series A 11/17/2023 2027 5.0% $365 - $427 $1,582 $831 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 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 $66,218 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 $86 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. Description of Long-Term Lease Arrangements The County formed the Public Facilities Corporation and the Financing Authority for the purpose of issuing debt. On behalf of the County, these two entities issued all currently outstanding certificates of participation and the Lopez Dam remediation general obligation bond. Therefore, the County makes semi-annual lease payments in lieu of debt service to these entities from a variety of sources including State and Federal revenues, penalty assessments, golf course fees, water contract payments, and property taxes. For lease payment details, see above schedules for specific type of debt. Description of Special Assessment Bonds Special assessment debt has been issued to provide funds for the construction of streets, utility, and water delivery systems. These bonds will be repaid from amounts levied against the property owners benefited by this construction. The County acts in an agent capacity for the assessment districts. In the event that a deficiency exists because of unpaid or delinquent special assessments at the time a debt service payment is due, the County must provide resources to cover the deficiency until other resources, for example, foreclosure proceeds, are received. Special assessment principal outstanding at June 30, 2025, totals $66,404 with interest rates from 2.52% to 5.45%. 76 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 $50,121 on June 30, 2025. The accumulated benefits will be liquidated in future years as employees elect to use them. In the normal course of business, all payments of these accumulated benefits will be funded from appropriations in the year in which they are to be paid. Legal Debt Margin State statutes limit the amount of general obligation debt a governmental entity may issue to 1.25% of its net assessed valuation. The current debt limitation for the County is $947,576 with a margin of $943,246. Direct Placement Debt The County does not have any direct placement debt as of June 30, 2025. Direct Borrowings The County’s outstanding notes from direct borrowings related to governmental activities of $8,699 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 $78,385 contain a provision that if default continues after the cure period, the entire obligation becomes due and payable. Rebatable Arbitrage Earnings The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service. During the current year, the County performed calculations of excess investment earnings and at June 30, 2025 had an arbitrage liability of $169. 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, 2025, is $5,232 of Public Facility Fees, $13,393 of Road Impact Fees, and $50 of Wildlife and Grazing programs restricted due to enabling legislation. The remaining $131,971 of restricted net position is restricted due to restrictions imposed by creditors, grantors, or contributors. 77 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Restricted net position at June 30, 2025, for governmental activities is as follows (in thousands): Amount RESTRICTED FOR: General Government Purchase obligations for Board of Supervisors professional services $ 135 Purchase obligations for Administrative Office related professional services 326 Purchase obligations for Clerk-Recorder related professional services 12 Purchase obligations for Facilities Management related professional services and maintenance 141 Purchase obligations for Building Maintenance projects 852 Purchase obligations for Information Technology related software, maintenance contracts, and 143 professional services Purchase obligations for Auditor-Controller-Treasurer-Tax Collector related software and equipment 41 Claims, contracts, and other restrictions imposed by grantors or contributors 9,319 Total General Government 10,969 Public Protection Purchase obligations for Waste Management related professional services 198 Purchase obligations for Sheriff-Coroner related equipment and professional services 160 Purchase obligations for Probation related professional services 21 Purchase obligations for fire protection related vehicles and equipment 4,363 Purchase obligations for Planning and Building related professional services 2,586 Purchase obligations for flood control related engineering and environmental services 9,201 Wildlife and Grazing programs restricted by enabling legislation 50 Claims, contracts, and other restrictions imposed by grantors or contributors 7,609 Total Public Protection 24,188 Health and Sanitation Purchase obligations for Public Health related program services 961 Purchase obligations for Behavioral Health related program services 832 Claims, contracts, and other restrictions imposed by grantors or contributors 19,457 Total Health and Sanitation 21,250 Public Assistance Purchase obligations for Public Assistance related program services 1,036 Claims, contracts, and other restrictions imposed by grantors or contributors 2,094 Prepaid expenses 10 Total Public Assistance 3,140 Public Ways and Facilities Purchase obligations for Public Works related professional services 2,238 Road impact fees restricted by enabling legislation for road maintenance and construction 13,393 Public facilities fees restricted by enabling legislation for public facilities 5,232 Total Public Ways and Facilities 20,863 Recreation and Cultural Services Parks equipment and maintenance services 955 Claims, contracts, and other restrictions imposed by grantors or contributors 680 Total Recreation and Cultural Services 1,635 Education Library related professional services 73 Prepaid expenses 8 Total Education 81 Debt Service 68,520 Total Restricted Net Position $ 150,646 The Public Works Internal Service Fund reported a deficit in net position of $43,132 at June 30, 2025. This deficit is mainly due to the fund’s net pension liability of $86,753 and the County plans to reduce the deficit with increased future charges. 78 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) The Workers’ Compensation and Protected Self-Insurance Internal Service Funds reported deficits in net position of $4,090 and $3,027, respectively, at June 30, 2025. 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.  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 – the residual classification for the General Fund that includes all amounts not contained in the other classifications. The General Fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. 79 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Fund balances for all the major and nonmajor governmental funds as of June 30, 2025, are distributed as follows: Capital Nonmajor General Projects Governmental Fund Fund Funds Total Nonspendable: Inventories $ 220 $ - $ - $ 220 Prepaid items 631 - 18 649 Advances to other funds 21,189 - - 21,189 Subtotal 22,040 - 18 22,058 Restricted for: General Government 2,015 - - 2,015 programs & encumbrances Automation projects 982 - - 982 Tax reduction reserves 5,371 - - 5,371 Public Protection programs 11,705 - - 11,705 Public Ways and Facilities 367 - - 367 programs & encumbrances Health and Sanitation 3,332 - - 3,332 programs & encumbrances Mental Health Services Act 4,411 - - 4,411 Public Assistance programs 1,036 - - 1,036 Public facilities - - 5,232 5,232 Traffic impact programs - - 13,392 13,392 Flood Control Districts - - 9,201 9,201 services Library equipment & - - 73 73 maintenance services County Service Areas road - - 138 138 maintenance Wildlife and grazing programs - - 52 52 Parks equipment and 240 - 716 956 maintenance services Debt service - - 75,208 75,208 Subtotal $ 29,459 $ - $ 104,012 $ 133,471 80 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Capital Nonmajor Projects Governmental General Fund Fund Funds Total Committed to: Maintenance projects $ 5,503 $ - $ - $ 5,503 Clerk-Recorder services 209 - - 209 Other general government 18,294 - - 18,294 Fire services and equipment 14,253 - - 14,253 Sheriff-Coroner programs 1,184 - - 1,184 Other public protection 1,134 - - 1,134 Public Health programs 1,554 - - 1,554 Public works engineering & 514 - - 514 consulting services Community parks programs 344 - - 344 Fish and Game programs - - 204 204 Flood Control programs - - 5,690 5,690 Lighting programs - - 550 550 Community Development - - 36,396 36,396 programs Emergency Medical Services - - 314 314 Roads - - 14,791 14,791 Community Service Areas - - 4,217 4,217 Library - - 8,927 8,927 Parks - - 1,297 1,297 General reserve 13,000 - - 13,000 SB1090 Economic 10,564 - - 10,564 development Internal financing 6,169 - - 6,169 Solar plant safety 843 - - 843 Automation projects 26,010 - - 26,010 Prado Rd Interchange project 1,435 - - 1,435 Talent Development 1,954 - - 1,954 Building replacement 60,272 - - 60,272 Tax reduction reserve 69,714 - - 69,714 Lease financing 1,266 - - 1,266 Capital Projects - 21,014 - 21,014 Subtotal $ 234,216 $ 21,014 $ 72,386 $ 327,616 81 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Capital Nonmajor Projects Governmental General Fund Fund Funds Total Assigned to: Tax reduction reserve $ 34,355 $ - $ - $ 34,355 Clerk-Recorder services 1,486 - - 1,486 Information Technology 294 - - 294 projects General government 25,876 - - 25,876 Sheriff-Coroner & Emergency 26,513 - - 26,513 Services programs Probation programs 24,497 - - 24,497 District Attorney programs 6,031 - - 6,031 Planning programs 4,196 - - 4,196 Other public protection 2,591 - - 2,591 programs Foster Care & Social Services 46,982 - - 46,982 programs Other public assistance 1,303 1,303 programs - - Public ways and facilities 3,776 - - 3,776 Behavioral Health programs 46,093 - - 46,093 Public Health programs 12,279 - - 12,279 Subsequent Fiscal Year 51,820 - - 51,820 Budget Imprest cash 137 - - 137 Subtotal $ 288,229 $ - $ - $ 288,229 Total $ 573,944 $ 21,014 $ 176,416 $ 771,374 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, 2025, to be reappropriated during the next fiscal year (in thousands): Fund Total Encumbrances General Fund $ 8,567 Capital Projects Fund 27,224 Nonmajor Governmental Funds 22,620 Total Lapsing Encumbrances $ 58,411 82 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 $20,078 over the next 10 years. The estimated amounts vary by year. For example, the principal amount due in 2025 is $1,564 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, 2025. 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, 2025, is $15,275 (in 2025 dollars). Of this, $11,284 is for the Maintenance Cost and $3,991 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 July 1, 2024, 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. 83 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, 2025, the Agricultural Preserve Program tax abatements were $19,844. 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 Bylaws 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 Bylaws of the Pension Trust. The San Luis Obispo County Employees Retirement Plan is part of those Bylaws. The County of San Luis Obispo Board of Supervisors has the sole authority to amend the Plan’s provisions. 84 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, 2024, there were 542 Tier 1 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 a bargaining Tier 2 unit that did not adopt Tier 2 are considered Tier 1 members. As of December 31, 2024, there were 233 active County employed members in Tier 2. Tier 3 includes all members hired on or after January 1, 2013. As of December 31, 2024, there were 1,888 Tier 3 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, 2024, 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 attaining 429 members 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 attaining 192 members 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 attaining 1,627 members 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 attaining 54 members 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 attaining 64 members 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 attaining 59 members 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 attaining 41 members 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 attaining 197 members a minimum age of 50. 85 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 five 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 for a minimum of six months up to a maximum of five 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. 86 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 33.24-37.74% 14.15-26.47% Miscellaneous Tier 2 33.24-37.74% 5.76-19.57% Miscellaneous Tier 3 32.75-37.60% 5.14-18.64% Probation Tier 1 42.50-45.52% 21.51-31.13% Probation Tier 2 Not Negotiated Not Negotiated Probation Tier 3 45.02% 10.27-21.95% Safety Tier 1 55.64-66.84% 15.22-29.23% Safety Tier 2 59.11-66.84% 9.45-26.04% Safety Tier 3 58.50-63.15% 9.25-21.62% 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, 2023 $73,290 June 30, 2024 $83,600 June 30, 2025 $87,584 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 64.5% funded as of January 1, 2025; 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 64.5 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, 2024, was $2,711,979. The County’s share of the Plan’s fiduciary net position was $1,696,582 as of the same date. As of December 31, 2024, the Plan’s fiduciary net position was 62.56% of the total pension liability. 87 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) At June 30, 2025, the County reported a liability of $1,015,396 for its proportionate share of the net pension liability of the Plan. The net pension liability was measured as of December 31, 2024. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation date of January 1, 2024. The actuarial assumptions used in the January 1, 2024, valuation were based on the results of an actuarial experience study for the period January 1, 2017, through December 31, 2023. Measurements as of December 31, 2023, are based on the fair value of assets on that date, and the Total Pension Liability as of the valuation date, January 1, 2024. The actuarial assumptions were rolled forward to the Pension Trust Plan’s fiscal year-end of December 31, 2024. There were no significant events between the January 1, 2024, valuation date and the December 31, 2024, 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, 2024, the County’s proportionate share was 94.00%, compared to 93.79% at December 31, 2023, increase of 0.21%. 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, 2025, the County recognized pension expense of $161,975. 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, 2024, 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 $ 1,848 $ 1,013 Deferred outflows and inflows of resources – difference between expected and actual experience 63,037 - Deferred outflows of resources – changes in actuarial assumptions 75,756 - Deferred outflows of resources – net difference between projected and actual earnings on pension plan investments 62,025 - County contributions subsequent to the measurement date 43,757 - $ 246,423 $ 1,013 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 $43,757 for contributions for the fiscal year ending June 30, 2025, made subsequent to the measurement date of December 31, 2024. The $43,757 of subsequent contributions will be recognized as reduction of the net pension liability in the fiscal year ending June 30, 2026. 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, 2024, 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, 2024, is also recognized over 5 years. 88 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) 2026 $ 80,128 2027 86,705 2028 19,190 2029 15,630 Thereafter - Total $ 201,653 Actuarial Assumptions The total pension liability in the January 1, 2024, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% Amortization payment growth method Level percentage of payroll Amortization growth rate 3.00% Salary increases 3.00% plus service-related merit component based on years of services ranging from 0.00% to 5.75% COLA increases 2.75% for Tier 1 and 2.00% for Tier 2 and Tier 3 Investment rate of return 6.75%, net of administrative expense Post-Retirement Mortality Sex distinct Public-2010 Amount-Weighted, Above-Median Income with generational mortality improvements using scale MP-2021. The actuarial assumptions used in the January 1, 2024, valuation were based on the results of an actuarial experience study for the period January 1, 2017 – December 31, 2023. 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 weighing 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% 4.00% Equities – Public Market 30% 6.25% Real Assets 15% 8.14% Private Markets 30% 8.19% US Treasury – Long Duration/TIPS 15% 4.15% 89 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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. 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, 2024 $1,384,473 $1,015,396 $713,117 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, 2025, were $326 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. 90 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) In April 2010, the County established an irrevocable trust with the California Employer’s Retiree Benefit Trust (CERBT) to prefund the future cost of retiree health insurance benefits. The CERBT is an IRS Section 115 trust fund administered by CalPERS. CalPERS issues a publicly available financial report consisting of financial statements and required supplementary information for the CERBT. The report may be obtained by writing to CalPERS, Lincoln Plaza North, 400 Q Street, Sacramento, CA 95811. Benefit Eligibility and Employees Covered To be eligible for benefits, a member must be eligible to retire, attain a minimum age of 50-52, depending on date of hire, and complete a minimum of five 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, 2025, a total of 3,771 employees were covered by the OPEB Plan’s benefit terms: Active Plan Members 2,643 Inactive Plan Members 997 Inactive Plan members entitled to but not yet receiving benefits 131 3,771 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 2024-25 the County provided the following to eligible retirees: Employee Healthcare Benefit Calendar Year 2023 $157 per month Calendar Year 2024 $158 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, 2025, the funding was a combination of direct premium payments to contracted medical, dental and vision providers, plus a contribution of $675 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 $27.2 million as of June 30, 2025. The June 30, 2025, net OPEB Liability was determined by the actuary using a measurement date of June 30, 2024. 91 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The total OPEB liability, measured as of June 30, 2024 for the June 30, 2025 reporting date, was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount Rate 6.40% Inflation 2.50% Health care cost trend rate Based on the Society of Actuaries “Long Term Healthcare Cost Trends Model v2024” that reflects actual premium change of 6.50% from 2024 to 2025 followed by 6.20% in 2026 decreasing gradually to an ultimate rate of 4.04% by 2075. Actuarial cost method Entry Age Normal, Level Percentage of Salary Reimbursement eligibility 40% of all retirants will apply for and receive the reimbursement Payroll growth rate 3.00% per annum Salary increases 3.00% plus service-related merit component Investment rate of return 6.40% 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, and salary scale are based on an experience study covering the period January 1, 2017, through December 31, 2023, 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 6.40% per annum, compounded annually, reflects the County’s current policy of pay-as-you-go plus additional funding of the OPEB liability, and the County’s ongoing selection of a “less conservative” (Strategy 1) portfolio invested by the CERBT. Per GASB guidance, the discount rate was determined by calculating the single rate that produces the same present value of expected benefit payments as (1) the expected long-term rate of return on plan assets during the period when projected assets are sufficient to pay future retiree benefits, and (2) the 20-year municipal bond rate after assets are projected to be exhausted. The CERBT Strategy 1 portfolio consists of the following assets managed internally by the California Public 92 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 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 6.4%. 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, 2024 $ 52,507 $ 27,313 $ 25,194 Service Cost 1,669 - 1,669 Interest Cost 3,278 - 3,278 Difference between expect and actual experience 5,834 - 5,834 Actuarial Gains/Losses - - - Change in Assumptions (1,587) - ( 1,587) Changes of Benefit Terms - - - Employee Contributions - - - Employer Contributions - 4,109 ( 4,109) Net Investment Income - 3,044 ( 3,044) Other Additions - - - Benefit Payments (1,866) ( 1,866) - Implicit Subsidy Credit (1,580) ( 1,580) - Administrative Expenses - (9) 9 Other Deductions - - - Net Projected Changes 5,748 3,698 2,050 Projected Balances as of June 30, 2025 $ 58,255 $ 31,011 $ 27,244 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, Homeless Services and Affordable Housing Fund, Library Fund, and Parks Fund. At June 30, 2025, the OPEB Plan’s fiduciary net position was 53.2% of the total OPEB liability. 93 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 6.40%, as well as what the liability would be if it were calculated using a discount rate that is one percentage-point lower, 5.40%, or one percentage-point higher, 7.40%, than the current rate: 1% Discount 1% Decrease Rate Increase (in thousands) (in thousands) (in thousands) 5.40% 6.40% 7.40% Net OPEB Liability $33,412 $27,244 $22,005 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) 5.80% 6.80% 7.80% Net OPEB Liability $24,487 $27,244 $30,435 OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2025, the County recognized OPEB expense of $4.0 million. 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, 2025, 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 $ 6,515 $ 6,455 expected and actual experience Deferred outflows of resources – changes in actuarial assumptions 3,359 2,414 Deferred outflows of resources – net difference between projected - 52 and actual earnings on pension plan investments County contributions subsequent to the measurement date 4,704 - $ 14,578 $ 8,921 $4,704 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, 2026. 94 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) 2026 $ 833 2027 733 2028 (1,091) 2029 (997) 2030 336 Thereafter 1,139 $ 953 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. 95 NOTES TO BASIC FINANCIAL STATEMENTS (Continued) 19. RESTATEMENT OF NET POSITION AND FUND BALANCE Change in Accounting Principle (Column A) In FY 2024-25, the County implemented Governmental Accounting Standards Board (GASB) Statement No. 101 – Compensated Absences. The new pronouncement uniformed and defined the elements required in the compensated absence liability calculation retroactively. The change in accounting principle affected the following line items in the prior year.  Government-wide Statements: Current and Long-Term Liabilities. As a result, Net Position of governmental activities and business-type activities were overstated in the prior year.  Internal Service and Enterprise Fund statements: Current and Long-Term Liabilities. As a result, Net Position was overstated in the prior year. Correction of an Error in Previously Issued Financial Statements (Column B) During the fiscal year ended June 30, 2025, it was determined Medi-Cal reimbursement revenue had been understated $20,168 thousand. The understatement consisted of two components related to Medi-Cal reimbursement revenue.  $15,237 thousand related to Medi-Cal reimbursement revenue received in prior years and recorded as an accounts payable. The accounts payable balance was used for anticipated repayment of revenue received after annual Medi-Cal reimbursement audits were completed. The error correction affected the prior year’s current liabilities total in the Government-wide Statements and prior year’s liabilities total in the Governmental Fund Statements. As a result, Net Position of governmental activities in the Government-wide Statements was understated, and Fund Balance of Governmental Funds was understated.  $4,931 thousand related to an under accrual of FY 2023-24 Medi-Cal reimbursement revenue. The error correction affected the prior year revenue total in the Government-wide Statements and Governmental Fund Statements. As a result, Net Position of governmental activities in the Government-wide Statements was understated, and the Fund Balance of Governmental Funds was understated. Restatements for change in accounting principle and error correction are summarized as follows: 6/30/2024 Change in As Previously Accounting Error 6/30/2024 Stated Principle (A) Correction (B) As Restated Government-Wide Governmental Activities $ 1,146,182 $ ( 11,574) $ 20,168 $ 1,154,776 Business-Type Activities 434,296 (179) - 434,117 Total Primary Government $ 1,580,478 $ ( 11,753) $ 20,168 $ 1,588,893 Governmental Funds Major Funds: General Fund $ 486,484 $ - $ 20,168 $ 506,652 Total Governmental Funds $ 486,484 $ - $ 20,168 $ 506,652 Proprietary Funds Major Enterprise Funds: Airport $ 125,799 $ (78) $ - $ 125,721 Nonmajor Enterprise Funds 6 6,939 (101) - 66,838 Internal Service Funds (32,337) (1,088) - (33,425) Total Proprietary Funds $ 160,401 $ (1,267) $ - $ 159,134 96 ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION ________________________________________________________________ REQUIRED SUPPLEMENTARY INFORMATION Required supplementary information includes financial information and disclosures that are required by the GASB but are not considered a part of the basic financial statements. Such information includes:  Schedule of the County’s Proportionate Share of the San Luis Obispo County Pension Plan’s Net Pension Liability  Schedule of the County’s Contributions to the San Luis Obispo County Pension Plan  Other Post-Employment Benefits (OPEB) Plan Schedule of Changes in the County’s Net OPEB Liability and Related Ratios  Other Post-Employment Benefits (OPEB) Plan Schedule of Actuarially Determined Plan Contributions and Related Ratios  Budgetary Comparison Schedule – General Fund  Notes to Required Supplementary Information 97 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 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% 2023 93.79% $941,869 $235,231 400.40% 62.98% 2024 94.00% $1,015,396 $240,438 422.31% 62.56% * Restated in accordance with the GASB Statement No. 82 definition of covered payroll as the payroll on which contributions to a pension plan are based as of the measurement date. Changes to benefit terms None Changes of assumptions None 98 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 2016 $32,839 $31,997^ $842 $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 $4,657 $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% 2024 $78,708 $83,600 ($4,892) $240,438 34.77% 2025 $79,949 $87,584 ($7,635) $245,908 35.62% ^ Restated to reflect a fiscal year measurement period. * Restated in accordance with the GASB Statement No. 82 definition of covered payroll as the payroll on which fiscal year contributions to a pension plan are based. Changes to benefit terms None Changes of assumptions None Separate stand-alone financial statements were issued for the Pension Plan and are available at the County of San Luis Obispo Auditor-Controller's office located at the County Government Center Room D220, San Luis Obispo, CA 93408. 99 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 OPEB liability: 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) Implicit subsidy credit - - - - - 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 Fiduciary net position: 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) Implicit subsidy credit - - - - - 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 discount rate increased from 6.25% in FY 2023-24 to 6.40% in FY 2024-25. The inflation rate increased from 2.30% in FY 2023-24 to 2.50% in FY 2024-25. The Notes to RSI are integral to the above schedule. (continued) 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 (CONTINUED) FOR THE LAST 10 FISCAL YEARS1 (in thousands) June 30, June 30, June 30, Measurement Date 2022 2023 2024 For Fiscal Year Reporting Period 2022-23 2023-24 2024-25 Total OPEB liability: Service cost $ 1,846 $ 1,702 $ 1,669 Interest 3,604 3,140 3,278 Differences between expected and actual experience (10,638) 153 5,834 Changes of assumptions 3,599 (1,429) (1,587) Benefit payments (3,758) (1,868) (1,866) Implicit subsidy credit - (1,506) (1,580) Net change in total OPEB liability (5,347) 192 5,748 Total OPEB liability – beginning 57,662 52,315 52,507 Total OPEB liability – ending (a) $ 52,315 $ 52,507 $ 58,255 Plan Fiduciary net position: Employer contributions 4,461 4,134 4,109 Net investment income (3,853) 1,639 3,044 Benefit payments (3,758) (1,868) (1,866) Implicit subsidy credit - (1,506) (1,580) Administrative expense (7) (7) (9) Other deductions - - - Net change in plan fiduciary net position (3,157) 2,392 3,698 Plan fiduciary net position – beginning 28,078 24,921 27,313 Plan fiduciary net position – ending (b) $ 24,921 $ 27,313 $ 31,011 County’s net OPEB liability – ending (a) – (b) $ 27,394 $ 25,194 $ 27,244 Plan fiduciary net position as a percentage of the total OPEB liability 47.6% 52.0% 53.2% Covered-employee payroll 2 $ 212,907 $ 229,810 $ 240,438 County’s net OPEB liability as a percentage of covered-employee payroll 12.9% 11.0% 11.3% 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 discount rate increased from 6.25% in FY 2023-24 to 6.40% in FY 2024-25. The inflation rate increased from 2.30% in FY 2023-24 to 2.50% in FY 2024-25. The Notes to RSI are integral to the above schedule. 101 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 $ (616) $ 229,810 1.80% 2024 $ 4,983 $ 4,110 $ (873) $ 240,438 1.71% 2025 $ 6,299 $ 4,704 $ (1,595) $ 245,908 1.91% 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 discount rate increased from 6.25% in FY 2023-24 to 6.40% in FY 2024-25. The inflation rate increased from 2.30% in FY 2023-24 to 2.50% in FY 2024-25. The Notes to RSI are integral to the above schedule. 102 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 267,139 $ 267,139 $ 271,225 $ 4,086 Licenses, permits, and franchises 1 5,901 1 5,901 1 4,141 (1,760) Fines, forfeitures, and penalties 3,558 3,621 3,939 318 Use of money and property 9,902 9,902 2 0,353 1 0,451 Aid from other governments 349,000 404,195 385,663 (18,532) Charges for services 4 1,406 4 3,310 4 2,638 (672) Other revenue 9,190 5 5,129 2 0,571 (34,558) Total Revenues 696,096 799,197 758,530 (40,667) Expenditures: Current: General government 6 6,836 8 4,848 7 2,840 1 2,008 Public protection 262,256 329,270 256,490 7 2,780 Public ways and facilities 6,220 1 1,632 5,612 6,020 Health and sanitation 162,783 177,474 151,354 2 6,120 Public assistance 171,429 175,986 157,957 1 8,029 Education 643 643 554 89 Recreation and Culture 6,808 1 7,791 1 3,205 4,586 Debt Service: Principal Payments - - 7,827 (7,827) Interest and Fiscal Charges - - 944 (944) Contingencies 3 2,920 2 8,346 - 2 8,346 Total Expenditures 709,895 825,990 666,783 159,207 Excess (Deficiency) of Revenues Over (Under) Expenditures (13,799) (26,793) 91,747 118,540 Other Financing Sources (Uses): Leases - - 8,903 8,903 SBITAs - - 8,611 8,611 Transfers in 525 4,119 739 (3,380) Transfers out (26,841) (57,830) (38,619) 1 9,211 Total Other Financing Sources (Uses) (26,316) (53,711) (20,366) 33,345 Net change in fund balances (40,115) (80,504) 71,381 151,885 Fund balances, beginning 381,868 381,868 381,868 - Fund balances, ending $ 341,753 $ 301,364 $ 453,249 $ 151,885 103 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, 2025 (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 $ 758,530 Revenues for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 8,632 Total Revenues as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 767,162 Uses/outflows of resources Actual amounts (budgetary basis) "Total Expenditures" from the budgetary comparison schedule $ 666,783 Expenditures for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 13,814 Total Expenditures as reported in the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 680,597 Other financing sources/(uses) of resources Actual amounts (budgetary basis) "Total Other Financing Sources (Uses)" from the Budgetary Comparison Schedule $ ( 20,366) Other financing sources (uses) for funds not meeting the special revenue fund definition which are presented with the General Fund for financial reporting purposes 1,093 Total Other Financing Sources (Uses) as reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds $ ( 19,273) 104 COUNTY OF SAN LUIS OBISPO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2025 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, 2025 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. 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. 105 ________________________________________________________________ OTHER SUPPLEMENTARY INFORMATION ________________________________________________________________ ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS ________________________________________________________________ NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS: Special revenue funds are used to account for revenues that are restricted by law or administrative actions to expenditures for specified purposes. Nonmajor special revenue funds used by the County are listed below: Homeless and Affordable Housing (formerly known as Community Development) Accounts for pass-through grants from Housing and Urban Development (HUD) entitlements and other housing and shelter program grants 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. Fish & Game Accounts for funds generated by fines levied as a result of Fish and Game violations. Road Impact Fees Accounts for resources collected from developers to add, maintain, and improve roads in specific areas where the fees were allocated. Library Accounts for resources used to provide library services throughout the County. Parks Accounts for resources used to provide parks and recreational services countywide. Public Facilities Fees Accounts for resources collected from the building permit process to build public facilities such as fire and law enforcement stations, library, and general government structures. Roads Accounts for resources used to maintain the County road system. Wildlife & Grazing Accounts for resources used to provide for range improvements and the control of predators. 106 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. 107 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2025 (IN THOUSANDS) Special Revenue Homeless Emergency Road and Affordable Medical Fish and Impact Housing Services Game Fees Assets Cash and cash equivalents $ 1 4,599 $ 293 $ 207 $ 1 3,393 Restricted cash with fiscal agent - - - - Accounts receivable, net - - - - Other receivables - - - - Due from other governments 3,742 313 - - Deposits with others - - - - Loans receivable, net of allowance for uncollectibles 30,086 - - - Leases receivable - - - - Advances to other funds - - - - Prepaid items 10 - - - Total assets $ 4 8,437 $ 606 $ 207 $ 1 3,393 Liabilities Accounts payable $ 5,220 $ 291 $ 3 $ - Salaries and benefits payable 75 - - - Due to other funds - - - - Deposits from others 558 - - - Unearned revenue 5,994 - - - Advances from other funds - - - - Total liabilities 11,847 291 3 - Deferred Inflows of Resources Unavailable revenue 185 - - - Lease revenue - - - - Total deferred inflows of resources 185 - - - Fund Balances Nonspendable 10 - - - Restricted - - - 13,393 Committed 36,395 315 204 - Total fund balances 36,405 315 204 13,393 Total liabilities, deferred inflows of resources, and fund balances $ 4 8,437 $ 606 $ 207 $ 1 3,393 108 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2025 (IN THOUSANDS) Special Revenue Public Facilities Library Parks Fees Roads Assets Cash and cash equivalents $ 9,183 $ 2,970 $ 5,232 $ 18,238 Restricted cash with fiscal agent - - - - Accounts receivable, net - 57 - - Other receivables - 24 - - Due from other governments 109 504 - 17,554 Deposits with others - - - 6 Loans receivable, net of allowance for uncollectibles - - - - Leases receivable - 100 - - Advances to other funds - - - - Prepaid items 8 - - - Total assets $ 9,300 $ 3,655 $ 5,232 $ 35,798 Liabilities Accounts payable $ 76 $ 54 $ - $ 4,302 Salaries and benefits payable 200 103 - - Due to other funds - - - - Deposits from others 1 6 579 - 90 Unearned revenue - - - 67 Advances from other funds - 811 - 14,815 Total liabilities 292 1,547 - 19,274 Deferred Inflows of Resources Unavailable revenue - 6 - 1,733 Lease revenue - 89 - - Total deferred inflows of resources - 95 - 1,733 Fund Balances Nonspendable 8 - - - Restricted 7 3 716 5,232 - Committed 8,927 1,297 - 14,791 Total fund balances 9,008 2,013 5,232 14,791 Total liabilities, deferred inflows of resources, and fund balances $ 9,300 $ 3,655 $ 5,232 $ 35,798 109 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2025 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County Grazing Districts Districts Service Areas Assets Cash and cash equivalents $ 52 $ 14,865 $ 552 $ 3,115 Restricted cash with fiscal agent - - - - Accounts receivable, net - - - - Other receivables - - - - Due from other governments - 234 - - Deposits with others - - - - Loans receivable, net of allowance for uncollectibles - - - - Leases receivable - - - - Advances to other funds - 181 - 1,253 Prepaid items - - - - Total assets $ 52 $ 15,280 $ 552 $ 4,368 Liabilities Accounts payable $ - $ 240 $ 3 $ 13 Salaries and benefits payable - - - - Due to other funds - - - - Deposits from others - - - - Unearned revenue - - - - Advances from other funds - - - - Total liabilities - 240 3 13 Deferred Inflows of Resources Unavailable revenue - 148 - - Lease revenue - - - - Total deferred inflows of resources - 148 - - Fund Balances Nonspendable - - - - Restricted 52 9,201 - 138 Committed - 5,691 549 4,217 Total fund balances 52 14,892 549 4,355 Total liabilities, deferred inflows of resources, and fund balances $ 52 $ 15,280 $ 552 $ 4,368 110 COUNTY OF SAN LUIS OBISPO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2025 (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 $ 4 0 $ 34,279 $ 3 5 $ 117,053 Restricted cash with fiscal agent 1 16 46,855 46,872 Accounts receivable, net - - - 57 Other receivables - - - 24 Due from other governments - - - 22,456 Deposits with others - - - 6 Loans receivable, net of allowance for uncollectibles - - - 30,086 Leases receivable - - - 1 00 Advances to other funds - - - 1,434 Prepaid items - - - 18 Total assets $ 4 1 $ 34,295 $ 46,890 $ 218,106 Liabilities Accounts payable $ - $ - $ - $ 10,202 Salaries and benefits payable - - - 3 78 Due to other funds - - 6,019 6,019 Deposits from others - - - 1,243 Unearned revenue - - - 6,061 Advances from other funds - - - 15,626 Total liabilities - - 6,019 39,529 Deferred Inflows of Resources Unavailable revenue - - - 2,072 Lease revenue - - - 89 Total deferred inflows of resources - - - 2,161 Fund Balances Nonspendable - - - 18 Restricted 41 34,295 40,871 104,012 Committed - - - 72,386 Total fund balances 41 34,295 40,871 176,416 Total liabilities, deferred inflows of resources, and fund balances $ 4 1 $ 34,295 $ 46,890 $ 218,106 111 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) Special Revenue Homeless Emergency Road and Affordable Medical Fish and Impact Housing Services Game Fees Revenues Taxes $ - $ - $ - $ - Fines, forfeitures, and penalties - 6 69 42 - Use of money and property 9 12 13 3 679 Aid from other governments 11,129 - - - Charges for services 3 05 - - 1,594 Other revenues 10,208 - - - Total revenues 22,554 6 82 45 2,273 Expenditures Current: Public protection - - 37 - Public ways and facilities - - - - Health and sanitation 20,833 - - - Public assistance - 9 21 - - Education - - - - Recreation and cultural services - - - - Debt service: Principal payments 1 17 - - - Interest and fiscal charges 9 - - - Total expenditures 20,959 9 21 37 - Excess (deficiency) of revenues over (under) expenditures 1,595 (239) 8 2,273 Other financing sources (uses) Leases 668 - - - SBITAs 12 - - - Transfers in 6,435 - - - Transfers out (110) - - (1,620) Total other financing sources (uses) 7,005 - - (1,620) Net change in fund balances 8,600 (239) 8 653 Fund balances - beginning 27,805 5 54 196 12,740 Fund balances - ending $ 36,405 $ 315 $ 204 $ 13,393 112 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, 2025 (IN THOUSANDS) Special Revenue Public Facilities Library Parks Fees Roads Revenues Taxes $ 12,656 $ - $ - $ 2,341 Fines, forfeitures, and penalties - 1 - - Use of money and property 385 194 368 950 Aid from other governments 336 1,374 - 51,555 Charges for services 102 6,487 1,012 443 Other revenues 358 9 - 258 Total revenues 13,837 8,065 1,380 55,547 Expenditures Current: Public protection - - - - Public ways and facilities - - - 67,836 Health and sanitation - - - - Public assistance - - - - Education 12,602 - - - Recreation and cultural services - 8,159 - - Debt service: Principal payments 85 - - 56 Interest and fiscal charges 1 - - 12 Total expenditures 12,688 8,159 - 67,904 Excess (deficiency) of revenues over (under) expenditures 1,149 (94) 1,380 (12,357) Other financing sources (uses) Leases - - - - SBITAs - - - - Transfers in 564 298 - 8,476 Transfers out (293) (665) (5,093) (109) Total other financing sources (uses) 271 (367) (5,093) 8,367 Net change in fund balances 1,420 (461) (3,713) (3,990) Fund balances - beginning 7,588 2,474 8,945 18,781 Fund balances - ending $ 9,008 $ 2,013 $ 5,232 $ 14,791 113 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, 2025 (IN THOUSANDS) Special Revenue Flood Wildlife Control Lighting County and Grazing Districts Districts Service Areas Revenues Taxes $ - $ 5,110 $ 49 $ 1,336 Fines, forfeitures, and penalties - - - - Use of money and property 3 810 27 157 Aid from other governments 2 1,549 - 4 Charges for services - 636 13 44 Other revenues - 110 - 6 Total revenues 5 8,215 89 1,547 Expenditures Current: Public protection 3 12,489 40 - Public ways and facilities - - - 877 Health and sanitation - - - - Public assistance - - - - Education - - - - Recreation and cultural services - - - - Debt service: Principal payments - - - - Interest and fiscal charges - - - - Total expenditures 3 12,489 40 877 Excess (deficiency) of revenues over (under) expenditures 2 (4,274) 49 670 Other financing sources (uses) Leases - - - - SBITAs - - - - Transfers in - 625 - - Transfers out - - - (53) Total other financing sources (uses) - 625 - (53) Net change in fund balances 2 (3,649) 49 617 Fund balances - beginning 50 18,541 500 3,738 Fund balances - ending $ 52 $ 14,892 $ 549 $ 4,355 114 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, 2025 (IN THOUSANDS) Debt Service Total Debt Service Debt Service Debt Service Nonmajor Public Facilities Pension Obligation Financing Governmental Corporation Bonds Authority Funds Revenues Taxes $ - $ - $ - $ 21,492 Fines, forfeitures, and penalties - - - 7 12 Use of money and property 1 1,493 3,191 9,186 Aid from other governments - - - 65,949 Charges for services 4 19 - 6,558 17,613 Other revenues - 7 65 - 11,714 Total revenues 4 20 2,258 9,749 126,666 Expenditures Current: Public protection - - - 12,569 Public ways and facilities - - - 68,713 Health and sanitation - - - 20,833 Public assistance - - - 9 21 Education - - - 12,602 Recreation and cultural services - - - 8,159 Debt service: Principal payments 2 32 3,516 3,119 7,125 Interest and fiscal charges 1 77 8,021 4,187 12,407 Total expenditures 4 09 11,537 7,306 143,329 Excess (deficiency) of revenues over (under) expenditures 11 (9,279) 2,443 (16,663) Other financing sources (uses) Leases - - - 6 68 SBITAs - - - 12 Transfers in - 14,831 - 31,229 Transfers out - - (32,077) (40,020) Total other financing sources (uses) - 14,831 (32,077) ( 8,111) Net change in fund balances 11 5,552 (29,634) (24,774) Fund balances - beginning 30 28,743 70,505 201,190 Fund balances - ending $ 4 1 $ 34,295 $ 40,871 $ 176,416 115 ________________________________________________________________ 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ - $ - $ 396 $ 396 Use of money and property - - 8 02 8 02 Aid from other governments - 3,852 5,109 1,257 Charges for services 6 02 14,259 2,796 (11,463) Other revenues - 3 71 - (371) Total Revenues 6 02 18,482 9,103 (9,379) Expenditures: Capital outlay 7,518 124,078 49,700 74,378 Total Expenditures 7,518 124,078 49,700 74,378 Excess (Deficiency) of Revenues Over (Under) Expenditures (6,916) (105,596) (40,597) 64,999 Other Financing Sources (Uses): Transfers in 5,758 101,110 45,710 (55,400) Transfers out - (1,220) (470) 7 50 Total Other Financing Sources (Uses) 5,758 99,890 45,240 (54,650) Net change in fund balances (1,158) (5,706) 4,643 10,349 Fund balances, beginning 16,371 16,371 16,371 - Fund balances, ending $ 15,213 $ 10,665 $ 21,014 $ 10,349 116 COUNTY OF SAN LUIS OBISPO Homeless and Affordable Housing Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 912 $ 912 Aid from other governments 5,697 47,137 11,129 (36,008) Charges for services - 2 97 3 05 8 Other revenues 50 9 76 10,208 9,232 Total Revenues 5,747 48,410 22,554 (25,856) Expenditures: Current: Health and sanitation Salaries, wages, and benefits 3,455 3,455 2,966 4 89 Services and supplies 1,013 1,013 8 09 2 04 Other charges 6,505 56,016 16,378 39,638 Capital outlay - - 6 80 (680) Debt service - - 126 (126) Reimbursements (297) - - - Total Expenditures 10,676 60,484 20,959 39,525 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,929) (12,074) 1,595 13,669 Other Financing Sources (Uses): Transfers in 4,926 9,984 6,435 (3,549) Transfers out - - (110) (110) Lease issuance - - 668 6 68 SBITA issuance - - 12 12 Total Other Financing Sources (Uses) 4,926 9,984 7,005 (2,979) Net change in fund balances (3) (2,090) 8,600 10,690 Fund balances, beginning 27,805 27,805 27,805 - Fund balances, ending $ 27,802 $ 25,715 $ 36,405 $ 10,690 117 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 575 $ 575 $ 669 $ 9 4 Use of money and property 2 2 13 11 Total Revenues 5 77 5 77 6 82 1 05 Expenditures: Current: Public assistance Services and supplies 5 76 8 69 9 21 (52) Total Expenditures 5 76 8 69 9 21 (52) Net change in fund balances 1 (292) (239) 53 Fund balances, beginning 5 54 5 54 5 54 - Fund balances, ending $ 555 $ 262 $ 315 $ 53 118 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 2 7 $ 2 7 $ 4 2 $ 1 5 Use of money and property - - 3 3 Total Revenues 27 27 45 18 Expenditures: Current: Public protection Services and supplies 39 39 37 2 Total Expenditures 39 39 37 2 Net change in fund balances (12) (12) 8 20 Fund balances, beginning 1 96 1 96 1 96 - Fund balances, ending $ 184 $ 184 $ 204 $ 20 119 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 679 $ 679 Charges for services - - 1,594 1,594 Total Revenues - - 2,273 2,273 Other Financing Sources (Uses): Transfers out (471) (5,726) (1,620) 4,106 Total Other Financing Sources (Uses) (471) (5,726) (1,620) 4,106 Net change in fund balances (471) (5,726) 6 53 6,379 Fund balances, beginning 12,740 12,740 12,740 - Fund balances, ending $ 12,269 $ 7,014 $ 13,393 $ 6,379 120 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 12,439 $ 12,439 $ 12,656 $ 217 Use of money and property 48 48 3 85 3 37 Aid from other governments 3 07 2,013 3 36 (1,677) Charges for services 90 90 1 02 12 Other revenues 15 4 58 3 58 (100) Total Revenues 12,899 15,048 13,837 (1,211) Expenditures: Current: Education Salaries, wages, and benefits 8,792 8,748 7,936 8 12 Services and supplies 4,550 4,925 4,253 6 72 Other charges 1 62 5,217 2 50 4,967 Capital Outlay - 2 43 1 63 80 Debt Service - - 86 (86) Contingencies 5 72 5 72 - 5 72 Total Expenditures 14,076 19,705 12,688 7,017 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,177) (4,657) 1,149 5,806 Other Financing Sources (Uses): Transfers in 5 63 1,363 5 64 (799) Transfers out - - (293) (293) Total Other Financing Sources (Uses) 5 63 1,363 2 71 (1,092) Net change in fund balances (614) (3,294) 1,420 4,714 Fund balances, beginning 7,588 7,588 7,588 - Fund balances, ending $ 6,974 $ 4,294 $ 9,008 $ 4,714 121 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Fines, forfeitures, and penalties $ 1 $ 123 $ 1 $ (122) Use of money and property 66 66 1 94 1 28 Aid from other governments 29 1,219 1,374 1 55 Charges for services 7,254 7,361 6,487 (874) Other revenues 9 9 9 - Total Revenues 7,359 8,778 8,065 (713) Expenditures: Current: Recreation and cultural services Salaries, wages, and benefits 3,587 3,456 3,424 32 Services and supplies 3,880 6,212 4,628 1,584 Other charges 43 43 42 1 Capital outlay - 8 78 65 8 13 Total Expenditures 7,510 10,589 8,159 2,430 Excess (Deficiency) of Revenues Over (Under) Expenditures (151) (1,811) (94) 1,717 Other Financing Sources (Uses): Transfers in 2 59 1,333 2 98 (1,035) Transfers out (21) (1,036) (665) 3 71 Total Other Financing Sources (Uses) 2 38 2 97 (367) (664) Net change in fund balances 87 (1,514) (461) 1,053 Fund balances, beginning 2,474 2,474 2,474 - Fund balances, ending $ 2,561 $ 960 $ 2,013 $ 1,053 122 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ - $ - $ 368 $ 368 Charges for services 1,209 1,209 1,012 (197) Total Revenues 1,209 1,209 1,380 1 71 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,209 1,209 1,380 1 71 Other Financing Sources (Uses): Transfers out (1,035) (7,411) (5,093) 2,318 Total Other Financing Sources (Uses) (1,035) (7,411) (5,093) 2,318 Net change in fund balances 1 74 (6,202) (3,713) 2,489 Fund balances, beginning 8,945 8,945 8,945 - Fund balances, ending $ 9,119 $ 2,743 $ 5,232 $ 2,489 123 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 2,141 $ 2,141 $ 2,341 $ 200 Use of money and property 1 00 1 00 9 50 8 50 Aid from other governments 23,221 95,913 51,555 (44,358) Charges for services 3 59 3 59 4 43 84 Other revenues - 87 2 58 1 71 Total Revenues 25,821 98,600 55,547 (43,053) Expenditures: Current: Public ways and facilities Services and supplies 27,168 43,353 67,652 (24,299) Other charges 5 50 5 50 1 84 3 66 Capital outlay 6,500 104,100 - 104,100 Debt Service - - 68 (68) Total Expenditures 34,218 148,003 67,904 80,099 Excess (Deficiency) of Revenues Over (Under) Expenditures (8,397) (49,403) (12,357) 37,046 Other Financing Sources (Uses): Transfers in 7,327 11,975 8,476 (3,499) Transfers out (113) (113) (109) 4 Total Other Financing Sources (Uses) 7,214 11,862 8,367 (3,495) Net change in fund balances (1,183) (37,541) (3,990) 33,551 Fund balances, beginning 18,781 18,781 18,781 - Fund balances, ending $ 17,598 $ (18,760) $ 14,791 $ 33,551 124 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 1 $ 1 $ 3 $ 2 Aid from other governments 4 4 2 (2) Total Revenues 5 5 5 - Expenditures: Current: Public protection Services and supplies 7 7 3 4 Total Expenditures 7 7 3 4 Net change in fund balances (2) (2) 2 4 Fund balances, beginning 50 50 50 - Fund balances, ending $ 48 $ 48 $ 52 $ 4 125 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 4,792 $ 4,792 $ 5,110 $ 318 Use of money and property 1 63 1 63 8 10 6 47 Aid from other governments 1,397 5,256 1,549 (3,707) Charges for services 6 34 6 34 6 36 2 Other revenues 5,164 5,164 1 10 (5,054) Total Revenues 12,150 16,009 8,215 (7,794) Expenditures: Current: Public protection Services and supplies 10,407 13,272 10,958 2,314 Other charges 73 2,173 24 2,149 Capital outlay 4,938 7,721 1,507 6,214 Total Expenditures 15,418 23,166 12,489 10,677 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,268) (7,157) (4,274) 2,883 Other Financing Sources (Uses): Transfers in 5 72 2,383 6 25 (1,758) Total Other Financing Sources (Uses) 5 72 2,383 6 25 (1,758) Net change in fund balances (2,696) (4,774) (3,649) 1,125 Fund balances, beginning 18,541 18,541 18,541 - Fund balances, ending $ 15,845 $ 13,767 $ 14,892 $ 1,125 126 COUNTY OF SAN LUIS OBISPO Lighting Districts Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 5 0 $ 5 0 $ 4 9 $ (1) Use of money and property - - 27 27 Charges for services 10 10 13 3 Total Revenues 60 60 89 29 Expenditures: Current: Public protection Services and supplies 55 55 40 15 Total Expenditures 55 55 40 15 Net change in fund balances 5 5 49 44 Fund balances, beginning 5 00 5 00 5 00 - Fund balances, ending $ 505 $ 505 $ 549 $ 44 127 COUNTY OF SAN LUIS OBISPO County Service Areas Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget to Actual Comparison For the Year Ended June 30, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Taxes $ 1,304 $ 1,304 $ 1,336 $ 3 2 Use of money and property 43 43 1 57 1 14 Aid from other governments 4 4 4 - Charges for services 51 51 44 (7) Other revenues 3 3 6 3 Total Revenues 1,405 1,405 1,547 1 42 Expenditures: Current: Public ways and facilities Services and supplies 1,274 1,274 8 77 3 97 Total Expenditures 1,274 1,274 8 77 3 97 Excess (Deficiency) of Revenues Over (Under) Expenditures 1 31 1 31 6 70 5 39 Other Financing Sources (Uses): Transfers out (834) (834) (53) 7 81 Total Other Financing Sources (Uses) (834) (834) (53) 7 81 Net change in fund balances (703) (703) 6 17 1,320 Fund balances, beginning 3,738 3,738 3,738 - Fund balances, ending $ 3,035 $ 3,035 $ 4,355 $ 1,320 128 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, 2025 (in thousands) Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues: Use of money and property $ 500 $ 500 $ 1,493 $ 993 Other revenues 15,090 15,090 7 65 (14,325) Total Revenues 15,590 15,590 2,258 (13,332) Expenditures: Debt Service: Principal payments 3,535 3,535 3,516 19 Interest and fiscal charges 7,347 7,347 8,021 (674) Total Expenditures 10,882 10,882 11,537 (655) Excess (Deficiency) of Revenues Over (Under) Expenditures 4,708 4,708 (9,279) (13,987) Other Financing Sources (Uses): Transfers in - - 14,831 14,831 Total Other Financing Sources (Uses) - - 14,831 14,831 Net change in fund balances 4,708 4,708 5,552 8 44 Fund balances, beginning 28,743 28,743 28,743 - Fund balances, ending $ 33,451 $ 33,451 $ 34,295 $ 844 129 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS NONMAJOR ENTERPRISE FUNDS ________________________________________________________________ NONMAJOR ENTERPRISE FUNDS ENTERPRISE FUNDS: Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is to have the costs of providing goods or services to the general public on a continuing basis be financed primarily through user charges, or where the County has decided that 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. 130 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION NONMAJOR ENTERPRISE FUNDS JUNE 30, 2025 (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 $ 3,716 $ 7,624 $ 1,729 $ 28 $ 4,503 $ 1 7,600 Accounts receivable, net - - 38 - 467 505 Inventories - - 115 - - 115 Due from other governments 337 392 4 - 239 972 Prepaid items - - 145 - - 145 Deposits with others - - - - 86 86 Total current assets 4,053 8,016 2,031 28 5,295 19,423 Noncurrent assets: Restricted cash with fiscal agent - 1 - - - 1 Capital assets: Nondepreciable Land - 2,155 1,333 - 534 4,022 Construction in progress - 2,422 240 - 5,214 7,876 Other property - 1,968 - - - 1,968 Depreciable Infrastructure, net - 16,786 4 - 3,110 19,900 Structures and improvements, net - 29,952 6,710 - 8,705 45,367 Equipment, net - 281 587 - 438 1,306 Other property, net - - - - 496 496 Lease assets, net - - 248 - - 248 Total noncurrent assets - 53,565 9,122 - 18,497 81,184 Total assets 4,053 61,581 11,153 28 23,792 1 00,607 Deferred Outflows of Resources Deferred pensions - - 1,147 - - 1,147 Deferred OPEB - - 81 - - 81 Total deferred outflows of resources - - 1,228 - - 1,228 Liabilities Current liabilities: Accounts payable 58 773 165 - 566 1,562 Salaries and benefits payable - - 64 - - 64 Deposits from others - 469 69 - 163 701 Interest payable - 196 6 - 21 223 Unearned revenue - - - - 5 5 Accrued vacation and sick leave - current - - 134 - - 134 Lease liability - current - - 116 - - 116 Notes and bonds payable - current - 2,813 405 - 113 3,331 Total current liabilities 58 4,251 959 - 868 6,136 Noncurrent liabilities: Advances from other funds - - 121 - 1,839 1,960 Accrued vacation and sick leave - - 269 - - 269 Lease liability - - 136 - - 136 Notes and bonds payable - 14,294 456 - 5,021 19,771 Net OPEB liability - - 151 - - 151 Net pension liability - - 4,727 - - 4,727 Total noncurrent liabilities - 14,294 5,860 - 6,860 27,014 Total liabilities 58 18,545 6,819 - 7,728 33,150 Deferred Inflows of Resources Deferred pensions - - 5 - - 5 Deferred OPEB - - 49 - - 49 Bond Refunding - - 89 - - 89 Total deferred inflows of resources - - 143 - - 143 Net Position Net investment in capital assets - 36,457 7,920 - 13,006 57,383 Unrestricted 3,995 6,579 (2,501) 28 3,058 11,159 Total net position $ 3,995 $ 4 3,036 $ 5,419 $ 28 $ 1 6,064 $ 6 8,542 131 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) General Flood Control Zone - Lopez County Salinas Dam Flood Control Golf Lopez Park Service Areas Total Operating revenues Charges for services $ 1,873 $ 8,490 $ 5,702 $ - $ 5,584 $ 2 1,649 Other revenues 3 - 2 - 64 69 Total operating revenues 1,876 8,490 5,704 - 5,648 21,718 Operating expenses Salaries and benefits - - 2,960 - - 2,960 Services and supplies 1,777 9,510 2,195 - 5,946 19,428 Other charges - 3 - - - 3 Depreciation - 1,420 514 - 564 2,498 Amortization - - 151 - - 151 Countywide cost allocation 31 98 111 - 130 370 Total operating expenses 1,808 11,031 5,931 - 6,640 25,410 Operating income (loss) 68 (2,541) (227) - (992) (3,692) Nonoperating revenues (expenses) Property taxes - 1,582 - - 694 2,276 Investment income (expense) 184 436 67 1 211 899 Interest expense - (647) (8) - (138) (793) Aid from governmental agencies 427 137 62 - 491 1,117 Sale of capital assets - - (3) - (4) (7) Total nonoperating revenues (expenses) 611 1,508 118 1 1,254 3,492 Income (loss) before contributions and transfers 679 (1,033) (109) 1 262 (200) Transfers in - - 11 - 1,967 1,978 Transfers out - - (66) - (8) (74) Change in net position 679 (1,033) (164) 1 2,221 1,704 Net position - beginning, as originally reported 3,316 44,069 5,684 27 13,843 66,939 Change in accounting principle - - (101) - - (101) Net position - beginning, as restated 3,316 44,069 5,583 27 13,843 66,838 Net position - ending $ 3,995 $ 4 3,036 $ 5,419 $ 28 $ 1 6,064 $ 6 8,542 132 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (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 $ 1,876 $ 8,381 $ 5,766 $ - $ 5,560 $ 2 1,583 Payments for goods and services (1,766) (8,859) (2,273) - (5,948) (18,846) Payments to employees for services - - (2,559) - - (2,559) Net cash provided (used) by operating activities 110 (478) 934 - (388) 178 Cash Flows from Noncapital Financing Activities Property tax proceeds - 1,582 - - 694 2,276 Grants and subsidies to other governmental agencies 126 (251) 55 - 168 98 Advances from other funds - - - - 474 474 Transfers from other funds - - 11 - 1,967 1,978 Transfers to other funds - - (66) - (8) (74) Net cash provided (used) by noncapital financing activities 126 1,331 - - 3,295 4,752 Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets - (170) (391) - (2,521) (3,082) Principal paid on capital debt - (2,762) (423) - (110) (3,295) Interest paid on capital debt - (676) (25) - (138) (839) Net cash provided (used) by capital and related financing activities - (3,608) (839) - (2,769) (7,216) Cash Flows from Investing Activities Interest received 184 436 67 1 211 899 Net cash provided (used) by investing activities 184 436 67 1 211 899 Net increase (decrease) in cash and cash equivalents 420 (2,319) 162 1 349 (1,387) Cash and cash equivalents at beginning of year 3,296 9,944 1,567 27 4,154 18,988 Cash and cash equivalents at end of year $ 3,716 $ 7,625 $ 1,729 $ 28 $ 4,503 $ 1 7,601 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 68 $ (2,541) $ (227) $ - $ (992) $ (3,692) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense - 1,420 665 - 564 2,649 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net 1 66 - (71) (4) Inventory - - (20) - - (20) Prepaid items - - 149 - - 149 Deferred outflows - pensions - - 8 - - 8 Deferred outflows - OPEB - - (1) - - (1) Leases - - (12) - - (12) Increase (decrease) in: Accounts payable 42 673 (101) - 118 732 Deposits from others - 80 14 - 11 105 Salaries and benefits payable - - 40 - - 40 Deferred inflows - pensions - - (3) - - (3) Deferred inflows - OPEB - - (3) - - (3) Net OPEB liability - - 14 - - 14 Net pension liability - - 345 - - 345 Unearned revenue - (111) - - (18) (129) Total adjustments 42 2,063 1,161 - 604 3,870 Net cash provided (used) by operating activities $ 110 $ (478) $ 934 $ - $ (388) $ 178 Noncash Investing, Capital and Financing Activities Leases $ - $ - $ 357 $ - $ - $ 357 133 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS INTERNAL SERVICE FUNDS ________________________________________________________________ INTERNAL SERVICE FUNDS INTERNAL SERVICE FUNDS: Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments on a cost-reimbursement basis. Internal Service Funds used at the County are listed below: Garage Accounts for resources used to provide a vehicle fleet of cars, trucks, and law enforcement vehicles for use by various County departments at the lowest possible maintenance and operating costs. Public Works Accounts for resources used to provide comprehensive engineering services in the form of manpower, equipment and contractual services and supplies to all departments, agencies, and private citizens as requested or required by state law or local ordinance. Insurance Funds Account for the operations of the County’s Workers’ Compensation, Protected Self-Insurance, Unemployment, Dental Insurance, and Other Post-Employment Benefits (OPEB) programs. 134 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2025 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Assets Current assets: Cash and cash equivalents $ 8,354 $ 27,079 $ 21,337 $ 56,770 Accounts receivable, net 6 20 - 26 Inventories 19 8 57 - 8 76 Prepaid items - 11 - 11 Total current assets 8,379 27,967 21,337 57,683 Noncurrent assets: Capital assets: Structures and improvements, net 2 14 1 68 - 3 82 Equipment, net 8,564 10,283 - 18,847 Lease assets, net - 5 12 - 5 12 SBITA assets, net - - 17 17 Total noncurrent assets 8,778 10,963 17 19,758 Total assets 17,157 38,930 21,354 77,441 Deferred Outflows of Resources Deferred pensions 8 16 21,054 - 21,870 Deferred OPEB 68 1,314 - 1,382 Total deferred outflows of resources 8 84 22,368 - 23,252 Liabilities Current liabilities: Accounts payable 8 28 1,212 3 83 2,423 Salaries and benefits payable 39 9 95 7 1,041 Deposits from others 3 6,850 1 6,854 Self-insurance liability - current - - 5,570 5,570 Lease liability - current - 1 26 - 1 26 SBITA liability - current - - 13 13 Accrued vacation and sick leave - current 1 14 2,615 - 2,729 Total current liabilities 9 84 11,798 5,974 18,756 Noncurrent liabilities: Self-insurance liability - - 21,255 21,255 Lease liability - 4 30 - 4 30 SBITA liability - - 4 4 Accrued vacation and sick leave 1 00 2,102 - 2,202 Net OPEB liability 1 28 2,456 - 2,584 Net pension liability 3,363 86,753 - 90,116 Total noncurrent liabilities 3,591 91,741 21,259 116,591 Total liabilities 4,575 103,539 27,233 135,347 Deferred Inflows of Resources Deferred pensions 3 87 - 90 Deferred OPEB 42 8 04 - 8 46 Total deferred inflows of resources 45 8 91 - 9 36 Net Position Net investment in capital assets 8,243 9,799 - 18,042 Unrestricted 5,178 (52,931) ( 5,879) (53,632) Total net position $ 13,421 $ (43,132) $ (5,879) $ (35,590) 135 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Operating revenues Charges for services $ 9,605 $ 54,625 $ 24,888 $ 89,118 Other revenues 26 1 87 - 2 13 Total operating revenues 9,631 54,812 24,888 89,331 Operating expenses Salaries and benefits 1,909 47,335 4 34 49,678 Services and supplies 4,878 10,096 17,763 32,737 Insurance benefit payments - - 6,550 6,550 Depreciation 1,738 1,224 - 2,962 Amortization - 1 25 13 1 38 Countywide cost allocation 1 67 2 67 4 21 8 55 Total operating expenses 8,692 59,047 25,181 92,920 Operating income (loss) 9 39 ( 4,235) (293) ( 3,589) Nonoperating revenues (expenses) Investment income (expense) 4 10 9 51 1,040 2,401 Interest expense - (4) - (4) Sale of capital assets 5 17 (10) - 5 07 Total nonoperating revenues (expenses) 9 27 9 37 1,040 2,904 Income (loss) before capital contributions and transfers 1,866 (3,298) 7 47 (685) Transfers out (59) ( 1,421) - ( 1,480) Change in net position 1,807 ( 4,719) 7 47 ( 2,165) Net position - beginning, as originally reported 11,650 (37,361) (6,626) (32,337) Change in accounting principle (36) ( 1,052) - ( 1,088) Net position - beginning, as restated 11,614 (38,413) ( 6,626) (33,425) Net position - ending $ 13,421 $ (43,132) $ (5,879) $ (35,590) 136 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) Combined Public Insurance Garage Works (5 Funds) Total Cash Flows From Operating Activities Receipts from interfund billings $ 9,630 $ 54,811 $ 25,376 $ 89,817 Payments for goods and services ( 4,637) ( 8,041) ( 8,518) (21,196) Payments to employees for services ( 1,686) (38,781) (435) (40,902) Payments for insurance benefits - - ( 5,086) ( 5,086) Payments for premiums - - ( 9,849) ( 9,849) Net cash provided (used) by operating activities 3,307 7,989 1,488 12,784 Cash Flows from Noncapital Financing Activities Transfers to other funds (59) ( 1,421) - ( 1,480) Net cash provided (used) by noncapital financing activities (59) ( 1,421) - ( 1,480) Cash Flows from Capital and Related Financing Activities Purchases and construction of capital assets ( 3,939) ( 2,076) - ( 6,015) Proceeds from sale of capital assets 5 17 - - 5 17 Principal paid on capital debt - (121) (14) (135) Interest paid on capital debt - (4) - (4) Net cash provided (used) by capital and related financing activities ( 3,422) ( 2,201) (14) ( 5,637) Cash Flows from Investing Activities Interest received 4 10 9 51 1,040 2,401 Net cash provided (used) by investing activities 4 10 9 51 1,040 2,401 Net increase (decrease) in cash and cash equivalents 2 36 5,318 2,514 8,068 Cash and cash equivalents at beginning of year 8,118 21,761 18,823 48,702 Cash and cash equivalents at end of year $ 8,354 $ 27,079 $ 21,337 $ 56,770 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 939 $ (4,235) $ ( 293) $ (3,589) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization expense 1,738 1,349 13 3,100 Changes in assets, deferred outflows of resources, liabilities, and deferred inflows of resources: (Increase) decrease in: Receivables, net (1) (1) 4 88 4 86 Inventory (2) 21 - 19 Deferred outflows - pensions 22 (425) - (403) Deferred outflows - OPEB (1) (14) - (15) Increase (decrease) in: Accounts payable 4 07 7 06 (184) 9 29 Deposits from others 3 1,593 1 1,597 Salaries and benefits payable 9 3 86 (1) 3 94 Deferred inflows - pensions (2) (47) - (49) Deferred inflows - OPEB (2) (52) - (54) Net OPEB liability 13 2 29 - 2 42 Net pension liability 1 84 8,479 - 8,663 Self-insurance liability - - 1,464 1,464 Total adjustments 2,368 12,224 1,781 16,373 Net cash provided (used) by operating activities $ 3,307 $ 7,989 $ 1,488 $ 12,784 137 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS - INSURANCE JUNE 30, 2025 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Assets Current assets: Cash and cash equivalents $ 17,377 $ 2,673 $ 754 $ 180 $ 353 $ 21,337 Total current assets 17,377 2,673 7 54 1 80 3 53 21,337 Noncurrent assets: SBITA assets, net - - - - 17 17 Total noncurrent assets - - - - 17 17 Total assets 17,377 2,673 7 54 1 80 3 70 21,354 Liabilities Current liabilities: Accounts payable 3 30 4 - 49 - 3 83 Deposits from others 1 - - - - 1 Salaries and benefits payable 7 - - - - 7 Self-insurance liability 4,068 1,502 - - - 5,570 SBITA liability - - - - 13 13 Total current liabilities 4,406 1,506 - 49 13 5,974 Noncurrent liabilities: Self-insurance liability 17,061 4,194 - - - 21,255 SBITA liability - - - - 4 4 Total noncurrent liabilities 17,061 4,194 - - 4 21,259 Total liabilities 21,467 5,700 - 49 17 27,233 Net Position Unrestricted ( 4,090) ( 3,027) 7 54 1 31 3 53 ( 5,879) Total net position $ (4,090) $ (3,027) $ 754 $ 131 $ 353 $ (5,879) 138 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, 2025 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Operating revenues Charges for services $ 10,339 $ 10,130 $ 395 $ 1,483 $ 2,541 $ 24,888 Total operating revenues 10,339 10,130 3 95 1,483 2,541 24,888 Operating expenses Salaries and benefits 4 34 - - - - 4 34 Services and supplies 4,918 10,623 1 05 2 48 1,869 17,763 Insurance benefit payments 3,969 - 2 05 1,702 6 74 6,550 Amortization - - - - 13 13 Countywide cost allocation 2 44 1 74 1 2 - 4 21 Total operating expenses 9,565 10,797 3 11 1,952 2,556 25,181 Operating income (loss) 7 74 (667) 84 (469) (15) (293) Nonoperating revenues (expenses) Investment income (expense) 8 00 1 65 37 22 16 1,040 Total nonoperating revenues (expenses) 8 00 1 65 37 22 16 1,040 Change in net position 1,574 (502) 1 21 (447) 1 7 47 Net position - beginning ( 5,664) ( 2,525) 6 33 5 78 3 52 ( 6,626) Net position - ending $ (4,090) $ (3,027) $ 754 $ 131 $ 353 $ (5,879) 139 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS - INSURANCE FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) Workers' Protected Unemployment Dental Compensation Self-Insurance Insurance Insurance OPEB Total Cash Flows From Operating Activities Receipts from interfund billings $ 10,445 $ 10,511 $ 395 $ 1,483 $ 2,542 $ 25,376 Payments for goods and services ( 3,288) ( 4,913) (106) (200) (11) ( 8,518) Payments to employees for services (435) - - - - (435) Payments for insurance benefits ( 3,323) 8 20 (205) ( 1,703) (675) ( 5,086) Payments for premiums ( 1,812) ( 6,179) - - ( 1,858) ( 9,849) Net cash provided (used) by operating activities 1,587 2 39 84 (420) (2) 1,488 Cash Flows from Capital and Related Financing Activities Principal paid on capital debt - - - - (14) (14) Net cash provided (used) by capital and related financing activities - - - - (14) (14) Cash Flows from Investing Activities Interest received (paid) 8 00 1 65 37 22 16 1,040 Net cash provided (used) by investing activities 8 00 1 65 37 22 16 1,040 Net increase (decrease) in cash and cash equivalents 2,387 4 04 1 21 (398) - 2,514 Cash and cash equivalents at beginning of year 14,990 2,269 6 33 5 78 3 53 18,823 Cash and cash equivalents at end of year $ 17,377 $ 2,673 $ 754 $ 180 $ 353 $ 21,337 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 774 $ ( 667) $ 8 4 $ ( 469) $ (15) $ ( 293) 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: Receivables, net 1 06 3 82 - - - 4 88 Increase (decrease) in: Accounts payable 63 (296) - 49 - (184) Deposits from others 1 - - - - 1 Salaries and benefits payable (1) - - - - (1) Self-insurance liability 6 44 8 20 - - - 1,464 Total adjustments 8 13 9 06 - 49 13 1,781 Net cash provided (used) by operating activities $ 1,587 $ 239 $ 8 4 $ ( 420) $ (2) $ 1,488 140 ________________________________________________________________ COMBINING FINANCIAL STATEMENTS FIDUCIARY FUNDS ________________________________________________________________ FIDUCIARY FUNDS 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 custodial categories. 141 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION CUSTODIAL FUNDS JUNE 30, 2025 (IN THOUSANDS) Clearing and 1915 Act Other Revolving Funds Service Funds Custodial Funds (96 Funds) (5 Funds) (25 Funds) Total ASSETS Cash and cash equivalents $ 120,170 $ 8 2 $ 21,981 $ 142,233 Taxes for other governments 8 26 - - 8 26 Other assets 3 - 4,369 4,372 Capital assets, net - - 15 15 Total assets $ 120,999 $ 8 2 $ 26,365 $ 147,446 LIABILITIES Other current liabilities $ 78,682 $ - $ 9,445 $ 88,127 Other long-term liabilities 9 - - 9 Total liabilities $ 7 8,691 $ - $ 9 ,445 $ 88,136 NET POSITION Restricted for: Individuals, organizations, and other governments $ 4 2,308 $ 82 $ 1 6,920 $ 59,310 142 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION CUSTODIAL FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) Clearing and 1915 Act Other Revolving Funds Service Funds Custodial Funds (96 Funds) (5 Funds) (25 Funds) Total ADDITIONS Interest $ 4,341 $ 3 $ 249 $ 4,593 Property taxes collected for other governments 2 59,929 - - 2 59,929 Sales taxes collected for other governments - - 17,966 17,966 Other Income 23,595 - 5,516 29,111 Total additions 2 87,865 3 23,731 3 11,599 DEDUCTIONS Administrative expenses 37 - 1 38 Interest expenses 34,797 4 - 34,801 Payments to other local governments 6,123 - - 6,123 Property taxes distributed to other governments 2 42,319 44 22,440 2 64,803 Total deductions 283,276 48 22,441 3 05,765 Change in net position 4 ,589 ( 45) 1 ,290 5,834 Net position - beginning 37,719 127 15,630 53,476 Net position - ending $ 42,308 $ 82 $ 16,920 $ 59,310 143 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS JUNE 30, 2025 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (22 Funds) (25 Funds) (6 Funds) (17 Funds) Total ASSETS Cash and cash equivalents $ 772,097 $ 17,580 $ 2,045 $ 51,849 $ 8 43,571 Total assets $ 772,097 $ 17,580 $ 2,045 $ 51,849 $ 8 43,571 NET POSITION Net position held in trust for pool participants $ 772,097 $ 17,580 $ 2,045 $ 51,849 $ 8 43,571 Total Net Position $ 772,097 $ 17,580 $ 2,045 $ 51,849 $ 8 43,571 144 COUNTY OF SAN LUIS OBISPO COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION INVESTMENT TRUST FUNDS FOR THE YEAR ENDED JUNE 30, 2025 (IN THOUSANDS) School Special Other Districts Districts Courts Local Boards (22 Funds) (25 Funds) (6 Funds) (17 Funds) Total Additions Contributions to pooled investments $ 1,473,641 $ 1 3,001 $ 6 1,918 $ 5 9,377 $ 1,607,937 Interest 22,525 852 1 1,386 24,764 Total additions 1,496,166 13,853 61,919 60,763 1,632,701 Deductions Distributions from investment pool 1,417,352 19,069 61,517 53,563 1,551,501 Total deductions 1,417,352 19,069 61,517 53,563 1,551,501 Change in net position 78,814 (5,216) 402 7,200 81,200 Net position - beginning 693,283 22,796 1,643 44,649 7 62,371 Net position - ending $ 772,097 $ 1 7,580 $ 2,045 $ 5 1,849 $ 843,571 145 ________________________________________________________________ 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, 2025 Original Final Variance with Description Budget Budget Actual Final Budget General Government - Expenditures Legislative and Administrative Administrative Office: Salaries, wages, and benefits $ 2,748 $ 2,748 $ 2,613 $ 135 Services and supplies 1 ,520 5 ,685 3 ,583 2,102 Other charges - 1 ,008 781 227 Expenditure transfers and reimbursements (122) (122) (127) 5 Total 4 ,146 9 ,319 6 ,850 2,469 Board of Supervisors: Salaries, wages, and benefits 1 ,745 1 ,878 1 ,813 65 Services and supplies 348 465 330 135 Expenditure transfers and reimbursements (71) (71) (71) - Total 2 ,022 2 ,272 2 ,072 200 Clerk/Recorder: Salaries, wages, and benefits 3 ,085 3 ,055 2 ,860 195 Services and supplies 1 ,496 1 ,647 1 ,441 206 Capital outlay - 288 675 (387) Expenditure transfers and reimbursements (1) (1) - (1) Total 4 ,580 4 ,989 4 ,976 13 Communications & Outreach: Salaries, wages, and benefits 279 279 249 30 Services and supplies 42 45 19 26 Capital outlay - leases/SBITAs - - 20 (20) Expenditure transfers and reimbursements (105) (105) (105) - Total 216 219 183 36 Total Legislative and Administrative 10,964 16,799 14,081 2,718 Finance Assessor: Salaries, wages, and benefits 11,674 11,771 11,056 715 Services and supplies 1 ,046 1 ,029 930 99 Capital outlay - leases/SBITAs - 17 16 1 Total 12,720 12,817 12,002 815 Auditor-Controller-Treasurer-Tax Collector Public Administrator: Salaries, wages, and benefits 9 ,581 9 ,581 9 ,174 407 Services and supplies 815 953 750 203 Expenditure transfers and reimbursements (10) (10) (16) 6 Total 10,386 10,524 9 ,908 616 Total Finance 23,106 23,341 21,910 1,431 continued 146 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2025 Original Final Variance with Description Budget Budget Actual Final Budget General Government - Expenditures (continued) Counsel County Counsel: Salaries, wages, and benefits $ 4,901 $ 4,970 $ 4,720 $ 250 Services and supplies 1 ,969 1 ,900 415 1,485 Expenditure transfers and reimbursement -- (58) (75) 17 Total Counsel 6 ,870 6 ,812 5 ,060 1,752 Personnel Personnel: Salaries, wages, and benefits 6 ,915 6 ,822 6 ,609 213 Services and supplies 3 ,732 4 ,109 4 ,031 78 Expenditure transfers and reimbursement (1,836) (1,836) (1,549) (287) Total Personnel 8 ,811 9 ,095 9 ,091 4 Talent Development: Salaries, wages, and benefits 311 261 251 10 Services and supplies 378 354 355 (1) Expenditure transfers and reimbursement (8) - - - Total Talent Development 681 615 606 9 Total Personnel 9 ,492 9 ,710 9 ,697 13 Property Management Facilities Management: Salaries, wages, and benefits 5 ,763 5 ,503 5 ,301 202 Services and supplies 4 ,725 5 ,005 4 ,857 148 Expenditure transfers and reimbursements (2,121) (2,121) (2,303) 182 Total 8 ,367 8 ,387 7 ,855 532 Maintenance Projects: Services and supplies 2 ,714 14,594 4 ,081 10,513 Expenditure transfers and reimbursements - (898) (6) (892) Total 2 ,714 13,696 4 ,075 9,621 Central Services Salaries, wages, and benefits 2 ,465 2 ,558 2 ,336 222 Services and supplies 3 ,750 3 ,760 1 ,301 2,459 Other charges 103 103 103 - Capital outlay - 8 4 ,046 (4,038) Expenditure transfers and reimbursements (620) (638) (814) 176 Total 5 ,698 5 ,791 6 ,972 (1,181) Total Property Management 16,779 27,874 18,902 8,972 continued 147 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2025 General Government - Expenditures (continued) Other General Information Technology: Salaries, wages, and benefits $ 15,684 $ 15,913 $ 15,336 $ 577 Services and supplies 7 ,011 7 ,283 4 ,253 3,030 Capital outlay - - 6 ,863 (6,863) Expenditure transfers and reimbursements (4,555) (4,555) (4,651) 96 Total 18,140 18,641 21,801 (3,160) Non-Department Financing Uses: Services and supplies - - 33 (33) Expenditure transfers and reimbursements ( 20,702) ( 20,702) ( 20,751) 49 Total ( 20,702) ( 20,702) ( 20,718) 16 Contributions to Other Agencies: Services and supplies 1 ,619 1 ,660 1 ,630 30 Total 1 ,619 1 ,660 1 ,630 30 Non-Department Other: Services and supplies 568 713 477 236 Total 568 713 477 236 Total Other General (375) 312 3 ,190 (2,878) Total General Government 66,836 84,848 72,840 12,008 Public Protection - Expenditures Judicial Court Operations Fund: Other charges 2 ,527 2 ,527 2 ,437 90 Total 2 ,527 2 ,527 2 ,437 90 District Attorney: Salaries, wages, and benefits 22,493 22,493 21,187 1,306 Services and supplies 3 ,071 3 ,271 2 ,902 369 Other charges 298 423 405 18 Expenditure transfers and reimbursements (3) (3) - (3) Total 25,859 26,184 24,494 1,690 Child Support Services: Salaries, wages, and benefits 4 ,350 4 ,350 3 ,676 674 Services and supplies 1 ,456 1 ,456 1 ,107 349 Total 5 ,806 5 ,806 4 ,783 1,023 Grand Jury: Salaries, wages, and benefits 24 24 19 5 Services and supplies 81 81 76 5 Expenditure transfers and reimbursements (9) (9) (3) (6) Total 96 96 92 4 continued 148 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2025 Public Protection - Expenditures (continued) Judicial (continued) Public Defender: Services and supplies $ 9,145 $ 10,270 $ 9,157 $ 1 ,113 Total 9 ,145 10,270 9 ,157 1,113 Total Judicial 43,433 44,883 40,963 3,920 Police Protection Sheriff-Coroner: Salaries, wages, and benefits 92,657 95,231 92,685 2,546 Services and supplies 21,395 24,919 21,107 3,812 Other charges 148 2 ,936 751 2,185 Capital outlay 160 3 ,950 3 ,552 398 Expenditure transfers and reimbursements (152) (154) (100) (54) Total Police Protection 114,208 126,882 117,995 8,887 Detention and Correction Probation Department: Salaries, wages, and benefits 25,623 25,623 24,580 1,043 Services and supplies 6 ,981 8 ,827 6 ,566 2,261 Other charges - 797 294 503 Capital outlay - 22 - 22 Expenditure transfers and reimbursements (454) (454) (463) 9 Total Detention and Correction 32,150 34,815 30,977 3,838 Fire Protection County Fire: Services and supplies 33,471 32,752 26,627 6,125 Other charges 35 1 ,265 1 ,230 35 Capital outlay 118 8 ,221 2 ,389 5,832 Expenditure transfers and reimbursements (10) (10) (1) (9) Total Fire Protection 33,614 42,228 30,245 11,983 Protective Inspection Agricultural Commissioner: Salaries, wages, and benefits 7 ,220 7 ,220 6 ,651 569 Services and supplies 1 ,044 1 ,068 1 ,003 65 Other charges 489 539 69 470 Expenditure transfers and reimbursements (2) (2) (2) - Total Protective Inspection 8 ,751 8 ,825 7 ,721 1,104 Other Protection Animal Services: Salaries, wages, and benefits 2 ,927 2 ,701 2 ,549 152 Services and supplies 1 ,373 1 ,706 1 ,444 262 Capital outlay - 7 - 7 Total 4 ,300 4 ,414 3 ,993 421 continued 149 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2025 Public Protection - Expenditures (continued) Other Protection (continued) Emergency Services: Salaries, wages, and benefits $ 1,704 $ 1,784 $ 1,432 $ 352 Services and supplies 878 1 ,299 1 ,000 299 Other charges 350 672 (92) 764 Capital outlay - 214 86 128 Total 2 ,932 3 ,969 2 ,426 1,543 Planning Department: Salaries, wages, and benefits 17,868 17,868 14,091 3,777 Services and supplies 3 ,084 35,944 3 ,998 31,946 Other charges 71 7 ,125 1 ,155 5,970 Capital outlay - - 1 ,203 (1,203) Expenditure transfers and reimbursements (151) (151) (198) 47 Total 20,872 60,786 20,249 40,537 Waste Management: Services and supplies 1 ,996 2 ,468 1 ,921 547 Total 1 ,996 2 ,468 1 ,921 547 Total Other Protection 30,100 71,637 28,589 43,048 Total Public Protection 262,256 329,270 256,490 72,780 Public Ways and Facilities - Expenditures Public Works: Services and supplies 4 ,024 5 ,137 3 ,052 2,085 Other charges 7 353 28 325 Total 4 ,031 5 ,490 3 ,080 2,410 Groundwater Sustainability Salaries, wages, and benefits 270 270 259 11 Services and supplies 1 ,919 5 ,072 2 ,273 2,799 Other charges - 800 - 800 Total 2 ,189 6 ,142 2 ,532 3,610 Total Public Ways and Facilities 6 ,220 11,632 5 ,612 6,020 Health and Sanitation - Expenditures Health Public Health: Salaries, wages, and benefits 36,400 36,518 31,205 5,313 Services and supplies 11,390 14,150 9 ,403 4,747 Other charges 812 5 ,462 3 ,304 2,158 Capital outlay - 412 (1,162) 1,574 Expenditure transfers and reimbursements (6,079) (6,079) (5,768) (311) Total 42,523 50,463 36,982 13,481 continued 150 COUNTY OF SAN LUIS OBISPO General Fund Detail Schedule of Expenditures Budget to Actual Comparison (in thousands) For the Year Ended June 30, 2025 Health and Sanitation - Expenditures (continued) Health (continued) Behavioral Health: Salaries, wages, and benefits $ 47,871 $ 45,226 $ 37,349 $ 7 ,877 Services and supplies 71,883 77,485 71,780 5,705 Other charges 2 ,416 6 ,194 3 ,259 2,935 Capital outlay - leases - 16 3 ,979 (3,963) Expenditure transfers and reimbursements (1,910) (1,910) (1,995) 85 Total 120,260 127,011 114,372 12,639 Total Health 162,783 177,474 151,354 26,120 Total Health and Sanitation 162,783 177,474 151,354 26,120 Public Assistance - Expenditures Administration Department of Social Services: Salaries, wages, and benefits 72,404 71,673 64,175 7,498 Services and supplies 25,047 26,283 23,970 2,313 Other charges 13,051 14,683 11,310 3,373 Capital outlay 68 109 - 109 Expenditure transfers and reimbursements (650) (717) (701) (16) Total Administration 109,920 112,031 98,754 13,277 Aid Programs Aid Foster Care Non-Fed: Services and supplies 290 290 197 93 Other charges 30,092 30,715 27,259 3,456 Expenditure transfers and reimbursement - (107) (116) 9 Total 30,382 30,898 27,340 3,558 Calworks Assistance: Other charges 15,284 16,784 16,276 508 Total 15,284 16,784 16,276 508 Total Aid Programs 45,666 47,682 43,616 4,066 General Relief General Relief: Other charges 2 ,004 2 ,393 2 ,345 48 Total General Relief 2 ,004 2 ,393 2 ,345 48 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, 2025 Public Assistance - Expenditures (continued) Veterans Service Veterans Service: Salaries, wages, and benefits $ 1,078 $ 1,125 $ 1,083 $ 42 Services and supplies 152 152 126 26 Expenditure transfers and reimbursements - (43) (42) (1) Total Veterans Service 1 ,230 1 ,234 1 ,167 67 Other Assistance Law Enforcement Med Care: Services and supplies 12,851 12,888 12,317 571 Expenditure transfers and reimbursements (242) (242) (242) - Total Other Assistance 12,609 12,646 12,075 571 Total Public Assistance 171,429 175,986 157,957 18,029 Education - Expenditures Agricultural Education UC Cooperative Extension Salaries, wages, and benefits 539 539 478 61 Services and supplies 104 104 76 28 Total Agricultural Education 643 643 554 89 Total Education 643 643 554 89 Recreation and Culture - Expenditures Community Parks Salaries, wages, and benefits 3 ,985 3 ,922 3 ,794 128 Services and supplies 2 ,804 3 ,097 2 ,695 402 Capital outlay - 10,652 6 ,728 3,924 Other Charges 110 211 99 112 Expenditure transfers and reimbursements (91) (91) (111) 20 Total Community Parks 6 ,808 17,791 13,205 4,586 Total Recreation and Culture 6 ,808 17,791 13,205 4,586 Debt Service Debt service: principal - - 7 ,827 (7,827) Debt service: interest - - 944 (944) Total Debt Service - - 8 ,771 (8,771) Total General Fund - Expenditures 676,975 797,644 666,783 1 30,861 (Before Contingencies) 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, 2025 Contingencies Appropriation for Contingencies Contingencies - General Fund: Appropriation for contingency $ 32,920 $ 28,346 $ - $ 2 8,346 Total 32,920 28,346 - 28,346 Total Appropriation for Contingency 32,920 28,346 - 28,346 Total Contingency 32,920 28,346 - 28,346 Total General Fund Expenditures $ 7 09,895 $ 8 25,990 $ 6 66,783 $ 159,207 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 66,783 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 13,814 Total expenditures as reported on the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds $ 6 80,597 153 ________________________________________________________________ STATISTICAL SECTION ________________________________________________________________ COUNTY OF SAN LUIS OBISPO Statistical Section This part of the County of San Luis Obispo’s (County) annual comprehensive 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……… 155 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 .………………………………………………………………………………………………… 160 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..………………………………………………………… 165 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 ………………………………………………………………….. 168 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 ………………………………………………………………… 170 154 County of San Luis Obispo Net Position by Component Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Governmental Activities Net investment in capital assets $ 1,168,573 $ 1,178,967 $ 1,185,073 $ 1,188,830 $ 1,202,709 $ 1,210,972 $ 1,216,907 $ 1,229,892 $ 1,259,302 $ 1,323,930 Restricted 41,230 64,822 29,836 41,281 66,655 104,024 98,489 173,086 177,598 150,646 Unrestricted (170,962) (226,970) (217,606) (220,206) (286,622) (248,517) (193,229) (297,796) (290,718) (261,064) Total governmental activities net position $ 1,038,841 $ 1,016,819 $ 997,303 $ 1,009,905 $ 982,742 $ 1,066,479 $ 1,122,167 $ 1,105,182 $ 1,146,182 $ 1,213,512 Business-Type Activities Net investment in capital assets $ 237,157 $ 270,246 $ 283,410 $ 285,888 $ 288,781 $ 283,512 $ 296,939 $ 293,062 $ 307,522 $ 318,038 Unrestricted 93,158 85,316 73,113 83,039 94,335 110,255 118,114 127,391 126,774 138,231 Total business-Type activities net position $ 330,315 $ 355,562 $ 356,523 $ 368,927 $ 383,116 $ 393,767 $ 415,053 $ 420,453 $ 434,296 $ 456,269 Total Primary Government Net investment in capital assets $ 1,405,730 $ 1,449,213 $ 1,468,483 $ 1,474,718 $ 1,491,490 $ 1,494,484 $ 1,513,846 $ 1,522,954 $ 1,566,824 $ 1,641,968 Restricted 41,230 64,822 29,836 41,281 66,655 104,024 98,489 173,086 177,598 150,646 Unrestricted (77,804) (141,654) (144,493) (137,167) (192,287) (138,262) (75,115) (170,405) (163,944) (122,833) Total primary government net position $ 1,369,156 $ 1,372,381 $ 1,353,826 $ 1,378,832 $ 1,365,858 $ 1,460,246 $ 1,537,220 $ 1,525,635 $ 1,580,478 $ 1,669,781 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. Source: Statement of Net Position 155 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Program Expenses Governmental Activities General government $ 53,282 $ 56,390 $ 56,858 $ 54,434 $ 53,926 $ 55,612 $ 54,592 $ 37,088 $ 67,933 $ 76,983 Public protection 170,134 187,255 183,814 213,809 241,749 204,861 204,993 254,728 257,497 296,567 Public ways and facilities 33,418 32,098 41,606 34,202 33,199 36,017 35,995 55,375 50,230 48,039 Health and sanitation 88,326 99,150 103,822 119,259 113,463 121,358 132,713 152,565 174,990 178,230 Public assistance 118,089 125,102 122,753 131,432 132,868 134,476 132,751 201,741 168,272 167,421 Education 11,934 12,787 12,754 12,698 14,322 14,213 11,930 15,256 13,756 12,507 Recreation and cultural services 8,702 10,385 8,927 11,891 11,501 10,497 12,310 13,754 14,202 16,152 Interest on long term debt 4,602 4,555 11,840 1,468 7,057 9,645 7,947 11,299 12,529 13,348 Total Governmental Activities Expenses 488,487 527,722 542,374 579,193 608,085 586,679 593,231 741,806 759,409 809,247 Business-Type Activities Expenses Airport 6,117 6,391 7,966 8,398 10,133 9,146 11,366 26,498 15,333 18,380 Golf 3,131 3,111 3,297 3,491 3,347 3,869 4,231 4,884 5,500 5,967 State Water Contract 5,848 5,571 5,909 6,973 7,709 6,928 5,924 6,882 7,404 6,244 Nacimiento Water Contract 14,888 14,191 14,044 14,318 13,257 14,816 13,889 14,170 12,571 14,075 Lopez Flood Control 6,220 6,387 7,072 7,004 6,733 7,087 6,941 7,708 8,145 11,718 Lopez Park 4 4 3 3 2 1 - - - - General Flood Control Zone - Salinas Dam 8 24 8 51 1,056 1,142 913 1,170 1,521 1,490 1,847 1,815 County Service Areas 4,065 4,218 4,445 4,747 4,670 4,697 5,636 7,340 6,463 6,796 Los Osos Wastewater 3,807 10,322 10,918 11,544 11,636 11,581 11,663 12,597 11,861 12,316 Total Business-Type Activities Expenses 44,904 51,046 54,710 57,620 58,400 59,295 61,171 81,569 69,124 77,311 Total Primary Government Expenses $ 533,391 $ 578,768 $ 597,084 $ 636,813 $ 666,485 $ 645,974 $ 654,402 $ 823,375 $ 828,533 $ 886,558 Program Revenues Governmental Activities Fees, Fines, Charges for Services General government $ 13,702 $ 14,839 $ 12,937 $ 13,484 $ 12,967 $ 15,502 $ 14,414 $ 16,808 $ 13,935 $ 16,156 Public protection 20,768 21,231 23,666 22,946 21,291 23,552 23,648 25,758 26,358 31,545 Public ways and facilities 9,434 7,462 6,155 5,721 4,797 5,532 4,343 4,974 4,449 4,553 Health and sanitation 7,179 6,757 7,501 7,698 8,571 8,038 8,022 8,130 10,637 19,761 Public assistance 2,107 2,032 1,763 1,194 1,155 9 26 950 901 1,074 1,249 Education 1,952 1,644 2,006 1,943 2,193 1,622 1,315 2,313 1,278 460 Recreation and cultural services 4,975 5,127 5,592 5,515 4,295 5,714 6,113 6,094 6,229 14,013 Operating Grants and Contributions General government 735 7 48 3 21 2 00 685 7 89 2,058 19,120 13,980 11,665 Public protection 63,528 52,205 58,184 59,592 59,974 67,187 76,907 79,867 81,679 91,133 Public ways and facilities 11,025 9,918 11,506 10,485 11,302 11,073 14,279 22,753 28,316 58 Health and sanitation 61,950 67,626 76,494 76,211 74,699 91,988 107,891 107,717 134,746 135,110 Public assistance 98,414 102,784 105,848 107,758 114,525 113,555 123,834 137,154 139,484 146,186 Education 124 1 32 1 73 1 43 204 2 19 374 247 374 350 Recreation and cultural services 153 2 73 6 71 2 00 230 2 71 511 1,794 1,015 1,230 Capital Grants and Contributions General government 4 5 - 3 49 9 30 - - - 1,000 1,489 1,968 Public protection 4,420 7,820 6 56 1,197 1,799 3,814 43 - 1,256 1,154 Public ways and facilities 6,031 6,655 8,893 14,361 17,732 12,856 11,993 4,516 10,842 53,371 Health and sanitation - - - - - - - - - - Education - - - - 267 - - - - - Recreation and cultural services 10,804 1,157 1 91 2 8 8 6 1 89 413 855 1,213 3,371 Total Governmental Activities 317,346 308,410 322,906 329,606 336,772 362,827 397,108 440,001 478,354 533,333 Source: Statement of Activities (continued) 156 County of San Luis Obispo Changes in Net Position Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Business-Type Activities Fees, Fines, Charges for Services Airport $ 5,165 $ 5,662 $ 7,158 $ 8,947 $ 8,300 $ 6,140 $ 9,314 $ 11,724 $ 15,131 $ 16,913 Golf 2,589 2,291 2,584 2,717 2,750 4,376 4,843 4,738 5,327 5,702 State Water Contract 6,846 5,941 6,110 7,656 7,825 7,470 5,691 7,367 7,754 12,502 Nacimiento Water Contract 17,048 15,149 15,709 16,947 16,732 17,458 16,696 15,596 15,723 18,831 Lopez Flood Control 6,530 6,708 6,677 7,148 6,978 6,927 7,451 7,918 7,379 8,490 Lopez Park - - - - - - - - - - General Flood Control Zone - Salinas Dam 960 9 04 9 09 9 13 2,884 1,370 1,234 1,380 1,985 1,873 County Service Areas - 2,301 3,662 3,894 4,492 4,702 4,739 5,500 5,449 5,571 Los Osos Wastewater 3,551 3,620 4,467 5,100 5,245 5,324 7,129 7,425 7,248 7,745 Operating Grants and Contributions Airport 126 1 26 3 96 3 28 4,644 7,580 5,823 5,599 2,302 3,936 Golf - 1,017 - - - 1 05 - - - 62 State Water Contract 1 3 14 1 4 1 4 1 4 1 5 14 14 18 14 Nacimiento Water Contract 9 - 6 - - - - - - - Lopez Flood Control 8 - 7 5 5 6 6 6 8 137 Lopez Park - - - - - - - - - - General Flood Control Zone - Salinas Dam - - - 2 6 - - - - 37 427 County Service Areas 295 3 3 1 3 3 3 3 3 3 491 Los Osos Wastewater 2,810 18 - - - - - - - - Capital Grants and Contributions Airport 7,069 15,379 2,211 3,139 505 1,138 12,259 - - - Nacimiento Water Contract - - 2 4 - - 2 00 - - - - County Service Areas - - - - - - - - - - Los Osos Wastewater 4,157 10,086 2,982 4,860 2,618 2,546 2,847 963 2,333 2,226 Total Business-Type Activities Revenues 57,176 69,219 52,919 61,707 62,995 65,360 78,049 68,233 70,697 84,920 Total Primary Government Revenues $ 374,522 $ 377,629 $ 375,825 $ 391,313 $ 399,767 $ 428,187 $ 475,157 $ 508,234 $ 549,051 $ 618,253 Net (Expense)/Revenues Governmental Activities $ (171,141) $ (219,312) $ (219,468) $ (249,587) $ (271,313) $ (223,852) $ ( 196,123) $ (301,805) $ (281,055) $ (275,914) Business-Type Activities 12,272 18,173 (1,791) 4,087 4,595 6,065 16,878 ( 13,336) 1,573 7,609 Total Primary Government net expense $ (158,869) $ (201,139) $ (221,259) $ (245,500) $ (266,718) $ (217,787) $ ( 179,245) $ (315,141) $ (279,482) $ (268,305) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 General Revenue and Other Changes in Net Position Governmental Activities Property taxes $ 163,367 $ 173,153 $ 180,051 $ 189,689 $ 198,927 $ 208,371 $ 216,107 $ 235,064 $ 245,825 $ 257,631 Other taxes 21,953 23,072 25,708 27,224 27,878 34,440 41,804 37,417 38,278 37,313 Interest and investment income 4,401 3,289 3,171 12,952 12,849 6 96 ( 16,312) 13,395 33,512 37,894 Unrestricted grants 3,140 63 2,740 2,115 3,845 41,157 9,001 5,334 5,567 3,236 Other revenues - 5 2 35,445 1,144 4,813 1,424 306 558 394 Transfers (768) (2,292) 2,267 (625) (493) 2 82 (213) (6,696) ( 1,685) ( 1,818) Special item - - - - - - - - - - Total Governmental Activities 192,093 197,290 213,939 266,800 244,150 289,759 251,811 284,820 322,055 334,650 Business-Type Activities Property taxes 4,782 3,814 3,858 3,912 4,043 4,387 4,380 4,944 5,045 5,152 Other taxes - - - - - - - - - - Interest and investment income 8 47 6 30 1,272 1,590 2,169 4 05 (1,333) 1,814 4,575 7,013 Other revenues 2 68 3 38 - 5 74 2,889 7 6 1,148 5,282 965 560 Transfers 7 68 2,292 (2,267) 6 25 493 (282) 213 6,696 1,685 1,818 Total Business-Type Activities 6,665 7,074 2,863 6,701 9,594 4,586 4,408 18,736 12,270 14,543 Total Primary Government $ 198,758 $ 204,364 $ 216,802 $ 273,501 $ 253,744 $ 294,345 $ 256,219 $ 303,556 $ 334,325 $ 349,193 Change in Net Position Governmental Activities $ 20,952 $ (22,022) $ (5,529) $ 17,213 $ (27,163) $ 65,907 $ 55,688 $ ( 16,985) $ 41,000 $ 58,736 Business-Type Activities 18,937 25,247 1,072 10,788 14,189 10,651 21,286 5,400 13,843 22,152 Total Primary Government $ 39,889 $ 3,225 $ (4,457) $ 28,001 $ (12,974) $ 76,558 $ 76,974 $ ( 11,585) $ 54,843 $ 80,888 Source: Statement of Activities 157 County of San Luis Obispo Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 General Fund Nonspendable $ 3,454 $ 3,535 $ 18,511 $ 19,222 $ 18,734 $ 9 ,861 $ 6,655 $ 6,773 $ 15,242 $ 22,040 Restricted 2,872 2,649 1 0,083 1 2,276 10,915 2 4,212 2 6,060 2 4,607 22,096 29,459 Committed 168,619 164,492 152,501 169,846 175,455 194,669 214,112 224,823 248,486 234,216 Assigned 122,925 126,596 107,145 127,007 119,426 173,558 190,037 199,196 200,660 288,229 Unassigned - - - - - - - - - - Total General Fund $ 297,870 $ 297,272 $ 288,240 $ 328,351 $ 324,530 $ 402,300 $ 436,864 $ 455,399 $ 486,484 $ 573,944 All Other Governmental Funds Nonspendable $ 3,776 $ 3 $ 24 $ 36 $ 4 $ 6 $ 9 $ 9 $ 18 $ 18 Restricted 21,317 24,192 2 4,750 3 3,496 57,057 5 8,106 5 4,520 129,672 129,739 104,012 Committed 61,926 94,904 6 2,307 6 6,616 67,593 8 8,636 9 6,623 8 6,728 87,804 93,400 Assigned - - - - - - - - - - Unassigned - - (3,038) - - - - - - - Total All Other Governmental Funds $ 87,019 $ 119,099 $ 84,043 $ 100,148 $ 124,654 $ 146,748 $ 151,152 $ 216,409 $ 217,561 $ 197,430 Source: Balance Sheet - Governmental Funds 158 County of San Luis Obispo Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Revenues Taxes $ 185,764 $ 196,822 $ 203,583 $ 217,106 $ 2 23,041 $ 2 43,406 $ 2 61,163 $ 2 70,790 $ 281,265 $ 2 92,717 Licenses, permits, and franchises 1 0,539 1 1,446 1 1,140 1 2,133 11,477 1 2,522 1 2,597 1 5,478 1 4,351 1 4,141 Fines, forfeitures, and penalties 5,173 4,339 5,977 4,396 3,916 4,352 4,304 4,297 4,889 5 ,385 Revenues from use of money and property 4,939 3,984 3,779 1 2,268 12,247 1,084 ( 14,773) 1 3,346 3 2,133 3 6,091 Aid from governmental agencies 256,490 254,350 262,660 271,961 2 77,267 3 48,093 3 50,382 3 78,339 408,888 4 56,721 Charges for current services 4 6,308 4 9,460 4 9,793 4 7,957 46,712 5 1,694 4 9,498 5 5,512 5 8,506 6 4,076 Other revenues 1 1,504 8,481 6,869 2 5,278 12,396 1 3,104 1 2,734 1 4,429 1 4,279 3 3,800 Total revenues 520,717 528,882 543,801 591,099 5 87,056 674,255 675,905 752,191 814,311 902,931 Expenditures Current: General government 54,461 54,918 60,445 54,991 5 4,078 64,686 63,569 75,027 78,117 86,478 Public protection 156,096 164,839 175,175 185,033 2 05,162 199,299 212,388 233,444 247,211 269,059 Public ways and facilities 41,044 29,077 42,254 35,267 4 3,865 37,099 39,124 58,016 53,698 74,325 Health and sanitation 81,591 88,623 99,885 103,512 1 08,158 117,359 157,490 140,568 168,927 172,187 Public assistance 111,227 113,392 117,066 121,327 1 31,154 129,141 133,275 188,616 156,910 158,878 Education 10,534 11,560 11,640 12,191 1 2,769 13,368 15,712 14,199 13,975 13,156 Recreational and cultural services 9,888 9,963 10,358 10,574 1 1,637 10,976 12,420 16,685 14,297 21,364 Debt service: Principal payments 6,788 7,576 50,989 5,093 1 0,561 5,289 9,137 13,067 14,207 15,117 Interest and fiscal charges 4,687 4,639 11,666 1,204 6,416 7,030 7,895 10,581 12,762 13,362 Debt issuance costs - - - - - - - - - - Capital outlay 30,465 11,554 11,828 6,374 7,645 13,795 17,376 14,563 22,986 49,700 Total expenditures 506,781 496,141 591,306 535,566 5 91,445 598,042 668,386 764,766 783,090 873,626 Excess (deficiency) of revenues over (under) expenditures 13,936 32,741 ( 47,505) 55,533 (4,389) 76,213 7,519 (12,575) 31,221 29,305 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Other Financing Sources Proceeds of long-term debt - - - - 20,384 2,841 - 7 0,033 - - Premium on lease revenue bonds issued - - - - 4,023 - - 4,634 - - Payment to refunded escrow agent - - - - - - - (5,724) - - Leases - - - - - - 3 0,950 3 8,935 6 59 9 ,571 Subscription-based IT arrangement - - - - - - - 305 6 95 8 ,623 Transfers in 3 5,803 5 7,668 5 4,782 3 1,633 36,803 3 7,384 4 5,602 4 8,050 4 8,204 7 9,518 Transfers out ( 35,641) ( 58,927) ( 51,365) ( 30,950) (36,136) ( 36,094) ( 45,103) ( 59,866) (48,542) (79,856) Total other financing sources and uses 1 62 ( 1,259) 3 ,417 6 83 25,074 4,131 3 1,449 9 6,367 1,016 1 7,856 Net change in fund balances $ 1 4,098 $ 3 1,482 $ ( 44,088) $ 5 6,216 $ 20,685 $ 8 0,344 $ 3 8,968 $ 8 3,792 $ 3 2,237 $ 4 7,161 Debt Service as a percentage of 2.43% 2.77% 11.15% 1.26% 3.00% 2.19% 2.70% 3.41% 3.68% 3.73% non-capital expenditures Source: Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 159 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 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 2024 71,302,780 2,750,976 (1,708,530) 72,345,226 5.8% 1.0036 2025 74,715,508 2,913,353 (1,822,753) 75,806,108 4.8% 1.0037 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 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 160 tnecreP Total Net Assessed Value Change from Prior Year Percent Change from Prior Year Fiscal Year County of San Luis Obispo Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (per $100 of assessed values) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 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 .00374 0.00400 0 .00400 0.00400 0 .00400 0.00400 0 .00400 0 .00400 0.00363 0 .00365 Total Direct Rate 1.00374 1.00400 1.00400 1.00400 1.00400 1.00400 1.00400 1.00400 1.00363 1.00365 Cities, Schools, and Special Districts Combined Rates Arroyo Grande 0.0756 0.0680 0 .1085 0.1051 0 .0965 0.0827 0 .0840 0.0648 0 .0602 0 .0515 Atascadero 0.1373 0.1373 0 .1373 0.1373 0 .1373 0.1373 0 .1373 0.1373 0 .1293 0 .1075 Grover Beach 0.0940 0.1023 0 .1599 0.1901 0 .1815 0.1677 0 .1690 0.1598 0 .1553 0 .1415 Morro Bay 0.0688 0.0683 0 .0683 0.0683 0 .0683 0.0614 0 .0582 0.0548 0 .0519 0 .0420 Paso Robles 0.0955 0.0828 0 .0828 0.1291 0 .1222 0.1160 0 .1198 0.1169 0 .1119 0 .1081 Pismo Beach 0.0700 0.0680 0 .1085 0.1051 0 .0965 0.0827 0 .0840 0.0648 0 .0602 0 .0515 San Luis Obispo 0.0683 0.0683 0 .0683 0.0683 0 .0683 0.0583 0 .0583 0.0543 0 .1033 0 .1015 Note: Rates shown represent the most common rates encountered for the tax rate areas within these cities. Source: County Property Tax Rate Book 161 County of San Luis Obispo Principal Property Taxpayers Current Year and Ten Years Ago (In Thousands) (UNAUDITED) Fiscal Year 2024-25 Fiscal Year 2015-16 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 $ 955,576 1 1.26% $ 2,683,257 1 5.57% High Plans Ranch II LLC Solar Ranch 8 02,131 2 1.06% - - 0.00% Southern California Gas Co. Utility 1 99,049 3 0.26% 81,863 4 0.17% Justin Vineyard & Winery Inc Winery 1 44,666 4 0.19% - - 0.00% Firestone Walker LLC Brewery 1 09,766 5 0.14% - - 0.00% CAP VIII - Mustang Village LLC Apartments 1 04,238 6 0.14% 78,358 5 0.16% Treasury Wine Estates Americas Co Winery 1 03,476 7 0.14% - - 0.00% E&J Gallo Winery/Vineyards Winery 90,679 8 0.12% 71,920 6 0.15% Vespera Pismo Beach Holdings Resort 82,968 9 0.11% - - 0.00% Jamestown Premier Commercial 82,596 10 0.11% - - 0.00% Phillips 66 Company Oil Refinery - - 0.00% 155,118 2 0.32% Beringer Wine Estates Company Winery - - 0.00% 90,412 3 0.19% Pacific Bell Telephone Co Communications - - 0.00% 70,939 7 0.15% Freeport-McMoran Oil & Gas Petroleum & Gas - - 0.00% 69,100 8 0.14% Martin Hotel Management Hotel - - 0.00% 64,891 9 0.13% Sierra Vista Hospital Inc. Hospital - - 0.00% 59,296 10 0.12% Total $ 2,675,144 3.53% $ 3,425,154 7.11% Total County Assessed Value $ 75,806,108 $ 48,172,375 Sources: County Property Tax System 2015-16 San Luis Obispo County Annual Comprehensive Financial Report 162 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 Total Levy for Collections in Fiscal Year the Fiscal Collected % of Original Subsequent Delinquent % of Levy Ended June 30, Year Amount Levy Years* Amount Delinquent 2016 $ 470,629 $ 466,465 99.12% N/A $ 4,164 0.88% 2017 4 95,277 4 90,890 99.11% N/A 4 ,387 0.89% 2018 5 22,528 5 17,777 99.09% N/A 4 ,751 0.91% 2019 5 49,869 5 44,994 99.11% N/A 4 ,874 0.89% 2020 5 73,449 5 64,422 98.43% N/A 9 ,027 1.57% 2021 5 99,508 5 92,847 98.89% N/A 6 ,660 1.11% 2022 6 19,518 6 14,110 99.13% N/A 5 ,408 0.87% 2023 6 61,387 6 54,754 99.00% N/A 6 ,632 1.00% 2024 6 98,978 6 90,161 98.74% N/A 8 ,817 1.26% 2025 7 32,558 7 23,178 98.72% N/A 9 ,380 1.28% Note: Amounts do not include tax collections for bonds or special assessments *Collections in subsequent years are not available from the County's current property tax system. Source: County Property Tax Booklet 163 County of San Luis Obispo Special Assessment Billings and Collections (In Thousands) (UNAUDITED) Special Special Year ended Assessment Assessment June 30, Billings Collected 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 2024 5,063 5,074 2025 5,062 5,100 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 164 County of San Luis Obispo Ratios of Total Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Governmental Activities Certificates of Participation $ 22,527 $ 21,411 $ 26,135 $ 24,808 $ 18,004 $ 19,619 $ 1 8,290 $ 11,178 $ 10,813 $ 10,433 Less deferred amounts: For issuance discounts: (87) (83) (79) (75) - - - - - - Add deferred amounts: For issuance premiums: 1,063 975 8 86 7 97 708 619 530 - - - State notes - - 2,056 1,901 1,744 1,586 1,426 1,264 1,101 936 Pension Obligation Bonds 145,291 143,890 99,407 96,903 93,733 89,825 85,112 79,516 72,966 64,715 Lease revenue bonds - - - - 20,380 19,970 19,380 88,803 85,842 82,723 Add deferred amounts: For issuance premiums: - - - - 4,023 3,837 3,652 7,972 7,566 7 ,160 Assessment Bonds from direct borrowings - - - - 436 391 344 294 2 41 185 Leases 1 - - - - - - 92,248 126,334 122,129 125,235 Subscription-based IT arrangements 2 - - - - - - - 2,614 7 57 6 ,261 Total bonds and notes payable 168,794 166,193 128,405 124,334 139,028 135,847 2 20,982 317,975 301,415 297,648 Business-Type Activities Certificates of Participation 17,194 16,470 15,678 14,811 13,908 12,966 14,668 11,471 10,734 9 ,959 Add deferred amounts: For issuance premiums: 393 361 3 28 2 95 262 229 196 - - - State Note 86,611 85,674 87,667 84,409 81,079 88,385 84,528 80,701 76,965 73,165 Other Notes - - - - - - 196 166 1 26 86 Revenue Bonds 177,198 173,535 168,410 164,126 159,841 155,330 1 50,585 145,595 140,345 134,819 Add deferred amounts: For issuance premiums: 10,058 9,623 8,926 8,502 8,077 7,653 7,230 6,805 6,381 5 ,957 Unamortized outflow on Bond Refinancing ( 4,171) (3,990) ( 3,808) - - - - - - - General Obligation Bonds 8,760 8,350 7,925 7,485 7,025 6,540 6,030 5,490 4,925 4 ,330 Add deferred amounts: For issuance premiums: 846 790 7 33 6 77 620 564 508 452 3 96 340 Lease Revenue Bonds - - - - - - - 1,582 1,217 831 Add deferred amounts: For issuance premiums: - - - - - - - 57 43 29 Assessment Bonds 79,396 78,089 76,746 75,358 73,943 72,483 70,978 69,437 67,850 66,218 Leases 1 - - - - - - 250 164 78 290 Subscription-based IT arrangements 2 - - - - - - - 199 86 - Total bonds and notes payable 376,285 368,902 362,605 355,663 344,755 344,150 3 35,169 322,119 309,146 296,024 Total Outstanding Debt $ 5 45,079 $ 535,095 $ 4 91,010 $ 4 79,997 $ 4 83,783 $ 4 79,997 $ 556,151 $ 640,094 $ 6 10,561 $ 593,672 Percentage of Personal Income 3.76% 3.58% 3.13% 2.92% 2.80% 2.54% 2.90% 3.13% 2.82% N/A Percentage of Assessed Value of Taxable Property 3 1.13% 1.06% 0.92% 0.85% 0.81% 0.77% 0.87% 0.94% 0.84% 0.78% Net outstanding debt Per Capita $ 1,961 $ 1,916 $ 1,753 $ 1,714 $ 1,709 $ 1,701 $ 1,964 $ 2,270 $ 2,168 $ 2,125 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 sbuscription-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 10 165 County of San Luis Obispo Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Certificates of Participation $ 12,137 $ 11,326 $ 10,482 $ 9,606 $ 8,693 $ 7,747 $ 6,757 $ 2 ,740 $ 2,688 $ 2,637 Less deferred amounts: For issuance discounts: (87) (83) (79) (75) - - - - - - Add deferred amounts: For issuance premiums: 1 ,063 975 8 86 797 708 619 530 - - - Lease Revenue Bonds - - - - 20,380 19,970 19,380 90,385 87,059 83,554 Add deferred amounts: For issuance premiums: - - - - 4,023 3,837 3,652 8,029 7,609 7,189 General Obligation Bonds 8 ,760 8,350 7,925 7,485 7,025 6,540 6,030 5,490 4,925 4,330 Add deferred amounts: For issuance premiums: 846 790 7 33 677 620 564 508 452 396 340 State Notes - - 2,056 1,901 1,744 1,586 1,426 1,264 1,101 936 Other Notes - - - - - - 196 166 126 86 Assessment Bonds 79,396 78,089 76,746 75,358 73,943 72,483 70,978 69,437 67,850 66,218 Leases 1 - - - - - - 92,498 126,498 122,207 125,525 Subscription-based IT arrangements 2 - - - - - - - 2,813 843 6,261 Less resources restricted for principal repayment (2,688) (2,692) ( 2,712) (8,061) (30,167) (23,110) (17,088) (90,011) (93,218) (68,520) Net Total General Obligation Debt $ 99,427 $ 96,755 $ 96,037 $ 87,688 $ 86,969 $ 90,236 $ 184,867 $ 217,263 $ 201,586 $ 228,556 Percentage of Personal Income 0.69% 0.65% 0.61% 0.53% 0.50% 0.48% 0.96% 1.06% 0.93% N/A Percentage of Assessed Value of Taxable Property1 0.21% 0.19% 0.18% 0.16% 0.15% 0.15% 0.29% 0.32% 0.28% 0.30% Net outstanding debt Per Capita $ 358 $ 347 $ 343 $ 313 $ 307 $ 320 $ 655 $ 770 $ 716 $ 818 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 sbuscription-based IT arrangements were not recognized as capital leases pre-GASB 96. Source: Notes to the Financial Statements, Note 10 166 County of San Luis Obispo Legal Debt Margin Information Last Ten Fiscal Years (In Thousands) (UNAUDITED) 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Assessed Value of Property (a) $ 48,172,375 $ 50,647,598 $ 53,415,961 $ 56,262,663 $ 59,450,048 $ 62,200,611 $ 64,252,963 $ 68,367,069 $ 72,345,226 $ 75,806,108 Debt Limit, 1.25% of Assessed Value 602,155 633,095 667,700 703,283 743,126 777,508 803,162 854,588 904,315 947,576 Amount of Debt Applicable to Limit General Obligation Bonds (b) 9 ,606 9 ,140 8 ,658 7 ,485 7 ,025 6 ,540 6 ,030 5 ,490 4 ,925 4 ,330 Less: Resources Restricted to Paying Principal - - - - - - - - - - Total Debt Applicable 9 ,606 9 ,140 8 ,658 7 ,485 7 ,025 6 ,540 6 ,030 5,490 4,925 4,330 Legal Debt Margin $ 592,549 $ 623,955 $ 659,042 $ 695,798 $ 736,101 $ 770,968 $ 797,132 $ 849,098 $ 899,390 $ 943,246 Total Debt Applicable as a Percentage of the Debt Limit 1.60% 1.44% 1.30% 1.06% 0.95% 0.84% 0.75% 0.64% 0.54% 0.46% Source: (a) County Assessed Values, Exemptions and Growth % Book (b) Notes to the Financial Statements, Note 10 167 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,f) (1,a,g) (4,c) (3,b,d) (2,e) 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 20,481,086 72,721 41.10 39,833 3.5 2024 281,639 21,688,624 77,009 41.00 40,183 3.9 2025 279,337 N/A N/A 41.20 40,684 4.8 Notes: N/A = not available a. Data for prior calendar years b. Data includes kindergarten through grade 12 and Cuesta College c. Calendar year 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, 2025 f. 2024 personal income was estimated by using the average growth over the last three years, 5.9%. g. 2024 per capita income amount is calculated using the estimated personal income amount. 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 168 County of San Luis Obispo Principal Employers Current Year and Ten Years Ago (UNAUDITED) 2025 2, 3 2016 1 Number of Percentage of Total Number of Percentage of Total Employer Employees Rank County Employment Employees Rank County Employment County of San Luis Obispo 2,932 1 2.18% 2,800 2 1.99% Department of State Hospitals - Atascadero 2,300 2 1.71% 2,000 3 1.42% Cal Poly Partners * 2,000 3 1.48% 1,400 6 1.00% California Polytechnic State University 1,935 4 1.44% 3,055 1 2.17% Pacific Gas and Electric Company 1,900 5 1.41% 1,900 5 1.35% California Men's Colony 1,349 6 1.00% 1,540 4 1.10% Adventist Health Central Coast ** 1,305 7 0.97% 1,272 7 0.90% Lucia Mar Unified School District 1,234 8 0.92% 1,000 9 0.71% Compass Health 1,200 9 0.89% 1200 8 0.0085 County Action Partnership of San Luis Obispo County 1,182 10 0.88% - - - Paso Robles Joint Unified School District - - - 935 10 0.67% Total Employment Labor Force 4 134,700 140,600 Sources: 1 2015-16 San Luis Obispo County Annual Comprehensive Financial Report 2 2024 Pacific Coast Business Times Book of Lists 3 2025-26 County Budget Report 4 State of California Employment Development Department * Previously Cal Poly Corportation ** Previously Tenet Health Central Coast 169 County of San Luis Obispo Full Time Equivalent County Government Employees by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2015-16 2016-17 2017-18* 2018-19* 2019-20* 2020-21* 2021-22* 2022-23* 2023-24* 2024-25* General Government 440.50 430.75 437.50 441.00 455.25 458.00 456.25 460.50 466.00 463.50 Public Protection 848.25 867.00 909.50 912.00 899.75 904.25 907.50 921.50 924.75 937.25 Public Ways and Facilities 207.75 234.75 237.75 246.75 247.75 248.75 249.75 253.75 258.00 261.00 Health and Sanitation 505.50 556.00 536.50 530.00 531.00 530.00 566.00 612.50 628.25 609.50 Public Assistance 524.00 524.00 523.00 522.00 523.50 526.75 527.25 543.25 538.50 553.50 Education 77.50 78.00 77.75 78.00 78.25 78.50 78.50 78.50 79.00 79.25 Recreation and Cultural Services 60.00 61.00 61.00 61.00 61.00 61.00 62.00 62.00 64.00 65.00 Total 2,663.50 2,751.50 2,783.00 2,790.75 2,796.50 2,807.25 2,847.25 2,932.00 2,958.50 2,969.00 Notes: 2016 and 2017 position allocation figures were calculated at the time of budget preparation for the following year. Figures include limited-term but do not include part-time or contract positions. * Position allocation figures are calculated based on the adopted budgets. Source: County Budget Report 170 County of San Luis Obispo Operating Indicators by Function Last Ten Fiscal Years (UNAUDITED) Function / Department 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Education Library: Annual number of items circulated per capita 1 0.5 10.3 11.6 12.1 12.1 7.6 9.7 9.7 7.2 6.5 Annual Expenditure per capita for total Library budget $ 3 6.27 $ 3 8.10 $ 40.36 $ 4 0.57 $ 4 4.47 $ 4 6.78 $ 4 7.12 $ 5 1.51 $ 4 2.69 $ 52.28 General Government Assessor: Assessment roll completed by June 30th of each year. 97% 95% 98% 97% 99% 96% 96% 97% 98% 96% Health and Sanitation Health Agency: Clients who report reduced, eliminated, or maintained sobriety from alcohol or other drug use upon completion from Drug and Alcohol Services treatment. 92% 94% 94% 95% 98% 96% 97% 94% 96% 92% Emergency medical service calls from dispatch. 1 n/a n/a n/a n/a n/a n/a n/a n/a n/a 31,824 Public Assistance Social Services: Percentage of child abuse/neglect referrals where a response is required within 10 days that were timely. 1 n/a 91% 95% 95% 94% 92% 94% 92% 98% 99% Veteran Services: Veterans contacted through outreach efforts in the community. 2 ,969 3 ,906 5,928 2 ,630 2 ,090 1 ,201 1 ,946 5 ,412 3 ,926 5,084 Public Protection District Attorney: Adult criminal cases referred to, reviewed, and filed or diverted. 1 n/a n/a n/a 1 1,622 11,952 11,925 12,069 11,304 1 1,981 12,298 Planning and Building: Total Permits Issued 3 ,355 3 ,927 3,542 3 ,256 3 ,299 3 ,624 4 ,032 4 ,577 3 ,472 3,313 Probation: Restitution collected and disbursed. 1 n/a n/a n/a n/a n/a n/a n/a 8 07,684 851,424 964,535 Sheriff: Jail bookings 11,018 1 1,774 11,324 1 0,246 8 ,144 6 ,235 6 ,367 7 ,994 7 ,023 7,659 Average daily population 603 632 621 636 552 448 462 463 532 573 Public Ways and Facilities Roads: Pavement Condition Rating for all County roads (70 = "good") 65 66 65 6 5 60 5 9 59 60 6 0 60 Recreation and Cultural Services Parks: Daily Passes 2 189,232 230,915 257,220 6 0,902 59,194 62,559 41,130 51,591 6 2,562 60,475 Annual Vehicle Passes 2 9 ,614 6 ,504 8,066 3 ,974 1 ,823 1 ,716 1 ,869 1 ,727 1 ,806 1,796 Daily Boat Launches 2 16,001 1 6,312 24,340 9 ,664 11,210 11,810 6 ,242 6 ,134 9 ,187 8,489 Annual Boat Passes 2 480 1 ,383 1,353 1 ,629 1 ,288 7 64 403 666 695 558 Airport Airport: Takeoffs and Landings 71,181 7 1,001 77,917 8 2,110 68,067 75,082 82,471 77,084 7 7,426 67,678 Passenger Enplanements 155,744 180,141 226,588 259,481 215,900 150,065 247,522 305,680 351,674 399,400 1 Performance measure is new within the last 10 years and data is not available for all 10 years. 2 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. Source: County Budget Performance Indicators 171 County of San Luis Obispo Capital Asset Statistics by Function Last Ten Fiscal Years (UNAUDITED) Function/Program 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Education Main and branch library facilities 1 15 15 15 15 15 15 15 15 15 15 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 13,841 13,841 13,841 13,841 13,841 14,607 Public Protection Correction facility capacities 2, 3 797 909 909 909 909 909 909 909 845 845 Animal Services Facility 1 1 1 1 1 1 1 1 1 1 Public Ways and Facilities Miles of county roads 1,338 1,338 1,339 1,339 1,349 1,349 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 building and equipment, which are under the functional area of General Government 1 One main library and 14 branches. 2 Amount is all holdings actual totals, including Main Jail, Women's Jail, West Housing, West Dorm, Honor Farm, and Weekender Barracks. 3 Prior to FY 2023-24 the amount reported was the self-rated capacity. Starting in FY 2023-24, the BSCC rated capacity is used. Source: County department management 172