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Home My WebLink About2016-01-26 - AGENDA REPORTS - 2014-15 FINANCIAL RPT (2)0 Agenda Item: 7 CITY OF SANTA CLARITA Q) AGENDA REPORT CONSENT CALENDAR i, CITY MANAGER APPROVAL: 1 j=� DATE: January 26, 2016 SUBJECT: FISCAL YEAR 2014-15 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND OTHER RELATED REPORTS DEPARTMENT: Administrative Services PRESENTER: Darren Hernandez RECOMMENDED ACTION City Council approve the Comprehensive Annual Financial Report and other related reports for fiscal year ending June 30, 2015. BACKGROUND The City's independent audit firm, RSM US LLP, has completed the City of Santa Clarita's (City's) annual audit for fiscal year ending June 30, 2015. RSM US LLP conducted the audit in accordance with Generally Accepted Auditing Standards, whereby an audit plan was prepared and followed to obtain reasonable assurance the City's financial statements were free from material misstatements. The audit included a review, on a test basis, of documents supporting the amounts and disclosures in the financial statements. The audit also included assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. The Comprehensive Annual Financial Report (CAFR) reflects the City's strong financial condition with continued growth of the General Fund balance. Based on the audit performed, RSM US LLP issued an unmodified "clean" audit opinion letter. The opinion reflects the best level an organization can receive on its financial statements. The letter is identified as the "Independent Auditor's Report" in the City's CAFR for fiscal year ending June 30, 2015. In accordance with Generally Accepted Auditing Standards (AU -C 260), the Auditor's Communication With Those Charged With Governance, a Reportto the Honorable Mayor and Members of the City Council has been prepared by RSM US LLP to provide specific information related to the audit scope and performance. Page 1 PacketPg. 53 In addition, the following reports were prepared for the fiscal year ending June 30, 2015, by RSM US LLP: Appropriations Limit Calculation Single Audit Report Transit Enterprise Fund of the City of Santa Clarita City of Santa Clarita Air Quality Improvement Fund Santa Clarita Open Space Preservation District Copies of the reports were provided to the City Council under a separate memo. ALTERNATIVE ACTION No feasible alternative action has been identified by staff. FISCAL IMPACT None ATTACHMENTS Air Quality Improvement Fund 6-30-15 (available in the City Clerk's Reading File) Appropriations Limit Calculation 6-30-15 (available in the City Clerk's Reading File) Compliance Report (A-133) Single Audit 6-30-15 (available in the City Clerk's Reading File) Comprehensive Annual Financial Report 6-30-15 (available in the City Clerk's Reading File) Open Space Preservation District 6-30-15 (available in the City Clerk's Reading File) Report to Honorable Mayor and Members of the City Council (available in the City Clerk's Reading File) Transit Enterprise Fund 6-30-15 (available in the City Clerk's Reading File) Page 2 Packet Pg. 54 City of Santa Clarita Air Quality Improvement Fund Financial and Compliance Report Year Ended June 30, 2015 M THE POWER OF BEING UNDERSTOORSM AUDIT I TAX [ CONSULTING Contents Independent Auditor's Report 1-2 Basic Financial Statements Balance sheet 3 Statement of revenues, expenditures, and changes in fund balance 4 Notes to financial statements Required Supplementary Information Budgetary information 5-6 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 8-9 11 RSM Independent Auditor's Report RSM US LLP To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the Air Quality Improvement Special Revenue Fund (the Fund) of the City of Santa Clarita (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Fund's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation ofthe financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2015, and the respective changes in financial position for the year then ended, in accordance with accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING PM 11 1L.,Ce LLS.inemuc firm of PSM n[rena(vnaLa gvbaI ne—k r _,r t - , gfirm, Uzi z +wti.zo ... .v regar.. uSLLFana RSM Inm:ctiv...I Emphasis of a Matter As discussed in Note 1 to the financial statements, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2015, and the changes in financial position for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 24, 2015, on our consideration of the Fund's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund's internal control over financial reporting and compliance. P.S/u__ U5'� / 'L Irvine, California December 24, 2015 Basic Financial Statements City of Santa Clarita Air Quality Improvement Fund Balance Sheet June 30, 2015 Assets Pooled Cash and Investments $ 444,480 Interest Receivable 886 Due From South Coast Air Quality Management District 67,000 Total assets $ 512,366 Liabilities and Fund Balance Liabilities Accounts payable and accrued liabilities $ 180 Total liabilities 180 Fund Balance Restricted 512,186 Total fund balance 512,186 Total liabilities and fund balance $ 512,366 See Notes to Financial Statements. City of Santa Clarita Air Quality Improvement Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended June 30, 2015 Revenues Assembly Bill 2766 revenues $ 258,386 Investment income 2,765 Total revenues 261,151 Expenditures Administrative 6,081 Air quality improvement program 10,700 Total expenditures 16,781 Net change in fund balances 244,370 Fund balances, beginning of year 267,816 Fund balances, end of year $ 512,186 See Notes to Financial Statements. 0 City of Santa Clarita Air Quality Improvement Fund Notes to Financial Statements Note 1. Summary of Significant Accounting Policies Basis of presentation: The Air Quality Improvement Fund's (the Fund) financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is presented as a Special Revenue Fund of the City of Santa Clarita (the City). The Governmental Accounting Standards Board (GASB) is the acknowledged standard-setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States. The financial statements were prepared from only the accounts of the Fund and, therefore, do not present the financial position or results of operations of the City. The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with a self -balancing set of accounts. Monies received under Assembly Bill 2766 (AB 2766) are recorded in the Fund. AB 2766 authorizes the South Coast Air Quality Management District (SCAQMD) to impose an annual vehicle registration fee and to distribute a portion of the collected revenues to all local jurisdictions within the South Coast Air Basin. These revenues are to be used solely to reduce air pollution from motor vehicles by implementing new programs and studies necessary for the implementation of the California Clean Air Act. Fund financial statements: Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures, and changes in fund balance. The Fund is accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures, and changes in fund balance present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The primary revenue sources are revenues associated with AB 2766 and interest revenue, which are measurable and considered to be available if they are collected within 90 days of the end of the current fiscal period. The Fund recognizes assets of non-exchange transactions in the period when the underlying transaction occurs when all eligibility requirements are met. Non-exchange transactions occur when one government provides (or receives) value to (from) another party without receiving (or giving) equal or nearly equal value in return. The AB 2766 revenue is an example of a non-exchange transaction. Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures are recorded only when payment is due. Pooled cash and investments: The Fund's cash balance was pooled with various other City funds for deposit and investment purposes. The City's treasury is responsible for the cash management of the Fund's cash balance, which pools available cash for investment purposes. The cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Each City fund owns a share of pooled cash and investments, which are separately maintained, and interest income was apportioned based on its average month-end cash balances to the total of the pooled cash and investments. City of Santa Clarita Air Quality Improvement Fund Notes to Financial Statements Note 1. Summary of Significant Accounting Policies (Continued) Fund balance and spending policy: In the Fund's financial statements, fund balance is classified as follows Restricted: Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Expenditures as they are incurred are applied against these restricted net assets. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. Note 2. Pooled Cash and Investments The Fund's pooled cash and investments at June 30, 2015 is $444,480. The deposit and investment disclosures required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, are reported in the annual report of the City. The City's pooled cash and investments is unrated, and average maturity is 30 days or less. As of June 30, 2015, none of the Fund's pooled cash was subject to concentration of credit risk or custodial credit risk. Note 3. Contingencies The Fund receives monies from the SCAQMD that are subject to review and audit by the SCAQMD. Although such audits could result in disallowed expenditures under terms of the program's guidelines, it is believed that any repayments resulting from disallowances will not be material. Any identified amounts as a result of these audits would be required to be remitted back to the SCAQMD or having future remittances from the SCAQMD deducted accordingly. Required Supplementary Information City of Santa Clarita Air Quality Improvement Fund Required Supplementary Information Budgetary Information The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America and utilizes an encumbrance system as a management control technique to assist in controlling expenditures and enforcing revenue provisions. The appropriated budget is prepared by function and department. The City's department heads, with the approval of the City Manager, may make transfers of appropriations within a department and between functions within a fund. The following is the budget comparison schedule for the Fund for the year ended June 30, 2015: City of Santa Clarita Air Quality Improvement Fund Required Supplementary Information For the Year Ended June 30, 2015 Variance With Final Budget Actual Positive Original Final Amounts (Negative) Revenues Assembly Bill 2766 revenues Investment income Total revenues Expenditures Administrative Air quality improvement program Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year 237,322 $ 244,000 $ 258,386 $ 14,386 656 656 2,765 2,109 237,978 244,656 261,151 16,495 6,570 8,263 6,081 2,182 451,929 500,954 10,700 490,254 458,499 509,217 16,781 492,436 (220,521) (264,561) 244,370 508,931 $ (220,521) $ (264,561) 244,370 $ 508,931 267,816 $ 512,186 11 RSM RSM US LLP Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Air Quality Improvement Special Revenue Fund (the Fund) of the City of Santa Clarita (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Fund's basic financial statements, and have issued our report thereon dated December 24, 2015. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Fund's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly, we do not express an opinion on the effectiveness of the Fund's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Fund's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiencyis a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we considerto be material weaknesses. However, material weaknesses may exist that have not been identified. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING PM 11 1L.1Ce LLS.inemuc 11. .1 PSM n[rena(vnaLa g.1a1 ne—, d fi—" s. awa- .v 5 .S LLFana RSM Inm:ctiv...I Compliance and Other Matters As part of obtaining reasonable assurance about whether the Fund's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, including certain provisions of Assembly Bill 2766, Chapter 1705 (Health and Safety Code Sections 44220 through 44246), noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Fund's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. P.S/k_ uS LLP Irvine, California December 24, 2015 I" I -j City of Santa Clarita Appropriations Limit Calculation June 30, 2015 M THE POWER OF BEING UNDERSTOORSM AUDIT I TAX [ CONSULTING RSM RSM US LLP Independent Accountant's Report on Applying Agreed -Upon Procedures To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Calculation of the City of Santa Clarita, California (the City) for the year ended June 30, 2015. These procedures, which were agreed to by the City and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article X111 -B of the California Constitution), were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIII -B of the California Constitution. The City's management is responsible for the Appropriations Limit Calculation. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed worksheets No. 1 through No. 7 presented in the Article XIII -B Appropriations Limitation Uniform Guidelines (or other alternative computations), and observed the limit and annual adjustment factors adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Findings: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit worksheet No. 6, we added line A, last year's limit, to line E, total adjustments, and compared the resulting amount to line F, this year's limit. Findings: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit worksheet No. 6 to the other worksheets described in No. 1 above. Findings: No exceptions were noted as a result of our procedures. 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year. Findings: No exceptions were noted as a result of our procedures. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING RSM OS LLPB[M US memw Arm of PSM a glOealvIl—,k f.ndeyendm[ aoelL[ax orua-zc-ing firma V ttrsmuzmm/aLw[uzfw m... 0,rmaoon r,rd ,- SSM -5LLO o -u We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Calculation of the City. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII -B of the California Constitution. This report is intended solely for the information and use of the City Council and management of the City, and is not intended to be, and should not be, used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. ;E�5/1c-, US LLP Irvine, California December 24, 2015 City of Santa Clarita Appropriations Limit Calculation Year Ended June 30, 2015 A. Appropriations Limit FY 2013-2014 B. Calculation Factors: 1. Population Increase % 2. Inflation Increase % 3. Total Adjustment % C. Annual Adjustment Increase D. Other Adjustments: 1. Loss Responsibility (- ) 2. Transfer to Private (- ) 3. Transfer to Fees ( - ) 4. Assumed Responsibility ( +) E. Total Adjustments F. Appropriations Limit FY 2014-2015 See Notes to Appropriations Limit Calculation. 3 Amount $ 312,720,424 Prior Year Source 1.019800 State Department of Finance 0.997700 State Department of Finance 1.017454 (B.1xB.2) 5,458,366 [(B.3-1)xA)] 5,458,366 (C+D) $ 318,178,790 (A+E) City of Santa Clarita Notes to Appropriations Limit Calculation Note 1. Purpose of Limited Procedures Review Under Article XIII -B of the California Constitution (the GANN Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIII -B, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit. Note 2. Method of Calculation Under Section 10.5 of Article XIII -B, for fiscal years beginning during or after July 1990, the appropriations limit is required to be calculated based on the limit for fiscal year 1987, adjusted for the population and inflation factors discussed in Notes 3 and 4 below. Note 3. Population Factors There are three methods of calculating the change in population that a city may choose in determining the GANN Limit: (1) The change in population within its jurisdiction, (2) the change in population within its jurisdiction, combined with the changes in population within all counties having borders that are contiguous to that city, and (3) the change in population within the incorporated portion of the city. The City of Santa Clarita (the City) may use any of these methods in any year. The method adopted by the City for fiscal year 2015 represents the change in population within its jurisdiction. Note 4. Inflation Factors A California governmental agency may use as its inflation factor either the annual percentage change in the fourth-quarter per capita personal income (which percentage is supplied by the State Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for fiscal year 2015 represents the annual percentage change in the fourth-quarter per capita personal income. Note 5. Other Adjustments A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year ended June 30, 2015. 0 I" I -d City of Santa Clarita, California Compliance Report Year Ended June 30, 2015 M THE POWER OF BEING UNDERSTOORSM AUDIT I TAX [ CONSULTING Contents Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards 1-2 Independent Auditor's Report on: Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 4-5 Compliance For Each Major Program, Report on Internal Control Over Compliance, and Report on Schedule of Expenditures of Federal Awards Required By OMB Circular A-133 6-7 Schedule of Findings and Questioned Costs Schedule of Prior Year Findings and Questioned Costs 10 City of Santa Clarita, California Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 Federal Pass -Through/ CFDA Identification Federal Federal Aaencv/Grant Name Number Number Expenditur U.S. Department of Housing and Urban Development: Direct Program: Community Development Block Grant' 14.218 B -13 -MC -06-0576 $ 1,123,057 Total U.S. Department of Housing and Urban Development 1,123,057 U.S. Department of Justice: Direct Program: Justice Assistance Grant Program - 2011 16.738 2011 -DJ -BX -2744 901 Justice Assistance Grant Program - 2012 16.738 2012 -DJ -BX -0827 22,473 Justice Assistance Grant Program - 2013 16.738 2013 -DJ -BX -0988 8,193 Justice Assistance Grant Program - 2014 16.738 2014 -DJ -BX -0319 465 Total Justice Assistance Grant Program 32,032 Passed through the County of Los Angeles: Equitable Sharing Program 16.922 CAEQ01940 9,403 Total U.S. Department of Justice 41,435 U.S. Department of Labor: Passed through Antelope Valley Workforce Development Consortium: Workforce Investment Act - Adult Program 17.258 ADW091001 308,191 Workforce Investment Act - Dislocated Workers 17.278 ADW091001 192,500 Total Workforce Investment Act Cluster 500,691 Total U.S. Department of Labor 500,691 U.S. Department of Transportation: Passed through the State of California, Transportation Department: Highway Planning and Construction' 20.205 BHLO-5450(066) 13,001 Highway Planning and Construction' 20.205 BHLS-5450(080) 170,585 Highway Planning and Construction' 20.205 BHLS-5450(082) 676,987 Highway Planning and Construction' 20.205 BPMPL-5450(080) 9,193 Highway Planning and Construction' 20.205 CML -5450(083) 37,791 Highway Planning and Construction' 20.205 HSIPL-5450(079) 401,702 Highway Planning and Construction' 20.205 HSIPL-5450(081) 269,803 Highway Planning and Construction' 20.205 RPSTPLE-5450(059) 138,243 Highway Planning and Construction' 20.205 STPL-5450(068) 39,713 Highway Planning and Construction' 20.205 STPL-5450(078) 1,732,416 Total Highway Planning and Construction Program 3,489,434 (Continued) City of Santa Clarita, California Schedule of Expenditures of Federal Awards (Continued) Year Ended June 30, 2015 Federal CFDA Federal Aoencv/Grant Name Number U.S. Department of Transportation (Continued): $ 13,604 Direct Program: 1,200,669 Federal Transit Formula Grant 20.500 Federal Transit Formula Grant 20.507 Federal Transit Formula Grant 20.507 Federal Transit Formula Grant 20.507 ARRA - Federal Transit Formula Grant 20.507 Total Federal Transit Cluster Total U.S. Department of Transportation U.S. Department of Homeland Security: Direct Program: Pre -Disaster Mitigation 97.047 Pre -Disaster Mitigation 97.047 Total Pre -Disaster Mitigation Program Total U.S. Department of Homeland Security Total Expenditures of Federal Awards Major Program See Notes to Schedule of Expenditures of Federal Awards. E Pass -Through/ Identification Federal Number Exoenditur CA -04-0246-00 $ 13,604 CA -9G -Y276-01 1,200,669 CA -90-Y719-00 29,260 CA -95-X137-00 116,062 CA -96-X071-01 42,353 1,401,948 4,891,382 PDM 11-PJ21 2011-0002 163,138 LPDM-PJ-09-CA-2010-002 45,108 208,246 208,246 $ 6,764,811 City of Santa Clarita, California Notes to Schedule of Expenditures of Federal Awards Note 1. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule) presents the activity of all federal award programs of the City of Santa Clarita (the City) for the year ended June 30, 2015. The Schedule includes federal awards received directly from federal agencies, as well as federal awards passed through other governmental agencies. The information in this Schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Because the Schedule presents only a selected portion of the operations of the City, it is not intended to, and does not, present the financial position, changes in net position, or cash flows of the City. The City's reporting entity is defined in Note 1 to the City's basic financial statements. Note 2. Summary of Significant Accounting Policies Funds received under the various grant programs have been recorded within the special revenue and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the special revenue funds, and the accrual basis of accounting is used for the enterprise funds. Expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. Note 3. Subrecipients Of the federal expenditures presented in the Schedule, the City provided federal awards to subrecipients as follows: Amount Provided to CFDA Program Name Grant Identifying Number Subrecipients 14.218 Community Development Block Grant B -13 -MC -06-0576 $ 332,178 RSM RSM US LLP Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita, California Santa Clarita, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Santa Clarita, California (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 24, 2015, which includes an emphasis of matter paragraph for the implementation of Governmental Accounting Standards Board Statement Nos. 68 and 71. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING USM US LLP5[be LLimemw firm rf RSM I aS-1-1a gi,brI,t vk rhnddrt —t t- -d mrrrAIng firm,SrtTa.Smal/rb-m9fm mare rrfamr-, 1, RIM US LLP ana Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. P -.LA- us LI -P Irvine, California December 24, 2015 11 RSM RSM US LLP Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita, California Santa Clarita, California Report on Compliance for Each Major Federal Program We have audited the City of Santa Clarita, California's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2015. The City's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued bythe Comptroller General ofthe United States; and Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non,Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City's compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING PM 11 1L.,Ce LLS.inemuc firm of PSM n[rena(vnaLa gvbaI ne—kf -u,t-, gfirm, Uzi s. awa- 1,.v 5 uSLLFana RSM Inm:ctiv...I Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control overcompliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Report on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 24, 2015, which contained unmodified opinions on those financial statements and an emphasis -of -matter paragraph for the implementation of Governmental Accounting Standards Board Statement Nos. 68 and 71. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is 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 financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Psm— LLP Irvine, California December 24, 2015 City of Santa Clarita, California Schedule of Findings and Questioned Costs For the Fiscal Year Ended June 30, 2015 I. Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified not considered to be material weaknesses? Yes X None reported • Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major federal programs: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified? Yes X None reported Type of auditor's report issued on compliance for major federal programs: Unmodified • Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? Yes X No Identification of major federal programs: CFDA Number Name of Federal Program or Cluster 14.218 Community Development Block Grant 20.205 Highway Planning and Construction Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? Yes X No E City of Santa Clarita, California Schedule of Findings and Questioned Costs (Continued) For the Fiscal Year Ended June 30, 2015 II. Financial Statement Findings No matters were reported. III. Federal Awards Findings and Questioned Costs No matters were reported. City of Santa Clarita, California Schedule of Prior Year Findings and Questioned Costs For the Fiscal Year Ended June 30, 2015 I. Financial Statement Findings Material Weaknesses Corrective Action or Number Comment Status Other Explanation 2014-001 There were proposed audit adjustments Corrected identified during our audit related to capital assets. These adjustments included restatements of net position of the governmental activities for a combination of infrastructure that had not been recorded and the removal of capital assets inconsistent with the City's records. II. Federal Awards Findings and Questioned Costs No matters were reported for the fiscal year ended June 30, 2014. 10 CITY OF SANTA CLARITA7 CALIFORNIA v-. 6 �Jouality o� Fiscal B UI L pING ANO cRF�r�ti L i cco+ �Gy City of Santa Clarita, California Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2015 PREPARED BY THE DEPARTMENT OF ADMINISTRATIVE SERVICES CITY OF SANTA CLARITA, CALIFORNIA City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 Pape INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement for Excellence in Financial Reporting ................................................... viii Officials of the City of Santa Clarita.............................................................................................................. ix OrganizationChart........................................................................................................................................ x Map of the City of Santa Clarita....................................................................................................................xi FINANCIAL SECTION IndependentAuditor's Report....................................................................................................................... 1 Management's Discussion and Analysis (Unaudited)................................................................................... 3 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position...................................................................................................................... 14 Statementof Activities........................................................................................................................... 16 Fund Financial Statements: Governmental Fund Financial Statements: BalanceSheet..................................................................................................................................... 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position....................................................................................................... 21 Statement of Revenues, Expenditures and Changes in Fund Balances.............................................................................................................. 22 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statementof Activities...................................................................................................................... 25 Proprietary Fund Financial Statements: Statementof Net Position.................................................................................................................... 26 Statement of Revenues, Expenses and Changes in Net Position...................................................... 27 Statementof Cash Flows.................................................................................................................... 28 Fiduciary Fund Financial Statements: Statement of Net Position (Deficit)...................................................................................................... 30 Statement of Changes in Net Position (Deficit)................................................................................... 31 Notes to Financial Statements................................................................................................................. 33 City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 Pape FINANCIAL SECTION (Continued) Required Supplementary Information (Unaudited) Schedules of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual: GeneralFund.........................................................................................................................................83 Bridge and Thoroughfare Special Revenue Fund................................................................................. 84 Public Library Special Revenue Fund.................................................................................................... 85 Landscape Maintenance District #1 Special Revenue Fund................................................................. 86 Schedule of Funding Progress................................................................................................................. 87 Schedule of Changes in the City's Net Pension Liability and Related Ratios ......................................... 88 Schedule of City Contributions................................................................................................................. 90 Notes to Required Supplementary Information........................................................................................92 Supplementary Information: Non -Major Governmental Funds: Description of Nonmajor Governmental Funds...................................................................................... 93 CombiningBalance Sheet.....................................................................................................................96 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .......................... 104 Schedules of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual: Developer Fees Special Revenue Fund........................................................................................... 112 Bikeway Special Revenue Fund....................................................................................................... 113 Gas Tax Special Revenue Fund....................................................................................................... 114 Proposition A Special Revenue Fund............................................................................................... 115 Special Assessment Special Revenue Fund.................................................................................... 116 State Park Special Revenue Fund.................................................................................................... 117 TDASpecial Revenue Fund.............................................................................................................. 118 Traffic Safety Special Revenue Fund................................................................................................ 119 CDBGSpecial Revenue Fund.......................................................................................................... 120 AQMDSpecial Revenue Fund.......................................................................................................... 121 Stormwater Special Revenue Fund.................................................................................................. 122 Surface Transportation Program Special Revenue Fund................................................................. 123 BJA Law Enforcement Special Revenue Fund................................................................................. 124 Supplemental Law Grant Special Revenue Fund............................................................................. 125 HOMESpecial Revenue Fund.......................................................................................................... 126 Library Facilities Fees Special Revenue Fund.................................................................................. 127 Public Education and Government Special Revenue Fund.............................................................. 128 Proposition C Special Revenue Fund............................................................................................... 129 Federal Grants Special Revenue Fund............................................................................................. 130 Measure R Special Revenue Fund................................................................................................... 131 Tourism Marketing District Special Revenue Fund........................................................................... 132 OSPDSpecial Revenue Fund........................................................................................................... 133 Miscellaneous Grants Special Revenue Fund.................................................................................. 134 Park Dedication Special Revenue Fund........................................................................................... 135 Housing Successor Agency Special Revenue Fund......................................................................... 136 Tourism Marketing Bureau Special Revenue Fund.......................................................................... 137 City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 Pape FINANCIAL SECTION (Continued) General Capital Projects Fund.......................................................................................................... 138 Public Financing Authority Capital Projects Fund............................................................................. 139 Public Financing Authority Debt Service Fund.................................................................................. 140 Internal Service Funds Description of Internal Service Funds.................................................................................................. 141 Combining Statement of Net Position.................................................................................................. 142 Combining Statement of Revenues, Expenses and Changes in Net Position .................................... 143 Combining Statement of Cash Flows.................................................................................................. 144 Fiduciary Funds: Description of Fiduciary Funds............................................................................................................ 145 Combining Statement of Assets and Liabilities—Agency Funds......................................................... 146 Combining Statement of Changes in Assets and Liabilities—Agency Funds ..................................... 148 STATISTICAL SECTION (Unaudited) Tableof Contents...................................................................................................................................... 151 NetPosition by Component...................................................................................................................... 152 Changesin Net Position............................................................................................................................ 154 Fund Balances of Governmental Funds................................................................................................... 158 Changes in Fund Balances of Governmental Funds................................................................................ 160 Assessed Values and Actual Values of Taxable Property........................................................................ 162 Assessed Values and Actual Values of Taxable Property—Redevelopment Agency .............................. 164 Assessed Values—Taxable Property....................................................................................................... 166 Assessed Values—Use Category Summary ............................................................................................ 168 Direct and Overlapping Property Tax Rates............................................................................................. 170 Principal Property Taxpayers.................................................................................................................... 172 Property Tax Levies, Tax Collections and Delinquencies......................................................................... 173 Top Property Owners Based on Net Values—Successor Agency........................................................... 174 Project Area Assessment Appeals Summary and Tax Collection History—Successor Agency .............. 175 Charge Detail Report for CFD 2002-1 (Valencia Town Center)—Successor Agency .............................. 176 Ratio of Outstanding Debt by Type........................................................................................................... 178 Ratio of General Bonded Debt Outstanding............................................................................................. 180 Direct and Overlapping Tax and Assessment Debt.................................................................................. 181 Legal Debt Margin Information.................................................................................................................. 182 Pledged Revenue Coverage..................................................................................................................... 184 Demographic and Economic Statistics..................................................................................................... 185 PrincipalEmployers.................................................................................................................................. 186 Full -Time and Part -Time City Employees by Function............................................................................. 187 Operating Indicators by Function.............................................................................................................. 188 Capital Asset Statistics by Function.......................................................................................................... 189 City of SANTA CLARITA 23920 Valencia Boulevard • Suite 300 • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 • FAX: (661) 259-8125 www.santa-clarita.com December 24, 2015 Honorable Mayor, Mayor Pro Tem, and City Councilmembers: The Comprehensive Annual Financial Report (CAFR) of the City of Santa Clarita for fiscal year ended June 30, 2015, is hereby submitted in accordance with Chapter 2.12 of the City of Santa Clarita Municipal Code. This report provides the City Council and the public with an understanding of the financial condition of the City of Santa Clarita as of June 30, 2015. This report consists of management's representations concerning the finances of the City of Santa Clarita. As such, management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive framework of internal controls that is designed to protect the City's assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City's financial statements. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City of Santa Clarita. State Law requires the City to prepare an annual financial report. This report fulfills that obligation. McGladrey LLP, an independent firm of certified public accountants, has issued an unmodified ("clean") opinion on the financial statements of the City of Santa Clarita for the year ended June 30, 2015. The independent auditor's report is located at the front of the financial section of this report. The CAFR has been prepared in conformity with Generally Accepted Accounting Principles (GAAP) and the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). These reporting requirements specify that management provide a narrative introduction, overview, and analysis to accompany the financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A, which immediately follows the independent auditor's report, complements this letter of transmittal and should be read in conjunction with it. Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed by our independent audit firm. The Single Audit was designed to meet the special needs of the federal grantor agencies. The standards governing the Single Audit engagements require that the independent auditor report on the fair presentation of the financial statements and 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 City's separately issued Single Audit Reports. CITY PROFILE The City of Santa Clarita was incorporated on December 15, 1987, as a General Law City, and operates under a City Council/City Manager form of government. Located minutes from Bob Hope Airport in Burbank, Santa Clarita lies between the Santa Susana and San Gabriel mountain ranges. Encompassing the communities of Canyon Country, Newhall, Saugus, and Valencia, Santa Clarita covers approximately 64.4 square miles. With a population of 213,231, the City is the 18th largest city in the State of California and the third largest in Los Angeles County. Santa Clarita residents enjoy an expansive year-round parks and recreation network, featuring 32 beautiful park facilities totaling more than 368 acres, over 8,745 acres of City -owned open space, and more than 98 miles of picturesque trails and paseos designed for commuting and recreational use, including walking, riding, jogging, and skating. With its unique blend of rural, old -west heritage, and urban sophistication, this fast-growing City has established an enviable balance between quality living and growth. The City of Santa Clarita's five City Councilmembers are elected at large to four-year overlapping terms, with elections held bi-annually. The position of Mayor is annually selected by the Councilmembers. The City Council is responsible, among other things, for passing ordinances, adopting the budget, setting policy, and appointing committees. The City Council appoints the City Manager, who is responsible for implementing the policies of the Council, overseeing the day-to-day operations of City government, and for appointing and managing the various Directors. The City Council also appoints the City Attorney. The City provides, either directly or under contract, a full range of municipal services including public safety, construction, maintenance of streets and other infrastructure, public libraries, public works, parks and recreation, community development, and cultural events. The City also provides services through the Santa Clarita Public Financing Authority (PFA), which is a blended component unit of the City of Santa Clarita. The financial activities of this entity are included in this report, as their activities are under the control of the City. A separate component unit report for the Santa Clarita PFA is also available. The City operates on a fiscal year basis which begins July 1 and ends June 30. The City's Municipal Code requires the City Manager to prepare a budget and present it to the City Council each year. The budget process begins by January of each year and is carried ii out under the direction of the City Manager in cooperation with the various City departments. The proposed operating and capital budget is submitted by the City Manager to City Council for adoption by June 30, to take effect at the beginning of the fiscal year on July 1. Budgetary control for the City is maintained through its accounting systems. Once adopted, the budget may be amended throughout the year as necessary. Budgetary control is established at the category level within each fund. LOCAL ECONOMY The City of Santa Clarita is one of Southern California's most desirable places to live and do business. City officials pride themselves on the organization's ability to balance the needs of locally based companies with those of the community, resulting in an unmatched quality of life. We continue to see positive changes in the economy, such as an increase in sales tax revenues and a recovering housing market. The City has a 100 percent track record for adopting a balanced, on-time budget, with ample reserves and contingency funds. Fiscal Year 2014-15 was successful and stable for the City due to prudent fiscal planning. Targeted employment sectors in Santa Clarita include aerospace, manufacturing, biomedical, entertainment, and technology. This past year we welcomed several new retailers to Westfield Valencia Town Center including: Lyfe Kitchen, Solitas, H&M and Lululemon. An Audi Dealership and Mamba Motorsports also opened in Santa Clarita. Retail vacancy rates continue to decline, currently at a low 4.8 percent compared to 5.2 percent in the 2nd Quarter of 2014. The same is true for industrial vacancy rates, which decreased to 3 percent from 5.6 percent in the 2nd Quarter of 2014. The largest area of potential growth in the City continues to be in office space, which increased to 10.8 percent in the 2nd Quarter of 2015 compared to 9.4 percent in the 2nd Quarter of 2014. The City's Film Office enjoyed its best year ever since its inception in 2002. In Fiscal Year 2014-15, filming in Santa Clarita meant an economic impact of $33.9 million to the local economy from location filming. Santa Clarita is home to more than 20 sound stages, 10 movie ranches, and hundreds of film -related businesses. Network television shows like "NCIS," "Switched at Birth," "Chasing Life," "Westworld," "The Player," "Blunt Talk," "Stitchers," and "Recovery Road" are based in Santa Clarita and regularly film on location within the City. Tourism continues to be one of the City of Santa Clarita's largest economic generators contributing more than $3.1 million to the general fund from Transient Occupancy Tax (TOT) in Fiscal Year 2014-15. The fifth year of the Tourism Marketing District (TMD), a collaborative assessment program and partnership between the City and five local hotels, grew upon previous success and collected over $576,000 in support of increased marketing and promotion of Santa Clarita as a tourism destination. TMD dollars are a vital component of the area's continued attraction of events and visitors, which translates to dollars spent in the community and at local businesses. The following events are just a iii few that were attracted as part of the City's increased event attraction efforts: Cal South State Soccer Cup, California Super States Chess Championships, USSSA Baseball, Masters College Collegiate Golf Tournament, USA Swimming Western Speedo Sectionals, Triple Crown Softball, NAIA Baseball National Championship, Masters College Collegiate Volleyball Tournament, and the Bonspiel Curling Tournament. The City also attracted two internationally sanctioned events, including the Amgen Tour of California, returning to the City for the 7th year, and the 2nd Annual Wings for Life World Run. The Santa Clarita Valley Enterprise Zone officially ended benefits to local businesses on December 31, 2014. The proposal to eliminate the California Enterprise Zone program was passed by the State Senate in June 2013. Even with the program ending in 2013, Santa Clarita businesses were still eligible to obtain a voucher certificate for qualified employees hired through the end of 2014. Since its inception in 1984, the Enterprise Zone program provided hiring credits and tax breaks in economically distressed areas of the state to encourage business investment and promote the creation of new jobs. Santa Clarita was awarded an Enterprise Zone in 2007 and received an expanded zone designation in 2011. The program provided approximately 600 local businesses with savings of over $542 million through hiring tax credits and issued 14,493 vouchers for people hired in local jobs in the Santa Clarita Valley. In 2014, the City worked with the Santa Clarita Valley Economic Development Corporation (SCVEDC) and the County in a final effort to market the SCV Enterprise Zone and ensure that companies that were eligible for the Enterprise Zone credit completed the vouchering process. The SCVEDC held multiple workshops to get the word out before the conclusion of the program and assisted an additional 16 companies with voucher credits for 177 jobs. Santa Clarita recognizes the important role education plays in the success of the community. The City is home to three premier colleges, including California Institute of the Arts (CalArts), College of the Canyons, and The Masters College. These colleges offer world-class instruction and programming to prepare students to become the next generation of business professionals and leaders. LONG -TERM FINANCIAL PLANNING Santa Clarita is one of California's model cities, boasting the essential elements needed for well-balanced living and total well-being. Santa Clarita remains one of the safest cities in California among cities with populations exceeding 150,000. Santa Clarita is home to a well-educated population, with more than 70 percent of adults over age 25 and older having attained some college or higher, as compared to Los Angeles County, which averages 56.6 percent. The City of Santa Clarita has experienced steady growth since its inception in 1987, and City officials work directly with the private and public sectors to attract new businesses to the Santa Clarita Valley. The City of Santa Clarita is focused on retaining existing companies and encouraging their growth within the City while working to attract new business, thereby creating new jobs for residents. Santa Clarita has set an aggressive goal iv of creating two jobs for every household, whereby providing an increased opportunity for residents to work close to home. The continuing recovery in our economy has directly affected the City's revenue growth, producing increases in property tax, sales tax, real property transfer tax, and TOT. The City provides necessary funding for essential services for City Council and community identified priorities, while taking steps to ensure the City remains in good financial health. Annually, the City prepares extended forecasts for the General Fund to determine the future impact of current actions. These forecasts indicate a stable General Fund over the next few years, primarily due to projected marginal increases in sales, property taxes, and property taxes in lieu of vehicle license fees. However, because the City of Santa Clarita has practiced smart growth in successful financial times, the City is well prepared for times when revenue projections do not include growth. The City maintains a General Fund balance sufficient to provide for various identified contingencies, as well as an established operating reserve. In addition, the General Fund contributes annually to the City's facilities replacement fund, which provides for major maintenance and replacement of infrastructure and capital improvements. The City's Capital Improvement Program (CIP) is a component of the annual budget process that addresses the City's short- and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard, as well as providing new facilities to support current growth and complement new development. MAJOR MILESTONES IN FISCAL YEAR 2014-15 ❖ The City of Santa Clarita set new film records in Fiscal Year 2014-15, with an estimated total economic impact of $33.9 million from location filming. The Santa Clarita Film Office has again surpassed previous year numbers for the 5th year in a row, processing 553 permits this fiscal year, a 4 percent rise over last year's 531 permits and recorded 1,437 film days, a 5 percent increase over last year's 1,370 film days, making Fiscal Year 2014-15 its best to date. ❖ Improving, maintaining, and adding to the City's infrastructure continues to be a high priority and focus for the City. During Fiscal Year 2014-15, the City completed the beautification project at Sand Canyon and SR 14; finished the widening of the McBean Parkway bridge across from the post office, adding a protected bike lane; opened its first Business Incubator in Old Town Newhall; dedicated Gateway Ranch open space which also prevented a massive development at the 1-5/SR 14 junction; opened River Village Park and the Santa Clara River Trail Phase three; and broke ground for the Golden Valley Road bridge -widening project that will include protected bike and pedestrian lanes. ❖ Santa Clarita continues to be proactive in addressing teen drug use. To raise awareness about drug availability and use, the City continued to reach out to v parents and families and provide assistance to those in need. The City's Drug Free Youth In Town (DFYIT) program continues to grow, with thousands of teens pledging to stay sober and engaged in meaningful, healthy activities on every junior and senior high school campus in the Santa Clarita Valley. ❖ Santa Clarita Public Library continues to thrive in its fourth year of operation. The three branches saw over 894,000 patron visits, issued 15,810 new library cards, circulated more than 1.5 million books and materials, and library website traffic rose 78 percent over last year. ❖ Special events hosted by the City attracted visitors from across the globe. Santa Clarita hosted the Amgen Tour of California bike race and the International Wings for Life World Run, in addition to the annual Marathon in November. The City also worked with community partners to host the Thursdays at Newhall event series, which includes Art Slam, JAM Sessions, Revved up, Senses, and the ARTree Speaker Series. The City's Cowboy Festival in April moved to Old Town Newhall and adjacent Hart Park for the first time with high attendance. AWARDS AND ACKNOWLEDGEMENTS The City of Santa Clarita was recognized many times throughout the year, being named in the top five Most Business Friendly Cities in Los Angeles County by the Los Angeles Economic Development Corporation and named among the Best City for Young Families by Nerd Wallet. Parenting.com also named Santa Clarita as the 3`a Safest City in America and Safewise.com titled the City as one of the 50 Safest Cities in California. The City of Santa Clarita also won various awards including: the 2015 Helen Putnam Award of Excellence from the League of California Cities in Economic Development through the Arts category for the revitalization of Old Town Newhall and given the title of "2014 Project of the Year" by the Southern California Chapter of the American Public Works Association (APWA) and "Project of the Year" by the APWA's High Desert Branch for the Newhall Roundabout. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Clarita for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2014. This was the 26th consecutive year the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy GAAP and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the requirements of the GFOA Certificate of Achievement Program, and we are submitting it to GFOA to determine its eligibility for another certificate. vi The City also received a Certificate of Excellence Award from the Association of Public Treasurers of the United States and Canada for Santa Clarita's Investment Policy. The City annually submits its Investment Policy to the Association's Investment Policy Certification Committee for award consideration and has received the prestigious Certificate of Excellence Award for the past 20 years. This report is a joint effort by many people from many different areas of responsibility. The preparation of this report could not have been accomplished without the hard work and team effort of the staff of the Finance Division, in particular, Finance and Technology Manager, Carmen Magana; Financial Analysts, Susan Cromsigt, Mary Ann Ruprecht, Jan Downey, Brittany Houston, Blanca Gomez, and Lisett Bautista; and General Accounting Specialist, Aruna Patel. I would like to express my appreciation to all members of the Division who assisted and contributed to its preparation. I would also like to thank the Mayor; Mayor Pro Tem; Councilmembers; City Manager, Ken Striplin; Assistant City Manager, Frank Oviedo; Director of Public Works, Robert Newman; Director of Community Development, Tom Cole; and Director of Parks, Recreation and Community Services, Rick Gould, for their continuing efforts in administering the financial operations of the City in a conservative and responsible manner. Sincerely, Darren Hernandez Deputy City Manager DH:cm:hds Darren\Transmittal Letter 2015 vii G�9 Gova rentFini eeofee.aA Miation Certificate of Achievement for Excellence in Financial Reporting Presented 0 City of Santa Clarita - California For its Comprehensive M uel Finmwinl Report for Ne Fiscal Year Ended //yy Jme 309 7014 *4r dol &[ UdvelrmwdcW OFFICIALS OF THE CITY OF SANTA CLARITA As of June 30, 2015 City Council Marsha McLean MAYOR Bob Kellar MAYOR PRO TEM Dante Acosta COUNCILMEMBER TimBen Boydston COUNCILMEMBER Laurene Weste COUNCILMEMBER City Officials Ken Striplin CITY MANAGER Frank Oviedo ASSISTANT CITY MANAGER Darren Hernandez DEPUTY CITY MANAGER Joseph Montes CITY ATTORNEY Tom Cole DIRECTOR OF COMMUNITY DEVELOPMENT Richard Gould DIRECTOR OF PARKS, RECREATION & COMMUNITY SERVICES Robert Newman DIRECTOR OF PUBLIC WORKS/CITY ENGINEER ix City of Santa Cladta ORGANIZATION CHART As of June 30, 2015 qd.. inensnve Pl Ice Techmlgy Services Commmity Presercanon Specu Districts Re liniment Cttyaf gHs �cicesnevelnpment Public Lbmry Eco cDevelopment works Cm®muvity swicea F lance Pl Ice Techmlgy Services Commmity Presercanon Specu Districts Re liniment TI sit Community Dev. Block Grant Public Lbmry Eco cDevelopment Urt m Forestry City Clerk Etameermg Recucation Sheriffs Department Tmt£c Engineemg Pads FueNmmnon Sodding&safety Coity Services Human Resomrces Gmcral Services Pads Planning & Opm Space Purchasing EavurommaenaA Services BilkM g®®t C-(SANTA CLARrr'A r L_ j r- s r � W X3 t � LJ i 1� RSM RSM US UP Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Santa Clarita, California (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City as of June 30, 2015, 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. THE POWER OF BEING UNI AUDIT I TAX I CONSULTING RYIIISW4MeLLSmm4vemofRYlFbrtlb�deJ�YW�vkrtYtlmvibaR+tlLWetlmWfM1ns Wtmumr✓� 0sb�meMv�YnrepdflB1115Wetl RYIFbMb�d Emphasis of Matter As discussed in Note 12 to the financial statements, the beginning net position of the governmental and business -type activities has been restated as of June 30, 2014 as a result of the implementation of Governmental Accounting Standards Board Statement Nos. 68 and 71. We also audited the adjustments described in Note 12 that were applied to restate the 2014 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information and schedules of funding progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining non -major fund financial statements and schedules, and other information such as the introductory and statistical sections, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining non -major fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining non -major fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 24, 2015 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. P—slk— 1)5. LL/> Irvine, California December 24, 2015 MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2015 This discussion and analysis of the City of Santa Clarita's (the City) financial performance provides an overview of the financial activities of the City for the fiscal year ended June 30, 2015. Our analysis includes information regarding the City's overall financial position and results of operations to assist users in evaluating the City's financial position, a discussion of significant changes that occurred in funds, and information regarding significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of currently known facts, decisions and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the accompanying transmittal letter, the basic financial statements and the accompanying notes to those financial statements. FINANCIAL HIGHLIGHTS • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $1.05 billion. Of this amount, $82.0 million represents unrestricted net position that may be used to meet the City's ongoing obligations to citizens and creditors (Table 1). • The City's total net position increased by $43.2 million. Net position of the business -type activities decreased by $4.3 million, or 5.0%, and the net position of the governmental activities increased by $47.5 million (Table 2). • Due to the implementation of GASB 68 and 71, the City restated its net position as of June 30, 2014 and recorded a total net pension liability of $26.9 million as of June 30, 2015. For additional information, see Note 12 regarding the prior year restatement and Note 13 for changes in the net pension liability. • The net capital assets of the City's governmental activities increased by $17.5 million, or 2.1%, over last fiscal year. The increase was in part due to purchases and contributions of land totaling $15.9 million. See Note 7 to the financial statements for additional information. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $196.9 million. This represents an increase of $8.5 million as compared to the prior year. • Within governmental funds, the General Fund reported a fund balance of $116.5 million, an increase of $7.6 million over the prior year. USING THIS ANNUAL REPORT The financial statements presented herein include all of the activities of the City of Santa Clarita and its component unit using the integrated approach as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34. The three components of the basic financial statements are as follows: 1) Government -Wide Financial Statements The Government -Wide Financial Statements present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting in a manner similar to a private -sector business. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). See independent auditor's report. USING THIS ANNUAL REPORT (CONTINUED) 2) Fund Financial Statements The Fund Financial Statements include statements for each of the three categories of activities: governmental, proprietary and fiduciary. For governmental activities, these fund statements tell how these services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government -wide statements by providing information about the City's most significant funds and other funds. 3) Notes to the Basic Financial Statements The notes provide additional information necessary to enable the user to fully understand the various financial statements. In addition to the basic financial statements and notes, this report contains other supplementary information. REPORTING THE CITY AS A WHOLE — GOVERNMENT -WIDE FINANCIAL STATEMENTS The Statement of Net Position and the Statement of Activities One of the most important questions asked about the City's finances is, "Is the City as a whole better or worse off as a result of the year's activities?" The Statement of Net Position and the Statement of Activities report information about the City as a whole, and its activities, is a way to answer this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Position reports all of the City's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, with the difference reported as net position. Net position is one way to measure the City's financial health or financial position. Over time, increases or decreases in the City's net position is an indication of whether its financial health is improving or deteriorating. Other things to consider are non-financial factors, such as changes in the economy due to external factors that would cause an increase or decrease in consumer spending. The Statement of Activities presents information relating to how the City's net position changed during the fiscal year. All activities resulting in changes in net position are reported when earned or incurred, regardless of the receipt or disbursement of the related transaction's cash flows. Some of the revenues and expenses reported in this statement will result in future fiscal period cash flows, such as the receipt of uncollected taxes and the payment of interest expense or compensated absences. In the Statement of Net Position and the Statement of Activities, we separate the City's activities as follows Governmental Activities — Most of the City's basic services are reported in this category, including general administration (City Manager, City Clerk, Finance, etc.), public safety, public works, parks, recreation and community services, and community development (planning and engineering). These activities are distinguished due to the use of property taxes, sales tax, transient occupancy tax, user fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues to finance these activities. Business -Type Activities — City functions that are intended to be primarily self-supporting through the imposition of user fees and charges are reported in the business -type activity category. Business -type activities for the City consist of transit activities related to the operation of the City's local public transportation system. See independent auditor's report. 4 REPORTING THE CITY AS A WHOLE — GOVERNMENT -WIDE FINANCIAL STATEMENTS (CONTINUED) Component Unit Activities — The City of Santa Clarita is the primary government unit to one legally separate entity. The financial activity and data of the Santa Clarita Public Financing Authority has been accounted for within the funds of the City, and therefore, separate component unit financial information is not presented within the financial statements. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS — FUND FINANCIAL STATEMENTS A fund is a grouping of related accounts used to account for and accumulate financial information related to a specific activity or objective. Some funds are required to be established by State law and bond covenants, however, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other resources. The fund financial statements provide detailed information about the most significant funds and other funds — not the City as a whole. The City's three types of funds are governmental, proprietary and fiduciary. Governmental Funds — Most of the City's basic services are reported in governmental funds. Governmental fund financial statements focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called "modified accrual" accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. Because the focus of the governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for the governmental activities in the government - wide financial statements. Reconciliation of the Fund Financial Statements to the Government -Wide Financial Statements is provided to explain the differences created by this integrated approach. The City reports governmental fund financial information within 33 governmental funds. The General Fund, Bridge and Thoroughfare Fund, Public Library Fund and Landscape Maintenance District Fund are presented separately as major funds in the governmental fund balance sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances. Financial data for the remaining 29 governmental funds are combined into a single, aggregated presentation. Supporting financial information on each of the other governmental funds is also provided within the report. Proprietary Funds — The City maintains two different types of proprietary funds. When the City charges customers for the services it provides, these services are generally reported in a type of proprietary fund known as an enterprise fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements, but the proprietary fund statements provide more detail and additional information, such as a statement of cash flows. The City uses the Transit Enterprise Fund to account for the activities related to transit operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses three internal service funds to account for costs related to self- insurance, computer replacement and vehicle -equipment replacement. Proprietary funds are reported in the same way all activities are reported in the Statement of Net Position and the Statement of Activities. The proprietary fund financial statements provide separate information for the Transit Enterprise Fund, which is considered to be a major fund of the City. All of the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report. See independent auditor's report THE CITY AS TRUSTEE — FIDUCIARY FUND STATEMENTS Reporting the City's Fiduciary Responsibilities The City is the trustee, or fiduciary, for certain funds held for the benefit of other parties outside of the City. The City's fiduciary activities are reported in separate Statements of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. These activities were excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. 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. OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the comparison of budget and actual results for the major governmental funds, other post -employment benefits schedule of funding progress, schedule of changes in the City's net pension liability and related ratios, and a schedule of the City's pension contributions. This section is located after the Notes to Financial Statements. The combining statements referred to earlier in connection with the other governmental funds, internal service funds and fiduciary funds are presented immediately following the required supplementary information described in the previous paragraph in the supplementary information section. The analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the City's governmental and business -type activities. The City's net position may be analyzed and The City's combined net position increased net of prior year restatements. See independent auditor's report. used as an indicator of the City's overall financial condition. by $43.2 million, increasing from $1.01 billion to $1.05 billion THE CITY AS A WHOLE (CONTINUED) ASSETS: Current and Other Assets Capital Assets, net Noncurrent Assets TOTAL ASSETS LIABILITIES: Noncurrent Liabilities Other Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: NET POSITION: Net Investment in Capital Assets Restricted Unrestricted TOTAL NET POSITION TABLE CITY OF SANTA CLARITA'S NET POSITION Governmental Activities Business -type Activities Total 2015 2014 2015 2014 2015 2014 $ 228,301,801 $ 210,971,600 $ 7,302,688 $ 6,300,981 $ 235,604,489 $ 217,272,581 847,862,095 830,373,009 78,495,871 83,296,545 926,357,966 913,669,554 29,892,432 21,254,919 29,892,432 21,254,919 1,106,056,328 1,062,599,528 85,798,559 89,597,526 1,191,854,887 1,152,197,054 702 131 101,114,219 82,004,957 981,976 26,714 102,096,195 82,031,671 29,826,359 26,169,470 3,424,596 2,920,056 33,250,955 29,089,526 130,940,578 108,174,427 4,406,572 2,946,770 135,347,150 111,121,197 818,817,043 799,926,613 78,495,871 83,296,545 897,312,914 883,223,158 73,541,304 71,643,713 - - 73,541,304 71,643,713 79,211,600 52,551,033 2,766,972 2,250,491 81,978,572 54,801,524 $ 971,569,947 $ 924,121,359 $ 81,262,843 $ 85,547,036 $ 1,052,832,790 $ 1,009,668,395 The City's net position is made up of three components. Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position. As of June 30, 2015, assets exceeded liabilities by $1.05 billion. The largest component of the City's net position, 85.2%, is represented by its $897.3 million net investment in capital assets (e.g., infrastructure, land, buildings and improvements, equipment, and construction in progress) less accumulated depreciation and any related outstanding debt used to acquire the capital assets. These capital assets are used to provide services to the citizens, and therefore are not available to finance future operations. In addition, resources necessary to repay the related debt must be provided by sources other than the capital assets, as the assets themselves cannot be used to satisfy these liabilities. An additional portion of the City's net position, 7.0%, represents resources subject to external restrictions on how they may be used. The remaining 7.8% of unrestricted net position, $82.0 million, may be used to meet the City's ongoing obligations to citizens and creditors. Consistent with the prior year, at the end of the current fiscal year, the City is able to report positive balances in both categories of governmental and business -type net position. Net position for governmental activities increased by $47.4 million over the prior year. The unrestricted net position of the business -type activities increased by $516,481. See independent auditor's report. THE CITY AS A WHOLE (CONTINUED) Governmental Activities Revenues from governmental activities increased by $29.4 million, or 16.5%, due in part to capital contributions of $15.8 million, the reversal of the allowance for doubtful accounts for the notes to the Redevelopment Successor Agency in the amount of $12.6 million, and an increase in property tax revenues of $2.9 million. The cost of all governmental activities this year was $152.8 million, an increase of 10.4% over the past year. As shown in the Statement of Activities, the governmental activities expenditures were ultimately financed in part by the taxpayers, as $47.7 million in revenues were generated by service revenues received from the performance of these activities; another $12.6 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions, and another $30.1 million in revenues was generated from capital grants and contributions. Overall, the City's governmental program and general revenues amounted to $207.6 million, which funded the expenditures and resulted in a $47.4 million increase in net position. TABLE 2 CITY OF SANTA CLARITA'S CHANGES IN NET POSITION Business -Type Activities Business -type activities decreased the City's net position by $4.3 million for the current year. Business -type activities revenues decreased by $10.9 million during the year for a total of $16.4 million in revenues, not including the $7.3 million of transfers in from other governmental activities. The decreased revenue was largely due to a decrease in capital grants and contributions. The purchase of five CNG buses funded with capital grants will be completed in the next fiscal year. Related transit activity expenses increased by $1.2 million. See independent auditor's report. Governmental ACOVIOes Business type ACOVIOes Total 2015 2014 2015 2014 2015 2014 Program Revenues: Charges for services $ 47,745,405 $ 52,032,520 $ 0,770,570 $ 7,507,407 $ 54,524,004 $ 00,2211,023 Operating grants and contributions 12,501,000 10,421,100 0,220,340 0,004,127 20,700,050 20,405,320 Capital grants and contributions 30,107,231 22,530,041 1,423,440 10,004,747 31,530,071 33,335,500 General Revenues: Taxes Propertytaxes 30,550,000 35,052,000 - - 30,550,000 35,052,000 Othertaxes 47,240,017 45,002,120 - - 47,240,017 45,002,120 Other 2,040,041 2,000,402 17,502 4,701 2,004,533 2,005,273 Capital Contributions 15,700,230 - - - 15,700,230 - ReversalofAllowance for Notes to RDA$uccesserAgency 12,033,032 12,033,032 Total Revenues 207,500,754 170,210,240 10,440,050 27,301,102 224,020,713 205,000,410 General government 40,224,013 41,007,204 - - 40,224,013 41,007,204 Public safety 22,235,300 22,107,434 - - 22,235,300 22,107,434 Public works 30,103,144 20,103,002 - - 30,103,144 20,103,002 Parks, recreation and community services 22,450,020 22,550,301 - - 22,450,020 22,550,301 Community development 5,000,045 0,103,101 - - 5,000,045 0,103,101 Unallocated infrastructure depreciation 10,072,057 17,501,530 - - 10,072,057 17,501,530 Interest and fiscal charges 1,027,004 1,072,032 - - 1,027,004 1,072,032 Transit 20,002,000 20,010,101 20,002,000 20,010,101 Total Expenses 152,002,050 130,350,353 20,002,000 20,010,101 100,005,310 105,175,514 Increase/Decrease in Net Position Before Transfers 54,770,104 30,002,005 (11,013,700) 502,001 43,104,305 40,424,000 Transfers (7,320,510) (5,002,032) 7,320,510 5,002,032 Changes in Net Position 47,440,500 34,170,003 (4,204,103) 0,254,033 43,104,305 40,424,000 Net Position— Beginning of Year 054,425,101 020,254,230 00,050,750 00,300,723 1,041,075,057 1,000,050,001 Restatements (30,303,742) (1,103,720) (31,407,402) NetPosi[ion — Beginning of Year, as restated 024,121,350 020,254,230 05,547,030 00,300,723 1,000,000,305 1,000,050,001 N at Position — EndofYear $ 071,500,047 $ 054,425,101 $ 01,202,043 $ 00,050,750 $ 1,052,032,700 $ 1,041,075,057 Business -Type Activities Business -type activities decreased the City's net position by $4.3 million for the current year. Business -type activities revenues decreased by $10.9 million during the year for a total of $16.4 million in revenues, not including the $7.3 million of transfers in from other governmental activities. The decreased revenue was largely due to a decrease in capital grants and contributions. The purchase of five CNG buses funded with capital grants will be completed in the next fiscal year. Related transit activity expenses increased by $1.2 million. See independent auditor's report. THE CITY'S FUNDS The governmental funds reported a combined fund balance at the end of the current fiscal year of $196.9 million, an increase of $8.5 million over the prior year. Approximately $85.8 million is restricted and already committed for specific restricted purposes. The total governmental fund balance includes the general fund balance of $116.5 million, which increased by $7.6 million over the prior year. The General Fund is the chief operating fund of the City of Santa Clarita. The fund balance increase of $7.6 million is due in part to an increase in tax revenues of $4.4 million. The unassigned fund balance of $50.1 million is available for spending at the City's discretion. More detailed information about the City's classification of fund balances are presented in Note 12 to the financial statements. Other major fund balance changes are noted below: The Bridge and Thoroughfare Fund has realized a decrease of $2.0 million from the prior year due in part to capital project expenditures of $1.9 million that included the widening of McBean Parkway over the river and the widening of the Golden Valley Road Bridge at SR -14. • The Public Library Fund has realized an increase of $1.1 million in its fund balance from the prior year due to an increase in tax revenue of $963,914. The Landscape Maintenance District's fund balance increased $1.7 million from the prior year in part due to a reduction in water utility expenditures of $1.0 million in response to drought emergency water conservation requirements imposed by the State. In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $10,913. The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The total net position for the Transit Enterprise Fund decreased over the prior year by $4.3 million, or 5.0%. The unrestricted portion of the business -type activities net position increased by $516,481 from the prior year, net of restatements. The Internal Service Funds net position decreased by $136,238, or 1.6%, net of restatements. The ending fund balance for Internal Service Funds is $8.4 million, of which $7.5 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2014-2015 original (adopted) general fund budgeted expenditures and transfers of $84.0 million to the final budgeted expenditures of $94.8 million results in a net increase of $10.8 million. Included in this net increase is $378,989 in committed purchase orders and contracts from the prior June 30 balance, as well as $421,308 of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2014-2015. The resulting beginning budget balance was equal to $84.8 million. Original Cont. Encumbrances Beg. Supplemental Final Budget + Appropriations + = Balance + Changes = Budget $83,993,532+ $421,308+ $378,989= $84,793,829+ $9,966,054= $94,759,883 See independent auditor's report. THE CITY'S FUNDS (CONTINUED) Comparing the beginning budget of $84.8 million with the final budget of $94.8 million indicates the General Fund had supplemental budgetary appropriations of $10.0 million during the fiscal year. Included in the supplemental appropriations are the results of this year's budget review. During the mid -year budget review, budgeted general fund revenue had a net increase of $2,497,247. Included in the net increase are $1 million in development revenue, $500,000 increase in property tax, $438,134 in 2005 flood federal mitigation funds, $312,703 in transient occupancy tax, $229,000 in animal licensing, $127,958 in parks and recreation revenue, and $67,500 in real property transfer tax. Revenue decreases in the general fund included $225,000 for traffic citations and $124,000 in waste haulers franchise fees. At year-end, the City's actual revenues were $4.8 million more than the final budgetary estimates. Actual expenditures were less than the final budgetary estimates by $4.5 million. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $926.4 million (net of accumulated depreciation) invested in a broad range of capital assets. This investment in capital assets includes land, buildings and related improvements, vehicles and equipment, and infrastructure (including infrastructure placed in service prior to July 1, 2002), such as streets, bridges, traffic signals, medians, sidewalks, trails, sewers, curbs and gutters, and drainage systems (see Table 3). TABLE 3 CITY OF SANTA CLARITA'S CAPITAL ASSETS (net of depreciation) Governmental Activities Business Type Activities Total 2015 2014 2015 2014 2015 2014 Land $141,193,369 $125,250,547 $15,087,880 $15,087,880 $156,281,249 $140,338,427 Construction in progress 18,351,762 13,438,221 - 83,252 18,351,762 13,521,473 Infrastructure, net 600,894,423 609,950,994 - - 600,894,423 609,950,994 Depreciable site improvements, net 30,173,283 26,079,903 10,814,127 10,570,218 40,987,410 36,650,121 Depreciable buildings and improvements, net 53,534,783 52,365,869 31,324,760 32,208,106 84,859,543 84,573,975 Depreciable equipment, net 3,714,475 3,287,475 21,269,104 25,347,089 24,983,579 28,634,564 TOTALS $847,862,095 $830,373,009 $78,495,871 $83,296,545 $926,357,966 $913,669,554 Major capital asset events during the year included: • Acquisitions and contributions of land totaling $15.9 million • Infrastructure additions totaling $9.2 million that included $6.3 million for sewers and $2.1 million for pavement projects • Equipment deletions in the Transit fund of $3.0 million for retirement of buses. Additional information on the City of Santa Clarita's capital assets can be located in Note 7 to the financial statements. See independent auditor's report. i[[ CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration At year-end, the City's total debt amounted to $40.9 million in bonds, notes, capital leases, contracts, claims payable and compensated absences as shown in Table 4. A summary of debt activity for the year follows. Refunding Certificates of Participation, net Certificates of Participation Lease Revenue Bonds Contract and Leases Loans Compensated Absences Claims Payable TOTAL TABLE 4 CITY OF SANTA CLARITA'S OUTSTANDING DEBT Governmental Activities Business -type Activities Total 2015 2014 2015 2014 2015 2014 $8,128,138 $9,323,138 15,175,988 15,291,374 11,673,964 12,002,622 217,615 154,705 300,000 580,000 3,313,500 3,197,040 1,993,915 2,157,763 $40,803,120 $42,706,642 75,251 66,390 $75,251 $66,390 $8,128,138 $9,323,138 15,175,988 15,291,374 11,673,964 12,002,622 217,615 154,705 300,000 580,000 3,388,751 3,263,429 1,993,915 2,157,763 $40,878,371 $42,773,031 The City's governmental activities had $40.8 million in debt at year-end. Governmental activities long-term debt decreased overall by $1.9 million during the year. Principal payments totaled $1.8 million. No new debt related to business -type activities was issued or refinanced during the current fiscal year. During the fiscal year ended June 30, 2015, the City was able to meet its current year debt obligation in a timely manner. State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its adjusted assessed valuation. The debt limitation for the City as of June 30, 2015 was $961,696,007. The calculation of the debt limitation is included in the statistical section. Additional information on the City of Santa Clarita's debt can be located in Note 8 to the financial statements. See independent auditor's report. 11 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS Our long history of conservative and strategic budget practices has allowed the City to maintain a balanced budget during every year of the Great Recession without layoffs or drastic cuts in services. The economy continues to show positive signs. It has taken seven years from the start of the Great Recession for the City of Santa Clarita to recover our revenues losses. • General Fund sales tax revenue continues to be the largest revenue source to operate general governmental functions, accounting for 34.8%, or $35.5 million, as projected in the 2015-2016 budget. This is 3.2% higher than 2014-2015 receipts. • Property tax revenues account for 32.2% of the General Fund budget, or $32.8 million, in 2015- 2016. The County Assessor's office makes changes to the City's property tax roll daily to reflect transfers in ownership, new construction, assessment appeals, parcel splits and other dynamic changes. Budgeted General Fund revenues for fiscal year 2015-2016 are $101.9 million, and operating and capital expenditures are budgeted at $92.9 million. The City's 2015-2016 operating and capital budget for all funds is $221.9 million. The City remains dedicated to service excellence, teamwork and creativity. City staff continues to do more with less, find creative ways to maintain services revered by our community, and provide award- winning programs. The 2015-2016 budget remains to be a reflection of the City's commitment to the residents of Santa Clarita. This is consistent with the City's long tradition of ensuring that programming for Santa Clarita's youth and children is a priority to help promote growth and curb teen crimes. A copy of the City's 2015-2016 budget can be obtained by contacting the City Finance Division or visiting the web at www.santa-clarita.com/citvhall/deipartments/cmo/citybudget. See independent auditor's report. if: 13 City of Santa Clarita Statement of Net Position June 30, 2015 See Notes to Financial Statements. 14 Governmental Business -Type Activities Activities Total Assets Current assets Cash and investments $ 212,464,217 $ 4,235,110 $ 216,699,327 Receivables: Accounts, net 728,780 - 728,780 Interest 453,272 8,749 462,021 Taxes 8,679,920 - 8,679,920 Prepaid costs 577,754 340,784 918,538 Due from other governments 5,397,858 2,718,045 8,115,903 Total current assets 228,301,801 7,302,688 235,604,489 Noncurrent assets Restricted assets: Cash and investments 4,253,009 - 4,253,009 Cash and investments with fiscal agents 2,259,033 - 2,259,033 Loans receivable 2,402,815 - 2,402,815 Land held for resale 1,188,969 - 1,188,969 Notes to RDA Successor Agency 12,633,832 - 12,633,832 Other post -employment benefits asset 7,154,774 - 7,154,774 Capital assets: Nondepreciable assets 159,545,131 15,087,880 174,633,011 Depreciable assets, net 688,316,964 63,407,991 751,724,955 Total noncurrent assets 877,754,527 78,495,871 956,250,398 Total assets 1,106,056,328 85,798,559 1,191,854,887 Deferred outflows of resources Deferred outflows of net pension liability 3,608,702 131,436 3,740,138 Total deferred outflows of resources 3,608,702 131,436 3,740,138 Liabilities Current liabilities Accounts payable and accrued liabilities 13,225,531 3,386,841 16,612,372 Interest payable 458,725 - 458,725 Deposits payable 3,070,803 - 3,070,803 Due to other governments 7,734,479 - 7,734,479 Unearned revenues 598,658 - 598,658 Compensated absences 1,605,963 37,755 1,643,718 Claims and judgments 1,233,572 - 1,233,572 Bonds, loans and capital leases 1,898,628 - 1,898,628 Total current liabilities 29,826,359 3,424,596 33,250,955 Noncurrent liabilities Compensated absences 1,707,537 37,496 1,745,033 Claims and judgments 760,343 - 760,343 Bonds, loans and capital leases 33,597,077 - 33,597,077 Developer credits 39,117,582 - 39,117,582 Net pension liability 25,931,680 944,480 26,876,160 Total noncurrent liabilities 101,114,219 981,976 102,096,195 Total liabilities 130,940,578 4,406,572 135,347,150 Deferred inflows of resources Deferred inflows of net pension liability 7,154,505 260,580 7,415,085 Total deferred inflows of resources 7,154,505 260,580 7,415,085 See Notes to Financial Statements. 14 City of Santa Clarita Statement of Net Position June 30, 2015 Net position Net investment in capital assets Restricted Landcape maintenance Transportation Open space preservation Public safety Public library Air quality improvement Stormwater Public education and government Tourism marketing Low- and moderate -income housing Community Development Unrestricted Total net position See Notes to Financial Statements. 15 Governmental Business -Type Activities Activities Total $ 818,817,043 $ 78,495,871 $ 897,312,914 34,647,671 - 34,647,671 15,309,948 - 15,309,948 7,156,136 - 7,156,136 1,492,080 - 1,492,080 454,198 - 454,198 512,186 - 512,186 5,453,491 - 5,453,491 1,434,532 - 1,434,532 595,231 - 595,231 4,063,016 - 4,063,016 2,422,815 - 2,422,815 79,211,600 2,766,972 81,978,572 $ 971,569,947 $ 81,262,843 $ 1,052,832,790 City of Santa Clarita Statement of Activities For the Year Ended June 30, 2015 Functions/Programs Expenses Charges for Services Program Revenues Operating Contributions and Grants Capital Contributions and Grants Governmental Activities: General government $ 46,224,813 $ 26,783,616 $ 4,079,593 $ 5,615,030 Public safety 22,235,368 1,605,059 1,053,265 879,070 Parks, recreation and community service 22,458,629 4,525,662 65,181 169,132 Public works 36,103,144 13,056,586 6,310,046 21,725,774 Community development 5,880,945 1,774,482 1,053,523 1,718,225 Unallocated infrastructure depreciation 18,072,657 - - - Interestandfiscalcharges 1,827,094 - - Totalgovernmentalactivities 152,802,650 47,745,405 12,561,608 30,107,231 Business -Type Activities: Transit Enterprise 28,062,668 6,779,579 8,228,348 1,423,440 Total business -type activities 28,062,668 6,779,579 8,228,348 1,423,440 Total $ 180,865,318 $ 54,524,984 $ 20,789,956 $ 31,530,671 General revenues Taxes: Property taxes Sales taxes Franchise taxes Transient occupancy taxes Property transfer tax Motor vehicle in lieu - unrestricted Investment income Miscellaneous Gain on sale of capital asset Transfers Capital contributions Reversal of Allowance for Notes to RDA Successor Agency Total general revenues and transfers Change in net position Net position, beginning of year, as restated Net position, end of year See Notes to Financial Statements. 16 Net(Expense)Revenue and Changes in Net Position Governmental Business -Type Activities Activities Total $ (9,746,574) $ - $ (9,746,574) (18,697,974) - (18,697,974) (17,698,654) - (17,698,654) 4,989,262 - 4,989,262 (1,334,715) - (1,334,715) (18,072,657) - (18,072,657) (1,827,094) - (1,827,094) (62,388,406) - (62,388,406) (11,631,301) (11,631,301) (11,631,301) (11,631,301) (62,388,406) (11,631,301) (74,019,707) 38,556,890 - 38,556,890 34,355,412 - 34,355,412 8,512,818 - 8,512,818 3,124,904 - 3,124,904 1,169,780 - 1,169,780 85,703 - 85,703 2,240,594 17,592 2,258,186 678,937 - 678,937 27,410 - 27,410 (7,329,516) 7,329,516 - 15,780,230 - 15,780,230 12,633,832 - 12,633,832 109,836,994 7,347,108 117,184,102 47,448,588 (4,284,193) 43,164,395 924,121,359 85,547,036 1,009,668,395 $ 971,569,947 $ 81,262,843 $ 1,052,832,790 17 City of Santa Clarita Balance Sheet Governmental Funds June 30, 2015 Assets Cash and investments Receivables: Accounts, net Interest Taxes Loans Notes to RDA Successor Agency Prepaid costs Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments Cash and investments with fiscal agents Total assets Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to otherfunds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit) See Notes to Financial Statements. 18 Special Revenue Funds Bridge and Public General $ 113,799,150 $ 9,341,070 $ 1,368,033 373,279 160,617 - 258,503 18,602 2,727 7,986,753 - 127,509 7,225,964 - - 118,400 - 53,243 975,587 - - 2,040,570 - 11,036,236 - - 225,682 825,698 - - $ 144,640,140 $ 9,520,289 $ 1,777,194 $ 7,448,001 $ 394,723 $ 244,050 3,070,803 - - 7,700,000 598,658 - 1,614,862 9,540,318 18,817,462 2,009,585 9,784,368 9,320,047 160,617 9,320,047 160,617 11,024,338 - - 7,350,087 55,336,807 50,141,486 - (8,007,174) 116,502,631 7,350,087 (8,007,174) $ 144,640,140 $ 9,520,289 $ 1,777,194 City of Santa Clarita Balance Sheet Governmental Funds June 30, 2015 Special Revenue Funds Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit) See Notes to Financial Statements. 19 $ 2,133,441 $ 2,752,759 $ 12,972,974 - - 3,070,803 34,479 7,734,479 - 598,658 2,040,570 2,040,570 - - 11,155,180 2,133,441 4,827,808 37,572,664 10, 393, 563 19, 874, 227 10, 393, 563 19, 874, 227 252,661 1,202,406 Landscape Non -Major Total - 14,000 Maintenance Governmental Governmental - (626,129) District#1 Funds Funds Assets Cash and investments $ 31,598,414 $ 46,730,953 $ 202,837,620 Receivables: Accounts, net 38,199 101,055 673,150 Interest 62,993 89,879 432,704 Taxes 221,460 344,198 8,679,920 Loans - 2,402,815 2,402,815 Notes to RDA Successor Agency - 5,407,868 12,633,832 Prepaid costs 252,661 13,437 437,741 Due from other governments - 4,422,271 5,397,858 Due from other funds - - 2,040,570 Advances to other funds - 118,944 11,155,180 Land held for resale - 1,188,969 1,188,969 Restricted assets: Cash and investments - 4,027,327 4,253,009 Cash and investments with fiscal agents - 1,433,335 2,259,033 Total assets $ 32,173,727 $ 66,281,051 $ 254,392,401 Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit) See Notes to Financial Statements. 19 $ 2,133,441 $ 2,752,759 $ 12,972,974 - - 3,070,803 34,479 7,734,479 - 598,658 2,040,570 2,040,570 - - 11,155,180 2,133,441 4,827,808 37,572,664 10, 393, 563 19, 874, 227 10, 393, 563 19, 874, 227 252,661 1,202,406 12,479,405 29,787,625 48,625,581 85,763,293 - 14,000 14,000 1,843,822 57,180,629 - (626,129) 41,508,183 30,040,286 51,059,680 196,945,510 $ 32,173,727 $ 66,281,051 $ 254,392,401 OM City of Santa Clarita Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2015 Fund balances of governmental funds $ 196,945,510 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Those capital assets consist of: Nondepreciable assets $ 159,545,131 Depreciable assets, net of accumulated depreciation 687,434,044 846,979,175 Revenues reported as deferred inflows in the governmental funds do not provide current financial resources and are recognized in the Statement of Activities. 19,874,227 Other post -employment benefit assets are not available to pay for current -period expenditures and therefore are not reported in the governmental funds. 7,154,774 Amounts reported for net pension liability are not due in the current period and therfore are not reported in the governmental funds. Related components that will affect the net pension liability in future measurement years are reported as deferred outflows and deferred inflows of resources are therefore not reported in the governmental funds. Net pension liability (25,832,976) Deferred outflows of resources related to pensions 3,594,966 Deferred inflows of resources related to pensions (7,127,273) (29,365,283) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Those long-term liabilities consist of: Lease revenue bonds (11,673,964) Certificates of participation bonds (23,304,126) Capital leases (217,615) Loans payable (300,000) Compensated absences (3,311,047) Bridge and Thoroughfare developer payables (39,117,582) (77,924,334) Accrued interest payable on long-term liabilities do not require the use of current financial resources and therefore are not reported in the governmental funds. (458,725) Internal service funds are used by management to charge the costs of certain activities, such as insurance, and vehicle and computer replacement, to individual funds. These assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 8,364,603 Net position of governmental activities $ 971,569,947 See Notes to Financial Statements. 21 City of Santa Clarita Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 22 21,366,674 4,991,505 21, 069,111 - 20,673,945 - - 12, 079, 362 1,188, 641 101,176 5,270,770 - - 5,849,555 1,038,855 33,387 22,422 - 50,057 - 192,897 102,472 - 5,105,402 - 86,331,839 7,525,795 5,278,597 9,273,204 (1,951,131) 1,106,101 2,217,935 (3,880,387) (7,284) (1,591) (1,662,452) (7,284) (1,591) 7,610,752 (1,958,415) 1,104,510 108,891,879 9,308,502 (9,111,684) $ 116,502,631 $ 7,350,087 $ (8,007,174) Bridge and Public General Thoroughfare Library Revenues Taxes $ 78,232,263 $ $ 6,107,578 Special assessments - - Licenses and permits 5,567,280 Intergovernmental 1,125,699 - Charges for services 9,139,349 85,000 Investment income 1,073,899 283,790 6,078 Fines and forfeitures 452,052 - - Developerfees - 5,290,874 - Other revenue 14,501 - 186,042 Total revenues 95,605,043 5,574,664 6,384,698 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 22 21,366,674 4,991,505 21, 069,111 - 20,673,945 - - 12, 079, 362 1,188, 641 101,176 5,270,770 - - 5,849,555 1,038,855 33,387 22,422 - 50,057 - 192,897 102,472 - 5,105,402 - 86,331,839 7,525,795 5,278,597 9,273,204 (1,951,131) 1,106,101 2,217,935 (3,880,387) (7,284) (1,591) (1,662,452) (7,284) (1,591) 7,610,752 (1,958,415) 1,104,510 108,891,879 9,308,502 (9,111,684) $ 116,502,631 $ 7,350,087 $ (8,007,174) City of Santa Clarita Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 11,832,237 Landscape Non -Major Total 1,119,530 Maintenance Governmental Governmental 20,846,943 District#1 Funds Funds Revenues 612,671 5,883,441 4,931,378 Taxes $ 901,701 $ 548,014 $ 85,789,556 Special assessments 17,661,944 10,226,182 27,888,126 Licenses and permits - - 5,567,280 Intergovernmental 30,827,993 31,953,692 Charges for services - 626,279 9,850,628 Investment income 290,063 372,677 2,026,507 Fines and forfeitures - 809,700 1,261,752 Developer fees 5,473,680 10,764,554 Other revenue - 310,574 511,117 Total revenues 18,853,708 49,195,099 175,613,212 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 11,832,237 5,005,752 43,196,168 - 1,119,530 22,188,641 3,696 169,302 20,846,943 186,951 22,519,057 36,075,187 - 612,671 5,883,441 4,931,378 11, 539,151 23, 392, 326 1,920,000 1,992,479 1,555,334 1,850,703 - - 5,105,402 16,954,262 44,440,797 160,531,290 1,899,446 4,754,302 15,081,922 5,632,705 7,850,640 (213,600) (10,376,094) (14,478,956) (213,600) (4,743,389) (6,628,316) 1,685,846 10,913 8,453,606 23 28,354,440 51,048,767 188,491,904 $ 30,040,286 $ 51,059,680 $ 196,945,510 24 City of Santa Clarita Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities For the Year Ended June 30, 2015 Net change in fund balances - total governmental funds $ 8,453,606 Amounts reported for governmental activities in the Statement of Activities are (116,261) different because: 325,000 Governmental funds report capital outlay as expenditures. However, in the 1,315,000 Statement of Activities, the costs of those assets are allocated over the (62,910) estimated useful lives as depreciation expense. The following were the 280,000 amounts of capital outlay and depreciation expense in the current period: 3,658 Capital outlay $ 23,392,326 Capital contributions 15,780,230 Capital leases 135,389 Depreciation expense (21,589,226) Disposal of capital assets (501,339) expenditure in the governmental funds, but reduces long-term liabilities in the 17,217,380 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds. 13,281,043 Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. There was an issuance of debt pertaining to two capital leases in the current period, and the following includes the issuance of debt for the capital leases and the amounts of repayment of long-term liabilities: Changes in compensated absences (116,261) Lease revenue bonds 325,000 Certificates of participation bonds 1,315,000 Purchased assets from capital leases (62,910) Loans payable 280,000 Amortization of premiums of long-term liabilities 3,658 Amortization of discounts of long-term liabilities (4,614) 1,739,873 The issuance of Bridge and Thoroughfare district credits provide current financial resources to governmental funds, but increases long-term liabilities in the Statement of Net Position. Redemptions of district credits is an expenditure in the governmental funds, but reduces long-term liabilities in the Statement of Net Position. Issuance of district credits 5,105,402 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These expenses consist of the following: Changes in interest payable for long-term liabilities 24,565 Changes and amortization of other post -employment benefit asset 939,844 Changes in net pension liabilities 823,113 1,787,522 Internal service funds are used by management to charge the costs of certain activities, such as insurance, and vehicle and computer replacement, to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities. (136,238) Change in net position of governmental activities $ 47,448,588 See Notes to Financial Statements. 25 City of Santa Clarita Statement of Net Position Proprietary Funds June 30, 2015 Business -Type Governmental Activities Activities Transit Internal Enterprise Service Funds Assets Current assets Cash and investments $ 4,235,110 $ 9,626,597 Receivables: Accounts - 55,630 Interest 8,749 20,568 Prepaid costs 340,784 140,013 Due from other governments 2,718,045 - Total current assets 7,302,688 9,842,808 Noncurrent assets Capital assets: Land 15,087,880 - Site improvements, net of accumulated depreciation 10,814,127 Building and improvements, net of accumulated depreciation 31,324,760 - Equipment, net of accumulated depreciation 21,269,104 882,920 Total noncurrent assets 78,495,871 882,920 Total assets 85,798,559 10,725,728 Deferred outflows of resources Deferred outflows of net pension liability 131,436 13,736 Total deferred outflows of resources 131,436 13,736 Liabilities Current liabilities Accounts payable and accrued liabilities 3,386,841 252,557 Compensated absences 37,755 2,453 Claims and judgments - 1,233,572 Total current liabilities 3,424,596 1,488,582 Noncurrent liabilities Net pension liability 944,480 98,704 Compensated absences payable 37,496 - Claims and judgments - 760,343 Total noncurrent liabilities 981,976 859,047 Total liabilities 4,406,572 2,347,629 Deferred inflows of resources Deferred inflows of net pension liability 260,580 27,232 Total deferred inflows of resources 260,580 27,232 Net position Net investment in capital assets 78,495,871 882,920 Unrestricted 2,766,972 7,481,683 Total net position $ 81,262,843 $ 8,364,603 See Notes to Financial Statements. 26 City of Santa Clarita Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended June 30, 2015 Business -Type Governmental Activities Activities Transit Internal Enterprise Service Funds Operating revenues Charge for services $ 6,469,205 $ 2,782,531 Cther revenues 310,374 - Total operating revenues 6,779,579 2,782,531 Operating expenses Administration and personnel services Transportation services Services and supplies Depreciation expense Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Intergovernmental revenue Investment income Gain on disposal of capital assets Total net nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Transfers and capital contributions Transfers in Transfers out Capital contributions Total transfers and capital contributions Changes in net position Net position Net position, beginning of year, as restated Net position, end of year See Notes to Financial Statements. 27 2,218,483 359,716 18,291,568 - 2,006,871 1,802,498 5,545,746 175,333 28,062,668 2,337,547 (21,283,089) 444,984 8,228,348 - 17,592 96,328 - 23,650 8,245,940 119,978 (13,037,149) 564,962 7,559,230 83,031 (229,714) (784,231) 1,423,440 8,752,956 (701,207)— (4,284,193) (136,238) 85, 547, 036 8,500,841 $ 81,262,843 $ 8,364,603 City of Santa Clarita Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2015 Cash flows from capital and related financing activities Capital contributions Business -Type Activities Transit Enterprise Governmental Activities Internal Service Funds Cash flows from operating activities Acquisition and construction of capital assets Cash received from customers and users $ 6,469,205 $ 2,730,312 Cash paid to suppliers for goods and services (19,891,664) (1,878,254) Cash paid to employees for services (2,239,718) (523,581) Cash received from other sources 310,374 - Net cash provided by (used in) operating activities (15,351,803) 328,477 Cash flows from non -capital financing activities 312,346 Cash transfers out (229,714) (784,231) Cash transfers in 7,559,230 83,031 Intergovernmental revenues 10,094,278 - Net cash provided by (used in) non -capital financing activities 17,423,794 (701,200) Cash flows from capital and related financing activities Capital contributions 1,057,418 Acquisition and construction of capital assets (745,072) (452,108) Proceeds from disposal of capital assets - 28,719 Net cash provided by (used in) capital and related financing activities 312,346 (423,389) Cash flows from investing activities Interest received 13,361 98,976 Net cash provided by investing activities 13,361 98,976 Net increase (decrease) in cash and cash equivalents 2,397,698 (697,136) Cash and cash equivalents at beginning of year 1,837,412 10,323,733 Cash and cash equivalents at end of year $ 4,235,110 $ 9,626,597 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ (21,283,089) $ 444,984 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 5,545,746 175,333 (Increase) in accounts receivable - (52,219) (Increase)in prepaid expense (99,686) (79,700) Increase in accounts payable 506,461 6,874 (Decrease) in claims and judgments - (163,848) (Decrease) in salaries and benefits payable (21,235) (2,947) Total adjustments 5,931,286 (116,507) Net cash provided by (used in) operating activities $ (15,351,803) $ 328,477 Non-cash investing, capital and financing activities Disposal of capital assets $ - $ (5,069) See Notes to Financial Statements. 28 00 City of Santa Clarita Statement of Net Position (Deficit) Fiduciary Funds June 30, 2015 Liabilities Accounts payable Due to other governments Interest payable Due to external parties Bonds, due within one year Bonds and notes, due in more than one year Total liabilities Net position (deficit) Trust deficit Total net position (deficit) 30 $ 1,952 11,672 635 - - 412,244 13, 533, 971 - - 654,470 - 47,107,166 $ 13, 536, 558 48,185, 552 (32,172, 258) $ (32,172,258) Private - Purpose Trust Fund Agency RDA Successor Funds Agency Assets Cash and investments $ 1,031,896 $ 1,575,499 Receivables: Interest 2,022 3,278 Taxes 2,167 - Prepaid costs 1,847 - Due from other governments 715,000 7,734,479 Land held for resale - 1,011,031 Restricted assets: Cash and investments - 3,888 Cash and investments with fiscal agents 1,759,112 1,165,384 Capital assets: Land 9,937,976 532,878 Site improvements, net of accumulated depreciation - 94,867 Building and improvements, net of accumulated depreciation 86,538 - Infrastructure, net of accumulated depreciation - 3,891,990 Total assets $ 13,536,558 16,013,294 Liabilities Accounts payable Due to other governments Interest payable Due to external parties Bonds, due within one year Bonds and notes, due in more than one year Total liabilities Net position (deficit) Trust deficit Total net position (deficit) 30 $ 1,952 11,672 635 - - 412,244 13, 533, 971 - - 654,470 - 47,107,166 $ 13, 536, 558 48,185, 552 (32,172, 258) $ (32,172,258) City of Santa Clarita Statement of Changes in Net Position (Deficit) Fiduciary Funds For the Year Ended June 30, 2015 Deductions Administrative expenses Private - Contractual services Purpose Interest expense Trust Fund Depreciation expense RDA Successor Total deductions Agency Additions 8,996,090 Property taxes $ 2,548,666 Investment income 6,424 Miscellaneous 8,528,627 Total additions 11,083,717 Deductions Administrative expenses 246,464 Contractual services 37,036 Interest expense 1,713,968 Depreciation expense 90,159 Total deductions 2,087,627 Changes in net position 8,996,090 Net position (deficit) Trust deficit, beginning of year (41,168,348) Trust deficit, end of year $ (32,172,258) 31 32 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity These financial statements present the financial results of the City of Santa Clarita, California (the City) and its component unit as required by accounting principles generally accepted (GAAP) in the United States of America. Component units are legally separate entities for which the primary government is financially accountable. The City has one component unit, the Santa Clarita Public Financing Authority (the Authority). The City is considered to be financially accountable for the Authority, which is governed by the City Council, which serves as the Board of the Authority. Therefore, the entity is reported as a blended component unit with the City's comprehensive annual financial report (CAFR). The City and the component unit have a June 30 year-end. The City was incorporated on December 15, 1987 as a general law city. The City operates under a council-manager form of government and provides its citizens with a full range of municipal services, either directly or under contract with the County of Los Angeles. Such services include public safety (police and fire protection), building permit/plan approval, planning, community development, recreation, animal control, and street maintenance. Component Unit The Santa Clarita Public Financing Authority was established in July 1991 as a joint powers authority between the City and the former redevelopment agency for the purpose of providing financing and funding of public capital improvements and the acquisition of property. The Authority's financial data and activity are reported within the debt service and capital projects fund types of the City. Separate financial statements for the Authority are not prepared. B. Government -Wide and Fund Financial Statements The City's government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the activities of the City. The effect of interfund activity has been removed from these statements, except for the interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Fiduciary activities of the City are not included in these statements. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not included among program revenues are reported as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. 33 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus The government -wide financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, infrastructure assets, long-term liabilities, and deferred inflows and deferred outflows of resources are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories: • Charges for services • Operating grants and contributions • Capital grants and contributions Certain eliminations have been made as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34 in regard to interfund activities. All internal balances in the Statement of Net Position have been eliminated, except those representing balances between the governmental activities and the business -type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated, however, those transactions between governmental and business -type activities have not been eliminated. The following interfund activities have been eliminated: • Due to and from other funds • Advances to and from other funds • Transfers in and out The City has conformed to the pronouncements of the GASB, which are acknowledged as the primary authoritative statements of GAAP in the United States of America applicable to state and local governments. Governmental Fund Financial Statements Governmental fund financial statements are reported using the "current financial resources" measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered 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 City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period for property and sales tax, and 90 days for all other revenues. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, expenditures related to compensated absences, pension, and other post -employment benefits, and the redemption of district credits are recorded only when payment is due. 34 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) Property taxes when levied for, taxpayer -assessed tax revenues (e.g., franchise taxes, sales taxes, motor vehicle fees, etc.), net of estimated refunds and uncollectible amounts, intergovernmental revenues when eligibility requirements are met, charges for services and interest associated with the current fiscal period are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered measurable only when cash is received by the City. The City reports the following major governmental funds: The General Fund is the primary operating fund of the City. It is used to account for all financial resources of the City that are not required to be accounted for in another fund. The Bridge and Thoroughfare Special Revenue Fund is used to account for restricted district fees received from developers as set by the State Subdivision Law and the Los Angeles County and City of Santa Clarita, which are used for the construction of street, highway, bridge and other thoroughfare in the Bouquet Canyon, Eastside Canyon, Via Princessa and Valencia districts. This fund also accounts for the issuance and redemption of district credits associated with the contribution of infrastructure. At June 30, 2015, the Bridge and Thoroughfare Special Revenue Fund was elected as a major fund for public interest purposes. The Public Library Special Revenue Fund is used to account for property tax receipts and disbursements associated with the operation of the City of Santa Clarita Public Library. The Landscape Maintenance District #1 Special Revenue Fund is used to account for property tax receipts and disbursements related to the landscape maintenance district. Proprietary Fund Financial Statements Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) and deferred inflows and deferred outflows of resources are included in the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Operating revenues and expenses result from the operating and maintenance of the local public transit services. The operating revenues consist of charges to customers for the service provided. Operating expenses include the costs of providing these services, administrative expenses and depreciation expense. All revenues and expenses not meeting these definitions and which are not capital in nature are reported as non-operating revenues and expenses. The City reports the following major enterprise fund: The Transit Enterprise Fund is used to account for the operation of the City's local public transit bus system. 35 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Net Position (Deficit) and a Statement of Changes in Net Position (Deficit). The fiduciary funds represent a private -purpose trust fund and agency funds. Fiduciary fund types are accounted for according to the nature of the fund. Agency funds are reported on the accrual basis of accounting and are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Private -purpose trust funds are reported using the "economic resources" measurement focus and the accrual basis of accounting. The RDA Successor Agency Private Purpose Trust Fund is used to account for monies received from the L.A. County Auditor Controller for the repayment of the enforceable obligations of the former Santa Clarita Redevelopment Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Obligation Payment Schedule (ROPS). The City reports the following agency funds: The Assessment District No. 92-2 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Assessment District No. 99-1 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Community Facilities District No. 2002-1 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Santa Clarita Watershed Recreation and Conservancy Authority is used to account for assets and liabilities held by the City as an agent and related to the park and open space lands for the Santa Clarita Watershed Recreation and Conservancy Authority (the Watershed Authority). The Santa Clarita Public Television Authority is used to account for assets and liabilities held by the City as an agent and related to the operations of the Santa Clarita Public Television Authority (the SCPTA). Fund Types Reported by the Citv Additionally, the City reports the following fund types: The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest and principal on long-term debt. The Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). IN City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) The Internal Service Funds are used to account for the financing of special activities that provide services within the City. Such activities include self-insurance, computer replacement and vehicle replacement. D. Cash and Cash Equivalents and Investments The City pools its available cash for investment purposes. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as cash and investments. For purposes of the statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool that maintains the general characteristics of a demand deposit account. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. The unexpended bond proceeds of the City's bonds are classified as restricted assets because their use is completely restricted to the purpose for which the bonds were originally issued. The City's cash and investments held by fiscal agents are pledged to the payment or security of certain long-term debt issuances. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of the bonds, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments its trustees or fiscal agents may make. The City also participates in the Los Angeles County Pooled Investment Fund. In accordance with GASB Statement No. 40, Deposit and Investment Risk Disclosures (an amendment of GASB Statement No. 3), certain disclosure requirements, if applicable, are provided for deposit and investment risk in the following areas: • Interest Rate Risk • Credit Risk - Overall - Custodial Credit Risk - Concentration of Credit Risk • Foreign Currency Risk E. Land Held for Resale Land parcels held for resale are recorded at the lower of cost or fair value. The cost of the land includes all costs incurred that are directly associated with the acquisition of the land, including purchase price, escrow costs, clearing land for use costs, demolition costs, etc. 37 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Intertund Transactions Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds" (i.e., current portion of interfund loans) or "advances from/to other funds" (i.e., noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." During the course of operations, numerous transactions occur between individual funds involving goods provided or services rendered. There are also transfers of revenues from funds authorized to receive the revenue to funds authorized to expend it. Any residual balances outstanding between governmental and business -type activities are reported in the government -wide financial statements as "transfers." G. Property Taxes Property taxes and special assessment taxes are attached as enforceable liens on real property on July 1, the beginning of the fiscal year, and are due in two installments on November 1 and February 1, however, no penalties or interest are assessed until December 10 and April 10, respectively. These taxes are determined annually based on property values, subject to limits based on Proposition 13, as of January 1 of the levy year, which is prior to the end of the previous fiscal year. The County of Los Angeles bills and collects these taxes for the City and are remitted on a monthly basis. Remittance of property taxes to the City is accounted for in the City's General Fund and Public Library Special Revenue Fund. Property taxes on certain registered motor vehicles are assessed and collected throughout the year. H. Allowances for Uncollectible Accounts Allowances for uncollectible accounts are maintained on customer and other trade receivables that historically experience uncollectible amounts. Allowances are based on collection experience and management's evaluation of the current status of existing receivables. L Prepaid Costs 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. These are accounted for using the consumption method, and accordingly, the expenditure is recorded in the period in which the goods or services are received. RE City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. Capital Assets Government -Wide Financial Statements, Proprietary Funds and Fiduciary Funds Capital assets, which include land, site improvements, buildings and improvements, equipment and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the proprietary funds and fiduciary funds. General infrastructure assets consist of roads, curbs and gutters, sidewalks, medians, street signs, bus shelters, bridges, trails, traffic signals, and storm drains/catch basins. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($25,000 for site improvements and building improvements and $100,000 for infrastructure) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Site Improvements 5-25 years Buildings and Improvements 5-50 years Equipment 5-25 years Infrastructure 20-60 years Governmental Fund Financial Statements The governmental fund financial statements do not present capital assets. Instead, capital assets purchases are reported as capital outlay expenditures. As such, capital assets are shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position. K. Long -Term Debt Government -Wide Financial Statements, Proprietary Funds, and Fiduciary Funds Long-term debt and other financed obligations, such as developer district credits, are reported as liabilities in the government -wide, proprietary fund, and fiduciary fund financial statements. Bond premiums, discounts, and deferred gains and losses on refundings are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable premium or discount. Deferred gains and losses on refundings are reported as a deferred inflow or deferred outflow of resources. 39 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) K. Long -Term Debt (Continued) Governmental Fund Financial Statements The governmental fund financial statements do not present long-term debt and other financed obligations. Governmental funds recognize bond premiums and discounts 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. Issuances costs are reported as debt service expenditures. Principal payments and reductions in the obligation are reported as debt service expenditures. As such, long-term debt and other financed obligations are shown as reconciling items in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position. L. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation (compensated absences). For proprietary fund types and governmental activities, this accumulation is recorded as an expense and liability of the appropriate fund in the fiscal year earned. For the governmental funds, the amount of accumulated unpaid vacation, which is payable from available resources, is recorded as a liability of the fund when it has matured (i.e., when due and payable). M. Claims and Judgments When it is probable that a claim liability has been incurred at year-end and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage, under its self-insurance program. Claims payable, which include an estimate for incurred but not reported (IBNR) claims, is recorded in the Self -Insurance Internal Service Fund. N. Pensions and Other Post -Employment Benefits The net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, information about the fiduciary net position of the California Public Employees' Retirement System (CaIPERS) and additions to/deductions from CaIPERS' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Deferred outflows and inflows of resources represent the effects on the net pension liability that have occurred after the liability was measured. Therefore, these will affect the net pension liability in future years. As noted in Note 13, deferred outflows and inflows of resources will be recognized as pension expense in future years, however, contributions subsequent to the measurement period will be recognized during the fiscal year ending June 30, 2016. The City also provides other post -employment benefits (OPEB) to eligible employees. The OPEB are measured based on the funding and when contributions exceed the annual required contribution an OPEB asset is reported on the Statement of Net Position (see Note 14). .e] City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. Net Position and Fund Balances Government -Wide Financial Statements, Proprietary Funds. and Fiduciary Funds Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows, and is classified into three categories: Net Investment in Capital Assets — This amount consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets, and excludes unspent debt proceeds. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also should be included in this component of net position. Restricted — This amount represents the net position that is not accessible for general use because its use is subject to restrictions enforceable by third parties and enabling legislation, reduced by liabilities and deferred inflows of resources related to those assets. Unrestricted — This amount represents the residual of amounts not classified in the other two categories and represents the net equity available for the City. Governmental Fund Financial Statements In the governmental fund financial statements, fund balances are classified in the following categories: Nonspendable — Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, advances, which are long-term interfund borrowings, and items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds. Restricted — Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed — Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision-making, City Council through Council Resolution, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. Assigned — Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision-making or by a committee or official designated for that purpose. The Deputy City Manager authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted to him through a resolution adopted by the City Council. 41 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. Net Position and Fund Balances (Continued) Unassigned — This includes the excess residual amounts in the General Fund and the residual deficit of all other governmental funds, which have not been restricted, committed, or assigned to specific purposes. The City Council has approved an operating reserve to be used for one-time unanticipated expenditure requirements and local disaster. This reserve did not meet the qualifications of a stabilization arrangement. At June 30, 2015, the balance totaled $14,460,000, which is included in the unassigned fund balance in the General Fund. P. Spending Policy Government -Wide Financial Statements and Proorietary Fund Financial Statements When an expense is incurred for purposes for which both restricted and unrestricted resources are available, the City's policy is to apply restricted resources first. Governmental Fund Financial Statements When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City's policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance: • Restricted • Committed • Assigned • Unassigned Q. Estimates The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the disclosure of contingent assets and liabilities at the date of the basic financial statements and the related reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes that the estimates are reasonable. R. Deferred Inflows of Unavailable Revenue and Unearned Revenue Government -Wide Financial Statements Unearned revenue represents money received during the current or previous years that has not been earned because certain performance criteria have not been met. City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) R. Deferred Inflows of Unavailable Revenue and Unearned Revenue (Continued) Fund Financial Statements In addition to unearned revenue, deferred inflows of resources represent funds that have been earned but have not been received within the availability period. This does not provide an available financial resource in the current period, therefore, recognition is deferred until these criteria have been met. S. Pronouncements Issued But Not Yet Adopted The GASB has issued pronouncements that have an effective date subsequent to June 30, 2015, which may impact future financial presentations. Except as noted below, management has not determined what, if any, impact implementation of the following Statements may have on future financial statements of the City: GASB Statement No 72, Fair Value Measurement and Application: Effective for the City's fiscal year ending June 30, 2016. Management has not yet determined the financial impact of this pronouncement. GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans: Effective for the City's fiscal year ending June 30, 2016. Management has not yet determined the financial impact of this pronouncement. GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions: Effective for the City's fiscal year ending June 30, 2018. GASB Statement No 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments: Effective for the City's fiscal year ending June 30, 2016. GASB Statement No. 77, Tax Abatement Disclosures: Effective for the City's fiscal year ending June 30, 2016. GASB Statement No. 78, Pensions Provided through Certain Multiple -Employer Defined Pension Plans: Effective for the City's fiscal year ending June 30, 2016. T. Significant Change in Accounting Policy The accompanying financial statements reflect the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The implementation impacts the accounting and reporting of net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, for the year ended June 30, 2015. The retroactive effect of implementing this change in reporting pension expenses and obligations resulted in a restatement of the beginning net position as described further in Note 12. 43 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS A. Cash and Investments Cash and investments at June 30, 2015, are classified in the accompanying financial statements as follows Governmental Business -Type Activities Activities Fiduciary Funds Total Cash and investments $ 212,464,217 $ 4,235,110 $ 2,607,395 $ 219,306,722 Restricted: 4,236,252 Medium -Term Notes 46,009,348 Cash and investments 4,253,009 - 3,888 4,256,897 Cash and investments with fiscal agent 2,259,033 - 2,924,496 5,183,529 Total $ 218,976,259 $ 4,235,110 $ 5,535,779 $ 228,747,148 Cash and investments consisted of the following at June 30, 2015 Cash on hand and deposits Cash on hand $ 4,354 Deposits with financial institutions 4,956,291 Certificates of deposit 699,998 Total cash on hand and deposits 5,660,643 Investments U.S. Treasury Securities 28,656,955 U.S. Government -Sponsored Enterprise Securities 81,451,856 Commercial Paper 4,236,252 Medium -Term Notes 46,009,348 Money Market Funds 1,772,897 State of California Local Agency Investment Fund (LAIF) 50,008,261 L.A. County Pooled Investment Fund (LACPIF) 1,510,510 Total investments 213,646,079 Restricted investments: Money Market Funds 4,256,897 Total restricted investments 4,256,897 Restricted investments with fiscal agent: Money Market Funds 5,183,529 Total investments with fiscal agent 5,183,529 Total cash and investments $ 228,747,148 The carrying amounts of the City's deposits were $5,660,643 at June 30, 2015. Bank balances before reconciling items were $4,169,504 at that date, the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City's name. City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) B. Investments Authorized by the California Government Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Maximum Percentage or Maximum Maximum Amount of Investment in Authorized Investment Type Maturity Portfolio* One Issuer ** Local Agency Bonds 5 years No Limit No Limit U.S. Treasury Obligations 5 years No Limit No Limit State of California Obligations 5 years No Limit No Limit California Local Agency Obligations 5 years No Limit No Limit U.S. Government -Sponsored Enterprise Securities 5 years No Limit No Limit Banker's Acceptances 180 days 40% 30% Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% No Limit Repurchase Agreements 1 year No Limit No Limit Medium -Term Notes 5 years 30% No Limit Money Market Funds 5 years 15% 10% Mortgage Pass -Through Securities 5 years 20% No Limit Los Angeles County Pooled Investment Fund (LACPIF) Not Applicable No Limit No Limit State of California Local Agency Investment Fund (LAIF) Not Applicable $ 50,000,000 No Limit * Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. ** Banker's acceptances may have no more than 30 percent in any one commercial bank, commercial paper may not represent more than 10 percent of the City's surplus funds for any single issuer, and money market mutual funds may have no more than 10 percent invested in any one mutual fund. 45 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) C. Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment U.S. Treasury Obligations U.S. Government -Sponsored Enterprise Securities Money Market Funds State of California Local Agency Investment Fund (LAIF) Maximum Percentage or Maximum Maximum Amount of Investment in Maturity Portfolio* One Issuer 5 years No Limit No Limit 5 years No Limit No Limit 5 years 15% 10% Not Applicable $ 50,000,000 No Limit Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. D. Disclosures Relating to Interest Rate Risk As a means of limiting its exposure to fair -value losses arising from rising interest rates, the City's investment policy limits investments to a maximum maturity of five years from the date of purchase. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter -term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time, as necessary, to provide the cash flow and liquidity needed for operations. 0 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) D. Disclosures Relating to Interest Rate Risk (Continued) At June 30, 2015, the City had the following investment maturities: Restricted Investments. Minimum Investment Maturities (In Years) 4256,897 4,256,897 Investment Type Fair Value Less Than 1 1to2 2to3 3to4 4to5 More than 5 InvesOnents 5 18352 5,183,529 A+toA- Total restricted investments Unrated nvestments 5 183 with fiscal agent U S. Treasury Securities $ 28,656955 $ - $ - $ 11,704531 $ 7999,807 $ 6751,824 $ 2200,793 $ 223.086505 U S. Government Sponsored $ 30201714 $ 30976.047 $ 45740984 $ 36964.681 $ 16,470985 $ 28,656955 $ - $ 28,656,955 to credit ate risk $ 223,086505 $ - Enterprise Securities 81,451,856 - 23,925,633 13163,473 20,648,863 14552,061 9,161,826 Commercial Paper 4236252 - 4,236252 - - - None - Medium-TermNotes 46,009348 - 2,039,829 6108,043 17092,314 15,660,796 5,108,366 Money Market Funds 1,772,897 1,772,897 - - - - - - LAIR 50,008261 50,008,261 - - - - 359 - LACPIF 1 510 510 1,510,510 - 4,030578 Money Market Funds None 1,772,897 Total investments 213,646,079 53291,668 30201 714 30,976,047 45 740 984 36964,681 16,470,985 Restricted Investments. Minimum Money Market Funds 4256,897 4,256,897 Total restricted investments 4256,897 4,256,897 4256,897 Restricted Investments With Fiscal Agent Rating Fair Value AAA Money Market Funds 5 18352 5,183,529 A+toA- Total restricted investments Unrated nvestments 5 183 with fiscal agent 5,183529 5,183,529 Total investments subject with fiscal agent 5,183529 to interest ate risk $ 223.086505 $ 62 732094 $ 30201714 $ 30976.047 $ 45740984 $ 36964.681 $ 16,470985 E. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating, as reported by Standard & Poor's, as of year-end for each investment type. Restricted Investments' Minimum Money Market Funds None 4256,897 Credit Ratings Total restricted investments 4256,897 Investment Type Rating Fair Value AAA AA,toAA - A+toA- A-1 Unrated nvestments 5 183 529 Total restricted investments with fiscal agent 5,183529 5 183 U S. Treasury Securities None $ 28,656955 $ - $ 28,656,955 to credit ate risk $ 223,086505 $ - $ - $ - U S. Government Sponsored Enterprise Securities None 81,451,856 963,710 64,491,416 15996,730 - Commercial Paper A-1 4 236 252 - - - 4 236 252 - Medium-TermNotes* A 46,009348 8 111 359 14545,718 19321,693 - 4,030578 Money Market Funds None 1,772,897 - - - - 1,772,897 LAIC None 50,008261 - - - - 50,008261 LACPIF None 1 510 510 1,510510 Total investments 213,646,079 9,075,069 107,694,089 35318,423 4 236 252 57,322246 Restricted Investments' Money Market Funds None 4256,897 4,256,897 Total restricted investments 4256,897 4,256,897 Restricted Investments with Fiscal Agent Money Market Funds None 5,183529 5 183 529 Total restricted investments with fiscal agent 5,183529 5 183 529 Total investments subject to credit ate risk $ 223,086505 $ 9,075,069 $ 107,694,089 $ 35318,423 $ 4 236 252 $ 66762,672 47 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) E. Disclosures Relating to Credit Risk (Continued) * Included in the medium-term notes is an investment in Lehman Brothers, which is not rated as of June 30, 2015. Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008, and the company's assets are still in the process of being liquidated. The value of the investment reported is the amount the City estimates it will receive when the investment is redeemed. As of June 30, 2015, this investment is recorded at $227,800. F. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer that represent 5 percent or more of the City's total investments are as follows: Issuer Investment Type Amount % of Total Investments Federal National Mortgage U.S. Government -Sponsored Association Federal Home Loan Bank Enterprise Securities U.S. Government -Sponsored Enterprise Securities Federal Home Loan Mortgage U.S. Government -Sponsored Corporation Enterprise Securities G. Custodial Credit Risk $ 21,924,230 9.83% $ 17,028,401 7.63% $ 18,459,316 8.27% Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk associated with investments that are uninsured, are not in the name of the City, or are held by counterparty or counterparty's trust department or agent but not in the City's name. In the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, the counterparty is then unable to deliver securities that are in the possession of another party. As of June 30, 2015, none of the City's deposits or investments were exposed to custodial credit risk. M] City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) H. Investment in State Investment Pool The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. Each City may invest up to $50,000,000 without limitation in special bond proceeds accounts. Investments in LAIF are highly liquid, as deposits can be converted to cash within 24 hours without loss of interest. The City's investments with LAIF at June 30, 2015 included a portion of the pool funds invested in structured notes and asset-backed securities: Structured Notes — Debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset -Backed Securities — Generally mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, collateralized mortgage obligations) or credit card receivables. As of June 30, 2015, the City had $50,008,261 invested in LAIF, which had invested 2.08 percent of the pool investment funds in structured notes and asset-backed securities. The LAIF fair -value factor of 1.000375979 was used to calculate the fair value of the investments in LAIF from their amortized cost basis. As a result of the LAIF fair value factor, the amount reported exceeded the $50,000,000 limit. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. L Investment in County Investment Pool The Los Angeles County Pooled Investment Fund (LACPIF) is a pooled investment fund program governed by the Los Angeles County Board of Supervisors and administered by the Los Angeles County Treasurer and Tax Collector. Investments in the LACPIF are highly liquid, as deposits and withdrawals can be made at any time without penalty. The LACPIF does not impose any maximum investment limit. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's prorated share of the fair value provided by the LACPIF for the entire LACPIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by the LACPIF, which are recorded on an amortized cost basis. As of June 30, 2015, the City had $1,510,510 invested in the LACPIF. The LACPIF fair value factor of 0.998957228 was used to calculate the fair value of the investments in the LACPIF from their amortized cost basis. City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 3. LAND HELD FOR RESALE As of June 30, 2015, the City had $1,188,969 of land held for resale, which is reported at fair value. There were no changes in fair value during the current year. Non -Major Governmental Funds Land held for resale, cost $ 3,351,588 Less: allowance for the decline in value (2,162,619) Land held for resale, net $ 1,188,969 CW-Aweielll0Y& 1ax03=11IF%1-1IIIIA Accounts receivable as of June 30, 2015, including allowances for uncollectible accounts, is as follows Landscape Non -Major General Bridge and Maintenance Governmental Internal Fund Thoroughfare District#1 Funds Service Funds Total Gross receivables $ 896,432 $ 160,617 $ 84,607 $ 113,114 $ 55,630 $ 1,310,400 Less: allowance for uncollectibles 523,153 - 46,408 12,059 - 581,620 Net total receivables $ 373,279 $ 160,617 $ 38,199 $ 101,055 $ 55,630 $ 728,780 5. LOANS RECEIVABLE The City has provided deferred -payment rehabilitation loans to qualified homeowners in connection with CDBG and HOME rehabilitation programs. In the governmental funds, the loans receivable balance totaling $2,402,815 at June 30, 2015, has been offset by deferred inflows of resources for unavailable revenues in the non -major governmental funds, since these loans are not available to finance current expenditures. 6. NOTES TO RDA SUCCESSOR AGENCY Prior to the dissolution of the former redevelopment agency, the General Fund and Developer Fees Special Revenue Fund advanced the former redevelopment agency funding for various redevelopment activities. These advances were made in the form of promissory notes and were transferred to the RDA Successor Agency upon dissolution. As of June 30, 2015, the California Department of Finance (DOF) approved final loan amounts from the General Fund and Developer Fees Special Revenue Fund to the former redevelopment agency for $7,225,964 and $5,407,868, respectively. As such, the City reported amounts in the General Fund and Developer Fees Special Revenue Fund of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAIF rate of 0.26 percent, which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes are $910,244 and $183,958, respectively. 50 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 7. CAPITAL ASSETS A. Governmental Activities The following is a summary of changes in the capital assets for governmental activities during the fiscal year ended June 30, 2015: Governmental activities: Non -depreciable assets: Land Construction in progress Total non -depreciable assets Depreciable assets: Site improvements Building and improvements Equipment Infrastructure Total depreciable assets Less accumulated depreciation: Site improvements Building and improvements Equipment Infrastructure Total accumulated depreciation Total depreciable assets, net Total capital assets, net Governmental Activities Balance Balance June 30, 2014 Additions Deletions Transfers June 30, 2015 $ 125,250,547 $ 15,955,322 $ (12,500) $ - $ 141,193,369 13,438,221 10,857,786 (175,005) (5,769,240) 18,351,762 138,688,768 26,813,108 (187,505) (5,769,240) 159,545,131 38,252,932 2,296,410 - 3,156,307 43,705,649 68,464,638 613,729 - 2,098,196 71,176,563 12,622,593 1,221,623 (513,932) - 13,330,284 895,352,264 8,694,484 (289,704) 514,737 904,271,781 1,014,692,427 12,826,246 (803,636) 5,769,240 1,032,484,277 12,173,029 1,359,337 - - 13,532,366 16,098,769 1,543,011 - - 17,641,780 9,335,118 789,554 (508,863) - 9,615,809 Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2015, as follows: Governmental Activities General government $ 1,051,508 Public safety 48,140 Parks, recreation and community service 2,127,110 Public works 287,173 Community development 2,638 Internal service funds depreciation 175,333 Allocated depreciation 3,691,902 Unallocated infrastructure depreciation 18,072,657 Total depreciation expense $ 21,764,559 51 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 7. CAPITAL ASSETS (Continued) B. Business -Type Activities The following is a summary of changes in the capital assets for business -type activities during the fiscal year ended June 30, 2015: Business -type activities: Non -depreciable assets: Land Construction in progress Total non -depreciable assets Depreciable assets: Site improvements Building and improvements Equipment Total depreciable assets Less accumulated depreciation: Site improvements Building and improvements Equipment Total accumulated depreciation Total depreciable assets, net Capital assets, net Business -Type Activities Balance Balance June 30. 2014 Additions Deletions Transfers June 30. 2015 $ 15,087,880 $ - $ - $ - $ 15,087,880 15,171,132 (83,252) 15,087,880 12,160,382 697,642 - 83,252 12,941,276 41,483,799 - - - 41,483,799 48,880,303 47,430 (3,050,600) 45,877,133 102,524,484 745,072 (3,050,600) 83,252 100,302,208 1,590,164 536,985 - - 2,127,149 9,275,693 883,346 - - 10,159,039 Depreciation expense for business -type activities for the fiscal year ended June 30, 2015 was charged as follows. Business -Type Activities: Transit Enterprise Total depreciation expense 52 $ (5,545,746) _L_L City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT A. Governmental Activities The following is a summary of long-term debt transactions of the City for the year ended June 30, 2015: Lease Revenue Bonds: Series 2007 Plus deferred amount for issuance premium Total Lease Revenue Bonds Certificates of Participation: Refunding, Series 2005 Series 2007 Less deferred amount for issuance discount Total Certificates of Participation Capital leases Loans Compensated absences Claims and judgments Total Classification Balance Balance Due Within Due More June 30. 2014 Additions Deletions June 30. 2015 One Year Than One Year $ 11,920,000 $ - $ (325,000) $ 11,595,000 $ 335,000 $ 11,260,000 82,622 (3,658) 78,964 78,964 12,002,622 (328,658) 11,673,964 335,000 11,338,964 9,325,000 - (1,195,000) 8,130,000 1,235,000 6,895,000 15,340,000 - (120,000) 15,220,000 150,000 15,070,000 (50,488) 4,614 (45,874) (45,874) 24,614,512 (1,310,386) 23,304,126 1,385,000 21,919,126 154,705 135,389 (72,479) 217,615 78,628 138,987 580,000 - (280,000) 300,000 100,000 200,000 3,197,040 1,794,182 (1,677,722) 3,313,500 1,605,963 1,707,537 2,157,763 1,028,290 (1,192,138) 1,993,915 1,233,572 760,343 $42,706,642 $ 2,957,861 $(4,861,383) $40,803,120 $ 4,738,163 $36,064,957 Lease Revenue Bonds — Series 2007 On January 16, 2007, the Authority issued $13,785,000 Lease Revenue Bonds, Series 2007. The bonds were issued by the Authority for the purpose of financing the costs of acquiring right-of-way for a portion of Golden Valley Road in connection with the payment of a judicial order by the City. Concurrent with this bond issuance, the Authority entered into a lease and lease -back arrangement with the City, whereby the Authority used the proceeds of the bond issuance to make a lump -sum lease payment to the City. In return, the City will make lease -back payments to the Authority sufficient to cover the principal and interest due on the Series 2007 Bonds. The property subject to the lease and lease -back arrangement is City Hall. Principal amounts on serial bonds mature annually each February 1 in the years 2008 through 2018 and bear interest at rates ranging from 4.0 percent to 5.0 percent. Term bonds totaling $2,495,000 mature on February 1, 2033, and bear interest at 4.3 percent. Term bonds totaling $2,965,000 mature in February 2037 and bear interest at 4.375 percent. Interest is payable semi-annually on February 1 and August 1 of each year. The term bonds maturing on February 1, 2033, are subject to mandatory redemption commencing on February 1, 2030. The term bonds maturing on February 1, 2037, are subject to mandatory redemption commencing on February 1, 2034. Bonds maturing on or after February 1, 2018, are subject to optional redemption on or after February 1, 2017. The total principal and interest remaining to be paid on the bonds is $18,098,771 as of June 30, 2015. For the current year, principal and interest paid on the bonds was $825,654 and was equal to the base lease payments as required to be paid to the Authority. The outstanding balance of the bonds was $11,595,000 at June 30, 2015. 53 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2037 Total Principal Interest Total 335,000 $ 487,654 $ 822,654 350,000 474,254 824,254 365,000 460,254 825,254 375,000 445,654 820,654 390,000 430,654 820,654 2,210,000 1,905,069 4,115,069 2,695,000 1,413,263 4,108,263 3,330,000 784,813 4,114,813 1,545,000 102,156 1,647,156 $ 11,595,000 $ 6,503,771 $ 18,098,771 Refunding Certificates of Participation — Series 2005 On July 12, 2005, the Authority issued $17,700,000 in Certificates of Participation, with an average interest rate of 3.4 percent, to advance refund $17,640,000 of outstanding 1997 Series certificates with an average interest rate of 4.9 percent. The defeased 1997 Series certificates have since been retired. The certificates are backed by lease payments to be made by the City to the Authority for the use and occupancy of certain real property. Principal amounts mature annually each October 1 in the years 2006 through 2020 and bear interest at rates ranging from 3.0 percent to 4.0 percent. Interest is payable semi-annually on April 1 and October 1. The certificates maturing on or after October 1, 2016, are subject to optional prepayment on any date on or after October 1, 2015, at a price equal to the principal amount plus accrued interest to the prepayment date, without premium. The total principal and interest remaining to be paid on the bonds is $9,116,016 as of June 30, 2015. For the current year, principal and interest paid on the bonds was $1,524,359 and was equal to the base lease payments as required to be paid to the Authority. The outstanding balance of the bonds was $8,130,000 at June 30, 2015. 54 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021 11ZO M Certificates of Participation —Series 2007 Principal Interest Total $ 1,235,000 $ 287,581 $ 1,522,581 1,280,000 242,769 1,522,769 1,325,000 194,725 1,519,725 1,375,000 143,241 1,518,241 1,430,000 88,000 1,518,000 1,485,000 29,700 1,514,700 $ 8,130,000 $ 986,016 $ 9,116,016 On December 12, 2007, the Authority issued $15,525,000 in Certificates of Participation to provide financing for the costs of acquiring open -space lands, parks, and parkland in accordance with the City's open space, park and parkland programs, purchase a reserve fund surety and fund the costs of delivery of the certificates. The certificates are secured by a pledge of special assessment revenues received by the City. Additionally, there is a backed -up pledge of lease payments to be made by the City to the Authority for the use and occupancy of the Aquatic Center and Sports Complex. This issuance is composed of $6,000,000 serial certificates maturing annually on October 1 from 2011 to 2028 and two term certificates (totaling $9,525,000) maturing on October 1, 2033, and October 1, 2037, that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the certificates is payable semi-annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.60 percent for the serial certificates and 4.75 percent for the term certificates. The City has pledged the future special assessment revenues received to repay the certificates. The certificates are payable solely from all or a portion of the annual special assessment collected for the City. The total principal and interest remaining to be paid on the certificates is $26,021,596 as of June 30, 2015. For the current year, principal and interest paid on the certificates was $823,851, and total special assessment revenues were $2,146,498. The outstanding balance of the certificates was $15,220,000 at June 30, 2015. 55 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these certificates are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2038 Total Loans Balance Principal Interest Total 150,000 185,000 220,000 255,000 290,000 2,070,000 698,451 691,751 683,651 674,151 663,251 3,086,313 848,451 876,751 903,651 929,151 953,251 5,156,313 3,300,000 2,488,341 5,788,341 4,885,000 1,532,231 6,417,231 3,865,000 283,456 4,148,456 $ 15,220,000 $ 10,801,596 $ 26,021,596 Balance Due Within Due in More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year HUD Loans: 1999 West Newhall $ 180,000 $ - $ (180,000) $ - $ - $ - Boys & Girls Club 97,000 - (23,000) 74,000 23,000 51,000 Scherzinger Lane 303,000 - (77,000) 226,000 77,000 149,000 Total loans $ 580,000 $ $ (280,000) $ 300,000 $ 100,000 $ 200,000 In December 1999, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $2,000,000. The purpose of this loan was to provide financing for the installation of curbs, gutters, and sidewalks in the West Newhall area. Payments are due semi- annually, commencing on August 1, 2001, and continuing through August 1, 2014. This loan has been paid off as of June 30, 2015. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $350,000. The purpose of this loan was to assist the Boys & Girls Club in financing the construction of a new gymnasium. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. The interest rate on this loan is fixed at 0.56 percent. The amount outstanding at June 30, 2015, is $74,000. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $1,150,000. The purpose of this loan was to provide financing for the construction of improvements to Scherzinger Lane. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. The interest rate on this loan is fixed at 0.56 percent. The amount outstanding at June 30, 2015 is $226,000. REP City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) Future payment requirements for the loans are combined as follows: Year Ending June 30, Principal Interest Total 2016 $ 100,000 $ 21,335 $ 121,335 2017 100,000 14,220 114,220 2018 100,000 8,605 108,605 Total $ 300,000 $ 44,160 $ 344,160 Capital Leases On February 28, 2012, the City Council approved a lease -purchase agreement with One Source Financial Corp. for two seven -bin sorters for the Canyon Country and Valencia Library branches in the amount of $251,455. The lease agreement has 60 monthly payments of $4,825 with an interest rate of 6 percent. The final payment is due May 15, 2017. The lease was assigned by One Source Financial Corp. to Bank of the West. The assets acquired through the capital lease are as follows: Equipment $ 252,068 Less: accumulated depreciation (159,643) Total $ 92,425 Future capital lease payment requirements are as follows: Year Ending June 30, Total 2016 $ 57,900 2017 53,075 Net minimum lease payments 110,975 Less: amount representing interest (6,326) Present value of net minimum lease payments $ 104,649 57 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) On August 1, 2014, the City Council approved a lease -purchase agreement with Canon Financial Services, Inc. to install a Canon Image Runner C5045 for the Canyon Country and Valencia Library branches in the amount of $13,433. The lease agreement has 60 monthly payments of $279 with an interest rate of 9.024 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment Less: accumulated depreciation Total Future capital lease payment requirements are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments $ 13,433 (2,463) $ 10, 970 3,348 3,348 3,348 3,348 279 13,671 (2,271) $ 11,400 On August 1, 2014, the City Council approved a lease -purchase agreement with Canon Financial Services, Inc. to install a Canon Image Runner C5045 for the Canyon Country and Valencia Library branches in the amount of $121,956. The lease agreement has 60 monthly payments of $2,270 with an interest rate of 4.43 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment Less: accumulated depreciation Total FE $ 121,956 (22, 359) $ 99,597 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) Future capital lease payment requirements are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments Compensated Absences Total $ 27,235 27,235 27,235 27,235 2,270 111.210 (9,644) $ 101,566 The City's liability for accrued and unpaid compensated absences in the governmental activities totaled $3,313,500 at June 30, 2015. The majority of compensated absences are liquidated through the General Fund. Claims and Judaments The City's liability for outstanding claims and judgments is $1,993,915 at June 30, 2015 (see Note 17). B. Business -Type Activities Compensated Absences The City's liability for accrued and unpaid compensated absences in the business -type activities at June 30, 2015, is as follows: Balance Balance Due Within Due in More June 30. 2014 Additions Deletions June 30. 2015 One Year Than One Year Compensated absences $ 66,390 $ 46,616 $ (37,755) $ 75,251 $ 37,755 $ 37,496 Total $ 66,390 $ 46,616 $ (37,755) $ 75,251 $ 37,755 $ 37,496 59 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 9. DEPOSITS PAYABLE The City collects deposits for a) improvements within the City, b) donations received for specified services, and c) deposits received in advance for recreation programs or other department services. These balances represent amounts that have been collected for which the eligibility requirements for revenue recognition have not been met. As of June 30, 2015, deposits payable were as follows: General Fund: Deposits from developers $ 2,813,195 Other deposits payable 257,608 Total deposits payable $ 3,070,803 10. DEVELOPER CREDITS The City and the County of Los Angeles have established the Santa Clarita Valley Bridge and Major Thoroughfare Districts to accommodate the needs of future development anticipated by the County of Los Angeles and the City of Santa Clarita General Plans. Included in the formation documents are provisions for district fees to be paid by developers, which are to be used to assist the City in constructing and maintaining the infrastructure within the areas of benefit. In lieu of paying the district fees, developers are allowed to donate infrastructure (roadways, bridges, intersections, and interchanges) necessary for the future development of the districts. In certain cases, the developer may donate infrastructure with a value that exceeds the district fees collected. If this occurs, the developer can receive a credit toward future district fees or request a cash withdrawal of the excess amount, subject to City approval if funding is determined to be available. As of June 30, 2015, the City accrued a liability of $39,117,582 for the value of infrastructure donated in excess of the district fees that were owed. There is no maturity schedule for the developer payables, and it has been determined that current financial resources will not be used to repay the liability, therefore, the liability has been recorded as a long-term obligation in the governmental activities in the Statement of Net Position. The following is a summary of developer credits by district for the year ended June 30, 2015: .o] Balance Balance June 30, 2014 Additions Deletions Transfers June 30, 2015 Bridge and Thoroughfare Districts: Bouquet District $ 13,280,489 $ - $ (3,372,768) $ - $ 9,907,721 Eastside District 15,171,320 - (417,890) (1,150,000) 13,603,430 Via Pnncessa District 200,000 - (1,314,744) 1,150,000 35,256 Valencia District 15,571,175 - - - 15,571,175 Total $ 44,222,984 $ $ (5,105,402) $ $ 39,117,582 .o] City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS A. Due To/Due From At June 30, 2015, the City had the following short-term interfund receivables and payables: Due To Other Funds: Non -Major Governmental Funds Total Due From Other Funds General $ 2,040,570 $ 2, 040, 570 The interfund payables balance represents routine temporary cash flow assistance until the amounts receivable from other governments are collected to reimburse eligible expenditures. B. Advances At June 30, 2015, the City had the following interfund advances: In March 2006, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $430,000 for acquisition of land. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $543,335. In December 2007, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,000,000 to pay outstanding developer payables at the time. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $952,583. 61 Advances To Other Funds Non -Major Governmental General Funds Total Advances From Other Funds: Major Governmental Funds: Bridge and Thoroughfare $ 1,495,918 $ 118,944 $ 1,614,862 Public Library 9,540,318 - 9,540,318 Total $ 11,036,236 $ 118,944 $ 11,155,180 In March 2006, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $430,000 for acquisition of land. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $543,335. In December 2007, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,000,000 to pay outstanding developer payables at the time. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $952,583. 61 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS (Continued) B. Advances (Continued) In July 2010, the Developer Fees Special Revenue Fund advanced the Bridge and Thoroughfare Special Revenue Fund $111,242 for the design and construction costs of the Newhall Avenue Pedestrian, Facilities, and Sidewalk project. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $118,944. The General Fund advanced the Public Library Special Revenue Fund $9,540,318, which consists of the following individual advances: In November 2010, the General Fund advanced the Public Library Special Revenue Fund $622,600 for the completion of the expansion of the Canyon Country Jo Anne Darcy Library. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount has been paid off. In January 2011, the General Fund advanced the Public Library Special Revenue Fund $93,040 for the purchase and installation of the integrated library system software. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount has been paid off. In March 2011, the General Fund advanced the Public Library Special Revenue Fund $1,348,000 for the acquisition of opening -day library materials and library furnishings and equipment. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $1,080,399 is outstanding. In May 2011, the General Fund advanced the Public Library Special Revenue Fund $8,071,596 for the acquisition of library facilities, real property, personal property and collections from the County of Los Angeles. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $8,071,596 is outstanding. In April 2011, the General Fund advanced the Public Library Special Revenue Fund $388,323 for the acquisition of a radio frequency identification system and related software for the Santa Clarita Public Library. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $388,323 is outstanding. WE City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS (Continued) C. Transfers At June 30, 2015, the City had the following transfers: Transfers Out Landscape NonMajorTransit Internal General Bridge and Public Maintenance Governmental Enterprise Service Fund Thoroughfare Library Districtbl Funds Fund Funds Total Transfers In'. General Fund $ - $ 7284 $ 1591 $ 103,842 $ 1,094963 $ 226,024 $ 784231 $ 2 217 935 NonMajorGovernmental Funds 3,789,996 - - 109,758 1,729261 3,690 - 5,632,705 Transit Enterprise 7,360 - - - 7,551,870 - - 7 559 230 Internal Service Funds 83,031 83,031 Total $ 3,880,387 $ 7284 $ 1591 $ 213,600 $ 10,376,094 $ 229714 $ 784231 $ 15,492901 The General Fund made transfers to non -major governmental funds for operating and capital improvement projects for $1,439,983 and current year debt service payments for $2,350,013, totaling $3,789,996. The General Fund also made transfers for $7,360 to the Transit Enterprise Fund for prior year cost reimbursements. Transfers from the General Fund to the Self -Insurance Internal Service Fund of $83,031 were for risk management operations. Transfers to the General Fund from the Self - Insurance Internal Service Fund for $784,231 consist primarily of Phase I of Edwards billboard removal settlement for $523,301 and $250,000 for Cemex mining opposition efforts. The Bridge and Thoroughfare, Public Library, and Landscape Maintenance District #1 Special Revenue Funds, non -major governmental funds, Transit Enterprise Fund, and Self -Insurance Internal Service Fund made transfers to the General Fund for current year post -employment benefits, totaling $360,204. The Landscape Maintenance District #1 Special Revenue Fund made transfers to the General Fund and the non -major governmental fund for operating costs for $149,750. The non -major governmental funds made transfers to the General Fund for operating and replacement costs for $894,438. Transfers from the non -major governmental funds to the Transit Enterprise Fund totaling $7,551,870 were to transfer Proposition A and Proposition C non-operating revenues in the current year. The Transit Enterprise Fund made transfers to the center transit operations. Transfers to non -major proportional share of Metrolink station maintenance. 63 General Fund for $150,000 to support the senior governmental funds for $3,690 were for the City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 12. FUND BALANCES AND NET POSITION A. Fund Balance Classification The details of fund balance of the governmental funds as of June 30, 2015, are presented below Committed. Capital improvements Total committed Assigned Major Gov emmenta l Funds Capital projects 15500,000 Landscape Non -Major 17343,822 Claims and settlements General Bndge and Public Maintenance Governmental 5,156328 Public facilities replacement Fund Thoroughfare Library Distinct #1 Funds Total Nonspendable 55336,807 1,843,822 57,180,629 Prepaid items $ 118,400 $ - $ - $ 252,661 $ 13,438 $ 384,499 Land held for resale - - - - 1,188968 1,188968 510 Advances to other funds* 10 905 938 10 905 938 Total nonspendable 11,024338 252,661 1202,406 12,479,405 Restricted. Landcape maintenance - - - 29,787,625 4,860,046 34,647,671 Capital improvements - 7350,087 - - 7,443,660 14,793,747 Transportation - - - - 15309948 15 309 948 Open space preservation - - - - 7,156,136 7,156,136 Public safety - - - - 1373,137 1373,137 Public library - - - - 454,198 454,198 Air quality improvement - - - - 512,186 512,186 Stormwater - - - - 5,453,491 5,453,491 Public education and government - - - - 1,404532 1,404532 Tourism marketing - - - - 595231 595231 Low -and moderate -income housing 4,063,016 4,063,016 Total restricted - 7 350.087 - 29 787 625 48.625581 85 763 293 Committed. Capital improvements Total committed Assigned Capital projects 15500,000 - - - 1,843,822 17343,822 Claims and settlements 5,156328 - - - - 5,156328 Public facilities replacement 34,680,479 34,680,479 Total assigned 55336,807 1,843,822 57,180,629 Unassigned 50,141,486 (8,007,174) (626,129) 41508,183 Total fund balances $ 116502.631 $ 7 350.087 $ (8.007.174) $ 30.040286 $ 51.059.680 $ 196 945 510 Accrued interest on General Fund advances to other funds of $130,298 do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. B. Net Position Restatements As a result of the implementation of GASB Statement of No. 68 and GASB Statement No. 71, the beginning net position was restated for the net pension liability that was measured at June 30, 2014. The following is a summary of the effect of this restatement: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 El Governmental Business -Type Activities Activities $ 954,425,101 $ 86,650,756 (30,303,742) (1,103,720) $ 924,121,359 $ 85,547,036 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 12. FUND BALANCES AND NET POSITION (Continued) B. Net Position Restatements (Continued) These changes had the effect of decreasing net position of the governmental activities by $30,303,742 and the business -type activities by $1,103,720 as of June 30, 2014, as compared to the amounts previously reported. The deferred outflows of resources and deferred inflows of resources were not determinable at the time of implementation, except for the contributions during the fiscal year ended June 30, 2014 of $3,562,246, which is included in the restatement. Beginning net position in the Transit Enterprise Fund has been restated as follows: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 Beginning net position in the internal service funds has been restated as follows: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 13. AGENT MULTIPLE -EMPLOYER PLAN General Information about the Pension Plan A. Plan Description Transit Enterprise Fund $ 86,650,756 (1,103, 720) $ 85,547,036 Internal Service Funds $ 8,616,187 (115, 346) $ 8,500,841 The City's defined benefit pension plan, California Public Employees' Retirement System (CaIPERS), provides pensions for all permanent full-time general and public safety employees of the City. CalPERS is an agent -multiple employer defined benefit pension plan administered by the California Public Employees' Retirement System. CalPERS issues a publicly available financial report that can be obtained at https://www.calpers.ca.gov. 65 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) B. Benefits Provided The City contributes to CalPERS, an agent multiple -employer public employee defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member or California Public Employees' Pension Reform Act (PEPRA) Safety member becomes eligible for Service Retirement upon attainment of age 50 with at least 5 years of credited service (total service across all CalPERS employers, and with certain other Retirement Systems with which CalPERS has reciprocity agreements). For employees hired into a defined benefit pension plan with the 1.5 percent at 65 formula, eligibility for Service Retirement is age 55 with at least five years of service. PEPRA miscellaneous members become eligible for Service Retirement upon attainment of age 52 with at least five years of service. The Service Retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation based on a three-year average. The benefit factor depends on the benefit formula specified in the agency's contracts. Beginning the second calendar year after the year of retirement, retirement and survivor allowances may be annually adjusted on a compound basis up to 2 percent. Copies of CaIPERS' annual financial report may be obtained from its executive office: 400 P Street, Sacramento, CA 95814. C. Employees Covered by Benefit Terms At June 30, 2013, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 127 Employees entitled to but not yet receiving benefits 335 Active employees 384 846 This information was obtained from the CalPERS Annual Valuation Report as of June 30, 2013 and is the most recent information available. D. Contributions Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CaIPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2015, the average active employee contribution rate is 7.803 percent of annual pay, and the employer's contribution rate is 13.733 percent of annual payroll. Employer contribution rates may change if plan contracts are amended. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer contribution. The employer contributions as of June 30, 2015, were $3,740,138. City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) E. Actuarial Assumptions For the measure period ended June 30, 2014 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2013 total pension liability. The June 30, 2013 and the June 30, 2014 total pension liabilities were based on the following actuarial methods and assumptions: Inflation 2.75 percent Salary increases 3.3 to 14.2 percent by Entry, Age and Service Investment rate of return 7.5 percent of net pension, investment and administrative expenses, including inflation The actuarial assumptions used in the June 30, 2013, valuation were based on the results of ar actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality, and retirement rates. Mortality rates were based on the 2014 CalPERS actuarial experience study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale BB. The Experience Study report can be obtained at CaIPERS' website under Forms and Publications. On October 8, 2015, the SOA issued an updated Mortality Improvement Scale MP -15. The SOA's preliminary estimates suggest that updating to this recently release scale might reduce a plan's liabilities up to 2 percent or less. Management has not yet evaluated the impact of this recent update with its actuary and, accordingly, no adjustment has been made to the plan's obligations as of the June 30, 2013 valuation date. 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 (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: New Strategic Expected Real Rate Expected Real Rate Asset Class Allocation of Return 1-10 Years of Return 11+ Years Global Equity 47.0% 5.25% 5.71% Private Equity 19.0 0.99 2.43 Global Fixed Income 6.0 0.45 3.36 Liquidity 12.0 6.83 6.95 Real Assets 11.0 4.50 5.13 Inflation Sensitive Assets 3.0 4.50 5.09 Asbolute Return Strategy (ARS) 2.0 -0.55 -1.05 67 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) F. Discount Rate The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the employee rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. 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. G. Changes in the Net Pension Liability Balances at June 30, 2013 Changes recognized for the measurement period: Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes of assumptions Contributions from the employer Contributions from employees Net investment income Benefit payments, including refunds of employee contributions Net changes during 2013-14 Balances at June 30, 2014 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Liability (a) - (b) $126,898,794 $ 91,929,025 $ 34,969,769 4,462,544 4,462,544 9,588,693 9,588,693 3,562,246 (3,562,246) 2,339,435 (2,339,435) 16,243,165 (16,243,165) (2,561,655) (2,561,655) 11,489,582 19,583,191 (8,093,609) $138,388,376 $111,512,216 $ 26,876,160 The City has allocated the proportion of the net pension liability and related components based on the share of contributions to the pension plan relative to the total contributions to the City. At June 30, 2015, the total net pension liability was proportionately allocated as follows: Governmental Transit Total Net Activities Enterprise Fund Pension Liability Net pension liability $ 25,931,680 $ 944,480 $ 26,876,160 9.1 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) H. Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of the City, calculated using the discount rate of 7.5 percent, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower (6.5 percent) or 1 -percentage point higher (8.5 percent) than the current rate: Discount Rate - 1 % Current Discount Discount Rate + 1 % (6.50%) Rate (7.50%) (8.50%) Net pension liability $ 48,974,390 $ 26,876,160 $ 8,821,514 L Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued CaIPERS financial report. J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2015, the City recognized pension expenses of $2,883,723. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date Total Deferred Outflows Deferred Inflows of Resources of Resources $ 7,415,085 3,740,138 - $ 3,740,138 $ 7,415,085 At June 30, 2015, the total deferred outflow of resources and deferred inflow of resources related to the net pension liability was proportionately allocated as follows: Governmental Transit Activities Enterprise Fund Total Deferred outflows of resources $ 3,608,702 $ 131,436 $ 3,740,138 Deferred inflows of resources 7,154,505 260,580 7,415,085 o; City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Amounts reported as deferred outflows and inflows of resources are amortized in pension expense for the year the gain or loss occurs, except for contributions subsequent to the measurement period, which are recognized during the fiscal year ending June 30, 2016. The amortization period differs depending on the source of the gain or loss. Differences between projected and actual earnings are amortized on a 5 -year straight-line basis and all other amounts are amortized over the average expected remaining service lives of all members that are provided with benefits. At June 30, 2015, the expected average remaining service lifetime is 4.7 years. Deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows/(I nflows) Fiscal Year Ending June 30, of Resources 2016 $ (1,853,771) 2017 (1,853,771) 2018 (1,853,771) 2019 (1,853,772) fiCl•I01-1d=1PA J110 IPAI=10Yd:I=F_111111:1-7=10I=IyY&'? A. Plan Description The City has elected through resolution to provide healthcare benefits as a single -employer defined benefit plan to retirees, spouses, and eligible dependents of the City. This plan provides post - employment medical insurance benefits through the CaIPERS Health Plan (the Plan). A separate financial report is not issued. B. Eligibility City employees who have a service retirement from the City at age 50 with five or more years of service are eligible to receive post -employment medical benefits. Employees who have a disability retirement are also eligible. The benefit for employees hired before January 1, 2008 is up to $1,016.58 per month. The maximum benefit will be adjusted when the lowest cost employee rate, plus one, exceeds $1,016.58. No minimum years of service were required for the employees hired before January 1, 2008 and retired before January 1, 2012 and represented employees hired before January 1, 2008 and retired after January 1, 2012 and before January 1, 2014 70 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) B. Eligibility (Continued) The City implemented the following vesting schedule on January 1, 2012 effective for unrepresented employees hired before January 1, 2008 who retire after January 1, 2012, and for represented employees hired before January 1, 2008 who retire after January 1, 2014: Years of Service Vested 0 to 5 years 0% 5 to 9 years 50% 10 to 14 years 75% 15 years and greater 100% Employees hired after January 1, 2008 receive the PERS minimum and are not subject to a vesting schedule. As of the most recent valuation, the total participants in the Plan are as follows: Participants Total Active employees Retirees Total C. Funding Policy 359 67 426 The City pays an allowance toward the healthcare benefits paid to retirees, spouses, and eligible dependents under a City resolution that can be amended by the City Council. During the year ended June 30, 2015, the City contributed $2,377,844 to the irrevocable OPEB Trust fund. The City conducted an actuarial valuation to determine the City's obligation to fund OPEB and determined that it served the City's interests to prefund those benefits. In December 2011, the City Council approved Resolution 11-89 adopting the Public Agencies Post -Retirement Health Care Plan Document and Trust Agreement. The OPEB Trust is a tax -qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to pre -fund OPEB as described in GASB Statement No. 45. The Plan Trustee is U.S. Bank, and Public Agencies Retirement Services (PARS) is the Trust Administrator. The City elected a discretionary investment approach with a blended investment objective strategy. The primary objective is to maximize total Plan return, subject to the risk and quality constraints established. The Plan's targeted rate of return is 6.5 percent. The asset allocation ranges for this objective are 0 percent to 20 percent cash source, 30 percent to 50 percent fixed income, and 50 percent to 70 percent equity. For fiscal year 2014-2015, the City contributed, on an individual basis, for employees and retirees up to the following amounts: Unrepresented SEIU Local 347 71 Retirees Employees 12,199 $ 14,107 12,199 14,107 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) D. Annual OPEB Cost and Net OPEB Obligation The City's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excesses) over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the Plan, and changes in the City's OPEB asset for the Plan: The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB asset as of June 30, 2015, were as follows: % of Annual Annual OPEB OPEB OPEB Annual Cost Asset Fiscal Year Ended Cost Contribution Contributed (Obligation) June 30, 2013 June 30, 2014 June 30, 2015 $ 1,625,000 $ 2,679,000 2,312,000 2,303,000 1,438,000 2,377,844 E. Funded Status and Funding Progress 164.9% Total Annual required contribution $ 1,388,000 Interest on OPEB asset (404,000) Adjustment to annual required contribution 454,000 Annual OPEB cost (expense) 1,438,000 Contributions made 2,377,844 Decrease in OPEB asset 939,844 OPEB asset - beginning of year 6,214,930 OPEB asset - end of year $ 7,154,774 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB asset as of June 30, 2015, were as follows: % of Annual Annual OPEB OPEB OPEB Annual Cost Asset Fiscal Year Ended Cost Contribution Contributed (Obligation) June 30, 2013 June 30, 2014 June 30, 2015 $ 1,625,000 $ 2,679,000 2,312,000 2,303,000 1,438,000 2,377,844 E. Funded Status and Funding Progress 164.9% $ 6,223,930 99.6% 6,214,930 165.4% 7,154,774 As of the most recent actuarial valuation date on June 30, 2014, the Plan was 93.6 percent funded. The actuarial accrued liability for benefits was $28.9 million, and the actuarial value of assets was $27.0 million, resulting in a UAAL of $1.9 million. The covered payroll (annual payroll of active employees covered by the Plan) was $27.4 million, and the ratio of UAAL to the covered payroll was 6.73 percent. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 72 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) F. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend rate. Amounts determined regarding the funded status of the Plan and the ARC are subject to continual revision, as actual results are compared with past expectations, and new estimates are made about the future. In the June 30, 2014 actuarial valuation, the entry -age actuarial cost method was used. The actuarial assumptions include a 6.50 percent investment rate of return, which is based on the expected return on funds invested by PARS, and an annual healthcare cost trend rate of 7.70 percent initially and reduced by decrements of 0.6 percent to an ultimate rate of 5.0 percent thereafter. The actuarial assumption for inflation was 3.00 percent, and the aggregate payroll increase was 3.25 percent used in the actuarial valuation. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2014 was 19 years. 15. INDIVIDUAL FUND DISCLOSURES A. Deficit Fund Balances and Net Position Funds that have a deficit fund balance at June 30, 2015, are as follows: Deficit Fund Fund Balance Major Funds: Public Library Special Revenue Fund $ (8,007,174) Non -Major Governmental Funds Proposition A (1) Surface Transportation Program (14,191) BJA Law Enforcement Special Revenue Fund (846) Proposition C (611,091) The City plans to eliminate the deficit in the Public Library Special Revenue Fund with future property tax receipts. The non -major governmental fund deficits will be eliminated when the intergovernmental receivables are collected in future periods. 73 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 15. INDIVIDUAL FUND DISCLOSURES (Continued) B. Expenditures in Excess of Appropriations For the year ended June 30, 2015, expenditures exceeded appropriations in the following programs/functions (legal level of budgetary control) of the respective funds: Excess Expenditures Over Fund Appropriations Expenditures Appropriations Major Governmental Funds General Fund General Government Non -Major Governmental Funds: Supplemental Law Grant Special Revenue Fund: Public Safety OSPD Special Revenue Fund: Interest and fiscal charges Public Financing Authority Debt Service Fund: Interest and fiscal charges $ 17,714,271 $ 21,366,674 $ (3,652,403) 348,607 353,043 (4,436) - 93 (93) 1,533,866 1,533,907 (41) 16. DEFERRED COMPENSATION PLAN/DEFINED CONTRIBUTION PLAN The City has established deferred compensation/defined contribution plans for certain classifications of management under IRC Section 401(a). City participation in contributions to the plans is mandatory. The City is obligated to contribute amounts ranging from $2,000 to $17,500 per participant per year. Employee contributions to certain plans are voluntary. During the year ended June 30, 2015, there were 713 participants in the plans. The City's contributions totaled $182,876, and employees' contributions totaled $2,110,412. fillA&I =111210&ill 9_3 0103 The City 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 City joined Special Districts Risk Management Authority (SDRMA) in the fall of 2005. SDRMA is a self-insurance risk pool that serves as a not-for-profit public agency to its members. Through SDRMA, the City currently holds a $500 general liability deductible. All general liability claims above $500 and up to a limit of $10,000,000 are handled by SDRMA. The City's workers' compensation coverage is also administered by SDRMA. The City is self-insured for workers' compensation up to $250,000, but has purchased coverage through SDRMA for individual claims exceeding $250,000 up to a maximum of $5,000,000. 74 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 17. SELF-INSURANCE (Continued) The annual member contribution is $596,288 for the property/liability program and the workers' compensation program (based on estimated wages). At June 30, 2015, $260,000 was accrued by the City for general liability claims, and $1,733,915 was accrued for workers' compensation claims and judgments. These accruals represent estimates of amounts to be paid for incurred and reported claims, as well as IBNR claims based upon past experience and modified for current trends and information. Changes in the reported claims liability since June 30, 2013, resulted in the following: Claims liability as of June 30, 2013 $ 1,114,117 Claims and changes in estimates during the year ended June 30, 2014 1,613,412 Claims and payments during the year ended June 30, 2014 (569,766) Claims liability as of June 30, 2014 2,157,763 Claims and changes in estimates during the year ended June 30, 2015 1,028,290 Claims and payments during the year ended June 30, 2015 (1,192,138) Claims liability as of June 30, 2015 $ 1,993,915 Settled claims have not exceeded any of these coverage amounts in any of the last three fiscal years, and there were no reductions in the City's insurance coverage during the year ended June 30, 2015. SDRMA has published its own financial report for the year ended June 30, 2014, which can be obtained from SDRMA, 1112 1 Street, Suite 300, Sacramento, CA 95814. 18. NON -COMMITMENT DEBT A. 1915 Act Limited Obligation Improvements Bonds On July 24, 1996, $879,432 of 1915 Act Limited Obligation Improvement Bonds (1915 Golden Valley Road Bonds) for the Golden Valley Road Improvement Assessment District (the Golden Valley Assessment District) were issued. The 1915 Golden Valley Road Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Golden Valley Assessment District. The principal amount of debt outstanding at June 30, 2015, was $360,000. B. 1915 Act Limited Obligation Improvements Bonds On January 27, 2000, $790,000 of 1915 Act Limited Obligation Improvement Bonds (1915 Vermont Drive/Everett Drive Bonds) for the Vermont Drive/Everett Drive Improvement Assessment District (the Vermont/Everett Assessment District) were issued. The 1915 Vermont Drive/Everett Drive Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Vermont/Everett Assessment District. The principal amount of the debt outstanding at June 30, 2015, was $450,000. 75 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 18. NON -COMMITMENT DEBT (Continued) C. Community Facilities District No. 2002-1 Special Tax Bonds On October 29, 2002, $17,370,000 of Special Tax bonds were issued for Community Facilities District No. 2002-1 (the Community Facilities District). On October 12, 2012, these bonds were refunded with the issuance of Community Facilities District No. 2002-1 (Valencia Town Center) Special Tax Refunding bonds for $16,485,000. The Special Tax Refunding bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Community Facilities District. The principal amount of the debt outstanding at June 30, 2015 was $15,830,000. 19. SANTA CLARITA WATERSHED RECREATION AND CONSERVANCY AUTHORITY In June 1992, the City entered into a joint powers agreement with the Santa Monica Mountains Conservancy (the Conservancy) to create the Watershed Authority. The purpose of the Watershed Authority is to acquire, develop, and conserve additional park and open space lands, including water - oriented recreation and conservation projects. The governing board consists of two representatives from the Conservancy and two from the City. The City performs administrative functions for the Watershed Authority. As a result, the Watershed Authority is reported as an agency fund in these financial statements. The Watershed Authority may request the City to make annual contributions. For the year ended June 30, 2015, the City did not make any contributions. Separate financial statements for the Santa Clarita Watershed Recreation and Conservancy Authority can be obtained from the City's administrative offices at 23920 Valencia Boulevard, Santa Clarita, CA 91355. KIAWA0YG_IK63IF-Al 0YG1101-14Na0=1441FA&11010I_lujl:101aYQ In July 2009, the City entered into a joint powers agreement with the William S. Hart School District (the District) to create the Santa Clarita Public Television Authority (SCPTA). As a result, the SCPTA is reported as an Agency fund in these financial statements. The purpose of the SCPTA is to provide a forum for public, educational, and governmental television programs by the members, individuals, and organizations in the community. The governing board consists of one representative from the District and one from the City. The City performs administrative functions for the SCPTA, and may, at the SCPTA's request, make annual contributions. For the year ended June 30, 2015, the City contributed $108,945. Separate financial statements for the Santa Clarita Public Television Authority are prepared biannually and can be obtained from the City's administrative offices at 23920 Valencia Boulevard, Santa Clarita, CA 91355. IN City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 21. COMMITMENTS AND CONTINGENCIES A. Construction Commitments The City has active construction projects as of June 30, 2015. At year-end, the City's commitments with contractors for infrastructure projects are as follows: Expenditures Contract to Date as of Remaining Project Amount June 30, 2015 Commitments Pavement $ 995,396 $ 699,938 $ 295,458 Bridges 11,161, 410 10, 043, 522 1,117, 888 Sidewalk 641,778 407,964 233,814 Medians 5,633,404 3,592,395 2,041,009 Trails 219,618 40,025 179,593 B. Encumbrances The City utilizes encumbrance accounting as a means of controlling expenditures. Under this method, funds are encumbered when purchase orders, contracts, and other commitments are signed or approved by authorized City officials. Such outstanding commitments at year-end do not constitute expenditures or liabilities. GASB Statement No. 54 provides additional guidance on the classification within the fund balances section of amounts that have been encumbered. Encumbrances of balances within the governmental funds are classified as either restricted or assigned and are included in the respective categories. These encumbrances are not separately classified in the financial statements and are summarized at June 30, 2015, as follows: General Fund Other governmental funds C. Contingencies Amount $ 350,855 28, 448, 515 The City has received Federal grants for specific purposes that are subject to review and audit by the Federal government. Although such audits could result in expenditure disallowance under grant terms, any required reimbursements are not expected to be material. In addition, the City is a defendant in certain other legal actions arising in the normal course of operations. In June 2013, a lawsuit was filed against the City alleging voting rights dilution, and the City has settled the dispute with the plaintiff. The maximum exposure to liability is $800,000, and management and the City's legal counsel have reasonably estimated a $600,000 liability for plaintiff attorney fees. The City has paid out $400,000, and the remaining $200,000 remains accrued in the Self -Insurance Internal Service Fund at June 30, 2015. In the opinion of management and legal counsel, there are no other liabilities that would have a substantial adverse effect on the financial position of the City as of June 30, 2015. 77 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 27 (the Bill), which provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City that had previously reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 24, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of the City Resolution No. 12-3. Each year, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. A. Cash and Investments The balance of cash and investments at June 30, 2015, is classified in the accompanying financial statements as follows: RDA Successor Agency Cash and investments pooled with City $ 1,575,499 Restricted: Cash and investments 3,888 Cash and investments with fiscal agent 1,165,384 Total $ 2,744,771 B. Land Held for Resale As of June 30, 2015, the City has $1,011,031 of land held for resale, which is reported at fair value. There were no changes in fair value during the current year. Cost of land held for resale Less: allowance for the decline in value Land held for resale, net RDA Successor Agency $ 2,850,000 (1,838,969) $ 1,011,031 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) C. Capital Assets RDA Successor Agency: Non -depreciable assets: Land Total non -depreciable assets Depreciable assets: Site improvements Infrastructure Total depreciable assets Less accumulated depreciation: Site improvements Infrastructure Total accumulated depreciation Total depreciable assets, net Total capital assets, net Balance Balance June 30, 2014 Additions Deletions June 30. 2015 $ 532,878 $ - $ - $ 532,878 532,878 - - 532,878 110,310 - - 110,310 4,287,341 - - 4,287,341 4,397,651 - - 4,397,651 11,031 4,412 - 15,443 309,604 85,747 - 395,351 320,635 90,159 - 410,794 4,077,016 (90,159) - 3,986,857 $ 4,609,894 $ (90,159) $ $ 4,519,735 The total depreciation expense charged to the RDA Successor Agency as of June 30, 2015, was $90,159. D. Long -Term Debt Loans from the City of Santa Clarita At June 30, 2015, the California Department of Finance (DOF) approved the advances to the former redevelopment agency consisting of the promissory notes outstanding between the City and the former redevelopment agency entered into between the periods of July 1996 and June 2010. These consist of notes outstanding from the General Fund and the Developer Fees Special Revenue Fund in the amounts of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAIF rate of 0.26 percent which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes at June 30, 2015, are $910,244 and $183,958, respectively. 79 Classification Balance Balance Due Within Due More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year RDA Successor Agency: Loans from the City of Santa Clarita $ 13,393,468 $ 34,512 $ (794,148) $ 12,633,832 $ $ 12,633,832 Tax Allocation Bonds: Series 2008 27,685,000 - (490,000) 27,195,000 510,000 26,685,000 Housing Set -Aside 8,205,000 - (145,000) 8,060,000 150,000 7,910,000 Less deferred amounts for unamortized discounts (132,726) 5,530 (127,196) (5,530) (121,666) Total Tax Allocation Bonds 35,757,274 5,530 (635,000) 35,127,804 654,470 34,473,334 Total $ 49,150,742 $ 40,042 $ (1,429,148) $ 47,761,636 $ 654,470 $ 47,107,166 Loans from the City of Santa Clarita At June 30, 2015, the California Department of Finance (DOF) approved the advances to the former redevelopment agency consisting of the promissory notes outstanding between the City and the former redevelopment agency entered into between the periods of July 1996 and June 2010. These consist of notes outstanding from the General Fund and the Developer Fees Special Revenue Fund in the amounts of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAIF rate of 0.26 percent which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes at June 30, 2015, are $910,244 and $183,958, respectively. 79 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) D. Long -Term Debt (Continued) Tax Allocation Bonds The former redevelopment agency issued Tax Allocation Bonds, which are special obligations of the Successor Agency secured by pledged property tax revenues. The bonds are not a debt of the City and are not payable out of any funds or properties other than those of the Successor Agency. Tax Allocation Bonds — Series 2008 On June 12, 2008, the former redevelopment agency issued the Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008, in the amount of $29,860,000. Proceeds of the bonds were used to finance certain projects of the former redevelopment agency, fund a debt service reserve account, and pay for costs of the bond issuance. The bonds were issued at a net discount of $165,906, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis. This bond issue comprises $12,065,000 serial bonds maturing annually, commencing on October 1, 2011, through 2028, and three term bonds (totaling $17,795,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042, that are payable in annual sinking fund installments commencing on October 1, 2029. Interest on the bonds is payable semi- annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.75 percent for the serial bonds and from 4.75 percent to 5.00 percent for the term bonds. The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2043 Total Principal Interest Total $ 510,000 $ 1,271,348 $ 1,781,348 530,000 1,250,548 1,780,548 550,000 1,228,948 1,778,948 575,000 1,206,448 1,781,448 595,000 1,183, 048 1,778,048 3,365,000 5,510,319 8,875,319 4,195,000 4,657,309 8,852,309 5,290,000 3,535,372 8,825,372 6,710,000 2,082,663 8,792,663 4,875,000 373,625 5,248,625 $ 27,195,000 $ 22,299,628 $ 49,494,628 Ell City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) D. Long -Term Debt (Continued) Tax Allocation Bonds — Housing Set -Aside On June 12, 2008, the former redevelopment agency issued the Santa Clarita Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008, in the amount of $8,850,000. Proceeds of the bonds were used to finance low- and moderate -income housing projects and programs, fund a reserve fund, and pay for costs of the bond issuance. The bond issue comprises $3,550,000 serial bonds maturing annually on October 1 through 2028, and three term bonds (totaling $5,300,000), maturing on October 1, 2032, October 1, 2037, and October 1, 2042, that are payable in annual sinking fund installments commencing on October 1, 2029. Interest on the bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.875 percent for the serial bonds and at 5.00 percent for the term bonds. The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2043 Total E. Deficit Net Position Interest Total 150,000 $ 382,956 $ 532,956 155,000 376,856 531,856 160,000 370,556 530,556 170,000 363,956 533,956 175,000 357,056 532,056 985,000 1,666,488 2,651,488 1,235,000 1,413,653 2,648,653 1,575,000 1,068,125 2,643,125 2,000,000 623,750 2,623,750 1,455,000 111,625 1,566,625 $ 8,060,000 $ 6,735,021 $ 14,795,021 As of June 30, 2015, the RDA Successor Agency Private -Purpose Trust Fund had a deficit net position of $26,067,990. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County and potential asset sales. 23. SUBSEQUENT EVENTS A. Change in Interest Rates for Notes to RDA Successor Agency- Senate Bill 107 On September 22, 2015, the Committee on Budget and Fiscal Review of the California State Senate approved SB 107. A mandate of this legislation is to recalculate the notes to the RDA Successor Agency using a 3 percent simple interest from the origination of the notes. As a result, the reported amounts in the General Fund and Developer Fees Special Revenue Fund of $7,225,964 and $5,407,868, respectively, will be increased to $9,146,941 and $6,272,669, respectively. a 82 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual General Fund For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 17,334,980 17,714,271 21,653,144 21,694,942 Variance From 21,532,334 13, 966, 011 17, 866, 754 5,807,672 Final Budget 168,550 Original Final Positive/ Budget Budget Actual (Negative) Revenues Taxes $ 72,308,793 $ 75,376,473 $ 78,232,263 $ 2,855,790 Licenses and permits 4,530,752 5,389,819 5,567,280 177,461 Intergovernmental 301,572 782,102 1,125,699 343,597 Charges for services 7,068,659 7,763,229 9,139,349 1,376,120 Investment income 808,366 808,366 1,073,899 265,533 Fines and forfeitures 516,500 551,500 452,052 (99,448) Other revenue 38,940 204,937 14,501 (190,436) Total revenues 85,573,582 90,876,426 95,605,043 4,728,617 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 17,334,980 17,714,271 21,653,144 21,694,942 21,413,338 21,532,334 13, 966, 011 17, 866, 754 5,807,672 6,047,517 168,550 6,001,256 21,366,674 (3,652,403) 21, 069,111 625,831 20,673,945 858,389 12,079,362 5,787,392 5,270,770 776,747 5,849,555 151,701 - 22,422 22,422 80,343,695 90,879,496 86,331,839 4,547,657 5,229,887 (3,070) 9,273,204 9,276,274 2,243,179 2,113,251 2,217,935 104,684 (3,649,837) (3,880,387) (3,880,387) (1.406.658) (1.767.136) (1.662.452) 104.684 M 7,610,752 108,891,879 $ 116,502,631 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Bridge and Thoroughfare Special Revenue Fund For the Year Ended June 30, 2015 Revenues Investment income Developer fees Total revenues Expenditures Current: Public works Capital outlay Debt service: Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Original Final Actual Variance From Final Budget Positive/ $ 295,649 $ 295,649 $ 283,790 $ (11,859) 1,694,744 516,362 5,290,874 4,774,512 1,990,393 812,011 5,574,664 4,762,653 1,585,829 7,527,640 1,188,641 6,338,999 228,880 2,206,326 1,038,855 1,167,471 202,800 202,800 192,897 9,903 - - 5,105,402 (5,105,402) 2,017,509 9,936,766 7,525,795 2,410,971 (27,116) (9,124,755) (1,951,131) 7,173,624 (7,284) (7,284) (7,284) (7,284) (7,284) (7,284) $ (34,400) $ (9,132,039) (1,958,415) $ 7,173,624 M 9,308,502 $ 7,350,087 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Library Special Revenue Fund For the Year Ended June 30, 2015 Revenues Taxes Charges for services Investment income Other revenue Total revenues Expenditures Current: General government Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) $ 5,546,065 $ 5,600,716 $ 6,107,578 $ 506,862 85,000 85,000 85,000 - - - 6,078 6,078 150,000 150,000 186,042 36,042 5,781,065 5,835,716 6,384,698 548,982 4,899,560 5,042,723 4,991,505 51,218 - 147,733 101,176 46,557 33,387 33,387 - 452,959 452,959 50,057 402,902 104,945 104,945 102,472 2,473 5,457,464 5,781,747 5,278,597 503,150 323,601 53,969 1,106,101 1,052,132 Other financing sources (uses) Transfers out (1,591) (1,591) (1,591) Total other financing sources (uses) (1,591) (1,591) (1,591) - Netchangeinfundbalances $ 322,010 $ 52,378 1,104,510 $ 1,052,132 Fund balances (deficit), beginning of year Fund balances (deficit), end of year 0 (9,111, 684) _L( City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Landscape Maintenance District #1 Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget General government Original Final 11,832,237 Positive/ Parks, recreation and community service Budget Budget Actual (Negative) Revenues 439,006 1,604,918 186,951 1,417,967 Taxes $ 840,301 $ 840,301 $ 901,701 $ 61,400 Special assessments 17,761,695 17,865,387 17,661,944 (203,443) Investment income 184,981 184,981 290,063 105,082 Total revenues 18,786,977 18,890,669 18,853,708 (36,961) Expenditures Current: General government 14,135,318 14,470,441 11,832,237 2,638,204 Parks, recreation and community service 4,092 43,542 3,696 39,846 Public works 439,006 1,604,918 186,951 1,417,967 Capital outlay 6,843,462 9,281,334 4,931,378 4,349,956 Total expenditures 21,421,878 25,400,235 16,954,262 8,445,973 Excess (deficiency) of revenues over(under)expenditures (2,634,901) (6,509,566) 1,899,446 8,409,012 Other financing sources (uses) Transfers out (213,600) (213,600) (213,600) Total other financing sources (uses) (213,600) (213,600) (213,600) - Netchangeinfundbalances $ (2,848,501) $ (6,723,166) 1,685,846 $ 8,409,012 Fund balances, beginning of year 28,354,440 Fund balances, end of year $ 30,040,286 Eel City of Santa Clarita Schedule of Funding Progress For the Year Ended June 30, 2015 Other Post -Employment Benefits The schedule of funding progress presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The funded status of the City's other post -employment benefits plan is as follows (in thousands): (A) (B) (C) (D) (E) (F) (Unfunded) (Unfunded) Actuarial Actuarial Actuarial Liability as Actuarial Actuarial Accrued Accrued Funded Percentage of Valuation Asset Liability Liability Ratio Covered Covered Payroll Date* Value Entry Age [(B) -(A)] [(A)/(B)] Payroll [(C)/(E)] 7/1/2010 $ - $ 41,425 $ (41,425) 0.00% $ 25,094 -165.08% 7/1/2012 19,928 30,879 (10,951) 64.54% 23,880 -45.86% 7/1/2014 27,035 28,876 (1,841) 93.62% 27,368 -6.73% * Based on most recent actuarial valuation available. 0 City of Santa Clarita Schedule of Changes in the City's Net Pension Liability and Related Ratios For the Year Ended June 30, 2015 The Schedule of Changes in the City's Net Pension Liability and Related Ratios during the measurement period is as follows: Measurement Period June 30, 2014 Total Pension Liability Service Cost Interest Changes of Benefit Terms difference between Expected and Actual Experience Changes of Assumptions Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Contributions - Employee Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Other Changes in Fiduciary Net Position Net Change in Fiduciary Net Position Plan Fiduciary net Position - Beginning Plan Fiduciary net Position - Ending (b) Plan Net Pension Liability/(Asset) - Ending (a) -(b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered -Employee Payroll Plan Net Pension Liability/(Asset) as a Percentage of Covered -Employee Payroll 4,462,544 9,588,693 (2,561,655) 11,489,582 126, 898, 794 $ 138, 388, 376 $ 3,562,246 2,339,435 16, 243,165 (2,561,655) 19, 583,191 91,929,025 $ 111,512,216 $ 26, 876,160 80.58% $ 26, 879, 556 99.99% Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes that occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of two years' Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: There were no changes in assumptions. This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. a-] M City of Santa Clarita Schedule of City Contributions For the Year Ended June 30, 2015 The Schedule of City Contributions during the measurement period is as follows: June 30, 2015 June 30, 2014 June 30, 2013 Actuarially determined contribution $ 3,740,138 $ 3,562,246 $ 3,319,326 Contributions in relation to the actuarially determined contribution (3,740,138) (3,562,246) (3,319,326) Contribution deficiency (excess) $ - $ - $ - Covered -Employee Payroll Contributions as a Percentage of Covered Employee Payroll $ 27,234,699 $ 26,879,556 $ 25,256,659 13.73% 13.25% 13.14% Valuation Date: The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2013-14 were from June 30, 2013 public agency valuations: Actuarial Cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Retirement age Entry Age Normal Level Percentage of Payroll, Closed 19 Years Actuarial Value of Assets 2.75% Varies by Entry Age and Service 7.50% Net of Pension Plan Investment and Administrative Expenses, includes Inflation. The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. Mortality The probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. Pre -retirement and post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. .o] City of Santa Clarita Schedule of City Contributions For the Year Ended June 30, 2015 June 30, 2012 June 30, 2011 June 30, 2010 June 30, 2009 June 30, 2008 June 30, 2007 June 30, 2006 $ 3,224,628 $ 2,916,852 $ 2,919,550 $ 2,865,328 $ 2,659,975 $ 2,470,285 $ 2,007,921 (3,224,628) (2,916,852) (2,919,550) (2,865,328) (2,659,975) (2,470,285) (2,007,921) $ 24,807,314 $ 24,940,516 $ 25,336,721 $ 26,145,818 $ 23,355,540 $ 21,540,546 $ 20,281,908 13.00% 11.70% 11.52% 10.96% 11.39% 11.47% 9.90% 91 City of Santa Clarita Notes to Required Supplementary Information For the Year Ended June 30, 2015 BUDGETARY INFORMATION Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles in the United States of America for the General Fund and each of the special revenue funds. All annual appropriations lapse at fiscal year-end. On or before the last day in January of each year, all operational units submit requests for appropriations to the city manager for budget preparation purposes. Before April 30, the proposed budget is presented to the City Council for review. The City Council holds public hearings, and a final budget must be prepared and adopted no later than June 30. The appropriated budget is prepared by fund, function, and department. The City's department heads, with approval of the city manager, may make transfers of appropriations within a department and between functions within a fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. Under encumbrance accounting, purchase orders, contracts, and other commitments for expenditures are recorded to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures or liabilities, encumbrances outstanding at year-end are classified as either restricted, committed, or assigned fund balances. Unexpended appropriations lapse at year-end. WE City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Developer Fees — To account for monies received from developers restricted to fund specific projects and infrastructure maintenance throughout the City. Bikeway — To account for monies received from the State of California restricted for bicycle and pedestrian facilities available under Article 3 of the Transportation Development Act (SB821). Gas Tax — To account for monies received and expended from the state and county gas tax allocation restricted to fund various street highway improvements, including maintenance. Proposition A — To account for the City's share of the one-half percent (0.5 percent) increased sales tax in Los Angeles County as a result of "Proposition A." This revenue is to be used for transportation - related purposes. Special Assessment — To account for special assessments received for small assessment districts. These funds may be used for maintenance expenses within the districts. State Park — To account for grant monies received from the State of California Department of Parks and Recreation for construction or improvements of parkland within the City. TDA (Transportation Development Act) — To account for monies received from the State of California under Article 8 of the TDA. These funds may be used for local streets and road expenditures when the City's unmet transportation needs have been satisfied. Traffic Safety — To account for monies received from vehicle code fines. This fund is used to finance law enforcement expenditures. CDBG (Community Development Block Grant) — To account for Federal entitlements under the Housing and Community Development Act of 1974, as amended. The City Council annually allocates CDBG funds to various programs. AQMD (Air Quality Management District) — To account for revenues and expenditures for Air Quality Management. Stormwater — To account for monies received from assessments restricted for the use of the stormwater and run-off programs. Surface Transportation Program — To account for receipts and disbursements associated with the Surface Transportation Program restricted for construction, reconstruction, and improvement of highways and bridges on eligible Federal -Aid highway routes. BJA Law Enforcement — To account for receipts and disbursements for the BJA law enforcement grant restricted for police department programs. Supplemental Law Grant — To account for receipts and disbursements for the supplemental law grant restricted for police department programs. HOME — To account for receipts and disbursements for the activity for the HOME grant program restricted to expand the supply of affordable housing for very low- and low-income families. 93 City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 Special Revenue Funds (Continued) Library Facilities Fees — To account for monies received from the library facilities developer fees, which are restricted for use on library facilities. Public Education and Government — To account for the 1 percent PEG Capital Grant funds received from video service providers pursuant to the Digital Infrastructure and Video Competition Act of 2006. Proposition C — To account for the City's share of the one-half percent (0.5 percent) increased sales tax in Los Angeles County as a result of Proposition C. This revenue is to be used for transportation - related purposes. Federal Grants — To account for receipts and disbursements of miscellaneous federal grant monies not accounted for in other funds. These receipts are restricted for planning, design, improvements, and maintenance of streets, roads and bridges, facility construction and improvements, transit operations, and other transit -related expenditures. Measure R —To account for the half -cent sales tax revenues that Los Angeles County voters approved in November 2008 to meet the transportation needs of Los Angeles County. Tourism Marketing District — To account for receipts and disbursements associated with promoting local businesses and tourism in the City of Santa Clarita through the Tourism Marketing District. The Tourism Marketing District was formed to provide financing for public programs to attract tourist visits to areas where tourism is economically important and desired. The Tourism Marketing District was established and is levied pursuant to the Parking and Business Improvement Area Law of 1989, Part 6 of Division 18 of the California Streets and Highways Code (the 1989 Law) and the provisions of the California Constitution Article XIIID (Proposition 218). OPSD (Open Space Preservation District) — To account for monies received from special assessments for the costs of acquiring open space lands, parks, and parkland in accordance with the City's programs. Miscellaneous Grants — To account for receipts and disbursements of non-federal miscellaneous grants, which are restricted for planning, design, improvements, and maintenance of streets, roads, and bridges, facility construction and improvements, transit operations, and other transit -related expenditures. Park Dedication — This fund accounts for monies received from developers restricted to finance the acquisition and develop new parkland space. These monies are restricted under the Quimby Act by ordinance and require the dedication of land or impose a requirement of the payment of fee in lieu. Housing Successor Agency — To account for the transactions of the Housing Successor Agency for the continuation of the low- and moderate -income programs of the former redevelopment agency. Tourism Marketing Bureau — To account for monies received from local and regional tourism -related organizations restricted for tourism and business development within the City's boundaries. 92 City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 The Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. General Capital Projects — To account for major capital improvement projects not accounted for in other funds. Public Financing Authority — To account for the construction of all capital projects that utilize public financing authority funds. The Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Public Financing Authority — To account for principal and interest payments for obligations issued by the Santa Clarita Public Financing Authority. 95 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 43,847 $ 10,839 $ 357,088 $ 400 43,847 10,839 357,088 400 2 2 249,510 - - 3,293,995 175,797 3,133,139 14,000 - - 53,674 3,611,179 175,797 3,133,139 (1) $ 9,181,838 $ 186,636 $ 3,490,227 $ 399 .p Developer Fees Bikeway Gas Tax Proposition A Assets Cash and investments $ 3,398,740 $ 186,265 $ 3,464,635 $ 398 Receivables: Accounts, net - - 19,021 - Interest 6,776 371 6,571 1 Taxes - - - Loans - Notes to RDA Successor Agency 5,407,868 - - - Prepaid costs - - - - Due from other governments - - - Advances to other funds 118,944 - - - Land held for resale 249,510 - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 9,181,838 $ 186,636 $ 3,490,227 $ 399 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 43,847 $ 10,839 $ 357,088 $ 400 43,847 10,839 357,088 400 2 2 249,510 - - 3,293,995 175,797 3,133,139 14,000 - - 53,674 3,611,179 175,797 3,133,139 (1) $ 9,181,838 $ 186,636 $ 3,490,227 $ 399 .p City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 415,712 $ 4,125 $ 246,797 $ - 165,007 - 55,074 415,712 169,132 246,797 55,074 13,437 5,672,217 7,466,620 5,685,654 7,466,620 $ 6,101,366 $ 169,132 $ 7,713,417 $ 55,074 97 (Continued) Special Assessment State Park TDA Traffic Safety Assets Cash and investments $ 5,939,684 $ - $ 7,698,071 $ Receivables: Accounts, net 48,658 - - Interest 12,989 - 15,346 Taxes 86,598 - - Loans - - Notes to RDA Successor Agency - - Prepaid costs 13,437 - - Due from other governments - 169,132 55,074 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 6,101,366 $ 169,132 $ 7,713,417 $ 55,074 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 415,712 $ 4,125 $ 246,797 $ - 165,007 - 55,074 415,712 169,132 246,797 55,074 13,437 5,672,217 7,466,620 5,685,654 7,466,620 $ 6,101,366 $ 169,132 $ 7,713,417 $ 55,074 97 (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 104,867 $ 180 $ 294,579 $ 129,168 - - 15,459 234,035 180 294,579 15,459 89,775 14,191 89,775 14,191 512,186 5,453,491 - - (14,191) 512,186 5,453,491 (14,191) $ 323,810 $ 512,366 $ 5,748,070 $ 15,459 9.1 Special Revenue Funds Surface Transportation CDBG AQMD Stormwater Program Assets Cash and investments $ - $ 444,480 $ 5,684,931 $ - Receivables: Accounts, net - - 7,021 - Interest - 886 11,341 - Taxes - - 44,777 - Loans 89,775 - - Notes to RDA Successor Agency - Prepaid costs - - - Due from other governments 234,035 67,000 15,459 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 323,810 $ 512,366 $ 5,748,070 $ 15,459 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 104,867 $ 180 $ 294,579 $ 129,168 - - 15,459 234,035 180 294,579 15,459 89,775 14,191 89,775 14,191 512,186 5,453,491 - - (14,191) 512,186 5,453,491 (14,191) $ 323,810 $ 512,366 $ 5,748,070 $ 15,459 9.1 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 719 $ 59,169 $ $ F nFa 6,778 59,169 2,313,040 2,313,040 15,950 15,318 454,198 (846) - - - (846) 15,950 15,318 454,198 $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 o; (Continued) BJA Law Supplemental Library Enforcement Law Grant HOME Facilities Fees Assets Cash and investments $ - $ 24,167 $ 15,318 $ 453,294 Receivables: Accounts, net - - - - Interest - 48 904 Taxes - - - - Loans - - 2,313,040 Notes to RDA Successor Agency - - - Prepaid costs - - Due from other governments 5,932 50,904 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 719 $ 59,169 $ $ F nFa 6,778 59,169 2,313,040 2,313,040 15,950 15,318 454,198 (846) - - - (846) 15,950 15,318 454,198 $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 o; (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 6,807 $ 317,206 $ 517,597 $ 50,641 - 1,444,018 225,785 - 6,807 1,761,224 743,382 50,641 1,404,532 1,752,593 387,392 - 1,752,593 387,392 - 266,879 4,534,392 - (611,091) - - 1,404,532 (611,091) 266,879 4,534,392 $ 1,411,339 $ 2,902,726 $ 1,397,653 $ 4,585,033 100 Special Revenue Funds Public Education and Government Proposition C Federal Grants Measure R Assets Cash and investments $ 1,275,458 $ 1,139,230 $ - $ 4,575,911 Receivables: Accounts, net 1,355 - - - Interest 2,543 2,271 - 9,122 Taxes 131,983 - - - Loans - - Notes to RDA Successor Agency - - - - Prepaid costs - - - - Due from other governments - 1,761,225 1,397,653 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 1,411,339 $ 2,902,726 $ 1,397,653 $ 4,585,033 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 6,807 $ 317,206 $ 517,597 $ 50,641 - 1,444,018 225,785 - 6,807 1,761,224 743,382 50,641 1,404,532 1,752,593 387,392 - 1,752,593 387,392 - 266,879 4,534,392 - (611,091) - - 1,404,532 (611,091) 266,879 4,534,392 $ 1,411,339 $ 2,902,726 $ 1,397,653 $ 4,585,033 100 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 16,139 $ 25,103 $ 76,796 $ - 16,139 25,103 76,796 - 760 760 590,230 6,972,741 Special Revenue Funds 4,225,348 590,230 Tourism 385,846 4,225,348 Marketing Miscellaneous Park District OSPD Grants Dedication Assets Cash and investments $ 549,497 $ 5,507,527 $ 86,545 $ 4,216,941 Receivables: Accounts, net - - - - Interest 1,095 10,979 - 8,407 Taxes 55,777 25,063 - - Loans - - Notes to RDA Successor Agency - - - - Prepaid costs - - - - Due from other governments - - 665,857 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - 20,941 - - Cash and investments with fiscal agents - 1,433,334 - - Total assets $7 606,369 $ 6,997,844 $ 752,402 $ 4,225,348 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 16,139 $ 25,103 $ 76,796 $ - 16,139 25,103 76,796 - 760 760 590,230 6,972,741 385,846 4,225,348 590,230 6,972,741 385,846 4,225,348 $ 606,369 $ 6,997,844 $ 752,402 $ 4,225,348 101 (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ $ 45,975 $ 158,173 $ 34,479 34,479 45,975 158,173 20,000 20,000 939,459 - 4,047,698 5,001 1,790,138 10 4,987,157 5,001 1,790,138 10 $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 102 Special Revenue Funds Capital Projects Funds Housing Tourism General Public Successor Marketing Capital Financing Agency Bureau Projects Authority Assets Cash and investments $ 75,640 $ 45,898 $ 1,948,311 $ 10 Receivables: Accounts, net - 25,000 - - I nterest 151 78 Taxes - - - - Loans - - - - Notes to RDA Successor Agency - - - - Prepaid costs - - - - Due from other governments - - - - Advances to other funds - - - - Land held for resale 939,459 - - - Restricted assets: Cash and investments 4,006,386 - - - Cash and investments with fiscal agents - - - - Total assets $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ $ 45,975 $ 158,173 $ 34,479 34,479 45,975 158,173 20,000 20,000 939,459 - 4,047,698 5,001 1,790,138 10 4,987,157 5,001 1,790,138 10 $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 102 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances 103 $ - $ 2,752,759 34,479 - 2,040,570 - 4,827,808 - 10,393,563 - 10,393,563 - 1,202,406 3 48,625,581 - 14,000 - 1,843,822 - (626,129) 3 51,059,680 $ 3 $ 66,281,051 Debt Service Funds Total Public Non -Major Financing Governmental Authority Funds Assets Cash and investments $ 2 $ 46,730,953 Receivables: Accounts, net - 101,055 Interest - 89,879 Taxes - 344,198 Loans - 2,402,815 Notes to RDA Successor Agency - 5,407,868 Prepaid costs - 13,437 Due from other governments - 4,422,271 Advances to other funds - 118,944 Land held for resale - 1,188,969 Restricted assets: Cash and investments - 4,027,327 Cash and investments with fiscal agents 1 1,433,335 Total assets $ 3 $ 66,281,051 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances 103 $ - $ 2,752,759 34,479 - 2,040,570 - 4,827,808 - 10,393,563 - 10,393,563 - 1,202,406 3 48,625,581 - 14,000 - 1,843,822 - (626,129) 3 51,059,680 $ 3 $ 66,281,051 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Developer Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 554,658 562,520 65,597 4,914,577 169,574 112,560 414,361 18,161 1,286,752 178,157 5,328,938 18,161 (366,861) 98,254 (72,910) 3,610,558 Transfers in 235,401 Transfers out (8,424) (176,696) (3,610,553) Total other financing sources (uses) (8,424) - 58,705 (3,610,553) Net change in fund balances (375,285) 98,254 (14,205) 5 Fund balances (deficit), beginning of year 3,986,464 77,543 3,147,344 (6) Fund balances (deficit), end of year $ 3,611,179 $ 175,797 $ 3,133,139 $ (1) 104 Fees Bikeway Gas Tax Proposition A Revenues Taxes $ - $ $ $ Special assessments - - Intergovernmental - 275,478 5,202,706 3,624,617 Charges for services - - - - Investment income 40,821 933 27,848 4,102 Fines and forfeitures - - - - Developer fees 879,070 - Other revenue - - 25,474 - Total revenues 919,891 276,411 5,256,028 3,628,719 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 554,658 562,520 65,597 4,914,577 169,574 112,560 414,361 18,161 1,286,752 178,157 5,328,938 18,161 (366,861) 98,254 (72,910) 3,610,558 Transfers in 235,401 Transfers out (8,424) (176,696) (3,610,553) Total other financing sources (uses) (8,424) - 58,705 (3,610,553) Net change in fund balances (375,285) 98,254 (14,205) 5 Fund balances (deficit), beginning of year 3,986,464 77,543 3,147,344 (6) Fund balances (deficit), end of year $ 3,611,179 $ 175,797 $ 3,133,139 $ (1) 104 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 3,381,756 1,364,877 169,132 - - 6,430,407 1,311,143 4,746,633 169,132 7,741,550 556 758 810,343 Transfers in 195,105 - Transfers out (17,654) - (810,813) Total other financing sources (uses) 177,451 - - (810,813) Net change in fund balances 647,007 - 282,758 (470) Fund balances (deficit), beginning of year 5,038,647 7,183,862 470 Fund balances (deficit), end of year $ 5,685,654 $ $ 7,466,620 $ (Continued) 105 Assessment State Park TDA Traffic Safety Revenues Taxes $ - $ $ $ Special assessments 5,140,723 Intergovernmental - 169,132 7,968,453 Charges for services 10,000 - - - Investment income 55,379 55,855 643 Fines and forfeitures - - 809,700 Developer fees - - Other revenue 10,087 - - - Total revenues 5,216,189 169,132 8,024,308 810,343 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 3,381,756 1,364,877 169,132 - - 6,430,407 1,311,143 4,746,633 169,132 7,741,550 556 758 810,343 Transfers in 195,105 - Transfers out (17,654) - (810,813) Total other financing sources (uses) 177,451 - - (810,813) Net change in fund balances 647,007 - 282,758 (470) Fund balances (deficit), beginning of year 5,038,647 7,183,862 470 Fund balances (deficit), end of year $ 5,685,654 $ $ 7,466,620 $ (Continued) 105 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 170 - 3,823 16,781 612,671 - 205,059 4,330 3,580,237 1,732,416 112,720 280,000 21,334 - - - 1,123,057 16,781 3,697,287 1,732,416 244,370 (437,719) (14,191) Transfers in 3,690 Transfers out (70,478) Total other financing sources (uses) - (66,788) - Netchangeinfundbalances 244,370 (504,507) (14,191) Fund balances (deficit), beginning of year 267,816 5,957,998 Fund balances (deficit), end of year $ $ 512,186 $ 5,453,491 $ (14,191) e] Special Revenue Funds Surface Transportation CDBG AQMD Stormwater Program Revenues Taxes $ $ $ - $ Special assessments 2,938,961 - Intergovernmental 1,123,057 258,386 - 1,718,225 Charges for services - - - - Investment income - 2,765 55,594 Fines and forfeitures - - - Developer fees - - Other revenue - - 265,013 - Total revenues 1,123,057 261,151 3,259,568 1,718,225 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 170 - 3,823 16,781 612,671 - 205,059 4,330 3,580,237 1,732,416 112,720 280,000 21,334 - - - 1,123,057 16,781 3,697,287 1,732,416 244,370 (437,719) (14,191) Transfers in 3,690 Transfers out (70,478) Total other financing sources (uses) - (66,788) - Netchangeinfundbalances 244,370 (504,507) (14,191) Fund balances (deficit), beginning of year 267,816 5,957,998 Fund balances (deficit), end of year $ $ 512,186 $ 5,453,491 $ (14,191) e] City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 32,032 353,043 32,032 353,043 15,318 296,897 (2,396) 15,318 296,897 (846) 18,346 - 157,301 $ (846) $ 15,950 $ 15,318 $ 454,198 107 (Continued) BJA Law Supplemental Library Enforcement Law Grant HOME Facilities Fees Revenues Taxes $ $ $ $ Special assessments Intergovernmental 32,032 350,631 15,318 Charges for services - - - - Investment income - 16 2,573 Fines and forfeitures - - - Developer fees - 294,324 Other revenue - - - - Total revenues 32,032 350,647 15,318 296,897 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 32,032 353,043 32,032 353,043 15,318 296,897 (2,396) 15,318 296,897 (846) 18,346 - 157,301 $ (846) $ 15,950 $ 15,318 $ 454,198 107 (Continued) City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures 267,947 9,403 840,528 802,618 756,739 1,162, 644 66,148 267,947 1,597,267 1,974,665 66,148 290,515 2,241,107 7,047 2,219,760 Other financing sources (uses) Transfers in Transfers out (4,023,244) Total other financing sources (uses) - (4,023,244) - - Net change in fund balances 290,515 (1,782,137) 7,047 2,219,760 Fund balances (deficit), beginning of year 1,114,017 1,171,046 259,832 2,314,632 Fund balances (deficit), end of year $ 1,404,532 $ (611,091) $ 266,879 $ 4,534,392 Special Revenue Funds Public Education and Federal Government Proposition C Grants Measure R Revenues Taxes $ 548,014 $ $ $ Special assessments - Intergovernmental 3,812,847 1,981,712 2,255,405 Charges for services - - - - Investment income 10,448 25,527 30,503 Fines and forfeitures - - - Developer fees Other revenue - - - Total revenues 558,462 3,838,374 1,981,712 2,285,908 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures 267,947 9,403 840,528 802,618 756,739 1,162, 644 66,148 267,947 1,597,267 1,974,665 66,148 290,515 2,241,107 7,047 2,219,760 Other financing sources (uses) Transfers in Transfers out (4,023,244) Total other financing sources (uses) - (4,023,244) - - Net change in fund balances 290,515 (1,782,137) 7,047 2,219,760 Fund balances (deficit), beginning of year 1,114,017 1,171,046 259,832 2,314,632 Fund balances (deficit), end of year $ 1,404,532 $ (611,091) $ 266,879 $ 4,534,392 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Tourism Marketing Miscellaneous Park District OSPD Grants Dedication Revenues Taxes Special assessments Intergovernmental Charges for services Investment income Fines and forfeitures Developer fees Other revenue Total revenues Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 2,146, 498 2,039,994 576,067 - 4,071 48,982 5,113 - 4,300,286 - 10,000 - - 580,138 2,205,480 2,039,994 4,305,399 379,926 378,853 500,688 - - 170,394 444,955 5,728,566 350,000 127,600 - 93 - - 379,926 6,107,512 1,466,037 127,600 200,212 (3,902,032) 573,957 4,177,799 (834,565) - (834,565) - - 200,212 (4,736,597) 573,957 4,177,799 390,018 11,709,338 (188,111) 47,549 $ 590,230 $ 6,972,741 $ 385,846 $ 4,225,348 109 (Continued) City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Capital Projects Funds Housing Tourism General Public Successor Marketing Capital Financing Agency Bureau Projects Authority Revenues Taxes Special assessments Intergovernmental Charges for services Investment income Fines and forfeitures Developer fees Other revenue Total revenues Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 17,550 22,662 1,050 410 18,600 23,072 34,479 57,773 166,000 1,527,573 1,070,024 200,479 57,773 2,597,597 (181,879) (34,701) (2,597,597) 223,191 977,971 823,667 - - (823,667) 223,191 977,971 41,312 (34,701) (1,619,626) 4,945,845 39,702 3,409,764 10 $ 4,987,157 $ 5,001 $ 1,790,138 $ 10 110 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 111 - 5,005,752 - 1,119,530 - 169,302 - 22,519,057 - 612,671 - 11,539,151 1,640,000 Debt Service 1,533,907 1,555,334 Funds Total Public Non -Major Financing Governmental Authority Funds Revenues Taxes $ - $ 548,014 Special assessments - 10,226,182 Intergovernmental - 30,827,993 Charges for services - 626,279 Investment income 44 372,677 Fines and forfeitures - 809,700 Developer fees 5,473,680 Other revenue - 310,574 Total revenues 44 49,195,099 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 111 - 5,005,752 - 1,119,530 - 169,302 - 22,519,057 - 612,671 - 11,539,151 1,640,000 1,920,000 1,533,907 1,555,334 3,173,907 44,440,797 (3,173,863) 4,754,302 3,173,680 5,632,705 - (10,376,094) 3,173,680 (4,743,389) (183) 10,913 186 51,048,767 $ 3 $ 51,059,680 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Developer Fees Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget Public safety Original Final 554,658 Positive/ Public works Budget Budget Actual (Negative) Revenues 1,569,361 1,703,287 169,574 1,533,713 Investment income $ 14,393 $ 14,393 $ 40,821 $ 26,428 Developer fees - 631,167 879,070 247,903 Total revenues 14,393 645,560 919,891 274,331 Expenditures Current: Public safety - 554,658 554,658 - Public works 18,499 612,829 562,520 50,309 Capital outlay 1,569,361 1,703,287 169,574 1,533,713 Total expenditures 1,587,860 2,870,774 1,286,752 1,584,022 Excess (deficiency) of revenues over(under)expenditures (1,573,467) (2,225,214) (366,861) 1,858,353 Other financing sources (uses) Transfers out (23,613) (8,424) (8,424) Total other financing sources (uses) (23,613) (8,424) (8,424) Net change in fund balances $ (1,597,080) $ (2,233,638) (375,285) $ 1,858,353 Fund balances, beginning of year 3,986,464 Fund balances, end of year $ 3,611,179 112 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Bikeway Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 280,638 $ 280,638 $ 275,478 $ (5,160) - - 933 933 280,638 280,638 276,411 (4,227) 65,597 65,597 65,597 - 215,041 292,584 112,560 180,024 280,638 358,181 178,157 180,024 113 98,254 $ 175,797 77,543 $ 175,797 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Gas Tax Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 5,345,792 6,535,140 4,914,577 1,620,563 Variance From 1,723,795 414,361 1,309,434 6,804,144 Final Budget 5,328,938 Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 5,081,091 $ 5,498,720 $ 5,202,706 $ (296,014) Investment income - - 27,848 27,848 Other revenue 1,110 366 25,474 25,108 Total revenues 5,082,201 5,499,086 5,256,028 (243,058) Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 5,345,792 6,535,140 4,914,577 1,620,563 1,458,352 1,723,795 414,361 1,309,434 6,804,144 8,258,935 5,328,938 2,929,997 (1,721,943) (2,759,849) (72,910) 2,686,939 235,401 235,401 235,401 (176,696) (176,696) (176,696) 58.705 58.705 58.705 114 3,147, 344 $ 3,133,139 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Proposition A Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) $ 3,588,822 $ 3,588,822 $ 3,624,617 $ 35,795 - - 4,102 4,102 3,588,822 3,588,822 3,628,719 39,897 35,890 - - 5,753 18,161 18,161 41,643 18,161 18,161 3,547,179 3,570,661 3,610,558 39,897 Other financing sources (uses) Transfers out (3,547,179) (3,576,745) (3,610,553) (33,808) Total other financing sources (uses) (3,547,179) (3,576,745) (3,610,553) (33,808) Net change in fund balances $ - $ (6,084) 5 $ 6,089 Fund balances (deficit), beginning of year Fund balances (deficit), end of year 115 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Special Assessment Special Revenue Fund For the Year Ended June 30, 2015 Revenues Special assessments Charges for services Investment income Other revenue Total revenues Expenditures Current: General government Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) $ 5,032,102 $ 5,032,102 $ 5,140,723 $ 108,621 10,000 5,000 10,000 5,000 36,067 36,067 55,379 19,312 - - 10,087 10,087 5,078,169 5,073,169 5,216,189 143,020 3,904,456 3,885,843 3,381,756 504,087 1,452,030 1,549,679 1,364,877 184,802 - 22,023 - 22,023 5,356,486 5,457,545 4,746,633 710,912 (278,317) (384,376) 469,556 853,932 Transfers in 113,178 195,105 195,105 Transfers out (17,654) (17,654) (17,654) Total other financing sources (uses) 95,524 177,451 177,451 - Net change in fund balances $ (182,793) $ (206,925) 647,007 $ 853,932 Fund balances, beginning of year Fund balances, end of year 116 5,038,647 $ 5,685,654 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual State Park Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Parks, recreation and community service Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 173,978 $ 173,978 $ 169,132 $ (4,846) 173,978 173,978 169,132 (4,846) 173,978 174,045 169,132 4,913 173,978 174,045 169,132 4,913 (67) 67 $ $ (67) - $ 67 117 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual TDA Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Public works Final Budget 6,430,407 Original Final 1,457,353 2,891,795 Positive/ 1,580,652 Budget Budget Actual (Negative) Revenues over (under) expenditures Intergovernmental $ 9,468,530 $ 9,726,795 $ 7,968,453 $ (1,758,342) Investment income - - 55,855 55,855 Total revenues 9,468,530 9,726,795 8,024,308 (1,702,487) Expenditures Current: Public works 8,011,177 14,015,096 6,430,407 7,584,689 Capital outlay 1,457,353 2,891,795 1,311,143 1,580,652 Total expenditures 9,468,530 16,906,891 7,741,550 9,165,341 Excess (deficiency) of revenues over (under) expenditures - (7,180,096) 282,758 7,462,854 Net change in fund balances $ $ (7,180,096) 282,758 $ 7,462,854 Fund balances, beginning of year 7,183,862 Fund balances, end of year $ 7,466,620 118 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Traffic Safety Special Revenue Fund For the Year Ended June 30, 2015 Other financing sources (uses) Transfers out (1,100,000) (706,000) (810,813) (104,813) Total other financing sources (uses) (1,100,000) (706,000) (810,813) (104,813) Net change in fund balances $ - $ 169,000 (470)$ (169,470) Fund balances, beginning of year 470 Fund balances, end of year $ - 119 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Investment income $ - $ - $ 643 $ 643 Fines and forfeitures 1,100,000 875,000 809,700 (65,300) Total revenues 1,100,000 875,000 810,343 (64,657) Other financing sources (uses) Transfers out (1,100,000) (706,000) (810,813) (104,813) Total other financing sources (uses) (1,100,000) (706,000) (810,813) (104,813) Net change in fund balances $ - $ 169,000 (470)$ (169,470) Fund balances, beginning of year 470 Fund balances, end of year $ - 119 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual CDBG Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 1,428,181 $ 1,428,181 $ 1,123,057 $ (305,124) 1,428,181 1,428,181 1,123,057 (305,124) - 176 170 6 100,000 100,000 3,823 96,177 816,841 830,269 612,671 217,598 210,005 220,005 205,059 14,946 280,000 280,000 280,000 - 21,335 21,334 21,334 1,428,181 1,451,784 1,123,057 328,727 120 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual AQMD Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget Public works Original Final 16,781 Positive/ Capital outlay Budget Budget Actual (Negative) Revenues 458,499 509,217 16,781 492,436 Intergovernmental $ 237,322 $ 244,000 $ 258,386 $ 14,386 Investment income 656 656 2,765 2,109 Total revenues 237,978 244,656 261,151 16,495 Expenditures Current: Public works 20,370 22,063 16,781 5,282 Capital outlay 438,129 487,154 - 487,154 Total expenditures 458,499 509,217 16,781 492,436 Excess (deficiency) of revenues over(under)expenditures (220,521) (264,561) 244,370 508,931 Total other financing sources (uses) - - Net change in fund balances $ (220,521) $ (264,561) 244,370 _$___508 ,931 Fund balances, beginning of year 267,816 Fund balances, end of year $ 512,186 121 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Stormwater Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: General government Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 12,000 12,000 4,330 7,670 3,763,687 4,539,955 3,580,237 959,718 49,200 121,732 112,720 9,012 3,824,887 4,673,687 3,697,287 976,400 (339,978) (1,188,778) (437,719) 751,059 3,690 3,690 3,690 - (70,647) (70,607) (70,478) 129 (66,957) (66,917) (66,788) 129 122 5,957,998 $ 5,453,491 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Special assessments $ 3,137,750 $ 3,137,750 $ 2,938,961 $ (198,789) Investment income 47,663 47,663 55,594 7,931 Other revenue 299,496 299,496 265,013 (34,483) Total revenues 3,484,909 3,484,909 3,259,568 (225,341) Expenditures Current: General government Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year 12,000 12,000 4,330 7,670 3,763,687 4,539,955 3,580,237 959,718 49,200 121,732 112,720 9,012 3,824,887 4,673,687 3,697,287 976,400 (339,978) (1,188,778) (437,719) 751,059 3,690 3,690 3,690 - (70,647) (70,607) (70,478) 129 (66,957) (66,917) (66,788) 129 122 5,957,998 $ 5,453,491 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Surface Transportation Program Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) 440 $ 2,050,423 $ 1,718,225 2,050,448 1,732,416 318,032 736,440 - - - 736,440 2,050,448 1,732,416 318,032 (25) (14,191) (14,166) $ $ (25) (14,191)$ (14,166) 123 $ (14,191) City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual BJA Law Enforcement Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Public safety Public works Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Original Final Budget Budget 77,472 32,032 45,440 59,490 $ 77,472 Actual 032 Variance From Final Budget Positive/ 70,917 32,032 38,885 6,555 - 6,555 77,472 32,032 45,440 59,490 $ 59,490 $ $ 124 (846) _L__1846)_ City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Supplemental Law Grant Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public safety Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) 125 330,259 $ 350,631 $ 20,372 - 16 16 330,259 350,647 20,388 348,607 353,043 (4,436) 348,607 353,043 (4,436) 18,346 $ 15,950 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual HOME Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ $ $ 15,318 $ 15,318 Total revenues 15,318 15,318 Net change in fund balances $ $ 15,318 $ 15,318 Fund balances, beginning of year - Fund balances, end of year $ 15,318 126 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Library Facilities Fees Special Revenue Fund For the Year Ended June 30, 2015 Revenues Investment income Developer fees Total revenues Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) - $ - $ 2,573 $ 2,573 100,000 200,000 294,324 94,324 127 157,301 $ 454,198 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Education and Government Special Revenue Fund For the Year Ended June 30, 2015 Revenues Taxes Investment income Total revenues Expenditures Current: General government Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) $ 450,000 $ 450,000 $ 548,014 $ 98,014 6,166 6,166 10,448 4,282 456,166 456,166 558,462 102,296 287,979 297,008 267,947 29,061 287,979 297,008 267,947 29,061 168,187 159,158 290,515 131,357 $ 168,187 $ 159,158 290,515 $ 131,357 128 1,114,017 $ 1,404,532 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Proposition C Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget Public works Original Final 840,528 Positive/ Capital outlay Budget Budget Actual (Negative) Revenues 3,936,001 8,670,301 1,597,267 7,073,034 Intergovernmental $ 7,660,871 $ 9,857,526 $ 3,812,847 $ (6,044,679) Investment income - - 25,527 25,527 Total revenues 7,660,871 9,857,526 3,838,374 (6,019,152) Expenditures Current: Public works 572,112 4,580,623 840,528 3,740,095 Capital outlay 3,363,889 4,089,678 756,739 3,332,939 Total expenditures 3,936,001 8,670,301 1,597,267 7,073,034 Excess (deficiency) of revenues over(under)expenditures 3,724,870 1,187,225 2,241,107 1,053,882 Other financing sources (uses) Transfers out (3,767,690) (5,002,356) (4,023,244) 979,112 Total other financing sources (uses) (3,767,690) (5,002,356) (4,023,244) 979,112 Net change in fund balances $ (42,820) $ (3,815,131) (1,782,137) $ 2,032,994 Fund balances, beginning of year 1,171,046 Fund balances (deficit), end of year $ (611,091) 129 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Federal Grants Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 3,532,623 $ 4,152,911 $ 1,981,712 $ (2,171,199) Total revenues 3,532,623 4,152,911 1,981,712 (2,171,199) Expenditures Current: Public safety - 10,180 9,403 777 Public works 1,206,675 1,791,291 802,618 988,673 Capital outlay 2,325,948 3,741,815 1,162,644 2,579,171 Total expenditures 3,532,623 5,543,286 1,974,665 3,568,621 Excess (deficiency) of revenues over(under)expenditures - (1,390,375) 7,047 1,397,422 Net change in fund balances $ - $ (1,390,375) 7,047 _$__1 ,397,422 Fund balances, beginning of year 259,832 Fund balances, end of year $ 266,879 130 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Measure R Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: Public works 2,724,022 2,724,022 66,148 2,657,874 Total expenditures 2,724,022 2,724,022 66,148 2,657,874 Excess (deficiency) of revenues over(under)expenditures (491,370) (491,370) 2,219,760 2,711,130 Other financing sources (uses) Transfers out (1,825,024) (558,489) 558,489 Total other financing sources (uses) (1,825,024) (558,489) - 558,489 Net change in fund balances $ (2,316,394) $ (1,049,859) 2,219,760 $ 3,269,619 Fund balances, beginning of year 2,314,632 Fund balances, end of year $ 4,534,392 131 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 2,232,652 $ 2,232,652 $ 2,255,405 $ 22,753 Investment income - - 30,503 30,503 Total revenues 2,232,652 2,232,652 2,285,908 53,256 Expenditures Current: Public works 2,724,022 2,724,022 66,148 2,657,874 Total expenditures 2,724,022 2,724,022 66,148 2,657,874 Excess (deficiency) of revenues over(under)expenditures (491,370) (491,370) 2,219,760 2,711,130 Other financing sources (uses) Transfers out (1,825,024) (558,489) 558,489 Total other financing sources (uses) (1,825,024) (558,489) - 558,489 Net change in fund balances $ (2,316,394) $ (1,049,859) 2,219,760 $ 3,269,619 Fund balances, beginning of year 2,314,632 Fund balances, end of year $ 4,534,392 131 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Tourism Marketing District Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget General government Original Final 379,926 Positive/ Total expenditures Budget Budget Actual (Negative) Revenues Charges for services $ 496,350 $ 540,651 $ 576,067 $ 35,416 Investment income 2,264 2,264 4,071 1,807 Total revenues 498,614 542,915 580,138 37,223 Expenditures Current: General government 406,920 406,920 379,926 26,994 Total expenditures 406,920 406,920 379,926 26,994 Excess (deficiency) of revenues over (under) expenditures 91,694 135,995 200,212 64,217 Net change in fund balances $ 91,694 $ 135,995 200,212 $ 64,217 Fund balances, beginning of year 390,018 Fund balances, end of year $ 590,230 132 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual OSPD Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From General government Final Budget 378,853 Original Final - 6,556,662 Positive/ 828,096 Budget Budget Actual (Negative) Revenues - - 93 (93) Total expenditures Special assessments $ 2,153,400 $ 2,153,400 $ 2,146,498 $ (6,902) Charges for services 10,000 10,000 - (10,000) Investment income 2,892 2,892 48,982 46,090 Other revenue - - 10,000 10,000 Total revenues 2,166,292 2,166,292 2,205,480 39,188 Expenditures Current: General government 477,942 525,100 378,853 146,247 Capital outlay - 6,556,662 5,728,566 828,096 Debt service: Interest and fiscal charges - - 93 (93) Total expenditures 477,942 7,081,762 6,107,512 974,250 Excess (deficiency) of revenues over(under)expenditures 1,688,350 (4,915,470) (3,902,032) 1,013,438 Other financing sources (uses) Transfers out (834,750) (834,565) (834,565) Total other financing sources (uses) (834,750) (834,565) (834,565) - Net change in fund balances $ 853,600 $ (5,750,035) (4,736,597) $ 1,013,438 Fund balances, beginning of year 11,709,338 Fund balances, end of year $ 6,972,741 133 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Miscellaneous Grants Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 565,725 $ 2,255,348 $ 2,039,994 $ (215,354) Total revenues 565,725 2,255,348 2,039,994 (215,354) Expenditures Current: General government 493,702 502,503 500,688 1,815 Public safety - 189,316 170,394 18,922 Public works 564,725 564,789 444,955 119,834 Capital outlay - 351,039 350,000 1,039 Total expenditures 1,058,427 1,607,647 1,466,037 141,610 Excess (deficiency) of revenues over (under) expenditures (492,702) 647,701 573,957 (73,744) Net change in fund balances $ (492,702) $ 647,701 573,957$ (73,7 44) Fund balances (deficit), beginning of year (188,111) Fund balances, end of year $ 385,846 134 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Park Dedication Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Capital outlay 140,416 127,600 12,816 Variance From - 140,416 127,600 12,816 Excess (deficiency) of revenues Final Budget Original Final 629 2,258,220 Positive/ 1,919,579 Budget Budget Actual (Negative) Revenues Fund balances, beginning of year 47,549 Investment income $ 629 $ 629 $ 5,113 $ 4,484 Developer fees - 2,398,007 4,300,286 1,902,279 Total revenues 629 2,398,636 4,305,399 1,906,763 Expenditures Capital outlay 140,416 127,600 12,816 Total expenditures - 140,416 127,600 12,816 Excess (deficiency) of revenues over (under) expenditures 629 2,258,220 4,177,799 1,919,579 Net change in fund balances $ 629 $ 2,258,220 4,177,799 $ 1,919,579 Fund balances, beginning of year 47,549 Fund balances, end of year $ 4,225,348 135 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Housing Successor Agency Special Revenue Fund For the Year Ended June 30, 2015 Revenues Charges for services Investment income Total revenues Expenditures Current: General government Public works Total expenditures Excess (deficiency) of revenues over(under)expenditures Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) $ $ 23,400 $ 17,550 $ (5,850) 1,050 1,050_ 23,400 18,600 (4,800) - 34,479 (34,479) 3,866,000 166,000 3,700,000 3,866,000 200,479 3,665,521 (3,842,600) (181,879) 3,660,721 Other financing sources (uses) Transfers in 223,191 223,191 Total other financing sources (uses) 223,191 223,191 - Net change in fund balances $ $ (3,619,409) 41,312 $ 3,660,721 Fund balances, beginning of year Fund balances, end of year 136 4,945,845 $ 4,987,157 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Tourism Marketing Bureau Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: General government Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year 41,810 66,810 57,773 9,037 41,810 66,810 57,773 9,037 137 717) (34,701 39,702 $ 5,001 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Charges for services $ 40,500 $ 38,500 $ 22,662 $ (15,838) Investment income 593 593 410 (183) Total revenues 41,093 39,093 23,072 (16,021) Expenditures Current: General government Total expenditures Excess (deficiency) of revenues over(under)expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year 41,810 66,810 57,773 9,037 41,810 66,810 57,773 9,037 137 717) (34,701 39,702 $ 5,001 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual General Capital Projects Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Expenditures Current: Public works $ 1,132,021 $ 1,801,187 $ 1,527,573 $ 273,614 Capital outlay 1,485,445 2,374,692 1,070,024 1,304,668 Total expenditures 2,617,466 4,175,879 2,597,597 1,578,282 Excess (deficiency) of revenues over(under)expenditures (2,617,466) (4,175,879) (2,597,597) 1,578,282 Other Financing Sources (Uses) Transfers in 977,971 977,971 977,971 Total other financing sources (uses) 977,971 977,971 977,971 Net change in fund balances $ (1,639,495) $ (3,197,908) (1,619,626) _$__1 ,578,282 Fund balances, beginning of year 3,409,764 Fund balances, end of year $ 1,790,138 138 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Financing Authority Capital Projects Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budqet Budqet Actual (Negative) Other Financing Sources (Uses) Transfers in $ 823,852 $ 823,667 $ 823,667 $ Transfers out (823,852) (823,667) (823,667) Total other financing sources (uses) Net change in fund balances $ $ $ Fund balances, beginning of year Fund balances, end of year 139 10 $ 10 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Financing Authority Debt Service Fund For the Year Ended June 30, 2015 Revenues Investment income Total revenues Expenditures Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other Financing Sources (Uses) Transfers in Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ $ $ 44 $ 44 44 44 1,640,000 1,640,000 1,640,000 - 1,533,866 1,533,866 1,533,907 (41) 3,173,866 3,173,866 3,173,907 (41) (3,173,866) (3,173,866) (3,173,863) 3 3,173,866 3,173,681 3,173,680 (1) 3,173,866 3,173,681 3,173,680 (1) $ - $ (185) (183) $ 2 140 186 $ 3 City of Santa Clarita Internal Service Funds As of and for the Year Ended June 30, 2015 The Internal Service Funds are used to account for goods or services provided by a central service department to other City departments. Self -Insurance — To account for the City's self-insurance program. Computer Replacement — To account for the financing of the replacement of the City's computer equipment. Vehicle Replacement — To account for the financing of the replacement of the City's automotive equipment. 141 City of Santa Clarita Combining Statement of Net Position Internal Service Funds June 30, 2015 Noncurrent assets Capital assets: Equipment, net of accumulated depreciation 138,918 744,002 882,920 Total noncurrent assets - 138,918 744,002 882,920 Total assets 3,247,316 2,359,047 5,119,365 10,725,728 Deferred Outflows of Resources Deferred outflows of net pension liability 13,736 13,736 Total deferred outflows of resources 13,736 13,736 Liabilities Current liabilities Accounts payable and accrued liabilities Compensated absences Claims and judgments Total current liabilities Noncurrent liabilities Net pension liability Claims and judgments Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Deferred inflows of net pension liability Total deferred inflows of resources Net position Net investment in capital assets Unrestricted Total net position 100,156 Self- Computer Vehicle 1,233,572 - - 1,233,572 Insurance Replacement Replacement Totals Assets Current assets Cash and investments $ 3,183,963 $ 2,075,976 $ 4,366,658 $ 9,626,597 Receivables: Accounts 55,630 - - 55,630 Interest 7,723 4,140 8,705 20,568 Prepaid costs - 140,013 - 140,013 Total current assets 3,247,316 2,220,129 4,375,363 9,842,808 Noncurrent assets Capital assets: Equipment, net of accumulated depreciation 138,918 744,002 882,920 Total noncurrent assets - 138,918 744,002 882,920 Total assets 3,247,316 2,359,047 5,119,365 10,725,728 Deferred Outflows of Resources Deferred outflows of net pension liability 13,736 13,736 Total deferred outflows of resources 13,736 13,736 Liabilities Current liabilities Accounts payable and accrued liabilities Compensated absences Claims and judgments Total current liabilities Noncurrent liabilities Net pension liability Claims and judgments Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Deferred inflows of net pension liability Total deferred inflows of resources Net position Net investment in capital assets Unrestricted Total net position 100,156 99,713 52,688 252,557 2,453 - - 2,453 1,233,572 - - 1,233,572 1,336,181 99,713 52,688 1,488,582 98,704 98,704 760,343 760,343 859,047 - - 859,047 2,195,228 99,713 52,688 2,347,629 27,232 27,232 27,232 27,232 - 138,918 744,002 882,920 1,038,592 2,120,416 4,322,675 7,481,683 $ 1,038,592 $ 2,259,334 $ 5,066,677 $ 8,364,603 142 City of Santa Clarita Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds For the Year Ended June 30, 2015 Self- Computer Vehicle Insurance Replacement Replacement Totals Operating revenues Charge for services $ 2,113,721 $ 411,010 $ 257,800 $ 2,782,531 Total operating revenues 2,113,721 411,010 257,800 2,782,531 Operating expenses Administration and personnel services Services and supplies Depreciation expense Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Investment income Gain (loss) on disposal of fixed assets Total net nonoperating revenues(expenses) Income (loss) before transfers Transfers Transfers in Transfers out Total transfers Changes in net position 355,246 1,540 2,930 359,716 1,398,089 404,409 - 1,802,498 - 64,206 111,127 175,333 1,753,335 470,155 114,057 2,337,547 360,386 (59,145) 143,743 444,984 30,745 21,265 44,318 96,328 - (3,760) 27,410 23,650 745 17,505 71,728 119,978 391,131 (41,640) 215,471 564,962 83,031 83,031 (784, 231) (784, 231) Net position Net position, beginning of year, as restated 1,348,661 2,300,974 4,851,206 8,500,841 Net position, end of year $ 1,038,592 $ 2,259,334 $ 5,066,677 $ 8,364,607- 143 City of Santa Clarita Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2015 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net cash provided by (used in) operating activities Cash flows from non -capital financing activities Cash transfers out Cash transfers in Net cash provided by non -capital financing activities Cash flows from capital and related financing activities Acquisition and construction of capital assets Proceeds from sales of capital assets Net cash (used in) capital and related financing activities Cash flows from investing activities Interest received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expense Increase (decrease) in accounts payable (Decrease) in claims and judgments (Decrease) in salaries and benefits payable Total adjustments Net cash provided by (used in) operating activities Non-cash investing, capital and financing activities Disposal of capital assets Self- Computer Vehicle Insurance Replacement Replacement Totals $ 2,058,091 $ 411,010 $ 261,211 $ 2,730,312 (1,412,133) (515,597) 49,476 (1,878,254) (522,041) (1,540) - (523,581) 123,917 (106,127) 310,687 328,477 (784,231) - - (784,231) 83,031 - - 83,031 (701,200) - - (701,200) (18,784) (433,324) (452,108) 1,309 27,410 28,719 - (17,475) (405,914) (423,389) 31,276 22,066 45,634 98,976 31,276 22,066 45,634 98,976 (546,007) (101,536) (49,593) (697,136) 3,729,970 2,177,512 4,416,251 10,323,733 $ 3,183,963 $ 2,075,976 $ 4,366,658 $ 9,626,597 $ 360,386 $ (59,145) $ 143,743 $ 444,984 - 64,206 111,127 175,333 (55,630) - 3,411 (52,219) - (79,700) - (79,700) (14,044) (31,488) 52,406 6,874 (163,848) - - (163,848) (2,947) - - (2,947) (236,469) (46,982) 166,944 (116,507) $ 123,917 $ (106,127) $ 310,687 $ 328,477 144 (2,451) $ (2,618) $ (5,069) City of Santa Clarita Fiduciary Funds As of and for the Year Ended June 30, 2015 Agency Funds are used to account for assets held by the City as an agency for individuals Assessment District No. 92-2 — To account for monies held to account for debt service requirements of Assessment District No. 92-2. Assessment District No. 99-1 —To account for monies held to account for debt service requirements of Assessment District No. 99-1. Community Facilities District No. 2002-1 — To account for monies held to account for debt service requirements of Community Facilities District No. 2002-1. Santa Clarita Watershed and Recreation Conservancy Authority — To account for monies held for the operations of the Watershed Authority, for which the City performs administrative functions. Santa Clarita Public Television Authority — To account for monies held for the operations of the SCPTA, for which the City performs administrative functions. 145 City of Santa Clarita Combining Statement of Assets and Liabilities Agency Funds June 30, 2015 Liabilities Accounts payable Due to other governments Due to external parties Total liabilities EEO $ 965 $ 987 $ - - 635 191,170 138,086 2,447,342 $ 192,135 $ 139,073 $ 2,447,977 Community Assessment Assessment Facilities District District District No. 92-2 No. 99-1 No. 2002-1 Assets Cash and investments $ 134,597 $ 76,552 $ 802,888 Receivables: Interest 268 153 1,601 Taxes 417 1,750 - Prepaid costs 944 903 Due from other governments - - - Restricted assets: Cash and investments with fiscal agents 55,909 59,715 1,643,488 Capital assets: Land - - - Building, net of accumulated depreciation - - - Total assets $ 192,135 $ 139,073 $ 2,447,977 Liabilities Accounts payable Due to other governments Due to external parties Total liabilities EEO $ 965 $ 987 $ - - 635 191,170 138,086 2,447,342 $ 192,135 $ 139,073 $ 2,447,977 City of Santa Clarita Combining Statement of Assets and Liabilities Agency Funds June 30, 2015 Liabilities Accounts payable $ $ $ 1,952 Due to other governments 635 Due to external parties 10,757,370 3 13,533,971 Total liabilities $ 10,757,370 $ 3 $ 13,536,558 147 Santa Clarita Watershed and Santa Clarita Recreation Public Conservancy Television Authority Authority Totals Assets Cash and investments $ 17,856 $ 3 $ 1,031,896 Receivables: Interest - - 2,022 Taxes - 2,167 Prepaid costs - - 1,847 Due from other governments 715,000 - 715,000 Restricted assets: Cash and investments with fiscal agents - - 1,759,112 Capital assets: Land 9,937,976 - 9,937,976 Building, net of accumulated depreciation 86,538 - 86,538 Total assets $ 10,757,370 $ 3 $ 13,536,558 Liabilities Accounts payable $ $ $ 1,952 Due to other governments 635 Due to external parties 10,757,370 3 13,533,971 Total liabilities $ 10,757,370 $ 3 $ 13,536,558 147 City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Assessment District No. 92-2 Assets Cash and investments Receivables: Taxes Interest Prepaid costs Restricted assets: Cash and investments with fiscal agents Total assets Liabilities Accounts payable Due to external parties Total liabilities Assessment District 99-1 Assets Cash and investments Receivables: Taxes Interest Prepaid costs Restricted assets: Cash and investments with fiscal agents Total assets Liabilities Accounts payable Due to external parties Total liabilities Balance Balance June 30, 2014 Additions Deductions June 30, 2015 $ 113,314 $ 84,666 $ 63,383 $ 134,597 408 416 407 417 257 268 257 268 - 944 - 944 58.697 48.955 51.743 55.909 $ - $ 7,626 $ 6,661 $ 965 172.676 127.623 109.129 191.170 $ 85,416 $ 62,053 $ 70,917 $ 76,552 1,187 1,750 1,187 1,750 194 153 194 153 - 903 - 903 59.712 52.707 52.704 59.715 $ - $ 10,173 $ 9,186 $ 987 146.509 107.393 115.816 138.086 M. City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Liabilities Accounts payable $ $ 393 $ 393 $ - Due to other governments 635 - 635 Due to external parties 2,413,494 3,425,189 3,391,341 2,447,342 Total liabilities $ 2.413.494 $ 3.426.217 $ 3.391.734 $ 2.447.977 Santa Clarita Watershed and Recreation Conservancy Authority Assets Cash and investments $ 33,119 $ 3 $ 15,266 $ 17,856 Due from other governments 715,000 - 715,000 Capital assets: Land 9,937,976 - 9,937,976 Building, net of accumulated depreciation 90,300 3,762 86,538 Total assets $ 10.776.395 $ 3 $ 19.028 $ 10.757.370 Liabilities Due to external parties $ 10,776,395 $ 3 $ 19,028 $ 10,757,370 Total liabilities $ 10.776.395 $ 3 $ 19.028 $ 10.757.370 (Continued) 149 Balance Balance June 30, 2014 Additions Deductions June 30, 2015 Community Facilities District No. 2002-1 Assets Cash and investments $ 768,335 $ 1,174,640 $ 1,140,087 $ 802,888 Receivables: Interest 1,740 1,601 1,740 1,601 Restricted assets: Cash and investments with fiscal agents 1,643,419 2,249,341 2,249,272 1,643,488 Total assets $ 2.413.494 $ 3.425.582 $ 3.391.099 $ 2.447.977 Liabilities Accounts payable $ $ 393 $ 393 $ - Due to other governments 635 - 635 Due to external parties 2,413,494 3,425,189 3,391,341 2,447,342 Total liabilities $ 2.413.494 $ 3.426.217 $ 3.391.734 $ 2.447.977 Santa Clarita Watershed and Recreation Conservancy Authority Assets Cash and investments $ 33,119 $ 3 $ 15,266 $ 17,856 Due from other governments 715,000 - 715,000 Capital assets: Land 9,937,976 - 9,937,976 Building, net of accumulated depreciation 90,300 3,762 86,538 Total assets $ 10.776.395 $ 3 $ 19.028 $ 10.757.370 Liabilities Due to external parties $ 10,776,395 $ 3 $ 19,028 $ 10,757,370 Total liabilities $ 10.776.395 $ 3 $ 19.028 $ 10.757.370 (Continued) 149 City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Assets Cash and investments Total assets Liabilities Due to external parties Total liabilities Total Agency Funds Assets Cash and investments Receivables: Interest Taxes Prepaid costs Due from other governments Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total assets Liabilities Accounts payable Due to other governments Due to external parties Total liabilities Balance Balance June 30, 2014 Additions Deductions June 30, 2015 91 $ 8 $ 115,300 $ 115,305 3 $ 8 $ 115,300 $ 115,305 $ 3 $ 1,000,192 $ 1,436,662 $ 1,404,958 $ 1,031,896 2,191 2,022 2,191 2,022 1,595 2,166 1,594 2,167 - 1,847 - 1,847 715,000 - 715,000 1,761,828 2,351,003 2,353,719 1,759,112 9,937,976 - - 9,937,976 90,300 - 3,762 86,538 $ 13,509,082 $ 3,793,700 $ 3,766,224 $ 13,536,558 $ $ 18,192 $ 16,240 $ 1,952 635 - 635 13.509.082 3.775.508 3.750.619 13.533.971 150 This part of the City of Santa Clarita's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information say about the government's overall financial health. CONTENTS PAGE Financial Trends These tables contain trend information that may assist the reader in the City's current financial performance by placing it in historical perspective. 152-161 Revenue Capacity These tables contain information that may help in assessing the viability of the City's most significant revenue sources, the property and sales tax. 162-177 Debt Capacity These tables present information that may assist the reader in analyzing the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 178-184 Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. 185-186 Operating Information These tables contain service and infrastructure indicators that can inform one's understanding of how the information in the City's financial statements relates to the services the City provides and the activities it performs. 187-189 151 City of Santa Clarita Net Position by Component Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Governmental Activities Investment in capital assets, net of related debt Restricted for: Capital projects Debt service Specific projects and programs Total restricted Unrestricted Total governmental activities net position Business -Type Activities Net investment in capital assets Unrestricted Total business -type activities net position Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net position FISCAL YEAR 14-15 13-14 12-13 11-12 $ 818,817,043 $ 799,926,613 $ 738,271,282 $ 743,281,558 14,292,447 3,275,312 73,541,304 71,643,713 54,229,493 46,915,965 73,541,304 71,643,713 68,521,940 50,191,277 79,211,600 52,551,033 65,706,424 79,141,211 $ 971,569,947 $ 924,121,359 $ 872,499,646 $ 872,614,046 $ 78,495,871 $ 83,296,545 $ 76,561,407 $ 73,778,640 2,766,972 2,250,491 3,835,316 3,099,419 $ 81,262,843 $ 85,547,036 $ 80,396,723 $ 76,878,059 $ 897,312,914 $ 883,223,158 $ 814,832,689 $ 817,060,198 73,541,304 71,643,713 68,521,940 50,191,277 81,978,572 54,801,524 69,541,740 82,240,630 $ 1,052,832,790 $ 1,009,668,395 $ 952,896,369 $ 949,492,105 Note: (1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets, restricted and unrestricted. Net position is considered restricted only when (a) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (b) enabling legislation is enacted by the City. (2) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. The fiscal year 2005- 06 balance was restated as a result of the City's valuation of the estimated historical cost of infrastructure placed in service prior to July 1, 2002. Source: City of Santa Clarita, Administrative Services Department - Finance Division 152 FISCAL YEAR 05-06'" 10-11 09-10 08-09 07-08 06-07 As Restated $ 717,613,095 $ 657,644,168 $ 629,621,720 $ 672,306,820 $ 661,210,117 $ 614,300,517 3,452,815 4,769,573 4,769,573 45,993,804 18,134,924 32,030,928 - - - 632,680 - 174,028 30,201,655 85,895,468 92,644,739 61,018,399 34,441,539 30,547,345 33,654,470 90,665,041 97,414,312 107,644,883 52,576,463 62,752,301 67,397,688 63,218,255 98,512,704 66,249,901 87,737,817 71,001,423 $ 818,665,253 $ 811,527,464 $ 825,548,736 $ 846,201,604 $ 801,524,397 $ 748,054,241 $ 75,416,868 $ 67,911,725 $ 66,478,547 $ 63,526,242 $ 62,246,621 $ 63,741,429 503,446 (176,196) 3,603,396 2,957,611 1,553,088 (406,224) $ 75,920,314 $ 67,735,529 $ 70,081,943 $ 66,483,853 $ 63,799,709 $ 63,335,205 $ 793,029,963 $ 725,555,893 $ 696,100,267 $ 735,833,062 $ 723,456,738 $ 678,041,946 33,654,470 90,665,041 97,414,312 107,644,883 52,576,463 62,752,301 67,901,134 63,042,059 102,116,100 69,207,512 89,290,905 70,595,199 $ 894,585,567 $ 879,262,993 $ 895,630,679 $ 912,685,457 $ 865,324,106 $ 811,389,446 153 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Expenses Governmental Activities General government Public safety Parks, recreation and community service Public works Community development Unallocated infrastructure depreciation Interest on long-term debt Total governmental activities expenses Business -Type Activities Transit Total business -type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services: General government Public safety Public works Parks, recreation and community service Community development Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -Type Activities Charges for services: Transit Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government revenues FISCAL YEAR 14-15 13-14 12-13 11-12 $ 46,224,813 $ 41,807,284 $ 35,921,943 $ 33,664,470 22,235,368 22,187,434 19,940,098 27,391,075 22,458,629 22,550,301 21,809,820 19,282,538 36,103,144 26,183,862 28,651,261 30,623,718 5,880,945 6,193,101 7,214,293 5,896,640 18, 072, 657 17, 561, 539 15,163, 864 16, 844, 238 1,827,094 1,872,832 1,992,574 3,391,058 152, 802, 650 138, 356, 353 130, 693, 853 137, 093, 737 28,062,668 26,819,161 25,653,753 24,930,635 28,062,668 26,819,161 25,653,753 24,930,635 $ 180,865,318 $ 165,175,514 $ 156,347,606 $ 162,024,372 $ 26,783,616 $ 31,970,148 $ 24,323,027 $ 13,719,117 1,605,059 1,847,403 2,284,334 2,079,109 13,056,586 12,463,046 9,943,014 7,209,724 4,525,662 4,390,686 4,371,888 4,156,386 1,774,482 1,961,243 1,611,184 5,152,484 12,561,608 19,421,199 9,061,950 16,032,433 30,107,231 22,530,841 33,585,797 28,616,388 90,414,244 94,584,566 85,181,194 76,965,641 6,779,579 7,587,497 6,863,086 6,616,778 8,228,348 8,984,127 8,579,209 7,385,264 1,423,440 10,804,747 8,513,238 5,041,992 16,431,367 27,376,371 23,955,533 19,044,034 $ 106,845,611 $ 121,960,937 $ 109,136,727 $ 96,009,675 Note: (1) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 154 FISCAL YEAR 10-11 09-10 08-09 07-08 06-07 05-06 $ 47,048,462 $ 32,116,335 $ 30,094,380 $ 27,488,731 $ 26,029,070 $ 24,225,414 21, 280, 904 17, 912, 704 17, 489, 870 16, 482, 917 14, 398, 408 13, 821, 626 11,281,552 27,835,763 32,747,618 21,817,251 20,573,077 20,988,533 25,799,166 26,758,527 48,514,645 30,549,888 19,273,980 6,417,841 11,547,650 13,831,341 9,761,681 9,257,881 8,985,449 16,939,976 16, 392, 901 15, 545, 626 14, 405, 047 13,128, 617 12, 920, 310 1,268,939 4,650,566 5,476,918 5,786,174 3,127,998 2,087,949 1,669,701 138,001,201 139,477,214 158,799,415 121,853,283 104,268,243 85,332,030 24,127,043 23,348,708 22,299,379 21,506,317 18,315,106 16,508,457 24,127,043 23,348,708 22,299,379 21,506,317 18,315,106 16,508,457 $ 162,128,244 $ 162,825,922 $ 181,098,794 $ 143,359,600 $ 122,583,349 $ 101,840,487 $ 398,181 $ 396,651 $ 621,624 $ 2,737,355 $ 302,075 $ 186,171 2,305,608 2,194,038 1,898,022 2,291,100 2,131,060 2,032,652 4,929,602 3,162,052 260,524 355,817 3,575,546 2,512,093 4,220,977 3,956,933 3,849,699 3,875,539 3,895,422 3,794,662 12,059,509 15,937,913 35,138,334 26,341,684 20,182,722 19,068,982 14,090,686 16,224,269 9,931,109 22,600,793 26,641,145 23,465,852 31,325,725 15,249,634 38,785,576 39,003,536 24,770,306 60,971,404 69,330,288 57,121,490 90,484,888 97,205,824 81,498,276 112,031,816 6,573,879 3,181,614 3,299,263 3,216,239 5,827,778 4,950,584 6,913,534 10, 260, 579 13, 653,177 11, 876, 720 12, 616, 641 3,351,941 13,043,418 - - 617,421 750,200 - 26,530,831 13,442,193 16,952,440 15,710,380 19,194,619 8,302,525 $ 95,861,119 $ 70,563,683 $ 107,437,328 $ 112,916,204 $ 100,692,895 $ 120,334,341 (Continued) 155 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Net Revenues (expenses): Governmental activities Business -type activities Total net revenues (expenses) General Revenue and Other Changes in Net Position Governmental activities Taxes: Sales taxes Property taxes Franchise taxes Real property transfer taxes Transient occupancy taxes Unrestricted revenue in lieu of motor vehicle taxes Unrestricted revenue in lieu of sales taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Miscellaneous revenue Gain on sale of capital asset Transfers Reversal of Allowance for Notes to RDA Successor Agency Capital Contributions Total governmental activities Business -type activities Unrestricted investment earnings Miscellaneous revenue Transfers Total business -type activities Total primary government Extraordinary Item Gain from dissolution of former redevelopment agency of the City of Santa Clarita Change in Net Position Governmental activities Business -type activities Total primary government FISCAL YEAR 14-15 13-14 12-13 11-12 $ (62,388,406) $ (43,771,787) $ (45,512,659) $ (60,128,096) (11,631,301) 557,210 (1,698,220) (5,886,601) $ (74,019,707) $ (43,214,577) $ (47,210,879) $ (66,014,697) $ 34,355,412 $ 33,480,522 $ 32,057,358 $ 28,828,139 38,556,890 35,652,080 32,341,369 34,818,426 8,512,818 7,796,070 7,141,953 6,920,244 1,169,780 947,470 706,180 590,474 3,124,904 2,781,527 2,556,774 2,380,547 85,703 86,531 91,062 - - - 87,883 2,240,594 2,090,322 (82,870) 1,509,201 678,937 781,986 310,676 5,372,890 27,410 18,174 - - (7,329,516) (5,692,032) (5,187,224) (6,844,199) 12,633,832 15,780,230 109,836,994 77,942,650 69,935,278 73,663,605 17,592 4,791 29,660 147 7,329,516 5,692,032 5,187,224 6,844,199 7,347,108 5,696,823 5,216,884 6,844,346 $ 117,184,102 $ 83,639,473 $ 75,152,162 $ 80,507,951 $ - $ - $ - $ 40,413,284 $ 47,448,588 $ 34,170,863 $ 24,422,619 $ 53,948,793 (4,284,193) 6,254,033 3,518,664 957,745 $ 43,164,395 $ 40,424,896 $ 27,941,283 $ 54,906,538 Note: (1) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department- Finance Division 156 FISCAL YEAR 10-11 09-10 08-09 07-08 06-07 05-06 $ (68,670,913) $ (82,355,724) $ (68,314,527) $ (24,647,459) $ (22,769,967) $ 26,699,786 2,403,788 (9,906,515) (5,346,939) (5,795,937) 879,513 (8,205,932) $ (66,267,125) $ (92,262,239) $ (73,661,466) $ (30,443,396) $ (21,890,454) $ 18,493,854 $ 27,701,757 $ 24,511,238 $ 27,751,506 $ 29,076,388 $ 23,790,825 $ 22,204,192 24,996,219 25,126,278 26,820,068 24,482,930 27,891,202 23,106,806 6,697,241 6,407,923 6,704,074 6,028,903 6,248,912 5,560,153 3,082,456 4,564,687 4,816,638 836,824 1,073,774 1,544,534 2,106,521 2,050,857 2,260,708 2,433,651 1,804,923 1,824,394 - - - - - 603,990 3,316,058 3,221,498 3,083,353 8,490,865 8,156,017 6,965,521 812,475 896,708 1,015,413 1,252,281 1,862,901 223,241 3,756,112 4,871,133 6,020,940 4,566,884 4,970,193 1,891,292 9,148,163 4,161,677 3,193,421 - - - (5,808,300) (7,477,547) (8,006,128) (8,431,120) 441,376 (12,054,795) 75,808,702 68,334,452 73,659,993 68,737,606 76,240,123 51,869,328 (27,303) 82,554 - 48,961 26,367 1,050 - - 938,901 - - 883,615 308.300 7.477.547 8.006.128 8.431.120 (441.376) 12.054.795 $ 7,137,789 $ (14,021,272) $ 5,345,466 $ 44,090,147 $ 53,470,156 $ 78,569,114 8,184,785 (2,346,414) 3,598,090 2,684,144 464,504 4,733,528 $ 15,322,574 $ (16,367,686) $ 8,943,556 $ 46,774,291 $ 53,934,660 $ 83,302,642 157 City of Santa Clarita Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2015 (modified accrual basis of accounting) General Fund Reserved Unreserved Nonspentlable Restricted Committed Assigned Unassigned Total general fund All Other Governmental Funds Reserved Unreserved: Special revenue funds Debt service fund Capital projects fund Nonspentlable Restricted Committed Assigned Unassigned Total all other governmental funds FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 11,024,338 11,519,143 11,910,059 18,902,350 23,845,861 - - - 66,257 12,356,339 55,336,807 51,718,096 47,106,536 309,078 572,781 50,141,486 45,654,640 35,320,706 50,664,338 46,915,238 $116,502,631 $108,891,879 $ 94,337,301 $ 69,942,023 $ 83,690,219 1,455,067 606,996 670,612 28,885,983 28,813,152 85,763,293 84,268,720 68,957,999 46,915,965 57,205,072 14,000 612,829 716,826 - - 1,843,822 3,412,127 4,466,367 3,275,312 3,637,410 (8,633,303) (9,300,647) (10,665,597) (56,718,519) (72,692,440) $ 80,442,879 $ 79,600,025 $ 64,146,207 $ 22,358,741 $ 16,963,194 FUND BALANCES Fiscal Year Ended June 30, 2015 • All Other Governmental • General Fund Funds 59% 41% Note: (1) Balance as restated; see financial statements for the applicable year. Source: City of Santa Clarda, Administrative Services Department - Finance Division 158 FISCAL YEAR 09-10 08-09 07-08 06-07 05-06111 $ 19,546,015 $ 32,617,139 $ 34,920,547 $ 34,699,034 $ 20,786,040 58,211,508 41,674,470 31,153,879 28,500,824 18,232,779 33,725,531 34,502,270 38,050,255 4,592,332 (249,111) $ 77,757,523 $ 74,291,609 $ 66,074,426 $ 63,199,858 $ 39,018,819 $ 51,195,454 $ 70,667,494 $ 51,972,970 $ 48,303,588 $ 80,399,389 2,109,198 (7,048,095) 28,377,796 3,827,570 (7,159,062) (24,048,962) (17,004,471) (15,873,835) (10,461,382) (4,743,697) 33,725,531 34,502,270 38,050,255 4,592,332 (249,111) $ 62,981,221 $ 81,117,198 $ 102,527,186 $ 46,262,108 $ 68,247,519 120 100 80 x 0 60 40 20 0 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years $102.53 $79.60 $80.44 $68.24 $81.12 $62.98 $64.15 46.26 $22.36 $16.96 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 159 City of Santa Clarita Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2015 (modified accrual basis of accounting) Revenues: Taxes Licenses and permits Developerfees Investment income Intergovernmental Fines and forfeitures Service charges Other revenues Total Revenues Expenditures: Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: FISCAL YEAR 14-15 13-14 12-13 11-12 $ 85,789,556 $ 80,285,660 $ 73,972,006 $ 73,625,713 5,567,280 5,366,972 4,246,957 4,097,709 10,764,554 2,600,997 15,828,388 7,181,986 2,026,507 1,911,491 1,702,006 2,739,794 31,953,692 34,355,734 27,452,216 28,375,142 1,261,752 1,661,157 2,114,166 1,674,085 37,738,754 42,156,582 36,311,324 28,145,012 511,117 5,943,608 332,146 6,425,792 175,613,212 174,282,201 161,959,209 152,265,233 43,196,168 36,294,205 35,433,288 50,816,449 22,188,641 22,137,338 19,894,859 25,412,420 20,846,943 20,498,108 19,824,550 19,523,584 36,075,187 24,385,865 27,968,407 20,753,607 5,883,441 6,185,263 7,252,424 5,923,872 23,392,326 36,580,589 23,837,533 27,403,439 Principal 1,992,479 1,837,174 1,750,538 2,338,787 Interest, professional services and fiscal charges 1,850,703 1,885,546 2,039,144 3,743,134 Redemption of district credits 5,105,402 - 14,368,419 - Total Expenditures 160,531,290 149,804,088 152,369,162 155,915,292 Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Revenue bonds issued/issuance premium Proceeds of long-term debt Escrow payment, costs of bonds issuance and others Proceeds from capital lease Transfers in Transfers out Issuance of district credits Total Other Financing Sources (Uses) Extraordinary Item: Dissolution of Santa Clarita Redevelopment Agency Net change in fund balances Fund balances - Beginning of Year Fund balances - End of Year Debt service as percentage of noncapital expenditures 15,081,922 24,478,113 9,590,047 (3,650,059) - - - 252,068 7,850,640 9,757,447 9,069,495 16,538,674 (14,478,956) (15,524,498) (14,256,719) (29,810,448) - 11,297,334 12,270,335 - (6,628,316) 5,530,283 7,083,111 (13,019,706) 116 8,453,606 30,008,396 16,673,158 (8,352,649) 188,491,904 158,483,508 141,810,350 100,653,413 $ 196,945,510 $ 188,491,904 $ 158,483,508 $ 92,300,764 2.80% 3.26% 2.95% 4.40% Source: City of Santa Clarita, Administrative Services Department- Finance Division 160 FISCAL YEAR 10-11 09-10 08-09 07-08 06-07 05-06 $ 72,474,882 $ 80,714,829 $ 87,659,599 $ 88,088,786 $ 70,576,755 $ 66,164,485 3,675,424 4,093,250 3,697,218 5,256,748 4,203,933 6,907,826 282,776 3,053,363 15,763,070 22,290,808 6,747,767 28,028,933 3,798,498 5,485,925 10,749,728 8,287,441 7,926,763 2,881,133 19,780,700 33,881,145 28,882,884 24,247,611 37,300,213 38,526,364 1,891,500 1,936,318 1,759,371 2,121,570 1,918,954 1,904,273 23,608,272 10,812,521 8,375,771 9,931,041 13,463,673 13,081,649 7,685,141 7,234,923 5,077,400 3,368,879 4,356,961 12,651,674 133,197,193 147,212,274 161,965,041 163,592,884 146,495,019 170,146,337 42,213,597 27,951,510 27,250,056 25,965,196 23,411,750 24,668,150 21,230,594 17,862,129 17,439,295 16,342,979 14,347,833 13,658,723 21,853,319 20,048,430 20,126,412 20,156,343 18,943,146 17,376,609 34,210,327 20,594,575 42,937,168 25,977,763 19,511,097 6,802,081 11,575,365 10,849,942 7,095,386 7,583,236 9,051,652 17,164,505 21,311,885 46,183,268 41,826,511 44,906,802 57,926,955 49,435,744 2,246,218 2,611,372 2,072,341 1,927,198 2,374,870 1,367,359 4,796,695 5,411,152 5,279,549 4,632,979 2,298,974 2,878,536 159,438,000 151,512,378 164,026,718 147,492,496 147,866,277 133,351,707 (26,240,807) (4,300,104) (2,061,677) 16,100,388 (1,371,258) 36,794,630 - - - - 13,894,752 - - - - 54,235,000 - 17,700,000 - - - (226,682) - (17,225,304) 50,869,852 18,953,115 12,150,426 43,112,541 27,468,089 7,865,612 (64,714,376) (28,930,662) (23,281,554) (54,668,661) (29,881,193) (19,409,716) (13,844,524) (9,977,547) (11,131,128) 42,452,198 11,481,648 (11,069,408) (40,085,331) (14,277,651) (13,192,805) 58,552,586 10,110,390 25,725,222 140,738,744 155,016,395 168,601,612 110,049,026 99,351,576 74,551,009 $ 100,653,413 $ 140,738,744 $ 155,408,807 $ 168,601,612 $ 109,461,966 $ 100,276,231 5.96% 6.84% 5.54% 5.16% 4.27% 4.85% 161 City of Santa China Assessed Values d and Actual Values of Taxable Property Last Ten Fiscal Years ASSESSED VALUATION by CATEGORIES (Total secured and unsecured) Fiscal Year Ended June 30, 2015 Note F Assessed va luatio n is Faced on 100%offull value In acm one nce with Se mon 135 oftheCartoon ia Reve nue an it Ta;alion Code. R) Direct Rate Includes Redevelopment Agency areae So ores HKCored &Cone , County of WS Angeles,Add lmr-C pricier Office , Cc mhmed To x DoIts 201314 162 STATE ASSE SSEO LOCALLY ASSESSED SECURED (UTILITY) SECURED Fecal IMPROVE- PERSONAL IMPROVE- PERSONAL OTHER Year LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY E%EMPTIDNS TOTAL 200506 2,098,608 10,833,95] 239530 13QR185 ]440,682]41 894]087$36 89,939,825 Orr 4RQ97) 162666238305 200607 2156981 8312,011 197013 10661 8556,960792 9]66,99]]97 104509489 P53946364) 18 174 521 684 200708 1515305 6,727,866 - 8,2431]1 90991005161 10612,016138 98197,6@ P14371451) 20,694]5]455 200809 1515305 330,866 - 1,8461]1 10259,253,083 11386047165 95,440322 P03 174372) 21 537566198 2009-10 1]50395 226478 - 4,015.1]5 9416163,69] 11115,44132] 105206,475 (323,630604) 20313270595 2010-11 11750395 226478 - 4,015.1]5 9.16056!,659 11286024994 112315544 (330372395) 20 222 555 042 2011-12 114316]1 2264] 80 - 3,696]51 9097382703 11485]23559 1@,08962] (372583,638) 2031],662651 2012-13 1,431621 2264]80 - 3,696]51 8082630332 11516688209 111202,431 (400045,608) 20111 075454 2013-1d 1,431621 2264780 - 3,696]51 9689545,816 13]26]55.146 1@166362 (412 668 046) 23,410]99283 2014-15 1,431621 2264780 - 3,696751 10020572661 14]49259449 103044310 (453562,893) 25220113022 ASSESSED VALUATION by CATEGORIES (Total secured and unsecured) Fiscal Year Ended June 30, 2015 Note F Assessed va luatio n is Faced on 100%offull value In acm one nce with Se mon 135 oftheCartoon ia Reve nue an it Ta;alion Code. R) Direct Rate Includes Redevelopment Agency areae So ores HKCored &Cone , County of WS Angeles,Add lmr-C pricier Office , Cc mhmed To x DoIts 201314 162 LOCALLY ASSESSED TOTALS 30 000 25 000 20 000 15 000 10000 5000 TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 05-06 0607 07L8 08-09 09-10 10-11 11-12 12-13 13-10 10-15 Fiscal Year 163 UNSECURED BEFORE TAXABLE % TOTAL OWNER IMPROVE- PERSONAL OTHER OTHER ASSESSED INCR. DIRECT PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL EXEMPTIONS VALUE (DECR.) RATE (2) TAX RELIEF 216,098,046 453,406,084 (9513,134) 659 990 996 1],160386,81] 16939,401,486 1490% 0.06909% 206,658586 255,41],833 4825]4,856 (7299585) ]30,693,104 19,1]],126,]42 18915,880,]93 11.6]% 0.08039% 206,464204 264,]08,]23 558,804,055 (32916267) 790596511 21,]40,884,855 21,49359],13] 13.63% 0.0832]% 220 192 568 293355,4]4 611,636166 (33951,806) 8]1,039,834 22 173326025 22,410,452203 42]% 0.08339% 223396,120 359 543 253 600,420,921 (15,12],698) 944,836,4]6 21,600,880,848 21262,122246 -1.08% 0.08313% 224,]31598 346,8]4,191 553,829,644 (133313]]) 88]3]2,458 21,45],646,]0] 21,113942935 -0 70% 0.0]432% 223,2]] 279 314286,482 548,430,090 (15,13]342) 84]5]9230 21556,659,612 21,168938,632 026% 0.0]392% 220,496294 349,415,601 53494],944 (13,693,]8]) 8]0,669,]58 21399,181358 20985,441963 -0.8]% 0.0]291% 216163,460 329350,845 541533,568 (1590],]16) 8549]6,69] 24,698,048,493 24269,4]2,]31 15.65% 0.0]291% 236,5]]388 339544,656 561,]40289 (13,152,888) 888,132,05] 25,645226,854 26,111942,635 7 59% 0.09136% 232,]99,644 30 000 25 000 20 000 15 000 10000 5000 TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 05-06 0607 07L8 08-09 09-10 10-11 11-12 12-13 13-10 10-15 Fiscal Year 163 City of Santa Clarita Redevelopment Agency I'I Assessed Values (2) and Actual Values of Taxable Property Last Ten Fiscal Years (1) The Redevelopment Agency of the City was established on November 28, 1989, pursuant to the State of California and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief ofthat year. Redevelopment agencies were dissolved by the State of California effective February 1, 2012. (2) Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code. Source: County of Los Angeles, Auditor-Controllen Tax Division 164 STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED FISCAL IMPROVE -PERSONAL IMPROVE- PERSONAL OTHER YEAR LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 2005-06 $61,007 $45,801 $ 26,219 $133,027 $273,260,130 $ 176,564,344 $ 2,435,378 $ (4,859,824) $447,400,028 2006-07 50,158 37,657 21,558 109,373 295,792,467 185,299,271 2,545,972 (5,085,710) 478,552,000 2007-08 - - - - 335,974,647 205,086,767 2,346,546 (4,630,171) 538,777,789 2008-09 - - - - 348,100,511 217,393,278 2,064,527 (3,754,719) 563,803,597 2009-10 - - - - 343,043,150 214,695,279 1,775,246 (3,779,814) 555,733,861 2010-11 - - - - 319,869,014 213,093,295 1,850,279 (3,196,475) 531,616,113 2011-12 - - - - 322,803,745 214,686,716 1,933,165 (7,016,751) 532,406,875 2012-13 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2013-14 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2014-15 N/A N/A N/A N/A N/A N/A N/A N/A N/A (1) The Redevelopment Agency of the City was established on November 28, 1989, pursuant to the State of California and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief ofthat year. Redevelopment agencies were dissolved by the State of California effective February 1, 2012. (2) Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code. Source: County of Los Angeles, Auditor-Controllen Tax Division 164 165 LOCALLY ASSESSED TOTALS HOME - UNSECURED TOTALS TAXABLE OWNER IMPROVE- PERSONAL OTHER BEFORE ASSESSED VALUE PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL BASE YEAR BASE YEAR VALUE GROWTH TAX RELIEF $ 5,901,959 $ 23,034,914 $ (91,000) $ 28,845,873 $ 476,378,928 $ (266,351,517) $ 210,027,411 $ 102,814,621 $ 2,053,943 26,593,269 25,569,962 (16,300) 52,146,931 530,808,304 (266,351,517) 264,456,787 54,429,376 1,971,567 28,204,577 48,299,529 (217,300) 76,286,806 615,064,595 (266,351,517) 348,713,078 84,256,291 2,034,432 39,771,667 48,437,084 (77,000) 88,131,751 651,935,348 (266,351,517) 385,583,831 36,870,753 2,002,848 34,102,838 46,361,945 (84,500) 80,380,283 636,114,144 (266,351,517) 369,762,627 (15,821,204) 1,921,661 21,240,432 62,307,206 (84,500) 83,463,138 615,079,251 (266,351,517) 348,727,734 (21,034,893) 1,871,456 34,353,633 46,665,422 (102,000) 80,917,055 613,323,930 (266,351,517) 346,972,413 (1,755,321) 1,865,922 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 165 City of Santa Clarita Assessed Values—Taxable Property Last Ten Fiscal Years CATEGORY 14-15 13-14 12-13 11-12 10-11 Residential $ 19,755,522,402 $ 18,138,258,224 $ 14,971,655,728 $ 15,212,586,674 $ 15,239,936,469 Commercial 2,952,772,231 2,847,760,176 2,794,405,083 2,748,247,727 2,820,296,027 Industrial 1,642,718,866 1,561,091,316 1,413,623,056 1,455,126,754 1,463,696,151 Irrigated 2,834,466 2,827,311 2,796,388 3,016,072 3,004,749 Dryfarm - - - - - Recreational 101,870,300 100,138,918 104, 981,278 106,506,146 121, 791,852 Institutional 142,862,940 136,824,169 132,119,758 125,982,002 127,363,481 Government 216,042 215,066 210,850 206,717 205,173 Miscellaneous 341,421 1,017,342 864,299 847,359 841,034 Vacant land 507,997,067 509,125,263 565,117,297 533,608,937 308,820,538 SBE Nommitary 3,696,751 3,696,751 3,696,751 3,696,751 4,015,175 Possessory Int. 112,978,072 113,541,478 125,301,717 131,534,263 136,599,828 Unsecured 888,132,057 854,976,697 870,669,758 847,579,230 887,372,458 Unknovm 20 20 TOTALS: $26,111,942,635 $24,269,472,731 $20,985,441,963 $21,168,938,632 $21,113,942,935 20,000 18,000 16,000 14,000 12,000 10,000 e 8,000 c 6,000 c 4,000 2,000 ASSESSED VALUE -TAXABLE PROPERTY Last Ten Fiscal Years 0546 0647 0748 m49 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 166 sRalaennal ECommerclal olnauatnal vacant lana DAH otlters FISCAL YEAR 09-10 08-09 07-08 06-07 05-06 $ 15,094,074,637 $ 16,493,025,013 $ 16,165,919,271 $ 13,962,275,972 $ 12,569,640,999 2,729,669,423 2,541,908,257 2,081,576,763 1,836,340,797 1,588,835,810 1,451,053,867 1,420,480,569 1,293,080,539 1,148,469,489 980,395,598 3,630,743 3,559,558 3,489,768 29,374,674 28,272,540 - - - 49,088,244 48,512,253 121,511,353 119,459,165 114,868,032 90,435,287 94,916,719 125,868,861 136,418,924 130,907,129 94,705,673 91,312,643 206,850 201,629 197,676 194,922 190,000 843,038 - 810,312 795,449 779,859 636,182,476 664,562,300 664,792,342 656,660,955 554,551,820 3,573,175 1,073,171 8,243,171 10, 666, 005 13,172,185 150,671,347 158,723,783 239,115,623 222,654,730 205,526,182 944,836,476 871,039,834 790,596,511 730,697,804 659,990,996 - - - 83,525,492 103,303,882 $ 21,262,122,246 $ 22,410,452,203 $ 21,493,597,137 $ 18,915,885,493 $ 16,939,401,486 Notes: In 1978 the voters of the State of California passed Proposition 13, which limited taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation just mentioned. 167 City of Santa Clarita Assessed Values—Use Category Summary Fiscal Year 2014-15 CATEGORY PARCELS ASSESSED VALUE PERCENT EXEMPTIONS NET TAXABLE VALUE PERCENT Residential 55,178 $ 19,809,106,842 74.5% $ 53,584,440 $ 19,755,522,402 75.70% Commercial 911 3,007,379,681 11.3% 54,607,450 2,952,772,231 11.30% Industrial 711 1,645,710,771 6.2% 2,991,905 1,642,718,866 6.30% Irrigated 6 2,834,466 0.0% - 2,834,466 0.00% Recreational 34 104,684,532 0.4% 2,814,232 101,870,300 0.40% Institutional 94 480,601,815 1.8% 337,738,875 142,862,940 0.50% Government 5 217,287 0.0% 1,245 216,042 0.00% Miscellaneous 6 341,421 0.0% - 341,421 0.00% Vacant land 3,831 509,201,601 1.9% 1,204,534 507,997,067 2.00% SBE Nonunitary (14) 3,696,751 0.0% - 3,696,751 0.00% Possessory Int. (2,196) 113,598,284 0.4% 620,212 112,978,072 0.40% Unsecured (6,415) 901,284,945 3.4% 13,152,888 888,132,057 3.40% Unknown 23 20 0.0% 20 0.00% TOTALS: 52,174 $ 26,578,658,416 100.00% $466,715,781 $ 26,111,942,635 100.00% ASSESSED VALUE by USE CATEGORY Fiscal Year 2014-15 Industrial 6.20% G Commercial 11.30% All Others 8.10% NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2014-15 Industrial • All Others 6.30% 17% o Commercial 11.30 ■ Residential 75.70% Source: HdL Coren & Cone, Los Angeles County Assessor 2014/15 Combined Tax Rolls. 168 169 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) Last Ten Fiscal Years Fiscal Year GENERAL LOS ANGELES COUNTY CASTAIC LAKE WATER AGENCY SCHOOL DISTRICTS COUNTY COUNTY SANITATION FLOOD DISTRICTS CONTROL TOTAL 2005-06 1.000000 0.000795 0.049327 0.064422 - 0.000049 1.114593 2006-07 1.000000 0.000660 0.040000 0.060360 - 0.000050 1.101070 2007-08 1.000000 - 0.040000 0.074050 - - 1.114050 2008-09 1.000000 - 0.040000 0.077110 - - 1.117110 2009-10 1.000000 - 0.060750 0.089815 - - 1.150565 2010-11 1.000000 - 0.070600 0.086830 - - 1.157430 2011-12 1.000000 - 0.070600 0.091457 - - 1.162057 2012-13 1.000000 - 0.070600 0.112835 - - 1.183435 2013-14 1.000000 - 0.070600 0.120330 - - 1.190930 2014-15 1.000000 - 0.070600 0.118570 - - 1.189170 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2014-15 1.200000 1.000000 GENERAL 0.800000 0.600000 0.400000 SCHOOL 0.200000 CASTAIC LAKE DISTRICTS WATER AGENCY SANITATION DISTRICTS 0.000000 LA COUNTY FLOOD CONTROL 170 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) One Year Detail of Rates Producing Revenue for City and Associated Redevelopment Agencies City General Fund Direct Rates RDA Incremental Rate Total Direct Rate City Share Prop. 13 and overlapping rates for the largest Of 1% Total City plus applicable 0.00801 Roll Year per Prop. 13 Debt Rates Rates voter -approved debt weighted average of all individual direct 2014-15 0.122750 0.000000 0.122750 0.00000% 0.09163% City of Santa Clarita Tax District 1 (249.01) Castaic Lake Water Agency (302.01) Children's Institutional Tuition Fund (400.21) Consolidated Fire Protection District of LA Co. (007.30) County School Service Fund Newhall (581.06) County School Service Hart William S. Hart (757.06) County School Services (400.15) Development Center Handicapped Minor Newhall (581.07) Educational Augmentation Fund Impound (400.01) Educational Revenue Augmentation Fund (ERAF) (400.00) Greater LA Co. Vector Control (061.80) 2014-15 0.05730 Notes: General fund tax rates are 0.05780 representative and based upon the direct 0.00283 and overlapping rates for the largest 0.16340 General Fund tax rates area (TRA) by net 0.00801 taxable value. Total Direct Rate is the 0.00034 weighted average of all individual direct 0.00143 rates applied bythe government preparing 0.00088 the statistical section information. 0.13380 The percentages presented in the columns 0.08260 above do not sum across rows. In 1978 1111111119% Santa Clarita Library (249.56) 0.02360 LA County Fire - Ffw (007.31) 0.00323 LA County Flood Control Improvement District (030.10) 0.00176 LA County Flood Control Maintenance (030.70) 0.00996 LA County General (001.05) 0.14050 LA County Accum Cap Outlay (001.20) 0.00009 Newhall School District (581.01) 0.08350 Santa Clarita Community College (814.04) 0.03740 Santa Clarita Street Light Maintenance #2 (249.32) 0.02250 Santa Clarita Valley Sanitation Dist. LA Co. 0.02500 Valencia Areawide Landscape T1A S.C. 0.01924 William S. Hart Elementary School Fund (757.07) 0.04290 William S. Hart Union High (757.02) 0.08150 Total Prop. 13 Rate: 1.00000 Castaic Lake Water Agency (302.01) 0.07060 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) 0.01820 Newhall Elementary School District Debt Services 1999 Ser. A (581.52) 0.01979 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.54) 0.00753 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55) 0.00694 Santa Clarita Community College Debt Services 2005 Refunding Bonds (814.53) 0.00787 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52) 0.00555 Santa Clarita Community College Debt Services 2006 Ser. 2012 0.00151 William S. Hart Un.Hsd Debt Services (757.51) 0.01265 William S. Hart Un.Hsd Debt Services 2008 Ser. B 0.01011 William S. Hart Un.Hsd Debt Services 2008 Ser. C 0.01059 William S. Hart Unified Debt Services 2001 Ser. B (757.52) 0.01120 William S. Hart Unified Debt Services 2008 Ser. A (757.53) 0.00663 Total Tax Rate 0.18917 Source: HdL Coren & Cone, Los Angeles County Assessor 2014/15 Tax Rate Table 171 California voters passed Proposition 13, which set the propertytax at a 1.00% fixed amount. This 1.00% is shared by all the taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter -approved bonds. City of Santa Clarita Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years Ago FISCAL YEAR 2014-15 PERCENT of NUMBER TOTAL TOTAL CITY Of ASSESSED ASSESSED OWNERITAXPAYER PARCELS VALUE VALUE Valencia Town Center 17 $ 360,706,327 1.38% Packard Humanities Institute 1 167,592,530 0.64 VTC Business Center LLC 9 138,845,199 0.53 Park Sierra Properties 15 132,347,680 0.51 Saugus Colony Limited 19 111,948,627 0.43 EQR Valencia LLC 218 99,428,019 0.38 EQR The Oaks LLC 28 97,365,194 0.37 RREEF America Reit 11 Corporatioi 2 79,368,053 0.30 Walmart/SAM's 5 77,852,110 0.30 Time Warner Cable 4 65,680,355 0.25 Total 318 1,331,134,094 5.10% All Others 24,780,808,541 94.90 Total Assessed Valuation $ 26,111,942,635 100.00% FISCAL YEAR 2005-06 PERCENT of NUMBER TOTAL TOTAL CITY Of ASSESSED ASSESSED OWNERITAXPAYER PARCELS VALUE VALUE Valencia Town Center Venture Newhall Land and Farming Co Casden Santa Clarita LLC Thomas Properties Group LLC CPF Promenade LLC Prado Town Center West LLC EQR Valencia LLC EQR Town Center LLC Palmer Saugus Limited Lexington Lion Clarita LP NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone, LA County Assessor 2014/15 Combined Tax Rolls 172 29 $ 226,942,988 1.34 % 139 112,433,973 0.66 25 74,999,960 0.44 28 73,940,222 0.44 16 63,386,867 0.37 10 61,399,861 0.36 217 54,881,437 0.32 3 50,687,860 0.30 22 49,074,973 0.29 6 48,643,800 0.29 495 816,391,941 4.82 % 16,123,009,545 95.18 $ 16,939,401,486 100.00% City of Santa Clarita Property Tax Levies, Tax Collections and Delinquencies Last Ten Fiscal Years 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2005-06 200647 200748 200849 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 TAX COLLECTIONS & DELINQUENCY - LAST TEN FISCAL YEARS FISCAL YEAR ■LEVIES GCOLLECTIONS • DELINQUENT AMOUNT NOTES: Article XIII -A of the Constitution of the State of California, adopted by the electorate in June 1978, precludes the City from a local property tax levy. Al general-purpose property taxes are levied by the County and allocated to other governmental entities on a predetermined formula. The above figures include secured property taxes only. Prior to the implementation of GASB 44 in FY 2006, collections in subsequent years were not required to be reported by tax year. Beginning in FY 2007, collections in subsequent years are included. Source: County of Los Angeles, Department of Auditor -Controller 173 COLLECTIONS TOTAL PERCENT FISCAL TAXES PERCENT IN SUBSEQUENT COLLECTIONS COLLECTIONS YEAR LEVIED COLLECTIONS COLLECTIONS YEARS TO DATE TO DATE 2005-06 11,593,852 11,292,337 97.4% 20,076 11,312,413 97.57% 2006-07 12,804,630 12,317,614 96.2% 2,689 12,320,303 96.22% 2007-08 14,483,825 13,754,184 95.0% 32,577 13,786,761 95.19% 2008-09 11,925,285 11,361,604 95.3% 16,722 11,378,326 95.41% 2009-10 14,202,626 13,711,940 96.5% - 13,711,940 96.55% 2010-11 14,172,030 13,829,640 97.6% 50,605 13,880,246 97.94% 2011-12 14,299,999 13,999,770 97.9% 49,862 14,049,633 98.25% 2012-13 18,634,850 18,297,746 98.2% - 18,297,746 98.19% 2013-14 21,446,963 21,128,332 98.5% - 21,128,332 98.51% 2014-15 23,131,317 22,795,838 98.5% - 22,795,838 98.55% 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2005-06 200647 200748 200849 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 TAX COLLECTIONS & DELINQUENCY - LAST TEN FISCAL YEARS FISCAL YEAR ■LEVIES GCOLLECTIONS • DELINQUENT AMOUNT NOTES: Article XIII -A of the Constitution of the State of California, adopted by the electorate in June 1978, precludes the City from a local property tax levy. Al general-purpose property taxes are levied by the County and allocated to other governmental entities on a predetermined formula. The above figures include secured property taxes only. Prior to the implementation of GASB 44 in FY 2006, collections in subsequent years were not required to be reported by tax year. Beginning in FY 2007, collections in subsequent years are included. Source: County of Los Angeles, Department of Auditor -Controller 173 City of Santa Clarita Successor Agency Top Property Owners Based on Net Values Fiscal Year 2014-15 174 Secured Unsecured Combined Owner Parcels Value ° Net AV Parcels Values ° Net AV Value of Net AV Primary Use 1) Casden Santa Clarita LLC 24 $ 61,766,314 10.79% $ 61,766,314 9.61% Vacant (Pending Appeals On Parcels) 2) Time Warner Cable 5 $41,787,456 59.20% 41,787,456 6.50% Unsecured 3) Saugus Station LLC 6 $17,633,797 3.08% 17,633,797 2.74% Industrial 4) Lyons Properties Limited 1 9,923,399 1.73% 9,923,399 1.54% Commercial (Pending Appeals On Parcels) 5) Peter and Barbara Coeler, et. al. 3 9,090,299 1.59% 1 9,009 0.01% 9,099,308 1.42% Residential (Pending Appeals On Parcels) 6) Telfair Corporation 2 8,538,579 1.49% 8,538,579 1.33% Commercial 7) David Weiswasser Trust 2 7,943,931 1.39% 7,943,931 1.24% Residential 8) 25805 San Fernando LLC 1 7,923,793 1.38% 7,923,793 1.23% Commercial 9) RFT Sprouts LLC, et. al. 3 7,585,341 1.33% 7,585,341 1.18% Residential 10) 23801 San Fernando Road Landco LLC 1 7,162,169 1.25% 7,162,169 1.11% Institutional Top Ten Total 43 137,567,622 24.03% 6 41,796,465 59.21% 179,364,087 27.90% Agency Total 572,366,311 70,583,512 642,949,823 Incremental Net AV Total $ 326,191,749 42.17% $52,651,860 79.38% $ 378,843,609 47.35% 174 City of Santa Clarita Successor Agency Project Area Assessment Appeals Summary and Tax Collection History Fiscal Years 2009-10 Through 2014-15 Project Area Assessment Appeals Summary—FY 2014-15 Estimated No. of No. of Estimated No. Reduction on Total No. of Resolved Successful Average No. & Value of of Appeals Pending Appeals Appeals Appeals Appeals Reduction Appeals Pending Allowed Allowed 212 143 121 65% 69/$279,879,202 58 $ 153,990,789 Tax Collection History For Fiscal Years 2009-10 Throuah 2014-15 Current Year Current Year Prior Year Collection Total Collection Year Tax Levy Collection Collection Total Percentage Percentage 2009-10 $4,068,572 $3,885,719 $ 42,260 $ 3,927,979 96% 97% 2010-11 3,618,835 2,744,263 (204,741) 2,539,523 76% 70% 2011-12 3,762,457 2,934,904 218,094 3,152,998 78% 84% 2012-13 3,485,808 2,786,791 275,290 3,062,081 80% 88% 2013-14 3,526,463 2,828,495 815,124 3,643,619 80% 103% 2014-15 3,836,835 3,185,967 158,652 3,344,619 83% 87% Source: Los Angeles County Auditor/Controller, Disbursement/Tax Division "CRA Remittance Advice" from Fiscal Years 1997-98 through 2010-11, and for Fiscal Year 2011-12, November 2011 through January 2012. (1) Sources: Ledgers and special reports from Los Angeles County Auditor -Controller commencing February 2012 pursuant to AB X 1 26. 175 City of Santa Clarita Successor Agency Charge Detail Report for CFD 2002-1 (Valencia Town Center) Fiscal Year 2014-15 LAND STRUCTURE TOTAL ASSESSOR'S ASSESSED ASSESSED ASSESSED TAXABLE PARCEL NUMBER PROPERTY OWNER VALUES ($1 VALUES ($1 VALUES ($1 ACREAGE 2861-058-071 Valencia Town Center Venture LP $ 1,193,943 $ 181,932 $ 1,375,875 0.84 2861-058-072 Valencia Town Center Venture LP 3,309,416 17,204,970 20,514,386 4.81 2861-058-073 Valencia Town Center Venture LP 26,153,181 3,222,804 29,375,985 15.68 2861-058-076 Valencia Town Center Venture LP 833,129 82,745 915,874 1.18 2861-058-077 Valencia Town Center Venture LP 4,498,529 384,782 4,883,311 6.70 2861-058-081 Valencia Town Center Venture LP 15,213,057 160,862,154 176,075,211 14.34 2861-058-084 Valencia Town Center Venture LP 3,138,371 9,096,737 12,235,108 2.05 2861-058-085 Valencia Town Center Venture LP 409,350 204,674 614,024 0.33 Totals: $ 54,748,976 $ 191,240,798 $ 245,989,774 45.94 176 MAX TAX RATE APPLIED CLASS ($) MAX TAX RATE ($) CHARGE 1 $ 34,246 $ 28,907 $ 25,344 $ 21,393 1 34,246 164,725 25,344 121,906 1 34,246 537,051 25,344 397,448 1 34,246 40,548 25,344 30,008 1 34,246 229,450 25,344 169,806 1&2 34,246 & 230,678 491,156 25,347 363,483 1 34,246 70,205 25,344 51,956 1 34,246 11,233 25,344 8,313 $ 1,164,311 177 City of Santa Clarita Ratio of Outstanding Debt by Type Last Ten Fiscal Years FISCAL YEAR CERTIFICATES OF PARTICIPATION (1) (3) LOANS GOVERNMENTAL ACTIVITIES TAX ALLOCATION BONDS (2) BONDS (4) CAPITAL LEASES TOTAL 2005-06 $17,700,000 $ 710,000 $ 5,029,113 $ - $ - $ - $ 12,211 $ 23,451,324 2006-07 16,760,000 - 4,328,207 13,785,000 - - 36,401 34,909,608 2007-08 15,790,000 15,525,000 3,593,734 13,575,000 29,860,000 8,850,000 23,676 87,217,410 2008-09 14,790,000 15,525,000 2,823,907 13,330,000 29,860,000 8,850,000 11,370 85,190,277 2009-10 13,760,000 15,525,000 2,017,793 13,075,000 29,460,000 8,730,000 1,624 82,569,417 2010-11 12,700,000 15,525,000 1,413,786 12,805,000 29,040,000 8,605,000 - 80,088,786 2011-12 11,610,000 15,490,000 1,040,000 12,525,000 - - 242,417 40,907,417 2012-13 10,480,549 15,379,349 810,000 12,316,280 - - 201,880 39,188,058 2013-14 9,323,138 15,291,374 580,000 12,002,622 - - 154,705 37,351,839 2014-15 8,128,138 15,175,988 300,000 11,673,964 - - 217,615 35,495,705 NOTES: (1) In 1991 the Santa Clarita Public Financing Authority issued $22,940,000 aggregate principal amount of Local Agency (Redevelopment) Revenue Bonds Series 1991. Simultaneously with the receipt of the Bond proceeds, the Authority acquired $22,940,000 Certificates of Participation issued by the Santa Clarita Redevelopment Agency, of which the proceeds were transferred to the City to finance and/or refinance the design, acquisition, improvement or construction of land, the City Hall Building and certain road improvements, and to refinance certain debt. The Agency leased back the facilities to the City for lease payments to be made by the City to the Authority equal to the principal and interest due on the revenue bonds. At this point in time, the Agency is not active. -The 1991 Series certificates were later refunded in fiscal year 1997-98 bythe Certificates of Participation Series 1997 of $19,670,000. As a result, the 1991 Series certificates are considered to be defeased and the liabilityfor those certificates was removed from the general long-term debt. -On July 1, 2005, the Santa Clarita Public Financing Authority issued $17,700,000 in Certificates of Participation to advance refund $17,640,000 of outstanding 1997 Series certificates. As a result, the 1997 Series were considered defeased and the liability for those certificates was removed from the long-term liability. -In November 2001, the Santa Clarita Public Financing Authority issued $3,200,000 in Certificates of Participation for the acquisition of parkland. In 2006 the COP Series 2001 were considered defeased and the liability for those certificates was removed from the general long-term debt. (2) On January 16, 2007, the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue Bonds, Series 2007 for the acquisition of right-of-way. (3) On December 1, 2007, the Santa Clarita Public Financing Authority issued $15,525,000 in Certificates of Participation for the acquisition of open space and parkland. (4) On June 1, 2008, the Santa Clarita Redevelopment Agency issued $29,860,000 in Non -Housing Tax Allocation Bonds and $8,850,000 in Low/Mod Housing Tax Allocations Bonds to fund certain redevelopment projects within the Redevelopment Project area. Upon the dissolution of redevelopment agencies in the State of California effective February 1, 2012, the bonds were transferred to the RDA Successor Agency. Sources: City of Santa Clarita, Administrative Services Department - Finance Division 178 OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years 600 500 $484 500 $466 $4 4 400 300 $231 200 91466 $206 $179 $150 100 0 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 179 PERCENTAGE BUSINESS -TYPE ACTIVITIES OF OUTSTANDING TOTAL TAXABLE DEBT DEBTTO LEASE PRIMARY ASSESSED PER PERSONAL PAYABLE TOTAL GOVERNMENT VALUE CAPITA INCOME $ 1,586,319 $ 1,586,319 $ 25,037,643 0.15% $ 150 2% 1,236,869 1,236,869 36,146,477 0.19% 206 3% 870,149 870,149 88,087,559 0.41% 500 6% 485,304 485,304 85,675,581 0.38% 484 5% 248,304 248,304 82,817,721 0.39% 466 5% - - 80,088,786 0.38% 454 N/A - - 40,907,417 0.19% 231 N/A - - 39,188,058 0.19% 191 N/A - - 37,351,839 0.15% 179 N/A - - 35,495,705 0.14% 166 N/A OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years 600 500 $484 500 $466 $4 4 400 300 $231 200 91466 $206 $179 $150 100 0 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 179 City of Santa Clarita Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years OUTSTANDING GENERAL BONDED DEBT FISCAL REVENUE CERTIFICATES OF YEAR POPULATION (1) BONDS PARTICIPATION TOTAL PERCENTAGE OF TAXABLE DEBT ASSESSED PER VALUE CAPITA 2005-06 167,412 - 18,410,000 18,410,000 0.11% 110 2006-07 175,676 13,893,228 16,760,000 30,653,228 0.16% 174 2007-08 176,030 13,575,000 31,315,000 44,890,000 0.21% 255 2008-09 177,150 13,330,000 30,315,000 43,645,000 0.19% 246 2009-10 177,641 13,075,000 29,285,000 42,360,000 0.20% 238 2010-11 176,320 12,805,000 28,225,000 41,030,000 0.19% 233 2011-12 177,445 12,525,000 27,100,000 39,625,000 0.19% 223 2012-13 204,951 12,316,280 25,859,898 38,176,178 0.18% 186 2013-14 209,130 12,002,622 24,614,512 36,617,134 0.15% 175 2014-15 213,231 11,673,964 23,304,126 34,978,090 0.13% 164 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years JJV 300 250 255 $186 200 150 $175 100 50 $110 0 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year Source: (1) State of California, Finance Department City of Santa Clarita Direct and Overlapping Tax and Assessment Debt June 30, 2015 2014-15 Assessed Valuation: $26.111.942.635 (Net of Redevelopment Agency Incremental Value of $378.843.6091 2014-15 Population: 213,231 Percent City's Share Total Debt Applicable of Debt 06/30/2015 To Citv °� 06/30/2015 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Los Angeles County Flood Control Distnct $ 15,105,000 Santa Clarita Community College District 191,916,361 William S. Hart Union High School District 376,152,328 William S. Hart Union High School District- Community Facilities District No. 87-1 295,000 William S. Hart Union High School District- Community Facilities District No. 90-1 465,000 Los Angeles County Community College and Unified School Districts 14,178,930,000 Castaic Union School District 14,814,428 Newhall School Distnct 17,700,000 Newhall School Distnct School Facilities Improvement District No. 2011-1 55,992,354 Saugus Union School District 36,604,684 Saugus Union School District School Facilities Improvement Distnct No. 2011-1 20,000,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 1 7,785,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 2 8,535,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 3 8,110,000 Sulphur Springs Union School District 34,291,036 City of Santa Clarita Open Space and Parkland Assessment District 15,175,988 City of Santa Clarita Community Facilities District No. 2002-1 15,830,000 City of Santa Clarita 1915 Act Bonds 810,000 Los Angeles County Regional Park and Open Space Assessment District 82,880,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT DIRECT AND OVERLAPPING GEN ERAL FUND DEBT: Los Angeles County General Fund Obligations $1,885,330,518 Los Angeles County Superintendent of Schools - Certificates of Participation 8,719,113 Los Angeles County Sanitation District No. 32 Authority 19,165,306 Santa Clarita Community College District- Certificates of Participation 17,700,000 William S. Hart Union High School District- Certificates of Participation 6,000,000 Castaic Union School District- Certificates of Participation 3,870,000 Saugus Union School District- Certificates of Participation 26,510,000 Sulphur Springs Union School Distnct- Certificates of Participation 24,272,492 Los Angeles Unified School Distnct- Certificates of Participation 307,180,000 City of Santa Clarita Obligations 20,319,717 Total Gross Direct and Overlapping General Fund Debt Less: Los Angeles County General Fund Obligations supported by landfill revenues Total Net Direct and Overlapping General Fund Debt OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 35,255,000 Total Direct Debt Gross Total Overiapping Debt Net Total Overlapping Debt GROSS COMBINED TOTAL DEBT N ET COMB IN ED TOTAL DEBT 2.195% $ 331,555 71.219% $ 136,680,914 71.208% $ 267,850,550 100.000% $ 295,000 100.000% $ 465,000 0.000% $ 1,418 27.232% $ 4,034,265 60.035% $ 10,626,195 61.210% $ 34,272,920 84.185% $ 30,815,653 85.357% $ 17,071,400 100.000% $ 7,785,000 100.000% $ 8,535,000 100.000% $ 8,110,000 92.330% $ 31,660,914 100.000% $ 15,175,988 100.000% $ 15,830,000 100.000% $ 810,000 2.174% $ 1,801,811 $ 592,153,582 2.174% $ 40,987,085 2.174% $ 189,554 73.470% $ 14,080,750 71.219% $ 12,605,763 71.208% $ 4,272,480 27.232% $ 1,053,878 84.185% $ 22,317,444 92.330% $ 22,410,792 0.00001% $ 31 100.000% $ 20,319,717 138,237,494 98,806 $ 138,138,688 100.000% 35,255,000 $ 35,495,705 745,326,359 $ 745,227,553 $ 765,646,076 $ 765,547,270 (1) Percentage of overlapping debt applicable to the city is estimated using taxable assed property value. Applicable percentages were estimated by determining the portion ofthe overiapping district's assessed value that is within the boundaries of the city divided bythe distnct's total taxable valu (2) Includes $217,615 Capital Lease obligations and $300,000 CDBG Loan. (3) Excludes tax and revenue anticipation notes, enterpnse revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2014-15 Assessed Valuation: Direct Debt ($15,220,000)...........................................................................0.06% Total Overlapping Tax and Assessment Debt......................................................2.27 % Total Direct Dept ($35,349,720)...................................................................0.14% Gross Combined Total Debt...........................................................................2.93% Net Combined Total Debt..............................................................................2.93 % Ratios to Redevelopment Successor Aaencv Incremental Valuation ($378.843.609): Total Overlapping Tax Increment Debt..............................................................9.31 % Source: MuniServices, LLC 181 City of Santa Clarita Legal Debt Margin Information Last Ten Fiscal Years Debt limit percentage 15% 15% 15% 15% 15% Debt limit 961,696,007 926,176,818 802,469,301 808,374,735 804,661,752 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin $ 961,696,007 $ 926,176,818 $ 802,469,301 $ 808,374,735 $ 804,661,752 Total debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% 0% Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarita, Administrative Services Department - Finance Division ME FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 Assessed valuation $ 25,645,226,854 $ 24,698,048,493 $ 21,399,181,358 $ 21,556,659,612 $ 21,457,646,707 Conversion percentage 25% 25% 25% 25% 25% Adjusted assessed valuation 6,411,306,714 6,174,512,123 5,349,795,340 5,389,164,903 5,364,411,677 Debt limit percentage 15% 15% 15% 15% 15% Debt limit 961,696,007 926,176,818 802,469,301 808,374,735 804,661,752 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin $ 961,696,007 $ 926,176,818 $ 802,469,301 $ 808,374,735 $ 804,661,752 Total debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% 0% Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarita, Administrative Services Department - Finance Division ME FISCAL YEAR 09-10 OM9 07-08 06-07 05-06 $21,600,880,848 $22,1]3,326,025 $21]40,884,855 $19,1]]126]42 $1],160,386,81] 25/0 25/0 25/0 25/0 25/0 5400 220 212 5543,331506 5,435221214 4,794281,686 4290,096,]04 810,033,032 831,499,]26 815283,182 ]19,142253 643514,506 $ 810,033,032 $ 831,499]26 $ 815283,182 $ ]19,142253 $ 643,514506 i o00 9N goo 600 sao 4ao rzao lao 0 05-06 06-07 OJ -08 CB -09 09-10 10.11 11-12 12-13 1314 14]5 LEGAL DEBT MARGIN FISCAL YEAR 183 City of Santa Clarita Pledged Revenue Coverage Last Ten Fiscal Years TRANSIT LESS NET Fiscal TRANSIT OPERATING AVAILABLE DEBT SERVICE Year REVENUES (1) EXPENSES (2) REVENUES Principal Interest COVERAGE 2005-06 $22,041,436 $ 17,242,035 $ 4,799,401 2006-07 19,468,288 19,033,240 435,048 2007-08 24,888,921 22,204,777 2,684,144 2008-09 26,612,418 23,014,324 3,598,094 2009-10 21,179,438 23,525,855 (2,346,417) 2010-11 32,507,582 24,270,533 8,237,048 2011-12 26,133,433 25,175,688 957,745 2012-13 29,420,486 25,901,822 3,518,664 2013-14 33,298,907 27,044,874 6,254,034 2014-15 24,008,186 28,292,380 (4,284,194) $ 332,993 $ 86,230 1.90% 349,449 69,388 2.15% 366,720 60,298 1.72% 384,846 42,172 1.60% 236,999 23,149 1.23% 248,304 11,844 0.80% - - 0.00% NOTE: (1) Includes Other revenues, Transfers in and Capital contributions (2) Includes Transfers out and Other expenses m City of Santa Clarita Demographic and Economic Statistics Last Ten Calendar Years YEAR CITY OF SANTACLARITA POPULATION ^.' AVERAGE ANNUAL PERCENTAGE INCREASE LOS ANGELES COUNTY POPULATION ".' AVERAGE ANNUAL PERCENTAGE INCREASE PER CAPITA PERSONAL INCOME f23 TOTAL PERSONAL INCOME (2) UNEMPLOYMENT RATE (3) 2006 165,243 -0.11% 9,798,609 -0.18% 36,917 385,732,651 4.20% 2007 173,979 5.29% 9,780,808 -0.18% 39,066 402,107,608 2.70% 2008 174,355 0.22% 9,785,474 0.05% 44,727 567,707,000 4.70% 2009 175,103 0.43% 9,801,096 0.16% 43,119 550,832,000 7.70% 2010 176,056 0.54% 9,822,121 0.21% 43,999 565,365,000 7.70% 2011 176,320 0.15% 9,818,605 -0.04% 44,423 575,044,998 7.60% 2012 177,445 0.64% 9,884,632 0.67% 46,337 604,831,837 6.90% 2013 204,951 15.50% 9,958,091 0.74% 48,425 635,891,798 6.60% 2014 209,130 2.04% 10,041,797 0.84% N/A N/A 4.70% 2015 212,231 1.48% 10,136,559 0.94% N/A N/A 6.40% 17.00% 15.00% 13.00% 11.00% 9.00% 7.00% 5.00% 3.00% 1.00% -1.00% 15.50% 5.29% -0.11% 022% 0.43% 0.54% ° ° ° 0.64% 1.48% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YEAR Sources: (1) State of California, Finance Department, as of 1/1/2015 (2) U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Personal Income and Unemployment rates are for the regional area, Los Angeles. The City's related information is not available. Information lags two years. (3) State of California, Department of Employment Development (EDD), September 18, 2015 185 City of Santa Clarita Principal Employers Current Fiscal Year and Nine Fiscal Years Ago * As of February 2015 NOTE: (1) Non-governmental employers Source: 2015 Santa Clarita Valley- Real Estate and Economic Outlook, 2006 CAFR 2015* 2006 PERCENT PERCENT NUMBER of NUMBER of of TOTAL of TOTAL EMPLOYER EMPLOYEES EMPLOYMENT EMPLOYER EMPLOYEES EMPLOYMENT Six Flags Magic Six Flags Magic Mountain 3,200 11.35% Mountain 3,878 19.09% Princess Cruises 1,885 6.69% Princess Cruises 1,850 9.11% Henry Mayo Newhall Henry Mayo Newhall Memorial Hospital 1,640 5.82% Memorial Hospital 1,355 6.67% Quest Diagnostics (formerly Speciality Laboratories) 850 3.02% The Master's College 741 3.65% Boston Scientific 780 2.77% Speciality Laboratories 700 3.45% The Master's College 760 2.70% HR Textron 688 3.39% Woodward HRT (formerly HR Textron) 728 2.58% Cal Arts 510 2.51% Advanced Bionics 700 2.48% Arvato Services 505 2.49% Cal Arts 690 2.45% Aerospace Dynamics 437 2.15% Walmart 624 2.21% Fanfare Media Works 407 2.00% Largest firms(') 11,857 42.07% Largest firmsr'r 11,071 54.50% All others 16,329 57.93% All others 9,243 45.50% Grand total 28,186 100.00% Grand total 20,314 100.00% * As of February 2015 NOTE: (1) Non-governmental employers Source: 2015 Santa Clarita Valley- Real Estate and Economic Outlook, 2006 CAFR City of Santa Clarita Full -Time and Part -Time City Employees by Function Last Ten Fiscal Years Function General government Public safety (1) Public work s Community development Parks and Recreation Transit Totals 395.00 390.00 385.00 380.00 375.00 370.00 365.00 360.00 355.00 350.00 345.00 340.00 87.60 87.60 8960 84 35 FISCAL YEAR 8975 95 75 91.75 8600 96.00 125.00 122.00 12900 126.00 127.00 12800 135 50 136 50 14-15 13-14 12-13 11-12 10-11 09-10 0849 0748 06-07 05-06 87.60 87.60 8960 84 35 85.75 8975 95 75 91.75 8600 96.00 125.00 122.00 12900 126.00 127.00 12800 135 50 136 50 13350 115.00 41.00 41.00 3200 3050 33.00 3300 3600 35.00 3300 36.00 111.15 109.15 10815 10500 10650 11050 11150 11050 108.00 106.00 11.00 11.00 11 00 13 00 12.00 12.00 14 00 11.00 11.00 8.00 375.75 370.75 36975 359 75 364 25 373 25 392 75 384.75 37150 361.00 CITY OF SANTA CLARITA - EMPLOYEES Last Ten Fiscal Years 0546 0647 0748 0849 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year (1) Police and Fire services have been provided by the County Source: City of Santa Clarita, Administrative Services Department - Finance Division 187 City of Santa Clanta Operating Indicators by Function Last Ten Fiscal Years Function 14-15 13-14 12-13 11-12 10-11 09-10 OM9 07-08 06-07 05-06 Police Parking citations issued 4,765 4786 5726 5521 6577 5,114 4,126 5257 4587 6,042 Parking revenue collected $ 320,682 $ 323,040 $ 341,607 $ 335,663 $ 323,408 $ 238,478 $ 235,634 $ 288,076 $ 334927 $ 27257 Public works: Street resurfacing (miles) 800 209 18.0 24.0 24.0 33.8 14.0 154 154 165 Parks and Recreation Number of recreation classes 2189 2557 2548 2,106 2,080 2,447 2284 2393 2535 2357 Number of facility rentals (times) 19,018 14,604 13,000 11,042 10,754 10239 9,801 9,767 19,645 19,435 Transit Number of customers served ru 3,422,015 3 540 969 3,661302 3,612,060 3724,490 3922,052 4210,842 3,821299 3 733 299 3718,640 NOTE. (1) The City contracts the Los Angeles County Sheriff Department for its Police services. The number of citations issued and money collected are within the City's boundaries. (2) Number of customers served Includes those outside of the City boundaries. Source City of Santa Fishing Administrative Services Department- Finance Division City of Santa Clarita Capital Asset Statistics by Function Last Ten Fiscal Years Function Public works: Streets (miles) Street lights M Traffic signals (City Jurisdiction) Traffic signals (Joint Jurisdiction) Parks and recreation: Number of parks Community centers Transit: Stations FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 497 496 496 496 496 496 496 496 496 496 17,843 17,843 17,843 15,081 14,963 14,939 14,739 14,429 14,000 13,200 180 177 177 171 170 166 172 176 166 167 5 5 5 6 1 6 5 4 4 5 32 29 29 24 23 20 20 20 19 18 2 2 1 1 1 1 1 1 1 1 4 4 4 4 4 4 4 4 4 4 (1) All of the above referred streetlights are/were owned and maintained by Edison Company. The Highway Safety Lights (HSL) are the streetlights attached to traffic signals (817) and those are City owned and maintained through a contract with the County. The City took over the streetlights from the County in 1998 and the City Engineering division established the inventory reports since 2001. Source: City of Santa Clarita, Administrative Services Department - Finance Division We CITY Lack Cover FINAL Color chaogeELEEFS. p If 11/6/2015 1019:11 AM Suite 300 Santa Clarita, California 91355 santa-clarita.com Santa Clarita Open Space Preservation District Financial Report Year Ended June 30, 2015 THE POWER OF BEING UNDERSTOORSM AUDIT I TAX [ CONSULTING Contents Independent Auditor's Report 1-2 Basic Financial Statements Government -wide financial statements: Statement of net position 3 Statement of activities 4 Fund financial statements: Governmental fund statements: Balance sheet 5 Reconciliation of the governmental funds balance sheet to the government -wide statement of net position 6 Statement of revenues, expenditures, and changes in fund balance 7 Reconciliation of the governmental funds statement of revenues, expenditures, and changes in fund balance to the government -wide statement of activities 8 Notes to financial statements Required Supplementary Information (Unaudited) M Budgetary comparison schedule—Santa Clarita Open Space Preservation District 17 Note to required supplementary information 18 ■= Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California RSM RSM US LLP Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and the major fund of the Open Space Preservation District (the District) of the City of Santa Clarita (the City) as of and for the year ended June 30, 2015 and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and the major fund of the District as of June 30, 2015 and the respective changes in financial position thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING R5M US LLP is the U.5. member firm of RSM International, a global network of independent audit tax, and consultingfirms. Mtit rsmuscom/aboutus for more information regarding RSM US LLP and RSM International. Emphasis of a Matter As discussed in Note 1 to the financial statements, the financial statements present only the District and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2015, and the changes in financial position for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matter Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the financial statements and other knowledge we obtained during our audit of the 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. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report under a separate cover dated December 24, 2015, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. P -5m— U:�- LLP Irvine, California December 24, 2015 Basic Financial Statements Government -Wide Financial Statements Santa Clarita Open Space Preservation District Statement of Net Position June 30, 2015 Assets Governmental Activities Current Assets Pooled cash and investments $ 5,507,527 Receivables: 1,433,334 Interest 10,979 Special assessments 25,063 Total current assets 5,543,569 Noncurrent Assets Restricted assets: Cash and investments 20,941 Cash and investments with fiscal agents 1,433,334 Capital assets: Nondepreciable assets 19,862,518 Depreciable assets, net 72,381 Capital assets, net 19,934,899 Total noncurrent assets 21,389,174 Total assets 26,932,743 Liabilities Current Liabilities Accounts payable and accrued liabilities 25,103 Interest payable 173,415 Certificates of participation, current portion 150,000 Total current liabilities 348,518 Noncurrent Liabilities Certificates of participation 15,024,126 Total noncurrent liabilities 15,024,126 Total liabilities 15, 372, 644 Net Position Net Investment in Capital Assets Restricted for Open Space Preservation Total net position See Notes to Financial Statements. 3 6,215,048 5,345,051 $ 11,560,099 Santa Clarita Open Space Preservation District Statement of Activities For the Year Ended June 30, 2015 General Revenues Investment income 48,982 Miscellaneous 10, 000 Transfers from City of Santa Clarita (10,714) Total general revenues and transfers 48,268 Change in net position 1,107,140 Net position, beginning of year 10,452,959 Net position, end of year $ 11,560,099 See Notes to Financial Statements. 0 Program Net Revenue Revenue (Expense)and Charges for Changes in Functions/Programs Expenses Services Net Position Governmental Activities General government $ 382,116 $ 2,146,498 $ 1,764,382 Interest and fiscal charges 705,510 - (705,510) Total governmental activities $ 1,087,626 $ 2,146,498 1,058,872 General Revenues Investment income 48,982 Miscellaneous 10, 000 Transfers from City of Santa Clarita (10,714) Total general revenues and transfers 48,268 Change in net position 1,107,140 Net position, beginning of year 10,452,959 Net position, end of year $ 11,560,099 See Notes to Financial Statements. 0 Fund Financial Statements Santa Clarita Open Space Preservation District Balance Sheet Governmental Funds June 30, 2015 General Assets Fund Pooled Cash and Investments $ 5,507,527 Receivables Interest 10,979 Special assessments 25,063 Restricted Assets Cash and investments 20,941 Cash and investments with fiscal agents 1,433,334 Total assets $ 6,997,844 Liabilities and Fund Balance Liabilities Accounts payable and accrued liabilities $ 25,103 Total liabilities 25,103 Fund Balance Restricted for open space preservation 5,539,407 Restricted for debt service 1,433,334 Total fund balance 6,972,741 Total liabilities and fund balance $ 6,997,844 See Notes to Financial Statements. 5 Santa Clarita Open Space Preservation District Reconciliation of the Governmental Funds Balance Sheet to the Government -Wide Statement of Net Position June 30, 2015 Fund balance of governmental funds $ 6,972,741 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Those capital assets consist of: Nondepreciable assets 19,862,518 Depreciable assets, net of accumulated depreciation 72,381 Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Those long-term liabilities consist of: Certificates of participation (15,220,000) Less: Unamortized net bond discount 45,874 Accrued interest payable on long-term liabilities does not require the use of current financial resources and therefore are not reported in the governmental funds. (173,415) Net position of governmental activities $ 11,560,099 See Notes to Financial Statements. Santa Clarita Open Space Preservation District Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds For the Year Ended June 30, 2015 Expenditures: General Fund Revenues: Special assessments $ 2,146,498 Investment income 48,982 Other revenue 10,000 Total revenues 2,205,480 Expenditures: Current: Open space preservation 378,853 Capital outlay 5,728,566 Debt service: Principal 120,000 Interest and fiscal charges 703,944 Total expenditures 6,931,363 Excess of revenues over (under) expenditures (4,725,883) Other financing sources (uses): Transfers to other funds of the City of Santa Clarita (10,714) Total net other financing sources (uses) (10,714) Net change in fund balance (4,736,597) Fund balance, beginning of year 11,709,338 Fund balance, end of year $ 6,972,741 See Notes to Financial Statements. Santa Clarita Open Space Preservation District Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance to the Government -Wide Statement of Activities For the Year Ended June 30, 2015 Net change in fund balance—total governmental funds $ (4,736,597) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those assets are allocated over the estimated useful lives as depreciation expense. The following were the amounts of capital outlay and depreciation expense in the current period: Capital outlay 5,728,566 Depreciation expense (3,263) Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. 120,000 Other expenses in the statement of activities that do not use current financial resources are not reported as expenditures in the governmental funds: Change in accrued interest 1,186 Amortization of bond premium (2,752) Change in net position of governmental activities $ 1,107,140 See Notes to Financial Statements. Santa Clarita Open Space Preservation District Notes to Financial Statements Note 1. Organization and Summary of Significant Accounting Policies Organization: On July 17, 2007, the City of Santa Clarita (the City) established the Santa Clarita Open Space Preservation District (the District) pursuant to the provisions of the Landscape and Lighting Act of 1972, being Part 2 of Division 15 of the California Street and Highway Code. The purpose of the District is to fund a portion of the City's open space, park and parkland program consisting of the acquisition, preservation, improvement, servicing, financing and maintenance of open -space land, parks and parkland, and appurtenant equipment and facilities, including the payment of debt service, of benefit to the property within the District. Facilities include, but are not limited to, open -space land, parks, parklands, the Santa Clarita River Watershed, trail systems and wildlife corridors. These are financed by special assessments levied on parcels within the City boundaries. The boundaries of the District are the same as the boundaries of the City. The City established a special revenue fund to account for the activities of the District. Basis of presentation: The District's statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Governmental Accounting Standards Board (GASB) is the acknowledged standard-setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States. The financial statements were prepared from only the accounts of the District and, therefore, do not present the financial position or results of operations of the City. Government -wide financial statements: The District's government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all the activities of the District. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. The government -wide financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the District's assets and liabilities, including capital assets, are included in the accompanying statement of net position. The statement of activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Fund financial statements: Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures, and changes in fund balance. These statements are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures, and changes in fund balance present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in the fund balance. The primary revenue sources are special assessments and interest revenue. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are considered available if they are collected within 90 days of the end of the current fiscal period, except for special assessments, which are within 60 days. Santa Clarita Open Space Preservation District Notes to Financial Statements Note 1. Organization and Summary of Significant Accounting Policies (Continued) Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures are recorded only when payment is due. Cash and investments: The District's cash and investments balance was pooled with various other City funds for deposit and investment purposes. The City's treasury is responsible for the cash management of the District's cash balance, which pools available cash for investment purposes. Each City fund owns a share of pooled cash and investments, which are separately maintained, and interest income was apportioned based on its average month-end cash balances to the total of the pooled cash and investments. The unexpended bond proceeds of the District's bonds are classified as restricted assets because their use is completely restricted to the purpose for which the bonds were originally issued. The District's investments held by fiscal agents are pledged for payment or security of certain long-term debt issuances. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of the bonds, may be invested in accordance with the ordinance, resolution or indentures specifying the types of investments its trustees or fiscal agents may make. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid investments with maturities of one year or less at the time of purchase are stated at amortized cost. All other investments are stated at fair value. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. Capital assets: The District reports capital assets that are titled by the City, consisting of land and site improvements that were acquired or constructed with capital improvement debt that is pledged by the District's special assessment revenue. The District is responsible for the management and maintenance of the capital assets. Capital assets are defined as assets having an initial cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are capitalized in the governmental activities financial statement at historical cost or estimated historical cost if purchased or constructed. The site improvements are being depreciated over 25 years on a straight-line basis. The governmental fund financial statements do not report capital assets. Instead, capital asset purchases are reported as capital outlay expenditures. As such, capital assets are reported as a reconciling item in the reconciliation of the governmental funds balance sheet to the government -wide statement of net position. Special assessments: Special assessment taxes are attached as enforceable liens on real property on July 1, the beginning of the fiscal year, and are due in two installments on November 1 and February 1; however, no penalties or interest are assessed until December 10 and April 10, respectively. These taxes are determined annually based on property values, subject to limits based on Proposition 13, as of January 1 of the levy year, which is prior to the end of the previous fiscal year. The County of Los Angeles bills and collects these taxes for the District and are remitted on a monthly basis. 10 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 1. Organization and Summary of Significant Accounting Policies (Continued) Net Position and Fund Balance Net position: Net position represents the difference between assets and deferred outflows, and liabilities and deferred inflows, and is classified into three categories: Net investment in capital assets: Consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets, and excludes unspent debt proceeds. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction or improvement of those assets or related debt are also included in this component of net position. Restricted: Represents the net position that is not accessible for general use due to externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted: Represents the residual amounts not classified in the other two categories and represents the net equity available to the District. Fund financial statements: In the governmental fund financial statements, fund balances are classified in the following categories: Nonspendable: Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, and items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds. Restricted: Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed: Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at the District's highest level of decision making, the City Council, and that remain binding unless removed in the same manner. Assigned: Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The deputy city manager authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted to him through a resolution adopted by the City Council. Unassigned: This includes the excess residual amounts in the General Fund, and the residual deficit of all other governmental funds, which have not been restricted, committed or assigned to specific purposes. 11 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 1. Organization and Summary of Significant Accounting Policies (Continued) Spending Policy Government -wide financial statements: When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the District's policy is to apply restricted net position first. Fund financial statements: When expenditures are incurred for purposes for which all restricted, committed, assigned and unassigned fund balances are available, the District's policy is to apply the following, in the following order, except for instances wherein an ordinance specifies the fund balance: restricted, committed, assigned then unassigned. Use of estimates: The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. Note 2. Cash and Investments The District's cash and investments consisted of the following at June 30, 2015: Pooled cash and investments $ 5,507,527 Restricted: Cash and investments 20,941 Cash and investments with fiscal agent 1,433,334 Total $ 6,961,802 Pooled cash and investments $ 5,507,527 Money Market Funds 1,454,275 $ 6,961,802 The deposit and investment disclosures required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, as they relate to the pooled cash and investments, are reported in the annual report of the City. The pooled cash and investments are unrated, and average maturity is 30 days or less. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City treasury is responsible for the custodial credit risk of the restricted cash and investments, and is reported in the annual report of the City. 12 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 2. Cash and Investments (Continued) Investments authorized by debt agreements: Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees: Maximum Percentage or Maximum Maximum Amount of Investment in Authorized Investment Type Maturity Portfolio* One Issuer U.S. Treasury obligations 5 years No limit No limit U.S. government-sponsored enterprise securities 5 years No limit No limit Money market accounts 5 years 15% 10% Local agency investment fund Not applicable $ 50,000,000 No limit * Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. Interest rate risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. At June 30, 2015, the District had the following investment maturities: Investment Type Restricted investments: Money Market Funds Restricted investments with fiscal agent: Money Market Funds 13 Investment Maturity (In Years) Fair Value Less Than 1 $ 20,941 $ 20,941 1,433,334 1,433,334 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 2. Cash and Investments (Continued) Credit risk: Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating, as reported by Standard & Poor's, as of year-end for each investment type: Investment Minimum Rating Investment Type Rating Fair Value Unrated Restricted investments: Money Market Funds Restricted investments with fiscal agent: Money Market Funds None $ 20,941 $ 20,941 None 1,433,334 1,433,334 Custodial credit risk: Custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City treasury is responsible for the custodial credit risk of the restricted cash and investments, and is reported in the annual report of the City. Note 3. Capital Assets At June 30, 2015, the District's capital assets consisted of the following: Capital assets, not being depreciated: Land Total capital assets, not being depreciated Capital assets, being depreciated: Site improvements Total capital assets, being depreciated Less accumulated depreciation: Site improvements Total accumulated depreciation Total depreciable assets, net Total capital assets, net Balance Balance June 30, 2014 Additions Deletions June 30, 2015 $ 14,133,952 $ 5,728,566 $ - $ 19,862,518 14,133,952 5,728,566 - 19,862,518 81,580 - - 81,580 81,580 - - 81,580 (5,936) (3,263) - (9,199) (5,936) (3,263) - (9,199) 75,644 (3,263) - 72,381 $ 14,209,596 $ 5,725,303 $ $ 19,934,899 14 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 4. Long -Term Debt The District had the following long-term liabilities at June 30, 2015: On December 12, 2007, the City, for the benefit of the District, issued $15,525,000 in Certificates of Participation (the Certificates) to provide financing for the costs of acquiring open -space lands, parks and parkland in accordance with the City's open -space, park and parkland programs, purchase a reserve fund surety and fund the costs of delivery of the Certificates. The Certificates are secured by a pledge of special assessment revenues received by the City from the operation of the District. Additionally, there is a backed -up pledge of lease payments to be made by the City to the Santa Clarita Public Financing Authority for the use and occupancy of the Aquatic Center and Sports Complex. The Certificates were issued at a discount of $80,479, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis, and which approximates the effective interest method, for government -wide financial statement purposes. This issuance is composed of $6,000,000 in serial Certificates maturing annually on October 1 from 2011 to 2028 and two -term Certificates (totaling $9,525,000) maturing on October 1, 2033 and October 1, 2037 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the Certificates is payable semiannually on October 1 and April 1 at rates ranging from 4.00 percent to 4.60 percent for the serial Certificates and 4.75 percent for the term Certificates. The City has pledged the future special assessment revenues received from the operation of the District to repay the Certificates. The Certificates are payable solely from all or a portion of the annual special assessment collected for the District. The total principal of $15,220,000 and interest of $10,801,597 remain to be paid on the Certificates as of June 30, 2015. For the current year, principal and interest paid on the Certificates was $823,851 and total special assessment revenues were $2,146,498. The outstanding balance of the Certificates was $15,220,000 at June 30, 2015. 15 Classification Balance Balance Due Within Due In More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year Governmental Activities Certificates of Participation: Series 2007 $ 15,340,000 $ - $ (120,000) $ 15,220,000 $ 150,000 $ 15,070,000 Less discount (48,626) - 2,752 (45,874) - (45,874) Total Certificates of Participation $ 15,291,374 $ $ (117,248) $ 15,174,126 $ 150,000 $ 15,024,126 On December 12, 2007, the City, for the benefit of the District, issued $15,525,000 in Certificates of Participation (the Certificates) to provide financing for the costs of acquiring open -space lands, parks and parkland in accordance with the City's open -space, park and parkland programs, purchase a reserve fund surety and fund the costs of delivery of the Certificates. The Certificates are secured by a pledge of special assessment revenues received by the City from the operation of the District. Additionally, there is a backed -up pledge of lease payments to be made by the City to the Santa Clarita Public Financing Authority for the use and occupancy of the Aquatic Center and Sports Complex. The Certificates were issued at a discount of $80,479, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis, and which approximates the effective interest method, for government -wide financial statement purposes. This issuance is composed of $6,000,000 in serial Certificates maturing annually on October 1 from 2011 to 2028 and two -term Certificates (totaling $9,525,000) maturing on October 1, 2033 and October 1, 2037 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the Certificates is payable semiannually on October 1 and April 1 at rates ranging from 4.00 percent to 4.60 percent for the serial Certificates and 4.75 percent for the term Certificates. The City has pledged the future special assessment revenues received from the operation of the District to repay the Certificates. The Certificates are payable solely from all or a portion of the annual special assessment collected for the District. The total principal of $15,220,000 and interest of $10,801,597 remain to be paid on the Certificates as of June 30, 2015. For the current year, principal and interest paid on the Certificates was $823,851 and total special assessment revenues were $2,146,498. The outstanding balance of the Certificates was $15,220,000 at June 30, 2015. 15 Santa Clarita Open Space Preservation District Notes to Financial Statements Note 4. Long -Term Debt (Continued) Debt service for the Certificates is as follows: Years Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2038 Total Principal Interest Total $ 150,000 $ 698,451 $ 848,451 185,000 691,751 876,751 220,000 683,651 903,651 255,000 674,151 929,151 290,000 663,251 953,251 2,070,000 3,086,313 5,156,313 3,300,000 2,488,341 5,788,341 4,885,000 1,532,231 6,417,231 3,865,000 283,456 4,148,456 $ 15,220,000 $ 10,801,596 $ 26,021,596 Me Required Supplementary Information (Unaudited) Santa Clarita Open Space Preservation District Budgetary Comparison Schedule For the Year Ended June 30, 2015 Revenues: Special assessments Investment income Other revenue Total revenues Expenditures: Current: Open space preservation Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Original Final Actual Variance From Final Budget Positive $ 2,153,400 $ 2,153,400 $ 2,146,498 $ (6,902) 2,892 2,892 48,982 46,090 - - 10,000 10,000 2,166,292 2,166,292 2,205,480 39,188 477,942 525,100 378,853 146,247 - 6,556,662 5,728,566 828,096 120,000 120,000 120,000 - 703,852 703,667 703,944 (277) 1,301,794 7,905,429 6,931,363 974,066 864,498 (5,739,137) (4,725,883) 1,013,254 Other financing uses: Transfers to other funds of the City of Santa Clarita (10,898) (10,898) (10,714) 184 Total other financing uses (10,898) (10,898) (10,714) 184 Net change in fund balance $ 853,600 $ (5,750,035) (4,736,597) $ 1,013,438 Fund balance, beginning of year Fund balance, end ofyear See Note to Required Supplementary Information. 17 11,709,338 $ 6,972,741 Santa Clarita Open Space Preservation District Note to Required Supplementary Information Budgetary Information Annual budgets are adopted on a basis consistent with U.S. GAAP for all governmental funds, except that encumbrances are shown in the year incurred for budgetary purposes. All annual appropriations lapse at fiscal year-end. On or before the last day in January of each year, all operational units submit requests for appropriations to the city manager for budget preparation purposes. Before April 30, the proposed budget is presented to the City Council for review. The City Council holds public hearings and a final budget must be prepared and adopted no later than June 30. The appropriated budget is prepared by fund, function and department. The City's department heads, with approval of the city manager, may make transfers of appropriations within a department and between departments within a fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. Under encumbrance accounting, purchase orders, contracts and other commitments for expenditures are recorded to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures or liabilities, encumbrances outstanding at year-end are reported as restricted fund balance. Unexpended appropriations lapse at year-end and at June 30, 2015. As of June 30, 2015, there are no outstanding encumbrances. M City of Santa Clarita Report to the Honorable Mayor and Members of the City Council December 24, 2015 THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING RSM December 24, 2015 ■= RSM RSM US LLP 18401 Von Karman Ave Fifth Floor Irvine, CA 92612 To the Honorable Mayor and Members of the City Council T +1 949 255 6500 of the City of Santa Clarita F +1 949 255 5091 Santa Clarita, California vwwv.rsmus.com We are pleased to present this report related to our audit of the basic financial statements of the City of Santa Clarita (the City) as of and for the year ended June 30, 2015. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City's financial reporting process. This report is intended solely for the information and use of the City Council and management, and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City of Santa Clarita. Asn— u5- 1--,L7' THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit tax, and consulting firms. Ytit rsmus.com/aboutus for mom information regarding RSM US LLP and RSMlnternational. Contents Required communications 1-2 Summary of significant accounting estimates 3-4 Summary of recorded audit adjustments 5 Summary of uncorrected misstatements 6 Exhibit A—Significant written communications between management and our firm Representation letters Required Communications Generally accepted auditing standards (AU -C 260, The Auditor's Communication With Those Charged With Governance) require the auditor to promote effective two-way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the financial statement audit as well as observations arising from our audit that are significant and relevant to your responsibility to oversee the financial reporting process. Area Comments Our Responsibilities With Our responsibilities under auditing standards generally accepted in Regard to the Financial the United States of America have been described to you in our Statement Audit arrangement letter dated June 18, 2015 Overview of the Planned We have issued a separate communication regarding the planned Scope and Timing of the scope and timing of our audit and have discussed with you our Financial Statement Audit identification of, and planned audit response to, significant risks of material misstatement. Accounting Policies and Preferability of Accounting Policies and Practices Practices Under generally accepted accounting principles, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice. Adoption of, or Change in, Accounting Policies Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. Following is a description of a significant accounting policy changed during the year: • Implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment to GASB Statement No. 68. See Note 12 to the financial statements for information regarding the impact the implementation had on the City. Significant or Unusual Transactions We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Management's Judgments and Accounting Estimates Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates. Audit Adjustments Audit adjustments proposed by us and recorded by City of Santa Clarita are shown in the attached Summary of Recorded Audit Adjustments. Uncorrected Misstatements Uncorrected misstatements are summarized in the attached Summary of Uncorrected Misstatements. Area Comments Disagreements With We encountered no disagreements with management over the Management application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the basic financial statements. Consultations With Other Accountants Significant Issues Discussed With Management Significant Difficulties Encountered in Performing the Audit Significant Written Communications Between Management and Our Firm We are not aware of any consultations management had with other accountants about accounting or auditing matters. No significant issues arising from the audit were discussed with or were the subject of correspondence with management. We did not encounter any significant difficulties in dealing with management during the audit. Copies of significant written communications between our firm and the management of the City, which are the representation letters provided to us by management, are attached as Exhibit A. Summary of Significant Accounting Estimates Accounting estimates are an integral part of the preparation of financial statements and are based upon management's current judgment. The process used by management encompasses its knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates. The following describes the significant accounting estimates reflected in the City's June 30, 2015 basic financial statements. Estimate Useful Lives of Long - Lived Assets Net Pension Liability Accountina Polic The estimated useful lives determined for assets have the following ranges: Site improvements, five to 25 years; buildings and related improvements are five to 50 years, equipment, two to five years; and infrastructure, 20 to 60 years. These assets are depreciated using the straight-line method. Land is a long-lived asset but is not depreciated. Construction in progress is not depreciated until placed into service. Pension plans that meet the criteria for recognition in accordance with GASB Statement No. 68 are measured at the net of actuarially determined total pension liabilities and fiduciary net plan assets. If the total pension liabilities exceed the fiduciary net plan assets, it results in a net pension liability, whereas a net pension asset is recorded if the Management's Estimation Process Management determines useful lives based on past experience, engineer estimates and industry norms. Management monitors and updates useful lives on a regular basis. The impacts of prominent events or circumstances may require management to assess whether an impairment of a capital asset has occurred. A capital asset is considered impaired if both the decline in the service utility of the capital asset is large in magnitude and the event or change in circumstance is outside the normal life cycle of the capital asset. Management utilizes the California Public Employees' Retirement System's (CaIPERS) actuaries for its defined benefit plan. Management reviewed and approved the actuarial assumptions and calculations used to determine the net pension liability and related components. Basis for Our Conclusions on Reasonableness of Estimate We have tested the reasonableness of information underlying management's estimation on the useful lives of long-lived assets. Based on our procedures, we concluded that assigned useful lives of capital assets are reasonable. We tested the reasonableness of the information underlying the actuarial evaluations. Based on our procedures, we concluded that the net pension liability recorded is reasonable, however, an unrecorded adjustment is noted for difference between the 7.50 percent discount rate used to value the total pension liability and the 7.65 percent Basis for Our Conclusions on Management's Reasonableness of Estimate Accounting Policy Estimation Process Estimate Net Pension Liability (Continued) Post -Employment Benefits Other Than Pensions (OPEB) total pension liability is less than the fiduciary net plan assets. An OPEB asset is recorded if contributions exceed the annual required contribution, whereas an OPEB liability is recorded if the contributions are less than the annual required contribution. 0 Management utilizes an actuarial consulting firm to perform an evaluation using the entry age actuarial cost method for its OPEB. Management reviewed and approved the actuarial assumptions and calculations used to determine the OPEB costs. investment return excluding the administrative expense determined by CALPERS. We tested the reasonableness of the information underlying the actuarial evaluations. Based on our procedures, we concluded that the OPEB costs recorded are reasonable. Summary of Recorded Audit Adjustments Governmental Activities Effect—Debit (Credit) Description Assets Liabilities Net Position Revenues Expenses To adjust net OPEB asset To adjust capital assets for current year duplications Record sales tax fourth quarter true -up payment To adjust unavailable revenues Reverse contingent liability for unspent bond proceeds after approval from California Department of Finance To adjust unearned revenues Current year effect of change in net position Effect on ending net position $ 939,848 $ - $ (2,608,731) 665,542 (665,542) - (11,852) 6,104,268 (29,190) $ - $ (939,848) - 2,608,731 11,852 - (6,104,268) 29,190 - - (4,394,343) $ 41,21L_$ 4 435 385 $ (1,003,341) $ 5,397,684 $ (4,394,343) General Fund Effect—Debit (Credit) Description Assets Liabilities Fund Balance Revenues Expenditures • Record sales tax fourth quarter true -up payment $ 665,542 $ (665,542) $ - $ - $ - • To adjust unearned revenues - (29,190) - 29,190 - Current year effect of change in fund balance - - 29,190 $ 29,190 $ Effect on ending fund balance $ 665,542 $ (694,732) $ 29,190 proceeds approved by California Department of Finance Current year effect of change in fund balance Effect on ending fund balance To adjust unavailable revenues Current year effect of change in fund balance Effect on ending fund balance bond proceeds that were approved by California Department of Finance Current year effect of change in net position Effect on ending net position Public Library Special Revenue Fund Effect—Debit (Credit) $ - $ 6,104,268 $ - $ - $ (6,104,268) - - (6,104,268) $ $ 6,104,268 $ $ 6,104,268 $ (Q104,268) Nonmajor Governmental Funds Effect—Debit (Credit) Assets Liabilities Fund Balance Revenues $ - $ (11,852) $ - $ 11,852 $ - - 11,852 $ 11,852 $ $ $ (11,852) $ 11,852 Fiduciary Activities Effect—Debit (Credit' $ (6,104,268) $ - $ - $ 6,104,268 $ - - 6,104,268 $ 6,104,268 $ _L(6,104,268) $ $ 6,104,268 5 Summary of Uncorrected Misstatements During the course of our audit, we accumulated uncorrected misstatements that were determined by management to be immaterial, both individually and in the aggregate, to the financial position, results of operations, cash flows and related financial statement disclosures. Following is a summary of those differences. Reversed opening net position misstatements Unrecorded accounts payables Estimated variance between 7.50% and 7.65% discount rate used to measure net pension Governmental Activities Effect—Debit (Credit) Assets Liabilities Net Position Revenues - $ 3,500 $ - $ (3,500) (12,739) - - 12,739 liability - 2,613,138 - (2,613,138) Current year effect of change in net position - - (2,603,899) $ - $ 2,603,899 Effect on ending net position $ - $ 2,600,399 $(2,600,399) Transit Enterprise Funds (Business -type Activities) Effect—Debit (Credit) Description Assets Liabilities Net Position Revenues Expenses • Estimated variance between 7.50% and 7.65% discount rate used to measure net pension liability $ - $ 95,058 $ - $ - $ (95,058) Current year effect of change in net position - - (95,058) $ - $ 95,058.00 Effect on ending net position $ - $ 95,058 $ (95,058) Bridges and Thoroughfare Special Revenue Fund Effect—Debit (Credit) Description Assets Liabilities Fund Balance Revenues Expenditures Unrecorded accounts payables Current year effect of change in fund balance Effect on ending fund balance discount rate used to measure net pension liability Current year effect of change in net position Effect on ending net position $ (12,739) $ - $ - $ 12,739 - - 12,739 $ - $ 12,739 $ - $ (12,739) $ 12,739 Aggregate Nonmajor Funds Effect—Debit (Credit) $ 10,020 $ - $ - $ (10,020) - - (10,020) $ - $ 10,020 $ - $ 10,020 $ (10,020) Exhibit A—Significant Written Communications Between Management and Our Firm City of SANTA CLARITA 23920 Valencia Boulevard • Suite 300 • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 • FAX: (661) 259-8125 www. san to-clari ta. com December 24,2015 RSM US LLP 18401 Von Karman Ave, 511 Floor Irvine, CA 92612 This representation letter is provided in connection with your audit of the financial statements of the City of Santa Clarita (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects in accordance with accounting principles generally accepted in the United States (U.S. GAAP). We confirm, to the best of our knowledge and belief, as of December 24, 2015: Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated June 18, 2015, for the preparation and fair presentation of the financial statements referred to above in accordance with U S. GAAP. 2. We acknowledge our responsibility 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. 3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 4. Significant assumptions used by us in making accounting estimates are reasonable and reflect our judgment based on our knowledge and experience about past and current events and our assumptions about conditions we expect to exist and courses of action we expect to take. 5. Related -party transactions, and interfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund transfers, long-term loans, leasing arrangements, and guarantees, have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. 6. All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed 7. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP. Mv RSM US LLP December 24, 2015 Page 2 8. We have no direct or indirect, legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders that is not disclosed in the financial statements. 9. We have complied with all aspects of contractual agreements that would have a material effect on the combined financial statements in the event of noncompliance. 10. We have provided all amendments to the California Public Employees' Retirement System (CalPERS) pension plan, and there were no amendments to the pension plan subsequent to the June 30, 2013 valuation date. 11. We do not plan to make frequent amendments to the pension plan. 12. We believe that the actuarial assumptions and methods used to measure the net pension liability and costs for financial accounting purposes are appropriate in the circumstances. 13. We have implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions — an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date — and amendment to GASB Statement No. 68, as discussed in Note 12 to the financial statements. The City has accurately disclosed the effect of adopting the guidance had on its financial position and the changes in net position. 14. We have not completed the process of evaluating the effect that would result from the implementation of GASB pronouncements that were issued but not effective at fiscal year ended June 30, 2015, The City is therefore unable to disclose the effect that adopting the guidance in the GASB pronouncements, as listed in Note 1, will have on its financial position and the results of operations when such guidance is adopted. 15. We have informed you of all uncorrected misstatements. As of and for the Year Ended June 30, 2015, we believe that the effects of the uncorrected misstatements aggregated by you and summarized below are immaterial, both individually and in the aggregate to the basic financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. Governmental Activities Effect—Debit (Credit_) Descri tion Assets Liabilities Net Position Revenues Expenses Reversed opening net position misstatements $ - $ - $ 3,500 $ - $ (3,500) Unrecorded accounts payables - (12,739) - - 12,739 Estimated variance between 7.50% and 7.65% discount rate used to measure net pension liability - 2,613,138 - (2,613,138) Current year effect of change in net position (2,603,899) $ - $ (2,603,899) Effect on ending net position $ $ 2,600,399 $ (2,600,399) RSM US LLP December 24, 2015 Page 3 Description Estimated variance between 7.50% and 7.65% discount rate used to measure net pension liability $ Transit Enterprise Funds (Business -type Activities) Effect—Debit (Credit) Assets Liabilities Net Position Revenues Expenses - $ 95,058 $ - $ - $ (95,058) Current year effect of change in net position (95,058) 5 $ (95,058) Effect on ending net position $ 5 95.058 $ (95,058) Bridges and Thoroughfare Special Revenue Fund Effect—Debit (Credit) Description Assets Liabilities Fund Balance Revenues Expenditures Unrecorded accounts payables $ $ (12,739) $ - $ - $ 12,739 Current year effect of change in fund balance 12,739 $ - $ 12,739 Effect on ending fund balance $ $ (12,739) $ 12,739 Aggregate Nonmajor Funds Effect—Debit (Credit) Description Assets Liabilities Net Position Revenues Expenses Estimated variance between 7.50% and 7.65% discount rate used to measure net pension liability $ - $ 10,020 $ - $ - $ (10,020) Current year effect of change in net position (10,020) $ - $ (10,020) Effect on ending net position S 10,020 $ 10,020) Information Provided 16. We have provided you with'. a. Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation, and other matters; b. Additional information that you have requested from us for the purpose of the audit; c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence. d Minutes of the meetings of the City Council or summaries of actions of recent meetings for which minutes have not yet been prepared. 17. All transactions have been recorded in the accounting records and are reflected in the financial statements 18. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud. RSM US LLP December 24, 2015 Page 4 19 We have no knowledge of allegations of fraud or suspected fraud, affecting the City's financial statements involving: a Management. b Employees who have significant roles in the internal control. c. Others where the fraud could have a material effect on the financial statements. 20. We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial statements received in communications from employees, former employees, analysts, regulators, or others. 21 We have no knowledge of noncompliance or suspected noncompliance with laws and regulations whose effects were considered when preparing financial statements. 22. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements 23. We have disclosed to you the identity of the City's related parties and all the related -party relationships and transactions of which we are aware 24 We are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize, and report financial data. 25. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. Supplementary Information 26 With respect to supplementary information presented in relation to the financial statements as a whole: a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. c. The methods of measurement or presentation have not changed from those used in the prior period. 27. With respect to the management's discussion and analysis, budgetary comparison information, schedules of funding progress, changes in the City's net pension liability and related ratios, and City contributions presented as required by the Governmental Accounting Standards Board to supplement the basic financial statements: a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by the Governmental Accounting standards Board. c. The methods of measurement or presentation have not changed from those used in the prior period'. RSM US LLP December 24, 2015 Page 5 28 During the course of your audit, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. Compliance Considerations In connection with your audit conducted in accordance with Government Auditing Standards, we confirm that: 29. We are responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework 30. We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to the auditee. 31. We are aware of no instances that have occurred, or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 32. We are aware of no instances that have occurred, or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that have a material effect on the determination of financial statement amounts. 33. Management is responsible 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 34. Management acknowledges its responsibility for the design, implementation and maintenance of internal controls to prevent and detect fraud. 35. Management has taken timely and appropriate steps to remedy fraud; noncompliance with provisions of laws, regulations, contracts and grant agreements; or abuse that the auditor reports. 36. Management has a process to track the status of audit findings and recommendations. 37. Management has identified for the auditor previous audits, attestation engagements and other studies related to the audit objectives and whether related recommendations have been implemented. 38. Management acknowledges its responsibilities as it relates to non -audit services performed by the auditor, including a statement that it assumes all management responsibilities; that it oversees the services by Carmen Magana, Finance and Technology Manager, who possesses suitable skill, knowledge or experience; that it evaluates the adequacy and results of the services performed; and that it accepts responsibility for the results of the services. RSM US LLP December 24, 2015 Page 6 In connection with your audit of federal awards conducted in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, we confirm: 1. Management is responsible for complying, and has complied, with the requirements of Circular A- 133. 2. Management is responsible for understanding and complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of its federal programs. 3. Management is responsible for establishing and maintaining, and has established and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that the City is managing federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on its federal programs. 4. Management has prepared the schedule of expenditures of federal awards in accordance with Circular A-133 and has included expenditures made during the period being audited for all awards provided by federal agencies in the form of grants, federal cost -reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance. 5. Management has identified and disclosed to the auditor the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on each major program. 6. Management has made available all contracts and grant agreements (including amendments, if any) and any other correspondence relevant to federal programs and related activities that have taken place with federal agencies or pass-through entities. 7. Management has identified and disclosed to the auditor all amounts questioned and all known noncompliance with the direct and material compliance requirements of federal awards. 8. Management believes that the City has complied with the direct and material compliance requirements (except for noncompliance it has disclosed to the auditor). 9. Management has made available all documentation related to compliance with the direct and material compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. 10. Management has provided to the auditor its interpretations of any compliance requirements that are subject to varying interpretations. 11. Management has disclosed to the auditor any communications from grantors and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditor's report. 12. Management has disclosed to the auditor the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor's report. 13. Management is responsible for taking corrective action on audit findings of the compliance audit 14. Management has provided the auditor with all information on the status of the follow-up on prior audit findings by federal awarding agencies and pass-through entities, including all management decisions RSM US LLP December 24, 2015 Page 7 15, Management has noted Identified any subsequent events that praride additional evidence with respect to conditions that exlsled at the end of the reporting period that affect noncompliance during the reporting period. 16. Management has disclosed all known noncompliance with direct and material compliance requirements occurring subsequent to the period covered by the audilor's report or stating that there were no such known instances, 17. Management has not Identified any changes in internal control over compliance or other factors that might significantly affect intemal control, including any corrective action taken by m?nagement with regard to significant deficlencies and material weaknesses in intemal control over compliance, have occurred subsequent to the date as of which compliance is audited. 18. Federal program financial reports and claims for advances and reimbutsemenls are supported by the books and records from which the basic financial statements have been prepared. 19. The copies of federal program financial reports provided to the auditor are true copies of the reports submitted, or electronically transmitted, to the federal agency or pass-through entity, as applicatule, 20. Management has monitored subrecipients to determine that they have expended pass-through assistance In accordance with appl;cab!e laws and regulations and have met the requirements of Circular A-133. 21. Management has charged costs to federal awards in accordance %ilh applicable cost principles. 22. Management Is responsible for, and has accurately prepared, the summary schedule of prior audil findings to include all findings required to be included by Circular A-133. 23. Management has accurately completed the appropriate sections ofthe data collection form. 24. If appEcab!e, management has disclosed all contracts or other agreements with service organ,sations, CITY OF SANTA CLARITA, CA 1 91666 Hernandez, Deputy City Manager and Director of Adminislrative Services Carmen l�fagana, Finance and Technology Manager City of SANTA GLARITA 23920 Valencia Boulevard • Suite 300 • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 • FAX: (661) 259-8125 www.santa-clarita.com December 24, 2015 RSM US LLP 18401 Von Karman Ave. 5�h Floor Irvine, CA 92612 In connection with your engagement to perform, in accordance with attestation standards established by the American Institute of Certified Public Accountants, specified agreed-upon procedures with respect to certain records and transactions of the City of Santa Clarita (the City) for the year ended June 30, 2015 for the purpose of determining as to whether the City's appropriations limit calculation was computed in accordance with Article XIII -B of the Constitution of the State of California, we confirm, to the best of our knowledge and belief, the following representations made to you during the course of your engagement. We confirm, to the best of our knowledge and belief, as of December 24, 2015: 1. We understand that we have the responsibility for the appropriations limit calculation. 2. We are responsible for determining that such criteria are appropriate for our purposes. 3. There are no known matters contradicting the compliance with the appropriations limit calculation for the year ended June 30, 2015 or through the date of this letter. 4. We have made available to you all records and related data relevant to the subject matter and the agreed-upon procedures. 5. There has been no knowledge of fraud or suspected fraud affecting the entity involving: a. Management, b. Employees who have significant roles in internal control. c. Others where fraud could have a material effect on the appropriation limitation calculation. 6. We acknowledge our responsibility for the design and implementation of programs and controls to provide reasonable assurance that fraud is prevented and detected. 7. We have no knowledge of any allegations of fraud or suspected fraud affecting the City received in communication from employees, former employees, analysts, regulators or others. 8. We have responded fully to all inquiries made to us by you during your engagement 9. During the course of your engagement, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. RSM US LLP December 24, 2016 Page 2 CrrY OF SANTA CLARITA, CALIFIRNIA barren Kernandez, Deputy City Manager and Director of Adminislralive Services Carmen Mama, Finance and Technology Manager •f1 -1 �� 'i7 :� '. � III I .• - _ _ _ II Ili ,` .- - �.+ ,�• _ j�r%;` City of SANTA GLARITA 23920 Valencia Boulevard • Suite 300 • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 • FAX: (661) 259-8125 www.santa-clarita.com December 24, 2015 RSM US LLP 18401 Von Karman Ave. 51h Floor Irvine, CA 92612 This representation letter is provided in connection with your audit of the financial statements of the Air Quality Improvement Special Revenue Fund (the Fund), a fund of the City of Santa Clarita, as of and for the year ended June 30, 2015 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects in accordance with accounting principles generally accepted in the United States (U.S. GAAP). We confirm, to the best of our knowledge and belief, as of December 24, 2015: Financial Statements 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated June 18, 2015, for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP. 2. We acknowledge our responsibility 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. 3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud. 4 Related -party relationships have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. 5. We have no knowledge of events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed 6. We have no knowledge of known or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP 7. We have no direct or indirect, legal or moral obligation for any debt of any organization, public or private that is not disclosed in the financial statement. 8. We have no knowledge of any uncorrected misstatements in the financial statements. RSM US LLP December 24, 2015 Page 2 As of and for the year end June 30, 2015, we believe that the effects of the uncorrected misstatements aggregated by you and summarized below are immaterial, both individually and in the aggregate to the basic financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. AQMD Special Revenue Fund Effect—Debit (Credit) Description Assets Liabilities Fund Balance Revenues Expenditures AQMD revenue accrual S 1,085 $ - $ - $ ('1.085) $ Current year effect of change in fund balance (1,085) $ (1,085) $ Effect on ending fund balance $ 1,085 $ - $ (1,085) Information Provided 10. We have provided you with: a. Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation, and other matters; b. Additional information that you have requested from us for the purpose of the audit, c Unrestricted access to persons from whom you determined it necessary to obtain audit evidence. d. Minutes of the meetings of the City Council and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared. 11. All transactions have been recorded in the accounting records and are reflected in the financial statements. 12. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud. 13. We have no knowledge of allegations of fraud or suspected fraud, affecting the Fund's financial statements involving: a. Management. b. Employees who have significant roles in the internal control. c. Others where the fraud could have a material effect on the financial statements. 14. We have no knowledge of any allegations of fraud or suspected fraud affecting the Fund's financial statements received in communications from employees, former employees, analysts, regulators, or others. 15. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations whose effects were considered when preparing the financial statements. 16. We are not aware of any pending or threatened litigation and claims whose effects should be considered when preparing the financial statements. RSM US LLP December 24, 2015 Page 3 17. We have disclosed to you the identity of the Fund's related parties and all the related -party relationsh'-ps and transactions of which we are aware_ 18. We are aware of no significant deficiendes, indLxPng material weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize, and report financial data. Compliance Conskferallons In connection with your tests of compliance for the Fund conducted in accordance with Assembly M1 2766, Chapter 1705 (Health and Safety Code Sections 44220 through 44247), (AS 2766), during the representations made to you during the course of your engagement: 19. We are responsible for the Fund's oomp6ance with AB 2766- 20. We have performed an evaluation of the Fund's compliance with AB 2766 Based on our evaluation, the Fund has complied with AB 2768. 21. We have no knowledge of krorrrn noncompliance Mth AB 2766 during the year ended June 30, 2015, or through the date of this letter. 22 We have made available to you all documentation related to the Fund's comp'iance With AB 2766. 23_ We have responded fully to ail inquiries made to us by you during your engagement 24. During the course of your audit, you may have accumulated records contaWng data that should be reflected in our books and records, A11 such data have been so reflected. According,y, copies of such records in your possession are no longer needed by us. CITY OF SANTA CLARITA, CALIFORNIA Darren Hernandez Deputy City Manager and Director of Adm'nistrative Services Var0_me_n#M#a 9 -an 2a Finance and Techno'ogy Manager The Transit Enterprise Fund of the City of Santa Clarita Financial Report Year Ended June 30, 2015 THE POWER OF BEING UNDERSTOORSM AUDIT I TAX [ CONSULTING Contents Independent Auditor's Report 1-2 Financial Statements Statement of net position Statement of revenues, expenses, and changes in net position Statement of cash flows Notes to financial statements 6-10 ■= Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California RSM RSM US LLP Report on the Financial Statements We have audited the accompanying financial statements of the Transit Enterprise Fund (the Fund), an enterprise fund of the City of Santa Clarita (the City), as of and for the year ended June 30, 2015, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Fund's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2015, and the changes in its financial position and cash flows thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING R5M US LLP is the U.5. member firm of RSM International, a global network of independent audit tax, and consultingfirms. Mtit rsmuscom/aboutus for more information regarding RSM US LLP and RSM International. Emphasis of a Matter As discussed in Note 1 to the financial statements, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2015, the changes in its financial position, or, where applicable, its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report under a separate cover dated December 24, 2015 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. P—Sm— U:� LLP Irvine, California December 24, 2015 Financial Statements The Transit Enterprise Fund of the City of Santa Clarita Statement of Net Position June 30, 2015 Assets Current Assets Pooled cash and investments $ 4,235,110 Interest receivable 8,749 Prepa ids 340,784 Due from other governments 2,718,045 Total current assets 7,302,688 Noncurrent Assets Capital assets 37,496 Nondepreciable assets 15,087,880 Depreciable assets, net 63,407,991 Total assets 85,798,559 Deferred Outflows of Resources of Net Pension Liability 131,436 Liabilities Current Liabilities Accounts payable 3,386,841 Compensated absences payable 37,755 Total current liabilities 3,424,596 Noncurrent Liabilities Compensated absences payable 37,496 Net pension liability 944,480 Total noncurrent liabilities 981,976 Total liabilities 4,406,572 Deferred Inflows of Resources of Net Pension Liability 260,580 Net Position Net Investment in Capital Assets Unrestricted Total net position See Notes to Financial Statements. 3 63, 407, 991 17, 854, 852 $ 81,262,843 The Transit Enterprise Fund of the City of Santa Clarita Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended June 30, 2015 Operating revenues: 1,272,559 Metrolink and EZ pass revenues $ 147,425 Fixed -route passenger fares 3,640,573 Dial -A -Ride passenger fares 111,028 County of Los Angeles operating assistance 1,639,606 Specialized transit services 930,573 Miscellaneous revenues 310,374 Total operating revenues 6,779,579 Operating expenses Salaries and benefits 1,272,559 Administrative services 945,957 Contract transportation services 18,291,568 Insurance 81,940 Supplies, utilities and other 1,924,898 Depreciation 5,545,746 Total operating expenses 28,062,668 Operating loss (21,283,089) Nonoperating revenues (expenses) Proposition A discretionary 4,605,191 Proposition A specialized transportation 714,636 Proposition C expansion 186,596 Proposition C BSIP 48,434 Proposition C transit mitigation 17,812 Proposition C MOSIP 20,024 Measure R bus operations 2,470,158 Intergovernmental revenues 80,097 Transit mitigation fees 85,400 Interest income 17,592 Total net nonoperating revenues (expenses) 8,245,940 Loss before contributions and transfers (13,037,149) Capital contributions: Federal Transit Administration capital grants 1,321,532 Proposition C MOSIP 101,908 Total capital contributions 1,423,440 Transfers from other fund of the City of Santa Clarita 7,559,230 Transfers to other fund of the City of Santa Clarita (229,714) Change in net position (4,284,193) Net position: Net position, beginning of year, as restated 85,547,036 Net position, end of year $ 81,262,843 See Notes to Financial Statements. 0 The Transit Enterprise Fund of the City of Santa Clarita Statement of Cash Flows For the Year Ended June 30, 2015 Cash Flovvs From Operating Activities Cash received from customers and users $ 6,469,205 Cash payments to suppliers of goods and services (19,891,631) Cash payments to employees (2,239,751) Cash received from other sources 310,374 Net cash used in operating activities (15,351,803) Cash Flovvs From Noncapital Financing Activities Cash transfers out (229,714) Cash transfers in 7,559,230 Federal and state funding received 10,094,278 Net cash provided by noncapital financing activities 17,423,794 Cash Flovvs From Capital and Related Financing Activities Federal and state capital contributions 1,057,418 Acquisition of capital assets 14,342,808 Net cash provided by capital and related financing activities 15,400,226 Cash Flovvs From Investing Activities Interest received 13,361 Net cash provided by investing activities 13,361 Net increase in cash and cash equivalents 17,485,578 Pooled Cash and Cash Equivalents Beginning of year 1,837,412 End of year $ 19,322,990 Reconciliation of Operating Loss to Net Cash Used in Operating Activities Operating loss $ (21,283,089) Adjustments to reconcile operating loss to net cash used in operating activities Depreciation 5,545,746 Changes in operating assets and liabilities (Increase) in prepaids (99,686) Increase in accounts payable and accrued liabilities 506,461 Increase in compensated absences 8,861 Increase in net pension liability (30,096) Total adjustments 5,931,286 Net cash used in operating activities $ (15,351,803) See Notes to Financial Statements. The Transit Enterprise Fund of the City of Santa Clarita Notes to Financial Statements Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of business: The financial statements of the Transit Enterprise Fund (the Fund) of the City of Santa Clarita, California (the City) are intended to present the financial position and results of bus line services operation. The financial statements of the Fund are included as a business -type (enterprise fund) activity in the basic financial statements of the City. A summary of the Fund's significant accounting policies is as follows: The accounting policies of the Fund are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) applicable to proprietary activities of governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing accounting and financial reporting principles. Financial presentation: The financial statements of the Fund include the statement of net position, the statement of revenues, expenses, and changes in net position, and the statement of cash flows. The financial statements are prepared using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the statement of net position. The statement of revenues, expenses, and changes in net position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recorded in the period in which the liability is incurred. Operating revenues and expenses result from the local public transit services for the local, commuter, Dial -A -Ride and Access Services, Inc., specialized and transit operations and maintenance. The operating revenues consist of charges to customers and users for the transit services provided. Operating expenses include the costs of providing these services, administrative expenses, and depreciation expense. All revenues and expenses not meeting these definitions and which are not capital in nature are reported as non-operating revenues and expenses. The Fund recognizes assets of non-exchange transactions in the period when the underlying transaction occurs, when an enforceable legal claim has arisen, or when all eligibility requirements are met. Non-exchange transactions occur when the Fund receives value from another party without giving equal or nearly equal value in return. Various intergovernmental revenues and most donations are examples of non-exchange transactions. Under the terms of grant agreements, the Fund has an enforceable claim with other governmental agencies when specific program expenses are incurred. The Fund has an enforceable claim to local funding allocations when the allocations are determined by the other governmental agencies on an annual basis. Pooled cash and investments: The Fund's cash balance was pooled with various other City funds for deposit and investment purposes. The City's treasury is responsible for the cash management of the Fund's cash balance, which pools available cash for investment purposes. The cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Each City fund owns a share of pooled cash and investments, which are separately maintained, and interest income was apportioned based on its average month-end cash balances to the total of the pooled cash and investments. The Fund's cash balance is considered to be a cash equivalent since it has the ability deposit or withdraw funds from the pool on demand. The Transit Enterprise Fund of the City of Santa Clarita Notes to Financial Statements Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued) Prepaids: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. Administrative services: The Fund has no direct employees, as all personnel -related services are provided by vendors through transportation service contracts or through City employees. Costs for such City employees, including the allocation of accrued compensated absences liabilities and pension costs, are allocated to the Fund based on an approved cost allocation plan. Grants: Grant revenues and receivables are recorded when earned on grants that have been approved and funded by the grantor, and when eligibility requirements for the grant have been met. Grant sources include Federal Transit Administration grants. Capital assets: Capital assets include land, site improvements, buildings and improvements, and vehicles and equipment assets. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($25,000 for site improvements and building improvements and $100,000 for infrastructure) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Site improvements Buildings and improvements Equipment 5-25 years 5-50 years 5-25 years Pension: The Fund reports a proportion of the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, of the collective net pension liability for the pension plan of the City of Santa Clarita. The Fund's proportion of the net pension liability was based on the Fund's share of contributions made to the City's pension plan relative to the contributions of the City. Net position: Net position represents the difference between assets and deferred outflows, and liabilities and deferred inflows, and is classified into three categories: • Net investment in capital assets: This amount consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets, and excludes unspent debt proceeds. • Restricted: Represents the net position that is constrained for use by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation. • Unrestricted net position: This amount represents the residual of amounts not classified in the other two categories and represents the net position available for the City. When an expense is incurred for purposes for which both restricted and unrestricted resources are available, the Fund's policy is to apply restricted resources first. The Transit Enterprise Fund of the City of Santa Clarita Notes to Financial Statements Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued) Employee compensated absences: It is the City's policy to permit employees to accumulate earned but unused vacation (compensated absences). This accumulation is recorded as an expense and liability of the Fund in the fiscal year earned. The outstanding balance as of June 30, 2015 was $75,251 of which $37,755 was considered due within one year, and $37,496 was considered due greater than one year. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. Accounting changes: The accompanying financial statements reflect the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The implementation impacts the accounting and reporting of net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, for the year ended June 30, 2015. The retroactive effect of implementing this change in reporting pension expenses and obligations resulted in a restatement of the beginning net position as described further in Note 8. Pronouncements issued but not yet adopted: The GASB has issued pronouncements that have an effective date subsequent to June 30, 2015, which may impact future financial results. Except as noted below, management has not currently determined what, if any, impact implementation of the following statements may have on future financial statements of the Fund: • GASB Statement No. 72, Fair Value Measurement and Application, effective for the Fund's fiscal year ending June 30, 2016. • GASB Statement No. 75, Fair Value Measurement and Application, effective for the Fund's fiscal year ending June 30, 2018. • GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, effective for the Fund's fiscal year ending June 30, 2016. Note 2. Pooled Cash and Investments The Fund's pooled cash and investments consisted of $4,235,110 of pooled cash and investments at June 30, 2015. The deposit and investment disclosures required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, as they relate to the pooled cash and investments, are reported in the annual report of the City. The pooled cash and investments are unrated, and average maturity is 30 days or less. As of June 30, 2015, none of the Fund's pooled cash was subject to concentration of credit risk or custodial credit risk. The Transit Enterprise Fund of the City of Santa Clarita Notes to Financial Statements Note 3. Due From Other Governments Due from other governments consists of the following at June 30, 2015: Agency Los Angeles County $ 1,740,767 Federal Transit Administration 633,950 Cther agencies 343,328 $ 2,718,045 Note 4. Capital Assets Changes in capital assets of the Fund at June 30, 2015 consisted of the following: Less accumulated depreciation Site improvements Balance (536,985) - - (2,127,149) Balance (9,275,693) June 30, 2014 Additions Deletions Transfers June 30, 2015 Non -depreciable assets: (24,608,029) Total accumulated depreciation (34,399,071) (5,545,746) 3,050,600 Land $ 15,087,880 $ - $ - $ - $ 15,087,880 Construction in progress 83,252 697,642 - (780,894) - Totalnondepreciableassets 15,171,132 697,642 (780,894) 15,087,880 Depreciable assets: Site improvements 12,160,382 - - 780,894 12,941,276 Building and improvements 41,483,799 - - - 41,483,799 Equipment 48,880,303 47,430 (3,050,600) - 45,877,133 Total depreciable assets 102,524,484 47,430 (3,050,600) 780,894 100,302,208 Less accumulated depreciation Site improvements (1,590,164) (536,985) - - (2,127,149) Building and improvements (9,275,693) (883,346) - - (10,159,039) Equipment (23,533,214) (4,125,415) 3,050,600 (24,608,029) Total accumulated depreciation (34,399,071) (5,545,746) 3,050,600 (38,894,217) Total depreciable assets, net 68,125,413 (5,498,316) - 780,894 63,407,991 Capital assets, net $ 83,296,545 $(4,800,674) $ $ $ 78,495,871 Note 5. Interfund Activity During the year ended June 30, 2015, the Fund transferred $229,714 to the General Fund and nonmajor governmental funds of the City for support of transit operations. The management of the City approved the transfer in from the General Fund and the nonmajor governmental funds to the Fund of $7,559,230 as follows General Fund $ 7,360 Proposition A 3,610,553 Proposition C 3,941,317 $ 7,559,230 The Transit Enterprise Fund of the City of Santa Clarita Notes to Financial Statements Note 6. Pension Plan At June 30, 2015, the Fund reported a liability of $944,480 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2014, and the total net pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date for the City. The Fund's proportion of the net pension liability at June 30, 2014 was 3.5 percent, which is unchanged for its proportion measured at June 30, 2013. For the year ended June 30, 2015, the Fund recognized pension expense of $101,344. At June 30, 2015, the Fund reported deferred outflows of resources and deferred inflows of resources related to the pensions from the following sources: Difference between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between Fund contributions and proportionate share of contributions District contributions subsequent to the measurement date Total Deferred Deferred Outflows Inflows of Resources of Resources 260,580 131,436 - $ 131,436 $ 260,580 The pension plan disclosures required by GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as they relate to the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, are reported in the annual report of the City. Note 7. Administrative and Personnel Costs Certain general and administrative costs are allocated to the Fund by the City based upon an approved cost allocation plan. Such allocated costs were $697,140 for the year ended June 30, 2015. Note 8. Restatement of Net Position As a result of the implementation of GASB Statement of No. 68 and GASB Statement No. 71, the beginning net position was restated for the net pension liability that was measured at June 30, 2014. The following is a summary of the effect of this restatement: Net position, as previously reported at June 30, 2014 $ 86,650,756 Net pension liability (measurement date as of June 30, 2014) (1,228,904) Deferred outflows of net pension liability—Fund contributions made for the year ended June 30, 2014 125,184 Net position, as restated at June 30, 2014 $ 85,547,036 10