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Home My WebLink About2018-01-23 - AGENDA REPORTS - 2016-17 FIN RPT (2)Agenda Item: 12 CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: �1 , DATE: January 23, 2018 SUBJECT: FISCAL YEAR 2016-17 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND OTHER RELATED REPORTS DEPARTMENT: Administrative Services PRESENTER: Carmen Magana RECOMMENDED ACTION City Council approve the Comprehensive Annual Financial Report and other related reports for fiscal year ending June 30, 2017. BACKGROUND The City of Santa Clarita's (City's) independent audit firm, Vavrinek, Trine, Day & Co., LLP, has completed the City's annual audit for fiscal year ending June 30, 2017. Vavrinek, Trine, Day & Co., 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, Vavrinek, Trine, Day & Co., 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, 2017. In accordance with Generally Accepted Auditing Standards (AU -C 260), the Auditor's Communication with Those Charged with Governance, a Report to the Honorable Mayor and Members of the City Council has been prepared by Vavrinek, Trine, Day & Co., LLP, to provide specific information related to the audit scope and performance. Page 1 Packet Pg. 55 In addition, the following reports were prepared for the fiscal year ending June 30, 2017, by Vavrinek, Trine, Day & Co., 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 Appropriations Limit Calculation 06-30-17 (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) Single Audit Report 06-30-17 (available in the City Clerk's Reading File) Open Space Preservation District 06-30-17 (available in the City Clerk's Reading File) Transit Enterprise Fund 06-30-17 (available in the City Clerk's Reading File) Air Quality Improvement Fund 06-30-17 (available in the City Clerk's Reading File) Comprehensive Annual Financial Report 06-30-17 (available in the City Clerk's Reading File) Page 2 Packet Pg. 56 Quality of Life O R P comprehensive annual Fiscal Year ended June 30, 2017 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 PREPARED BY THE DEPARTMENT OF ADMINISTRATIVE SERVICES CITY OF SANTA CLARITA, CALIFORNIA CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ......................................................................................................................... i GFOA Certificate of Achievement for Excellence in Financial Reporting ................................. viii Officials of the City of Santa Clarita .............................................................................................. ix Organizational Chart ........................................................................................................................ x Map of the City of Santa Clarita ..................................................................................................... xi FINANCIAL SECTION Independent Auditors’ Report .......................................................................................................... 1 Management’s Discussion and Analysis.......................................................................................... 4 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ............................................................................................ 14 Statement of Activities ................................................................................................ 16 Fund Financial Statements: Governmental Funds Financial Statements: Balance Sheet ........................................................................................................ 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ......................................................................... 20 Statement of Revenues, Expenditures and Changes in Fund Balances ..................................................................................................... 21 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities ........................................................................................ 23 Proprietary Funds Financial Statements: Statement of Net Position ..................................................................................... 24 Statement of Revenues, Expenses and Changes in Net Position .......................... 25 Statement of Cash Flows ...................................................................................... 26 Fiduciary Funds Financial Statements: Statement of Fiduciary Net Position ..................................................................... 27 Statement of Changes in Fiduciary Net Position .................................................. 28 Notes to the Financial Statements ..................................................................................... 29 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: General Fund .................................................................................................................... 75 Bridge and Thoroughfare Special Revenue Fund ............................................................ 76 Developer Fees Special Revenue Fund ............................................................................ 77 Public Library Special Revenue Fund ............................................................................. 78 Landscape Maintenance District #1 Special Revenue Fund ............................................ 79 Schedule of Funding Progress ....................................................................................................... 80 Schedule of Changes in the City’s Net Pension Liability and Related Ratios ............................... 81 Schedule of City Contributions ...................................................................................................... 82 Notes to Required Supplementary Information ............................................................................. 84 SUPPLEMENTARY INFORMATION Non-major Governmental Funds: Description of Non-major Governmental Funds ..................................................................... 86 Combining Balance Sheet ........................................................................................................ 89 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................ 97 Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: Bikeway Special Revenue Fund ............................................................................................ 105 Gas Tax Special Revenue Fund ............................................................................................. 106 Proposition A Special Revenue Fund .................................................................................... 107 Special Assessment Special Revenue Fund ........................................................................... 108 State Park Special Revenue Fund .......................................................................................... 109 Transportation Development Act Special Revenue Fund ...................................................... 110 Traffic Safety Special Revenue Fund .................................................................................... 111 Community Development Block Grant Special Revenue Fund ............................................ 112 Air Quality Management District Special Revenue Fund ..................................................... 113 Stormwater Special Revenue Fund ........................................................................................ 114 Surface Transportation Program Special Revenue Fund ....................................................... 115 BJA Law Enforcement Special Revenue Fund ...................................................................... 116 Supplemental Law Grant Special Revenue Fund .................................................................. 117 HOME Special Revenue Fund ............................................................................................... 118 Library Facilities Fees Special Revenue Fund ...................................................................... 119 Public Education and Government Special Revenue Fund ................................................... 120 Proposition C Special Revenue Fund .................................................................................... 121 Federal Grants Special Revenue Fund ................................................................................... 122 Measure R Special Revenue Fund ......................................................................................... 123 Tourism Marketing District Special Revenue Fund .............................................................. 124 Open Space Preservation District Special Revenue Fund ..................................................... 125 Miscellaneous Grants Special Revenue Fund ........................................................................ 126 Park Dedication Special Revenue Fund ................................................................................ 127 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Housing Successor Agency Special Revenue Fund .............................................................. 128 Tourism Marketing Bureau Special Revenue Fund ............................................................... 129 General Capital Projects Fund ............................................................................................... 130 Public Financing Authority Capital Projects Fund ................................................................ 131 Public Financing Authority Debt Service Fund ..................................................................... 132 Internal Service Funds: Description of Internal Service Funds ................................................................................... 133 Combining Statement of Net Position ................................................................................... 134 Combining Statement of Revenues, Expenses and Changes in Net Position ........................ 135 Combining Statement of Cash Flows .................................................................................... 136 Agency Funds Description of Agency Funds ................................................................................................ 137 Combining Statement of Assets and Liabilities ..................................................................... 138 Combining Statement of Changes in Assets and Liabilities .................................................. 140 STATISTICAL SECTION Table of Contents .............................................................................................................. 143 Net Position by Component .................................................................................................. 144 Changes in Net Position ......................................................................................................... 146 Fund Balances of Governmental Funds ................................................................................ 150 Changes in Fund Balances of Governmental Funds .............................................................. 152 Assessed Values and Actual Values of Taxable Property ..................................................... 154 Assessed Values and Actual Values of Taxable Property—Redevelopment Agency .......... 156 Assessed Values—Taxable Property ..................................................................................... 158 Assessed Values—Use Category Summary .......................................................................... 160 Direct and Overlapping Property Tax Rates .......................................................................... 161 Principal Property Taxpayers ............................................................................................... 163 Property Tax Levies, Tax Collections and Delinquencies .................................................... 164 Top Property Owners Based on Net Values—Successor Agency ......................................... 165 Project Area Assessment Appeals Summary and Tax Collection History—Successor Agency ...................................................................... 166 Charge Detail Report for CFD 2002-1 (Valencia Town Center)—Successor Agency ......... 167 Ratio of Outstanding Debt by Type ...................................................................................... 169 Ratio of General Bonded Debt Outstanding .......................................................................... 171 Direct and Overlapping Tax and Assessment Debt .............................................................. 172 Legal Debt Margin Information ............................................................................................ 173 Pledged Revenue Coverage ................................................................................................... 175 Demographic and Economic Statistics ................................................................................. 176 Principal Employers .............................................................................................................. 177 Full-Time and Part-Time City Employees by Function ....................................................... 178 Operating Indicators by Function ......................................................................................... 179 Capital Asset Statistics by Function ..................................................................................... 180 i ii ii iii iv v vi vii viii OFFICIALSOFTHECITYOFSANTACLARITA OFFICIALSOFTHECITYOFSANTACLARITA As of June 30, 2017 City Council Cameron Smyth MAYOR Laurene Weste MAYOR PRO TEM Marsha McLean COUNCILMEMBER Bill Miranda COUNCILMEMBER Bob Kellar COUNCILMEMBER City Officials Ken Striplin CITY MANAGER Frank Oviedo ASSISTANT CITY MANAGER Darren Hernández DEPUTY CITY MANAGER Joseph Montes CITY ATTORNEY Carmen Magana DIRECTOR OF ADMINISTRATIVE SERVICES Tom Cole DIRECTOR OF COMMUNITY DEVELOPMENT Robert Newman DIRECTOR OF PUBLIC WORKS/CITY ENGINEER Richard Gould DIRECTOR OF RECREATION, COMMUNITY SERVICES, ARTS, AND OPEN SPACE ix ORGANIZATION CHART As of June 30, 2017 Santa Clarita Residents | City Council | City Manager | |||| Public AdministrativeNeighborhoodCommunityRecreation, Community Services,City Manager's ServicesServicesDevelopmentArts, and Open SpaceOfficeWorks |||||| FinanceEnvironmental ServicesCommunity PreservationArts and EventsCommunicationsBuilding and Safety |||||| Clerk and Contract ServicesParksEconomic DevelopmentRecreation and Community ServicesHuman ResourcesCapital Improvement Program |||||| Technology ServicesSpecial DistrictsPlanningOpen SpaceIntergovernmental RelationsEngineering Services ||| TransitSheriff's DepartmentGeneral Services ||| Public LibraryFire ProtectionTraffic & Transportation Planning x xi INDEPENDENT AUDITORS’ 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, (City) as of and for the year ended June 30, 2017, 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. Auditors’ 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 auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW 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, 2017, 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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis (pages 4 through 13), schedules of revenues, expenditures and changes in fund balance – budget and actual for the General fund and each major special revenue fund (pages 75 through 79), schedule of funding progress (page 80), schedule of changes in the City’s net pension liability and related ratios (page 81), and schedule of city contributions (pages 82 through 83) 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 introductory section, combining and individual nonmajor funds financial statements and budgetary comparison schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor funds financial statements and budgetary comparison 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 and individual nonmajor funds financial statements and budgetary comparison 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. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2017, 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 City’s internal control over financial reporting and compliance. Rancho Cucamonga, California December 28, 2017 3 MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2017 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, 2017. 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 $1.13 billion. Of this amount, $103.7 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 $61.5 million. Net position of the business-type activities decreased by $1.4 million, or 2%, and the net position of the governmental activities increased by $62.9 million (Table 2). The net capital assets of the City’s governmental activities increase by $54.5 million, or 6.4% over last fiscal year. The increase was in part due to purchases, contributions and annexations of land and infrastructure totaling $42.4 million, and the increase of construction in progress of $31 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 $233 million. This represents an increase of $9.5 million as compared to the prior year. Within governmental funds, the General Fund reported a fund balance of $149 million, an increase of $8 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). 4 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, in 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 between the two 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, neighborhood services, 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. 5 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, Developer Fees Fund, Public Library Fund and Landscape Maintenance District #1 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 28 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. 6 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 CITY AS A WHOLE 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 used as an indicator of the City’s overall financial condition. The City’s combined net position increased by $61.5 million, increasing from $1.08 billion to $1.14 billion. 7 THE CITY AS A WHOLE (CONTINUED) TABLE 1 CITY OF SANTA CLARITA’S NET POSITION Governmental ActivitiesBusiness-type ActivitiesTotal 201720162017201620172016 ASSETS: Current and Other Assets$ 287,793,027 $ 259,492,495 $ 7,525,050 $ 7,388,268 $ 295,318,077 $ 266,880,763 Capital assets, net 899,324,125 844,844,011 79,589,102 76,687,260 978,913,227 921,531,271 Noncurrent Assets 25,568,478 26,412,670 - - 25,568,478 26,412,670 TOTAL ASSETS 1,212,685,630 1,130,749,176 87,114,152 84,075,528 1,299,799,782 1,214,824,704 DEFERRED OUTFLOWS OF RESOURCES: 12,766,476 6,023,063 399,450 151,201 13,165,926 6,174,264 LIABILITIES: Noncurrent Liabilities 118,556,662 107,339,614 1,415,876 1,115,278 119,972,538 108,454,892 Other Liabilties 45,694,038 30,053,700 7,644,191 3,215,168 53,338,229 33,268,868 TOTAL LIABILITIES 164,250,700 137,393,314 9,060,067 4,330,446 173,310,767 141,723,760 1,841,246 2,925,290 67,065 107,260 1,908,311 3,032,550 DEFERRED INFLOWS OF RESOURCES: NET POSITION: Net investment in capital assets867,144,998 810,324,041 79,589,102 76,687,260 946,734,100 887,011,301 Restricted 87,272,724 70,773,322 - - 87,272,724 70,773,322 Unrestricted 104,942,438 115,356,272 (1,202,632) 3,101,763 103,739,806 118,458,035 TOTAL NET POSITION 1,059,360,160 996,453,635 78,386,470 79,789,023 1,137,746,630 1,076,242,658 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, 2017, assets exceeded liabilities by $1.13 billion. The largest component of the City’s net position, 83.2%, is represented by its $947 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, 7.7%, represents resources subject to external restrictions on how they may be used. The remaining 9.1% of unrestricted net position, $103.7 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 $62.9 million over the prior year. The unrestricted net position of the business-type activities decreased by $4.3 million. 8 THE CITY AS A WHOLE (CONTINUED) Governmental Activities Revenues from governmental activities increased by $26 million or 14.5% due in part to an increase of $31.6 million in capital grants and contributions. The cost of all governmental activities this year was $138.5 million, a decrease of 6.3% over the past year. As shown in the Statement of Activities, the governmental activities expenses were ultimately financed in part by the taxpayers, as $52.7 million in revenues were generated by service revenues received from the performance of these activities; another $6 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions; and another $55.2 million in revenues was generated from capital grants and contributions. Overall, the City’s governmental program and general revenues amounted to $205 million, which funded the expenses and resulted in a $63 million increase in net position. TABLE 2 CITY OF SANTA CLARITA’S CHANGES IN NET POSITION Governmental ActivitiesBusiness-type ActivitiesTotal 201720162017201620172016 Program Revenues: Charges for services $ 52,664,081 $ 50,478,658 $ 7,231,136 $ 7,546,433 $ 59,895,217 $ 58,025,091 Operating grants and contributions 5,977,971 7,705,545 8,459,236 9,153,499 14,437,207 16,859,044 Capital grants and contributions 55,220,052 23,602,526 9,138,643 3,504,305 64,358,695 27,106,831 General Revenues: Taxes: Property taxes 39,924,749 40,072,597 39,924,749 40,072,597 Other taxes 49,415,366 51,526,137 49,415,366 51,526,137 Other 1,801,478 5,683,439 24,488 59,086 1,825,966 5,742,525 Total Revenues 205,003,697 179,068,902 24,853,503 20,263,323 229,857,200 199,332,225 General government 44,390,099 39,155,006 - - 44,390,099 39,155,006 Public safety 25,231,712 23,778,931 - - 25,231,712 23,778,931 Recreation and community services 23,563,825 23,350,273 - - 23,563,825 23,350,273 Public works 16,224,154 30,467,720 - - 16,224,154 30,467,720 Community development 7,057,301 10,505,906 - - 7,057,301 10,505,906 Neighborhood Services 1,815,637 - - - 1,815,637 - Unallocated infrastructure depreciation 18,833,113 18,342,933 - - 18,833,113 18,342,933 ,378,888 2,194,181 Interest and fiscal charges 1,378,888 2,194,181 - -1 Transit - - 29,858,499 28,127,407 29,858,499 28,127,407 Total Expenses 138,494,729 147,794,950 29,858,499 28,127,407 168,353,228 175,922,357 Increase/Decrease in Net Postion Before Transfers 66,508,968 31,273,952 (5,004,996) (7,864,084) 61,503,972 23,409,868 Transfers (3,602,443) (6,390,264) 3,602,443 6,390,264 - - Changes in Net Position 62,906,525 24,883,688 (1,402,553) (1,473,820) 61,503,972 23,409,868 Net Position – Beginning of Year 996,453,635 971,569,947 79,789,023 81,262,843 1,076,242,658 1,052,832,790 Net Position – End of Year$ 1,059,360,160 $ 996,453,635 $ 78,386,470 $ 79,789,023 $ 1,137,746,630 $ 1,076,242,658 Business-Type Activities Business-type activities decreased the City’s net position by $1.4 million for the current year. Business-type activities revenues increased by $4.6 million during the year for a total of $24.9 million in revenues, not including the $3.6 million of transfers in from other governmental activities. The increased revenue was largely due to an increase in capital grants and contributions of $5.6 million that included federal funds for the purchase of 8 replacement CNG commuter buses. Related transit activity expenses increased by $1.7 million. 9 THE CITY’S FUNDS The governmental funds reported a combined fund balance at the end of the current fiscal year of $233 million, an increase of $9.5 million over the prior year. Approximately $87.5 million is restricted and already committed for specific restricted purposes. The total governmental fund balance includes the general fund balance of $149 million, which increased by $8 million over the prior year. The General Fund is the chief operating fund of the City of Santa Clarita. The unassigned fund balance of $54 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 $1.3 million in its fund balance from prior year. The Developer Fee Fund has realized an increase of $787,994 due to an increase in developer contributions. The Public Library Fund has realized an increase of $1.3 million in its fund balance from the prior year. The Landscape Maintenance District’s fund balance decreased $753,262 from the prior year. In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $1.6 million. 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 $1.4 million or 1.8%. The unrestricted portion of the business-type activities net position decreased by $4.3 million from the prior year. The Internal Service Funds net position increased by $506,358 or 6.13%. The ending fund balance for Internal Service Funds is $8.8 million, of which $7.5 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2016-2017 original (adopted) general fund budgeted expenditures and transfers of $117.4 million to the final budgeted expenditures of $132.3 million results in a net increase of $14.9 million. Included in this net increase is $1,401,513 in committed purchase orders and contracts from the prior June 30 balance, as well as $1,209,337 of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2016-2017. 10 THE CITY’S FUNDS (CONTINUED) Original Budget Continued Encumbrances Beg. Balance + Supplemental Final Budget + Appropriations + =Changes = $122,005,978 + $1,209,337 + $1,401,513 = $124,616,828 + $12,186,673 = $136,803,501 Comparing the beginning budget of $124.6 million with the final budget of $136.8 million indicates the General Fund had supplemental budgetary appropriations of $12.2 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 an increase of $954,462. Included in the increase is $1.4 million in development revenues, $200,000 in real property transfer tax, $174,000 in property tax in lieu of VLF, $112,000 in waste hauler franchise fees and $57,500 in reimbursements from the State. At year-end, the City’s actual revenues were $1 million more than the final budgetary estimates. Actual expenditures were less than the final budgetary estimates by $30.7 million. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $978.9 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 ActivitiesBusiness Type Activities Total 201720162017201620172016 Land$162,971,944$147,141,106 $ 15,087,880 $ 15,087,880 $178,059,824$162,228,986 Construction in progress32,869,1195,922,009 1,736 1,736 $32,870,855$5,923,745 $616,639,481$604,831,025 Infrastructure, net616,639,481604,831,025 - - $40,344,769$40,287,925 Depreciable site improvements, net30,667,08430,042,0199,677,685 10,245,906 Depreciable building and $81,409,274$83,172,190 improvements, net51,851,20852,730,77729,558,066 30,441,413 $29,589,024$25,087,400 Depreciable equipment, net4,325,2894,177,07525,263,735 20,910,325 $899,324,125$844,844,01179,589,102 76,687,260$978,913,227$921,531,271 TOTALS Major capital asset events during the year included: Acquisitions, contributions and annexations of land totaling $15.8 million Infrastructure additions totaling $27.8 million that included $16.4 million for bridges, and $11.4 million for pavement projects. Equipment additions in the Transit fund of $8.3 million for ten CNG commuter buses. Additional information on the City of Santa Clarita’s capital assets can be located in Note 7 to the financial statements. 11 CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration At year-end, the City’s total debt amounted to $37.1 million in bonds, notes, capital leases, contracts, claims payable and compensated absences as shown in Table 4. A summary of debt activity for the year follows. TABLE 4 CITY OF SANTA CLARITA’S OUTSTANDING DEBT Governmental ActivitiesBusiness-type ActivitiesTotal 201720162017201620172016 Lease Revenue Bonds$ 25,262,456$ 26,012,352$ -$ 25,262,456-$ $ 26,012,352 Contract and Leases 60,444 138,877 - - 60,444 138,877 Private Placement Lease 4,984,543 6,328,411 - - 4,984,543 6,328,411 Loans 100,000 200,000 - - 100,000 200,000 Compensated Absences 3,486,115 3,249,285 84,893 82,397 3,571,008 3,331,682 Claims Payable 3,190,756 2,449,815 - - 3,190,756 2,449,815 TOTAL 37,084,314 38,378,740 84,893 82,397 37,169,207$38,461,137 The City’s governmental activities had $37.1 million in debt at year-end. Governmental activities long-term debt decreased overall by $1.3 million. Principal payments totaled $2.3 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, 2017, 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, 2017 was $1,075,718,289. 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. 12 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 every year. Since the Great Recession, our organization has understood that there will continue to be economic peaks and valleys, and we need to be prepared and positioned for times when the economy is weak. General Fund sales tax revenue continues to be the largest revenue source to operate general governmental functions, accounting for 35% or $36.8 million as projected in the 2017-2018 budget. This is projected at 1.8% higher than 2016-2017 receipts. Property tax revenues account for 33% of the General Fund budget or $34 million in 2017-2018. 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. Total General Fund expenditures are projected to be $107.8 million, resulting in a balanced budget, an operating surplus of $271K, and a 20% operating reserve of $18.2 million. The City’s 2017-2018 operating and capital budget for all funds is $199 million. The City remains dedicated to service excellence, teamwork and creativity. City staff continues to do more with less, find creative ways to maintain services revered by our community, and provide award- winning programs. The 2017-2018 budget remains to be a reflection of the City’s commitment to the residents of Santa Clarita. This is consistent with the City’s long tradition of ensuring that programming for Santa Clarita’s youth and children is a priority to help promote growth and curb teen crimes. A copy of the City’s 2017-2018 budget can be obtained by contacting the City Finance Division or visiting the web at http://www.santa-clarita.com/city-hall/departments/city-manager-s-office/city-budget. 13 GOVERNMENT-WIDE FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION JUNE 30, 2017 GovernmentalBusiness-type ActivitiesActivitiesTotal Assets: Current assets: Cash and investments 268,535,397$ 2,363$ 268,537,760$ Receivables: Accounts, net 277829,765 830,042 Interest -1,177,571 1,177,571 Taxes -10,217,031 10,217,031 Prepaid costs 117,979255,922 373,901 Due from other governments5,491,229 8,690,543 14,181,772 Internal balances1,286,112 (1,286,112) - Total Current Assets 7,525,050287,793,027 295,318,077 Noncurrent assets: Restricted assets: Cash and investments206,386 - 206,386 Cash and investments with fiscal agents7,154 - 7,154 Loans receivable2,476,974 - 2,476,974 Land held for resale347,127 - 347,127 Notes to RDA Successor Agency16,054,063 - 16,054,063 Net other post-employment benefits asset6,476,774 - 6,476,774 Capital assets: Nondepreciable assets195,841,063 15,089,616 210,930,679 Depreciable assets, net703,483,062 64,499,486 767,982,548 Total Noncurrent Assets 79,589,102924,892,603 1,004,481,705 Total Assets 87,114,1521,212,685,630 1,299,799,782 Deferred Outflows of Resources: Deferred outflows related to pensions10,966,791 399,450 11,366,241 Unamortized loss on refundings1,799,685 - 1,799,685 Total Deferred Outflows of Resources 399,45012,766,476 13,165,926 Liabilities: Current liabilities: Accounts payable and accrued liabilities 13,029,321 7,586,586 20,615,907 Interest payable 212,999 - 212,999 Deposits payable 17,744,540 17,744,540- Due to other governments 7,734,479 - 7,734,479 Unearned revenues 695,630 - 695,630 Compensated absences 2,058,057 57,605 2,115,662 Claims and judgments 1,972,069 - 1,972,069 Bonds, loans and capital leases 2,246,943 - 2,246,943 Total Current Liabilities 45,694,038 7,644,191 53,338,229 Noncurrent liabilities: Compensated absences 1,428,058 27,288 1,455,346 Claims and judgments 1,218,687 - 1,218,687 Bonds, loans and capital leases 28,160,500 28,160,500- Developer credits 49,626,105 49,626,105- Net pension liability 38,123,312 1,388,588 39,511,900 Total Noncurrent Liabilities 118,556,662 1,415,876 119,972,538 Total Liabilities 164,250,700 9,060,067 173,310,767 Deferred Inflows of Resources: Deferred inflows related to pensions 1,841,246 67,065 1,908,311 See accompanying notes to financial statements. 14 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION (CONTINUED) JUNE 30, 2017 GovernmentalBusiness-type ActivitiesActivitiesTotal Net Position: Net investment in capital assets$ 867,144,998$ 79,589,102$ 946,734,100 Restricted: Landscape maintenance 38,239,307 38,239,307- Transportation 16,192,159 16,192,159- Open Space preservation 4,635,113 - 4,635,113 Public safety 2,482,213 - 2,482,213 Public library 1,244,736 - 1,244,736 Air quality improvement 840,006 - 840,006 Stormwater 5,609,697 - 5,609,697 Public education and government 1,811,285 - 1,811,285 Tourism marketing 1,019,791 - 1,019,791 Low and moderate-incoming housing 493,155 - 493,155 Capital improvements 14,705,262 14,705,262- Unrestricted 104,942,438 (1,202,632) 103,739,806 Total Net Position$ 1,059,360,160$ 78,386,470$ 1,137,746,630 See accompanying notes to financial statements. 15 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Program Revenues OperatingCapital Charges forContributionsContributions Functions/Programs ExpensesServicesand Grantsand Grants Governmental activities: General government $ 44,390,099$ 6,740,507$ 646,289 - Public safety 25,231,7121,231,974150,0801,925,639 Recreation and community service 23,563,8256,191,0115,7021,162 Public works 16,224,15411,549,8064,384,00753,293,251 Community development 7,057,3011,906,079791,893 - Neighborhood Services 1,815,63725,044,704 - - Unallocated infrastructure depreciation 18,833,113 - - - Interest and fiscal changes 1,378,888 - - - Total governmental activities 138,494,729 52,664,081 5,977,971 55,220,052 Business-type activities: Transit enterprise 29,858,4997,231,1368,459,2369,138,643 Total primary government $ 168,353,228$ 59,895,217$ 14,437,207$ 64,358,695 General revenues: Taxes: Property taxes Sales taxes Franchise taxes Transient occupancy taxes Property transfer tax Propety taxes in lieu of motor vehicle fee Investment income (loss) Miscellaneous Gain on sale of capital assets Total General Revenues Transfers Change in Net Position Net Position, Beginning of Year Net Position, End of Year See accompanying notes to financial statements. 16 Net (Expense) Revenues and Changes in Net Position GovernmentalBusiness-type ActivitiesActivitiesTotal $ (37,003,303)$ - $ (37,003,303) (21,924,019)- (21,924,019) (17,365,950)- (17,365,950) 53,002,910- 53,002,910 (4,359,329)- (4,359,329) 23,229,067- 23,229,067 (18,833,113)- (18,833,113) (1,378,888)- (1,378,888) (24,632,625)- (24,632,625) - (5,029,484) (5,029,484) (24,632,625) (5,029,484) (29,662,109) 39,924,749- 39,924,749 36,147,727- 36,147,727 8,208,347- 8,208,347 3,639,264- 3,639,264 1,275,363- 1,275,363 144,665- 144,665 1,052,254 (28,735) 1,023,519 737,513- 737,513 11,711 53,223 64,934 91,141,59324,488 91,166,081 (3,602,443) 3,602,443 - 62,906,525 (1,402,553) 61,503,972 996,453,635 79,789,023 1,076,242,658 $ 1,059,360,160$ 78,386,470$ 1,137,746,630 17 CITY OF SANTA CLARITA, CALIFORNIA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Bridge andDevelope r General FundThoroughfareFees Assets: Cash and investments$ 152,219,199$ 11,488,364$ 5,271,611 Receivables: Accounts, net 729,681 11,571 - 688,378 49,155 22,575 Interest Taxes 9,163,168 - - Loans - - - -9,462,202 6,591,861 Notes to RDA Successor Agenc y Prepaid costs126,097 - - Due from other governments405,775 - - Due from other funds4,380,533 - - Advances to other funds17,256,104 - 121,708 Land held for resale- - 260,238 Restricted assets: Cash and investments- - - Cash and investments with fiscal agents- - - Total assets$ 11,549,090194,431,137$ 12,267,993$ Liabilities, deferred inflows of resources, and fund balances (deficit): Liabilities: Accounts payable and accrued liabilities7,976,998$ 195,973 15,045 Deposits payable17,744,541 - - Due to other governments7,700,000 - - Unearned revenues695,630 - - Due to other funds- - - Advances from other funds - 8,622,678 - Total liabilities 8,818,65134,117,169 15,045 Deferred inflows of resources: Unavailable revenues11,298,702 11,571 6,713,569 Fund balances (deficit): Nonspendable15,745,704 - - Restricte 2,718,8685,376,613- d Committe -- 14,000 d Assigne -79,367,084 148,766 d Unassigne53,902,478 - - d Total fund balances (deficit) 149,015,266 2,718,868 5,539,379 Total liabilities, deferred inflows of of resources and fund balances (deficit)$ 194,431,137$ 11,549,090$ 12,267,993 See accompanying notes to financial statements. 18 Special Revenue Funds LandscapeNon-majoTotal r PublicMaintenanceGovernmentalGovernmental LibrarDistrict #1FundsFunds y $ 3,067,513$ 32,957,390$ 52,725,112$ 257,729,189 6 21,869 64,263 827,390 13,136 140,734 215,627 1,129,605 213,356 356,967 483,540 10,217,031 - - 2,476,974 2,476,974 - - 16,054,063- 24,195 84,220 - 234,512 - - 5,085,454 5,491,229 - - - 4,380,533 - - 17,377,812- - - 86,889 347,127 - - 206,386 206,386 - - 7,154 7,154 $ 3,318,206$ 33,561,180$ 61,351,399$ 316,479,005 186,810 1,727,566$ 2,872,717$ 12,975,109 - - 17,744,541- - - 34,479 7,734,479 - - - 695,630 - - 3,094,421 3,094,421 8,755,134 - 17,377,812- 8,941,944 1,727,566 6,001,617 59,621,992 - - 5,908,958 23,932,800 24,195 84,220 15,854,119- 31,749,39447,688,087- 87,532,962 - - - 14,000 - - 2,002,594 81,518,444 (5,647,933) - (249,857) 48,004,688 (5,623,738) 31,833,614 49,440,824 232,924,213 $ 3,318,206$ 33,561,180$ 61,351,399$ 316,479,005 19 CITY OF SANTA CLARITA, CALIFORNIA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2017 Fund balances of governmental funds$ 232,924,213 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$ 195,841,063 Depreciable assets, net of accumulated depreciation 702,239,345 898,080,408 Revenues reported as deferred inflows in the governmental funds do not provide current financial resources but are recognized in the Statement of Activities 23,932,800 Other post-employment benefit assets are not available to pay for current-period expenditures and therefore are not reported in the government funds. 6,476,774 Amounts reported for net pension liability are not due in the current period d and therefore are not reported in the governmental funds. Relate 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 (37,978,196) Deferred outflows of resources related to pensions 10,925,046 Deferred inflows of resources related to pensions (1,834,237) (28,887,387) 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 (25,262,456) Private placement lease payable (4,984,543) Capital leases (60,444) Loans payable (100,000) Deferred outflow of resources related to loss on refunding 1,799,685 Compensated absences (3,479,746) Bridge and Thoroughfare developer payables (49,626,105) (81,713,609) 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. (212,999) 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, deferred outflows/inflows of resources and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 8,759,960 Net Position of Governmental Activities $ 1,059,360,160 See accompanying notes to financial statements. 20 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Bridge andDeveloper GeneralThoroughfareFees Revenues: Taxes$ 81,462,981$ -$ - Special assessments - - - Licenses and permits 7,408,357 - - Intergovernmental 241,992 - - Charges for services 8,397,274 - - Investment income (loss) 537,605 304,078 (324) Fines and forfeitures 706,870 - - Developer fees - 283,475 2,025,639 Other revenue 61,788 - - Total revenues 98,816,867 587,553 2,025,315 Expenditures: Current: General government 15,097,325 - - Public safety 23,306,998 - 1,396,467 Recreation and community service 20,283,686 - - Public works 21,541,973 394,967 - Community development 5,989,628 - - Neighborhood services 593,591 - - Capital outlay 341,442 1,200,560 19,075 Debt service: Principal retirement - - - Interest and fiscal charges - 328,926 - Total expenditures 87,154,643 1,924,453 1,415,542 Excess (deficiency) of revenues over (under) expenditures 11,662,224 (1,336,900) 609,773 Other financing sources (uses): Transfers in 1,384,023 - 250,000 Transfers out (5,175,897) (2,500) (71,779) Total other financing sources (uses) (3,791,874) (2,500) 178,221 Net change in fund balances 7,870,350 (1,339,400) 787,994 Fund balances (deficit), beginning of year 141,144,916 4,058,268 4,751,385 Fund balances (deficit), end of year $ 149,015,266$ 2,718,868$ 5,539,379 See accompanying notes to financial statements. 21 Special Revenue Funds LandscapeNon-majorTotal PublicMaintenanceGovernmentalGovernmental LibraryDistrict #1FundsFunds $ 6,415,945$ 986,814$ 474,375$ 89,340,115 - 16,098,524 11,220,492 27,319,016 - - - 7,408,357 - - 23,680,369 23,922,361 85,000 - 838,356 9,320,630 3,451 68,525 116,811 1,030,146 - - 410,750 1,117,620 - - 1,902,776 4,211,890 176,123 - 453,063 690,974 6,680,519 17,153,863 39,096,992 164,361,109 5,151,073 15,808,308$ 5,081,970$ 41,138,676 - - 510,626 25,214,091 - 102,649 60,261 20,446,596 - 373,096 21,149,584 43,459,620 - - 593,856 6,583,484 - 468,789 604,678 1,667,058 42,945 1,207,821 6,947,415 9,759,258 53,561 - 2,113,868 2,167,429 115,271 - 793,160 1,237,357 5,362,850 17,960,663 37,855,418 151,673,569 1,317,669 (806,800) 1,241,574 12,687,540 - 150,600 6,262,090 8,046,713 (5,814) (97,062) (5,896,780) (11,249,832) (5,814) 53,538 365,310 (3,203,119) 1,311,855 (753,262) 1,606,884 9,484,421 (6,935,593) 32,586,876 47,833,940 223,439,792 $ (5,623,738)$ 31,833,614$ 49,440,824$ 232,924,213 22 CITY OF SANTA CLARITA, CALIFORNIA 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, 2017 Net changes in fund balances - total governmental funds$ 9,484,421 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense in the current period. Additionally, certain capital contributions are onl reflected as revenues on overnment-wide statement of activities. yg Capital outlay and public works expenditures$ 37,148,419 Capital contributions 39,769,654 Depreciation expense (22,566,242) 54,351,831 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. 2,517,179 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 debit 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 (234,731) Lease revenue bonds 670,000 Private placement lease payable 1,343,868 Loans and capital leases 78,433 Loans payable 100,000 Loss on refundings (91,645) Amortization of premiums of long-term liabilities 79,896 1,945,821 The issuance of Bridge and Thoroughfare district credits does not impact governmental funds, but increases long-term liabilities in the statement of net position. Redemptions of district credits does not impact expenditures in the governmental funds, but reduces long-term liabilities in the statement of net position. Net impact of issuance and redemption of district credits (4,639,596) 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 consists of the following: Changes in interest payable for long-term liabilities (154,654) Changes and amortization of other post-employment benefit asset (674,000) Changes in net pension liabilities and related deferred inflows and outflows of resources (430,835) (1,259,489) Internal services 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. 506,358 Change in net position of governmental activities $ 62,906,525 See accompanying notes to financial statements. 23 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2017 Business-typeGovernmental ActivitiesActivities TransitInternal EnterpriseService Funds Assets: Current assets: Cash and investments$ 10,806,2082,363$ Receivables: Accounts 2,375277 Interest 47,966 Prepaid costs117,97921,410 Due from other governments8,690,543- Total current assets 10,877,9598,811,162 Noncurrent assets: Capital assets: Land and construction in progress15,089,616- Site improvements, net of accumulated depreciation9,677,685 - Building and improvements, net of accumulated depreciation29,558,066 - Equipment, net of accumulated depreciation25,263,7351,243,717 Total noncurrent assets 79,589,102 1,243,717 Total assets 88,400,264 12,121,676 Deferred outflows of resources: Deferred outflows related to pensions399,450 41,745 Liabilities: Current liabilities: Accounts payable and accrued liabilities7,586,586 54,212 Compensated absences57,605 6,368 Claims and judgements 1,972,069- Due to other funds 1,286,112 - Total current liabilities 8,930,303 2,032,649 Noncurrent liabilities: Compensated absences payable 27,288 - Claims and judgments 1,218,687- Net pension liability 1,388,588 145,116 Total noncurrent liabilities 1,415,876 1,363,803 Total liabilities 10,346,179 3,396,452 Deferred inflows of resources: Deferred inflows related to pensions 67,065 7,009 Net Position: Net investment in capital assets 79,589,102 1,243,717 Unrestricted (1,202,632) 7,516,243 Total net position $ 78,386,470$ 8,759,960 See accompanying notes to financial statements. 24 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Business-typeGovernmental ActivitiesActivities TransitInternal EnterpriseService Funds Operating revenues: Charges for services6,689,154$ 2,881,631$ Other revenues541,982 75,843 Total operating revenues 2,957,4747,231,136 Operating expenses: Administration and personnel services4,307,915 198,837 Transportation services18,848,994 - Services and supplies1,330,266 1,668,918 Depreciation expense5,371,324 221,914 Total operating expenses 29,858,499 2,089,669 Operating income (loss) (22,627,363) 867,805 Nonoperating revenues (expenses): Intergovernmental revenue 8,459,236 - Investment income (loss) (28,735) 26,166 Gain on disposal of capital assets 53,223 11,711 Total nonoperating revenues (expenses) 8,483,724 37,877 Income (loss) before transfers and capital contributions (14,143,639) 905,682 Transfers and capital contributions: Transfers in 3,788,081 79,052 Transfers out (185,638) (478,376) Capital contributions 9,138,643 - Total transfers and capital contributions 12,741,086 (399,324) Change in net position (1,402,553) 506,358 Net position Net position, beginning of year 79,789,023 8,253,602 et position, end of yea$ 78,386,470$ 8,759,960 Nr See accompanying notes to financial statements. 25 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Business-typeGovernmental ActivitiesActivities TransitInternal EnterpriseService Funds Cash flows from operating activities: Cash received from customers and users6,689,185$ 2,960,608$ Cash paid to suppliers for goods and services(16,641,360) (1,101,157) Cash paid to employees for services(2,020,923) (195,088) Cash received from other services541,982 - Net cash provided by (used in) operating activities 1,664,363(11,431,116) Cash flows from noncapital financing activities: Cash transfers out (185,638) (478,376) Cash transfers in 3,788,081 79,051 Intergovernmental revenues 2,659,269 - Net cash (used in) provided by noncapital financing activities 6,261,712 (399,325) Cash flows from capital and related financing activities: Capital contributions 9,138,643 - Acquisition and construction of capital assets (8,273,166) (350,195) Proceeds from disposal of capital assets 53,223 11,711 Net cash provided (used) for capital and related financing activities 918,700 (338,484) Cash flows from investing activities: Interest received 3,551(17,089) Net increase/(decrease) in cash and cash equivalents 930,105(4,267,793) Cash and cash equivalents at beginning of the year 9,876,1034,270,156 Cash and cash equivalents at end of year $ 10,806,2082,363$ Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss)$ 867,805(22,627,363)$ Adjustments to reconcile operating income (loss) to net cash provide by (used in) operating activities: Depreciation 221,9145,371,324 Decrease in accounts receivable 3,13431 Decrease in prepaid expense 51,39197,603 Change in deferred amounts related to pensions(288,444) (30,146) Change in net pension liability304,247 31,796 Increase/(Decrease) in accounts payable4,422,878 (224,571) Increase in due to other funds1,286,112 - Increase in claims and judgments 740,941- Increase in compensated absences2,496 2,099 Total adjustments 796,55811,196,247 Net cash provided by (used in) operating activities $ 1,664,363(11,431,116)$ See accompanying notes to financial statements. 26 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2017 Private-purpose Trust Fund AgencyRedevelopment FundsSuccessor Agency Assets: Cash and investments$ 1,174,022$ 229,290 Receivables: Interest 4,814 900 Taxes 3,709 - Due from other governments - 7,734,479 Land held for resale - 93,398 Restricted assets: Cash and investments - 11,040 Cash and investments with fiscal agents 1,760,976 1,524,624 Capital assets: Land 9,937,976 - Site improvements, net of accumulated depreciation - 86,042 Building and improvements, net of accumulated depreciation 79,014 - Infrastructure, net of accumulated depreciation - 3,720,497 Total assets $ 12,960,511 13,400,270 Deferred Outflows of Resources: Unamortized loss on refunding$ - 2,497,603 Liabilities: Accounts payable 124 1,052 Interest payable - 341,783 Due to external parties 12,960,387 - Bonds, due within on year - 853,660 Bonds and notes, due in more than one year - 50,848,271 Total liabilities $ 12,960,511 52,044,766 Net position (deficit): Trust deficit$ (36,146,893) See accompanying notes to financial statements. 27 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Private-purpose Trust Fund Redevelopment Successor Agency Additions: Property taxes$ 2,595,534 Miscellaneous 30,415 Total Additions 2,625,949 Deductions: Administrative expenses 48,966 Contractual services 217,781 Interest expense 1,472,708 Investment loss 6,844 Depreciation expense 90,159 Costs associated with bond refunding 972,650 Total Deductions 2,809,108 Change in Net Position (183,159) Net Position (deficit): Trust deficit, beginning of year (35,963,734) Trust deficit, end of year$ (36,146,893) See accompanying notes to financial statements. 28 NOTES TO BASIC FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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 Authority is governed by the Board of the Authority, which is comprised of City Council. Additionally, the City and Authority have a financial benefit or burden relationship. 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 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. On May 10, 2016, the City Council adopted Resolution 16-15 that removed the Successor Agency from the agreement and substituted the Santa Clarita Parking Authority. 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. 29 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments 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. Property taxes, taxpayer-assessed tax revenues (e.g., franchise taxes, sales taxes, motor vehicle fees, etc.), net of estimated refunds and uncollectible amounts, intergovernmental revenues, 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 to the extent normally collected within the availability period, as defined above. All other revenue items are considered measurable only when cash is received by the City. 30 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C.Basis of Accounting and Measurement Focus (Continued) 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. The City has elected the Bridge and Thoroughfare Special Revenue Fund as a major fund for public interest purposes. The Developer Fees Special Revenue Fund is used to account for monies received from developers restricted to fund specific projects and infrastructure maintenance throughout the City. 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 present 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. 31 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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 Redevelopment Successor Agency Private-Purpose Trust Fund is used to account for monies received from the Los Angeles 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 City 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). 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. 32 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 money market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are reported at fair value. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. 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 centration of Credit Risk - Con Foreign Currency Risk The City applies GASB Statement No. 72, Fair Value Measurements and Application for determining fair value measurements, applying fair value to investments, and disclosures related to the fair value hierarchy. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 33 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E.Land Held for Resale Land parcels held for resale are recorded at the lower of cost or net realizable 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. F.Interfund 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 considered 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. I.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. 34 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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, and 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 acquisition 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 or other functional expenditures such as public works. 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. 35 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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 includes 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 (CalPERS), and additions to/deductions from CalPERS’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. 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. A deferred outflow of resources is a consumption of net position or fund balance by a government that is applicable to a future reporting period. A deferred inflow of resources represents an acquisition of net position or fund balance by the government that is applicable to a future period. Deferred outflows and inflows of resources related to pensions represent amounts that will be recognized as adjustments to pension expense in future years. As noted in Note 13, deferred outflows and inflows of resources will be recognized as pension expense in future years. Contributions subsequent to the measurement period will be recognized during the fiscal year ending June 30, 2018. 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). 36 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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 of resources less liabilities and deferred inflows of resources, 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. 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. 37 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O.Net Position and Fund Balances (Continued) The City Council has approved an operating reserve to be used for one-time unanticipated expenditure requirements and local disaster. At June 30, 2017, the balance totaled $17,500,000, which is included in the unassigned fund balance in the General Fund. P.Spending Policy Government-Wide Financial Statements and Proprietary 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 balances 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 Resources, 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. Fund Financial Statements As described above, a deferred inflow of resources represents an acquisition of fund balance by the government that is applicable to a future period. In addition to unearned revenue, governmental funds report deferred inflows of resources related to resources that have 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. 38 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) S.Pronouncements Issued But Not Yet Adopted The GASB has issued pronouncements that have an effective date subsequent to June 30, 2017, which may impact future financial presentations. 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. 75 – In June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). This Statement is effective for fiscal years beginning after June 15, 2017, or the 2017-2018 fiscal year. The City has not determined the effect of the Statement. GASB Statement No. 81 – In March 2016, GASB issued Statement No. 81, Irrevocable Split–Interest Agreements.The objective of the Statement is to improve financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. The Statement requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, the Statement requires that a government recognize assets representing its beneficial interests in irrevocable split-interest agreements that are administered by a third party, if the government controls the present service capacity of the beneficial interests. The Statement requires that a government recognize revenue when the resources become applicable to the reporting period. The Statement is effective for the reporting periods beginning after December 15, 2016, or the 2017-18 fiscal year. The City has not determined the effect of the Statement. GASB Statement No. 83 – In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations.This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital asset should recognize a liability based on the guidance in this Statement. This Statement also requires disclosure of information about the nature of a government’s ARO, the methods and assumptions used for the estimates of the liabilities, and the estimated remaining useful life of the associated tangible capital assets. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018, or the 2018-19 fiscal year. The City has not determined the effect of the Statement. GASB Statement No. 84 – In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018, or the 2019-20 fiscal year. The City has not determined the effect of this Statement. GASB Statement No. 85 – In March 2017, GASB issued Statement No. 85, Omnibus 2017. The objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits \[OPEB\]). The Statement is effective for the reporting periods beginning after June 15, 2017, or 2017-2018 fiscal year. The City has not determined the effect of the Statement. 39 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) S.Pronouncements Issued But Not Yet Adopted (Continued) GASB Statement No. 86 – In May 2017, GASB issued Statement No. 86, Certain Debt Extinguishment Issues. The primary objective of this Statement is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources—resources other than the proceeds of refunding debt— are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. The Statement is effective for the reporting periods beginning after June 15, 2017, or 2017-2018 fiscal year. The City has not determined the effect of the Statement. GASB Statement No. 87 – In June 2017, GASB issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The Statement is effective for the reporting periods beginning after December 15, 2019, or 2020-2021 fiscal year. The City has not determined the effect of the Statement. NOTE 2 – CASH AND INVESTMENTS A.Cash and Investments Cash and investments at June 30, 2017, are classified in the accompanying financial statements as follows: GovernmentalBusiness-Type ActivitiesActivitiesFiduciary FundsTotal Cash and investments268,535,397$ 2,363$ 1,403,312$ 269,941,072$ Restricted assets: Cash and investments206,386 - 11,040 217,426 Cash and investments with fiscal agents7,154 - 3,285,600 3,292,754 Totals268,748,937$ 2,363$ 4,699,952$ 273,451,252$ 40 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 – CASH AND INVESTMENTS A.Cash and Investments (Continued) Cash and investments consisted of the following at June 30, 2017: Cash on hand and deposits: Cash on hand $ 4,838 Deposits with financial institutions 3,793,842 Certificates of deposit 549,998 4,348,678 Total Cash on Hand and Deposits Investments: U.S. Treasury Securities 46,711,861 U.S. Government-Sponsored Enterprise Securities94,820,048 Negotiable Certificate of Deposits 7,457,892 Supranational 14,929,793 Commercial Paper 7,286,845 Medium-Term Notes 64,341,364 Money Market Funds 285,908 Asset Backed 14,021,457 State of California Local Agency Investment Fund (LAIF)14,200,200 L.A. County Pooled Investment Fund (LACPIF)1,537,026 265,592,394 Total Investments Restricted investments: Money Market Funds 217,426 Restricted investments with fiscal agent: Money Market Funds 3,292,754 $ 273,451,252 Total cash and investments The carrying amounts of the City’s deposits were $4,348,678 at June 30, 2017. Bank balances before reconciling items were $6,617,137 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. 41 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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. Maximu m Percentage orMaximum AuthorizedMaximum Amount of Investment in Investment TypeMaturityPortfolio*One Issuer** Local Agency Bonds5 yearsNo Limit50% y Obligations5 yearsNo LimitNo Limit U.S. Treasur State of California Obligations5 yearsNo Limit50% California Local Agency Obligations5 yearsNo Limit50% U.S. Governmental-Sponsored Enterprise Securities5 yearsNo LimitNone Supranationals/Unsubordinated Obligations5 years30%10% Banker's Acceptances180 days40%30% per270 days25%10% Commercial Pa Negotiable Certificates of Deposit5 years30%50% purchase Agreements1 yearNo Limit50% Re Medium-Term Notes 5 years30%50% Money Market Funds years20%10% 5 Mortgage Pass-Through Securities 5 years20%50% Asset Backed years20%None 5 Los Angeles County Pooled Investment Fund (LACPIF) Not ApplicableNo LimitNo Limit State of California Local Agency Investment Fund (LAIF) pplicable$65,000,000 No Limit Not A * 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. 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. Maximu m Percentage ofMaximum MaximumAmount ofInvestment in Authorized Investment TypeMaturityPortfolioOne Issuer U.S. Treasury ObligationsN/A50%None U.S. Government-Sponsored Enterprise Securities5 yearsNoneNone Money Market Funds5 yearsoneone NN State of California Local Agency Investment Fund (LAIF)5 years30%None 42 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 – CASH AND INVESTMENTS (CONTINUED) 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 which 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. At June 30, 2017, the City had the following investment maturities: Investment Maturities (In Years) Investment TypeFair ValueLess Than 11 to 22 to 33 to 44 to 5 Investments: y Securities $ 46,711,861 $ 3,497,866 $ 5,683,889 $ 9,754,281 $ 20,596,265 $ 7,179,560 U.S. Treasur U.S. Government-Sponsored Enterprise Securities 94,820,048 9,889,699 18,097,629 33,504,409 12,039,678 21,288,633 Supranational 14,929,793 5,014,450 3,291,563 3,002,144 - 3,621,636 Negotiable Certificates of Deposit 7,457,892 7,457,892 - - - - Commercial Paper 7,286,845 7,286,845 - - - - Medium-Term Notes 64,341,364 20,563,552 12,542,107 9,689,488 10,143,027 11,403,190 Money Market Funds 285,908 285,908 - - - Asset Backed 14,021,457 296,632 4,952,288 8,772,537 - - Local Agency Investment Fund (LAIF) 14,200,200 14,200,200 - - - Los Angeles County Pooled 1,537,026 1,537,026 - - - Investments Fund (LACPIF) Total Investments 265,592,394 70,030,070 44,567,476 64,722,859 42,778,970 43,493,019 Restricted investments: Money Market Funds217,426 217,426 - - - - Restricted investments with fiscal agent: Money Market Funds3,292,754 3,292,754 - - - - Total Investments Subect j $ 73,540,250269,102,574$ 44,567,476$ 64,722,859$ 42,778,970$ 43,493,019$ to Interest Rate Risk 43 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 – CASH AND INVESTMENTS (CONTINUED) 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: Minimum Investment TypeRatingFair ValueAAAAA/A-1AUnrated Investments: U.S. Treasury SecuritiesNone $ 46,711,861 $ - $ 46,711,861 $ - $ - U.S. Government-Sponsored Enterprise SecuritiesNone 94,820,048 - 94,820,048 - - SupranationalAA 14,929,793 11,308,157 - - 3,621,636 Negotiable Certificates of DepositNone 7,457,892 - 7,457,892 Commercial PaperA-1 7,286,845 - 7,286,845 - Medium-Term Notes*A-1 64,341,364 3,383,806 21,401,809 39,424,749 131,000 Money Market FundsNone 285,908 285,908 - - - Asset BackedAA 14,021,457 7,238,460 - - 6,782,997 Local Agency Investment Fund (LAIF) None 14,200,200 - - - 14,200,200 Los Angeles County Pooled None 1,537,026 1,537,026 - - - (LACPIF) Investments Fund Total Investments 265,592,394 23,753,357 177,678,455 39,424,749 24,735,833 Restricted investments: Money Market FundsNone -- - 217,426 ,426 217 Restricted investments with fiscal agent: Money Market FundsNone -- - 3,292,754 3,292,754 Total Investments Subject $ 23,753,357269,102,574$ 177,678,455$ 39,424,749$ $ 28,246,013 to Interest Rate Risk * Included in the medium-term notes is an investment in Lehman Brothers, which is not rated as of June 30, 2017. 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, 2017, this investment is recorded at $131,000. F.Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer that represent 5 percent or more of the City’s total investments are as follows: IssuerInvestment TypeAmountInvestments U.S. Government-Sponsored Federal National Mortgage Enterprise Securities$ 35,269,27913.28% Association U.S. Government-Sponsored Federal Home Loan Bank Enterprise Securities$ 28,243,99310.63% U.S. Government-Sponsored Federal Home Loan Mortgage Enterprise Securities$ 25,648,6369.66% Corporation 44 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 – CASH AND INVESTMENTS (CONTINUED) G.Custodial Credit Risk 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, 2017, none of the City’s deposits or investments were exposed to custodial credit risk. H.Fair Value Classifications Fair value measurements are categorized based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments categorized as Level 2 are valued using market approach using quoted market prices and matrix pricing. Investments' fair value measurements are as follows as of June 30, 2017: Investment TypeFair ValueLevel 1Level 2 Level 3 Investments: U.S. Treasury Securities $ 46,711,861 $ - $ 46,711,861 $ - U.S. Government-Sponsored Enterprise Securities 94,820,048 - 94,820,048 - Supranational 14,929,793 - 14,929,793 - otiable Certificates of Deosits 7457892 - 7457892 - Negp,,,, e 7286845 - 7286845 - Commercial Papr,,,, Medium-Term Notes 64,341,364 - 64,341,364 - Asset Backed 14,021,457 - 14,021,457 - 249,569,260 $ - $ 249,569,260 $ - Total Leveled Investments Uncategorized Investments: Local Aenc Investment Fund LAIF 14200200 gy(),, 1,537,026 Los Angeles County Pooled Investments Fund (LACPIF) Mone Market Funds 285908 y, Restricted investments: Money Market Funds 217,426 Restricted investments with fiscal agent: Money Market Funds 3,292,754 $ 269,102,574 Total Investment Portfolio Deposits and withdrawals related to the investments in LAIF, LACPIF, and money market funds are are made on the basis of $1 and not fair value. Accordingly, under the fair value hierarchy these investments are uncategorized. 45 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 – CASH AND INVESTMENTS (CONTINUED) I.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 $65,000,000 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, 2017 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, 2017, the City had $14,200,200 invested in LAIF, which had invested 2.89 percent of the pool investment funds in structured notes and asset-backed securities. The LAIF fair value factor of 0.998940671 was used to calculate the fair value of the investments in LAIF from their amortized cost basis. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. J.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, 2017, the City had $1,537,026 invested in the LACPIF. NOTE 3 – LAND HELD FOR RESALE As of June 30, 2017, the City had $347,127 of land held for resale, which is reported at fair value. The allowance was reduced by $1,254,543 due to the City’s reassessment of value during the year. Non-Major Developer FeesGovernmental FundFundsTotal Land held for resale, cost260,238$ 807,401$ 1,067,639$ Less: cumulative allowance for the decline in value- (720,512) (720,512) Land held for resale, net260,238$ 86,889$ 347,127$ 46 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable as of June 30, 2017, including allowances for uncollectible accounts, is as follows: Landscape GeneralBridge andPublicMaintenance FundThoroughfareLibrarDistrict #1 y Gross receivables1,404,054$ 11,571$ 6$ 56,966$ Less: allowance for uncollectibles(674,373) - - (35,097) Net Total Receivables729,681$ 11,571$ 6$ 21,869$ Non-Major GovernmentalInternal FundsService FundsTransitTotal Gross receivables64,263$ 2,375$ 277$ 1,539,512$ Less: allowance for uncollectibles- - - (709,470) Net Total Receivables64,263$ 2,375$ 277$ 830,042$ NOTE 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 $2,476,974 at June 30, 2017, 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. NOTE 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. In fiscal year 2014-2015, 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, using a LAIF rate of 0.26 percent, which was in effect when the Oversight Board reinstated the loans on February 25, 2015. On September 22, 2015, the Committee on Budget and Fiscal Review of the California State Senate approved SB 107. A mandate of this legislation included a recalculation of the notes to the RDA Successor Agency using a 3 percent simple interest from the origination of the note, instead of the LAIF rate. For fiscal year 2016-2017 and subsequent, the loan amounts will increase by the 3 percent interest only. As of June 30, 2017, the loan amounts reported in the General Fund and Developer Fees Special Revenue Fund was $9,462,202 and $6,591,861, respectively. The unpaid accrued interest of these notes is $2,548,616 and $1,271,975, respectively. 47 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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, 2017: Governmental Activities BalanceBalance June 30, 2016Additions DeletionsTransfersJune 30, 2017 Governmental activities: Non-depreciable assets: Land $ 147,141,106 $ 15,830,838 $ - $ - $ 162,971,944 Construction in progress 5,922,009 31,053,974 - (4,106,864) 32,869,119 Total Non-Depreciable Assets 153,063,115 46,884,812 - (4,106,864) 195,841,063 Depreciable assets: Site improvements45,094,476 2,212,683 - - 47,307,159 Building and improvements71,942,196 694,904 - - 72,637,100 Equipment14,009,210 941,163 (1,221,554) - 13,728,819 Infrastructure926,471,193 26,534,708 - 4,106,864 957,112,765 30,383,4581,057,517,075 (1,221,554) 4,106,864 1,090,785,843 Total Depreciable Assets Less accumulated depreciation: Site improvements15,052,457 1,587,618 - - 16,640,075 Building and improvements19,211,419 1,574,475 - - 20,785,894 Equipment9,832,135 792,950 (1,221,554) - 9,403,531 Infrastructure321,640,168 18,833,113 - - 340,473,281 Total Accumulated Depreciation365,736,179 22,788,156 (1,221,554) - 387,302,781 7,595,302691,780,896 - 4,106,864 703,483,062 Total Depreciable Assets, Net $ 844,844,011$ 54,480,114$ -$ 899,324,125-$ Total Capital Assets, Net Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2017, as follows: Governmental Activities: General government$ 957,944 Public safety 15,133 Recreation and community service 2,374,232 Neighborhood services 6,583 Public works 376,599 Community development 2,638 Internal service funds depreciation 221,914 3,955,043 Allocated Depreciation Unallocated infrastructure depreciation 18,833,113 $ 22,788,156 Total Depreciation Expense 48 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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, 2017: Business-Type Activities BalanceBalance June 30, 2016AdditionsDeletionsJune 30, 2017 Business-type activities: Non-depreciable assets: ,087,880 $ - $ - 15,087,880 Land $ 15 Construction in progress 1,736 - - 1,736 Total Non-Depreciable Assets 15,089,616 - - 15,089,616 Depreciable assets: Site improvements12,941,276 - - 12,941,276 Building and improvements41,483,799 - - 41,483,799 Equipment49,540,292 8,284,045 (2,002,436) 55,821,901 8,284,045103,965,367 (2,002,436) 110,246,976 Total Depreciable Assets Less accumulated depreciation: Site improvements2,695,370 568,221 - 3,263,591 Building and improvements11,042,386 883,347 - 11,925,733 Equipment28,629,967 3,919,756 (1,991,557) 30,558,166 Total Accumulated Depreciation42,367,723 5,371,324 (1,991,557) 45,747,490 2,912,72161,597,644 (10,879) 64,499,486 Total Depreciable Assets, Net $ 2,912,72176,687,260$ (10,879)$ 79,589,102$ Total Capital Assets, Net Depreciation expense for business-type activities for the fiscal year ended June 30, 2017 was charged as follows: Business-type Activities: Transit enterprise fund$ 5,371,324 NOTE 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, 2017: Classification BalanceBalanceDue WithinDue More June 30, 2016Additions DeletionsJune 30, 2017One YearThan One Year Lease Revenue Bonds: Series 2016A (Golden Valley Road) $ 10,320,000 $ - $ (375,000) $ 9,945,000 $ 375,000 $ 9,570,000 Series 2016B (OSPD) 14,020,000 - (295,000) 13,725,000 275,000 13,450,000 Plus deferred amount for issuance premium 1,672,352 - (79,896) 1,592,456 79,896 1,512,560 Total Lease Revenue Bonds 26,012,352 - (749,896) 25,262,456 729,896 24,532,560 Private Placement Lease: Refunding, Series 20156,328,411 - (1,343,868) 4,984,543 1,388,803 3,595,740 Loans 200,000 (100,000)- 100,000 100,000 - Capital Leases 138,877 - (78,433) 60,444 28,244 32,200 Compensated absences 3,249,285 2,294,887 (2,058,057) 3,486,115 2,058,057 1,428,058 Claims and judgments 2,449,815 1,492,256 (751,315) 3,190,756 1,972,069 1,218,687 Total$ 38,378,740$ 3,787,143$ (5,081,569)$ 37,084,314$ 6,277,069$ 30,807,245 49 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 8 – LONG-TERM DEBT A.Governmental Activities (Continued) Lease Revenue Bonds – Series 2016A and 2016B In June 2016, the Authority issued Lease Revenue Refunding Bonds, Series 2016A (Golden Valley Road) and Series 2016B (OSPD), in the amount of $10,320,000 and $14,020,000, respectively. Interest on the Refunding Lease Revenue Bonds, Series 2016A, is paid as part of a variable rate between 2 percent and 4 percent payable on June 1 and December 1 of each year commencing on December 1, 2016. Interest on the Refunding Lease Revenue Bonds, Series 2016B, is paid as part of a variable rate between 2 percent and 4 percent payable on April 1 and October 1 of each year commencing on October 1, 2016. Principal payments are due annually in various amounts commencing December 1, 2016, through December 1, 2035, for Series 2016A, and October 1, 2016, through October 1, 2037, for Series 2016B. The unpaid balance as of June 30, 2017, was $9,945,000 for Series 2016A and $13,725,000 for Series 2016B. The annual debt service requirements on the remaining bonds are as follows: Series 2016A: Year Ending June 30,PrincipalInterestTotal 2018375,000$ 326,600$ $ 701,600 2019 385,000 311,400 696,400 2020 400,000 295,700 695,700 2021 420,000 279,300 699,300 2022 435,000 262,200 697,200 2023-2027 2,450,000 1,030,500 3,480,500 2028-2032 2,850,000 629,175 3,479,175 2033-2036 2,630,000 163,925 2,793,925 $ 9,945,000$ 3,298,800$ 13,243,800 Series 2016B: Year Ending June 30,PrincipalInterestTotal 2018275,000$ 430,206$ $ 705,206 2019 305,000 418,606 723,606 2020 340,000 405,706 745,706 2021 375,000 391,406 766,406 2022 410,000 375,706 785,706 2023-2027 2,630,000 1,590,931 4,220,931 2028-2032 3,620,000 1,134,525 4,754,525 2033-2037 4,675,000 564,516 5,239,516 2038 1,095,000 16,425 1,111,425 $ 13,725,000$ 5,328,027$ 19,053,027 50 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 8 – LONG-TERM DEBT (CONTINUED) A.Governmental Activities (Continued) Private Placement Lease In July 2015, the Authority entered into a lease assignment agreement in the amount of $6,985,000 with Umpqua Bank. Interest on the lease is paid as part of a variable rate between 3.5 percent and 4.0 percent payable on October 1 and April 1 of each year commencing on October 1, 2015. Principal payments are due annually in various amounts commencing October 1, 2015, through October 1, 2020. The unpaid balance as of June 30, 2017, was $4,984,543. The annual debt service requirements on these certificates are as follows: Year Ending June 30,PrincipalInterestTotal 2018$ 1,388,803$ 94,674$ 1,483,477 2019 1,418,260 66,198 1,484,458 2020 1,447,109 37,110 1,484,219 2021 730,371 7,450 737,821 $ 4,984,543$ 205,432$ 5,189,975 Loans BalanceBalanceDue WithinDue More June 30, 2016Additions DeletionsJune 30, 2017One YearThan One Year HUD Loans: Boys & Girls Club $ 51,000 $ - $ (23,000) $ 28,000 $ 28,000 $ - Scherzinger Lane 149,000 - (77,000) 72,000 72,000 - $ 200,000 $ - $ (100,000) $ 100,000 $ 100,000 $ - Total Loans 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, 2017 is $28,000. 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, 2017 is $72,000. 51 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 8 – LONG-TERM DEBT (CONTINUED) A.Governmental Activities (Continued) Future payment requirements for the loans are combined as follows: Year Ending June 30, PrincipalInterestTotal 2018$ 100,000$ 8,604$ 108,604 Capital Leases 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 $279 with an interest rate of 9.024 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment$ 13,433 Less: accumulated depreciation(7,836) Total$ 5,597 Future capital lease payment requirements are as follows: Year Ending June 30,Total 2018$ 3,348 2019 3,348 2020 279 Net minimum lease payments 6,975 Less: amount representing interest (638) Present value of net minimum lease payments$ 6,337 On August 1, 2014, the City County 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 $2,270 with an interest rate of 4.42 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment$ 121,956 Less: accumulated depreciation(71,141) Total$ 50,815 52 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 8 – LONG-TERM DEBT (CONTINUED) A.Governmental Activities (Continued) Future capital lease payment requirements are as follows: Year Ending June 30,Total 2018$ 27,235 2019 27,235 2020 2,270 Net minimum lease payments 56,740 Less: amount representing interest (2,633) Present value of net minimum lease payments$ 54,107 Compensated Absences The City’s liability for accrued and unpaid compensated absences in the governmental activities totaled $3,486,115 at June 30, 2017. The majority of compensated absences are liquidated through the General Fund. Claims and Judgments The City’s liability for outstanding claims and judgments is $3,190,756 at June 30, 2017 (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, 2017, is as follows: BalanceBalanceDue WithinDue More June 30, 2016Additions DeletionsJune 30, 2017One YearThan One Year Compensated absences $ 82,397 $ 60,101 $ (57,605) $ 84,893 $ 57,605 $ 27,288 NOTE 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, 2017, deposits payable were as follows: General Fund: Deposits from developers2,450,560$ Other deposits payable15,293,980 Total Deposits Payable17,744,540$ 53 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 10 – DEVELOPER CREDITS The City and 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, 2017, the City accrued a liability of $49,626,105 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, 2017: BalanceBalance June 30, 2016Additions DeletionsJune 30, 2017 Bridge and Thoroughfare Credits: Bouquet District $ 17,316,182 $ 4,639,596 $ - $ 21,955,778 Eastside District 11,927,888 - - 11,927,888 Via Princessa District 171,264 - - 171,264 Valencia District 15,571,175 - - 15,571,175 44,986,509 4,639,596 - 49,626,105 Total Bridge and Thoroughfare Credits NOTE 11 – INTERFUND TRANSACTIONS A.Due To/Due From At June 30, 2017, the City had the following short-term interfund receivables and payables: Due Fro m Other Funds General Due to Other Funds: Non-Major Governmental Funds3,094,421$ Transit Enterprise Fund1,286,112 Total$ 4,380,533 54 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 11 – INTERFUND TRANSACTIONS (CONTINUED) B.Advances At June 30, 2017, the City had the following interfund advances: Advances To Other Funds Develope r GeneralFeesTotal Advances From Other Funds: Bridge and Thoroughfare$ 8,500,970$ 121,708$ 8,622,678 Public Librar -8,755,134 8,755,134 y Total$ 17,256,104$ 121,708$ 17,377,812 Bridge and Thoroughfare 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, 2017, the amount of the advance outstanding is $555,960. 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, 2017, the amount of the advance outstanding is $974,720. In July 2015, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $400,000 to acquire the right-of-way for the project that will design and widen the Newhall Ranch Road Bridge over the San Francisquito Creek. 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, 2017, the amount of the advance outstanding is $408,525. In June 2016, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,000,000 for the design of mass grading plans, buttress fill, survey, topography, complete roadway design and signals for the future intersections and road extension. 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, 2017, the amount of the advance outstanding is $3,038,012. In January 2017, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,500,000 for the widening of the Newhall Ranch Road Bridge over the San Francisquito Creek (Project S1039). 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. The payments are payable in separate annual installments over an eight year period beginning January 2017 and ending June 2025. At June 30, 2017, the amount of the advance outstanding is $3,523,753. 55 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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, 2017, the amount of the advance outstanding is $121,708. Public Library The General Fund advanced the Public Library Special Revenue Fund $8,755,134, which consists of the following individual advances: 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, 2017, the amount of the advance outstanding is $295,217. 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, 2017, the principal amount of the advance of $388,323 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, 2017, the principal amount of the advance of $8,071,594 is outstanding. 56 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 11 – INTERFUND TRANSACTIONS (CONTINUED) C.Transfers At June 30, 2017, the City had the following transfers: Transfers Out GeneralBridge andDeveloperPublic FundThoroughfareFeesLibrary Transfers in: General Fund-$ 2,500$ 71,779$ 5,814$ Landscape Maintenance District #1150,600 - - - Non-Major Governmental Funds 4,946,245 - - - Transit Enterprise - - - - Internal Service Funds 79,052 - - - Total$ 5,175,897$ 2,500$ 71,779$ 5,814 Transfers Out LandscapeNon-MajorTransit MaintenanceGovernmentalEnterpriseInternal District #1FundsFundService FundsTotal Transfers in: General Fund80,062$ $ 563,544$ 181,948$ 478,376$ 1,384,023 Landscape Maintenance District #1 - - - - 150,600 Developer Fees - 250,000 - - 250,000 Non-Major Governmental Funds 17,000 1,295,155 3,690 6,262,090- Transit Enterprise 3,788,081- - 3,788,081- Internal Service Funds - - - - 79,052 Total$ 97,062$ 5,896,780$ 185,638$ 478,376$ 11,913,846 The General Fund made transfers to Landscape Maintenance District #1 and non-major governmental funds for operating and capital improvement projects for $2,945,975 and current year debt service payments for $2,150,871, totaling $5,096,846. Transfers from the General Fund to the Self-Insurance Internal Service Fund of $79,051 were for risk management operations. Transfers to the General Fund from the Self-Insurance Internal Service Fund for $473,770 represents Phase II of Edwards billboard removal settlement. The Bridge and Thoroughfare, Developer Fees, 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 $170,437. The Landscape Maintenance District #1 Special Revenue Fund made transfers to the General Fund and the non-major governmental fund for operating costs for $57,000. The Developer Fees Special Revenue Fund made transfers to the General Fund for operating costs for $71,779. The non-major governmental funds made transfers to the General Fund for operating costs for $478,036. Transfers from non-major governmental funds to non-major governmental funds of $1,271,835 represent debt service payments for the 2016 Lease Revenue Refunding Bonds. Transfers from the non-major governmental funds to non- major governmental funds of $23,321 were to transfer Miscellaneous Grant revenue to Miscellaneous Federal Grant revenues. Transfers from the non-major governmental funds to the Transit Enterprise Fund totaling $3,788,081 were to transfer Proposition A and Proposition C non-operating revenues in the current year. Transfers from the non-major governmental funds totaling $250,000 were to transfer Developer Fees revenues in the current year. The Transit Enterprise Fund made transfers to the General Fund for $150,000 to support the senior center transit operations. Transfers to non-major governmental funds for $3,690 were for the proportional share of Metrolink station maintenance. 57 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 12 – FUND BALANCES AND NET POSITION A.Fund Balance Classification The details of fund balance of the governmental funds as of June 30, 2017, are presented below: Major Governmental Funds Landscapeon-Major N GeneralBridge anDeveloperPublicMaintenanceGovernmental d FundThoroughfareFeeLibraryDistrict #1FundsTotal onspendable: N Prepaid items126,097$ -$ -$ 24,195$ 84,220$ -$ 234,512$ Advances to other funds15,619,607 *- - - - - 15,619,607 Total Nonspendable15,745,704 - - 24,195 84,220 - 15,854,119 Restricted: Landscape maintenance- - - - 31,749,394 6,489,913 38,239,307 Capital improvements- 2,718,868 2,464,481 - - 8,913,725 14,097,074 Transportation- - - - - 16,192,159 16,192,159 Open space preservation- - - - - 4,635,113 4,635,113 Public safet -- 2,218,227 - - 524,224 2,742,451 y Public librar -- - - - 1,244,736 1,244,736 y Air quality improvement- - 250,798 - - 589,208 840,006 Stormwater- - - - - 5,609,697 5,609,697 Public education and government- - - - - 1,811,285 1,811,285 Tourism marketing- - - - - 1,019,791 1,019,791 Low- and moderate-income housing- - 443,107 - - 658,236 1,101,343 Total Restricte 2,718,868- 5,376,613 - 31,749,394 47,688,087 87,532,962 d Committed: Capital improvements- - 14,000 - - - 14,000 Assigned: Capital projects15,500,000 - 148,766 - - 2,002,594 17,651,360 Claims and settlements5,156,328 - - - - - 5,156,328 Public facilities replacement58,710,756 - - - - - 58,710,756 Total Assigned79,367,084 - 148,766 - - 2,002,594 81,518,444 Unassigned53,902,478 - - (5,647,933) - (249,857) 48,004,688 Total Fund Balances149,015,266$ 2,718,868$ 5,539,379$ (5,623,738)$ 31,833,614$ 49,440,824$ 232,924,213$ * Accrued interest on General Fund advances to other funds of $1,636,497, do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN A.Plan Description The City’s defined benefit pension plan, California Public Employees’ Retirement System (CalPERS), provides pensions for all permanent full-time general and some part-time employees of the City. CalPERS is an agent-multiple employer defined benefit pension plan administered by the California Public Employees’ Retirement System. CalPERS acts as a common investment and administrative agent for its participating member employers and are included within Public Employees’ Retirement Fund A (PERF A). Benefits provisions under the Plan are established by State statute and may be amended by City resolution. CalPERS issues a publicly available financial report, which includes a full description of the pension plan regarding benefit provisions, and assumptions and membership information that can be obtained at https://www.calpers.ca.gov. 58 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN (CONTINUED) B.Benefits Provided CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits (total service across all CalPERS employers, and with certain other Retirement Systems with which CalPERS has reciprocity agreements). All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees’ Retirement Law. The Plan’s provisions and benefits in effect as of June 30, 2017 are summarized as follows: Miscellaneous Tier 2Tier 3 Tier 1 Formula2.7% at 552% at 602% at 62 Benefit vesting schedule5 years of service5 years of service5 years of service Benefit paymentsmonthly for lifemonthly for lifemonthly for life Retirement age556062 Monthly benefits, as a % of annual salary2.7%2.0%2.0% Required employee contribution rates*8%7%5.75% Required employer contribution rates 15.035%15.035%6.25% Tier 2Tier 3 Tier 1 Applies to:Employees hired before Employees hired Employees hired April 9, 2011**between April 9, 2011, January 1, 2013, or later and December 31, 2012, ** or those hired January 1, 2013, or later, who have been a Classic CalPERS member with a public agency or in a Classific reciprocal plan within the last 6 months). ** * For unrepresented Tier 1 participants, the City pays 3% of the required employee contribution. For the SEIU Tier 1 participants, the City pays 3% of the required employee contributions. The City does not pay any portion of the employee contribution for Tier 2 or Tier 3 participants. These payments are classified as employee contributions in accordance with GASB 68. ** Those hired as part-time seasonal (PTS) who later convert to regular full-time will qualify for Tier 1, 2 or 3 depending on their conversion date. C.Employees Covered by Benefit Terms At June 30, 2016, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits147 Employees entitled to but not yet receiving benefits411 Active employees396 954 The information was obtained from the CalPers Annual Valuation Report as of June 30, 2016, and is the most recent information available. 59 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN (CONTINUED) 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 CalPERS' 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. Refer to Section B for required contribution rates during the year ended June 30, 2017, including amounts paid by the City related to employees’ required contribution rates. The employer contributions during the year ended June 30, 2017 were $4,484,140. E.Actuarial Assumptions The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial assumptions: Valuation Date June 30, 2015 Measurement Date June 30, 2016 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.65 percent Inflation 2.75 percent Salary increases 3.3 to 14.2 percent by Entry, Age and Service Investment rate of return 7.65 percent Mortality rates were based on the 2014 CalPERS actuarial experience study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale AA. The Experience Study report can be obtained at CalPERS' website under Forms and Publications. 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. In determining the long-term expected 7.65 percent rate of return on pension plan investments, CalPERS took into account both short- and long-term market return expectations, as well as the expected pension fund cash flows. Based on the expected benefit payments of the Public Employees’ Retirement Fund, CalPERS indicated that a 19-year horizon was ideal in determining the level equivalent discount rate assumption. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short- and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short- and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are the same for each Plan. 60 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN (CONTINUED) E.Actuarial Assumptions (Continued) These geometric rates of return are net of administrative expenses and are summarized in the following table: New StrategicExpected Real RateExpected Real Rate Asset ClassAllocationof Return 1-10 Years (a)of Return 11+ Years (b) Global Equit51.0%5.25%5.71% y Global Debt Securities20.0%0.992.43 Inflation Assets6.0%0.453.36 Private Equity10.0%6.836.95 Real Estate10.0%4.505.13 Infrastructure and Forestland2.0%4.505.09 Liquidit1.0%-0.55-1.05 y 100% (a) An expected inflation rate of 2.5% used for this period (b) An expected inflation rate of 3.0% used for this period F.Discount Rate The discount rate used to measure the total pension liability was 7.65 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 the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65 percent discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.65 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress-test results are presented in a detailed report that can be obtained from the CalPERS website. 61 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN (CONTINUED) G.Changes in the Net Pension Liability Increase (Decrease) Total PensionPlan FiduciarNet Pension y Liability (a)Net Position (b)Liability (a) - (b) Balances at June 30, 2015147,685,835$ 116,829,771$ 30,856,064$ Changes recognized for the measurement period: Service cost 4,409,399 4,409,399- Interest 11,315,207 11,315,207- Differences between expected and actual experience (305,665) - (305,665) Contributions from the employe 3,959,503- (3,959,503) r Contributions from the employees- 2,252,522 (2,252,522) Net investment income- 622,282 (622,282) Benefit payments, including refunds of employee contributions(3,347,335) (3,347,335) - Administrative expense- (71,202) 71,202 Net changes 12,071,606 3,415,770 8,655,836 Balances at June 30, 2016$ 159,757,441$ 120,245,541$ 39,511,900 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, 2017, the total net pension liability was allocated as follows: GovernmentalTransitTotal Net ActivitiesEnterprise FunPension Liability d Net pension liability38,123,312$ 1,388,588$ 39,511,900$ 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 7.65 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 (6.65 percent) or 1-percentage point higher (8.65 percent) than the current rate: 1% DecreaseCurrent Discount1% Increase (6.65%)Rate (7.65%)(8.65%) Net pension liability64,806,444$ 39,511,900$ 18,875,340$ I.Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial report. 62 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 13 – AGENT MULITPLE-EMPLOYER PLAN (CONTINUED) J.Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2017, the City recognized pension expenses of $4,933,040. At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources. Deferred OutflowsDeferred Inflows of Resourcesof Resources Net difference between projected and actual earnings on pension plan investments6,650,643$ -$ Changes in assumptions (1,672,115)- Differences between expected and actual experience231,458 (236,196) City contributions subsequent to the measurement date4,484,140 Total$ (1,908,311)11,366,241$ At June 30, 2017, the total deferred outflow of resources and deferred inflow of resources related to the net pension liability was allocated as follows: GovernmentalTransit ActivitiesEnterprise FunTotal d Deferred outflows of resources10,966,791$ 399,450$ $ 11,366,241 Deferred inflows of resources (1,841,246) (67,065) (1,908,311) Amounts reported as deferred outflows of resources and deferred inflows of resources are amortized in pension expense for the year the gain or loss occurs, except for contributions subsequent to the measurement period of $4,484,140, which will be recognized as a reduction of the net pension liability during the fiscal year ending June 30, 2018. The amortization period differs depending on the source of the gain or loss. Differences between projected and actual investment earnings are amortized on a 5-year straight-line basis and all other amounts are amortized over the average expected remaining service lives of all members that are provided with benefits. As of the June 30, 2016 measurement date, the expected average remaining service lifetime is 4.4 years. Deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows/(Inflows) Fiscal Year Ending of Resources 2018$ 394,403 2019 394,401 2020 2,536,300 2021 1,648,686 Total$ 4,973,790 63 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 14 – POST-EMPLOYMENT HEALTH BENEFITS 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 CalPERS 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 city 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 $1,017 per month. The maximum benefit will be adjusted when the lowest cost employee rate, plus one, exceeds $1,017. 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. For employees hired before January 1, 2008 the following vesting applies: Years of ServiceVested Percentage 0 to 5 years0% 5 to 9 years50% 1 to 14 years75% 100% 15 years and greate r Employees hired after January 1, 2008, receive the PERS minimum and are not subject to a vesting schedule. As of the most recent valuation dated June 30, 2016, the total participants in the Plan are as follows: ParticipantsTotal Active employees369 Retirees103 Total472 C.Funding Policy 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. 64 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 14 – POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) C.Funding Policy (Continued) The obligation of the City to contribute to the plan is established and may be amended by the City Council. Employees are not required to contribute to the plan. The City has established a practice of contributing to the irrevocable trust administered by PARS 100% of the Cash Subsidy, an amount actuarially determined every two years in accordance with the parameters of GASB Statement 45. The Cash Subsidy represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost of each year. The Cash Subsidy component of the annual required contribution for fiscal year 2016-17 was $1,010,000, 3.5% of estimated covered payroll. Due to an amendment to Actuarial Standards of Practice (ASOP) No. 6 Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Costs or Contributions, valuations performed after March 31, 2015 requires the calculation of an implicit subsidy component of the annual required contribution and actuarial liability. The City has elected not to fund the implicit subsidy component of the annual required contribution. The City received credit of $189,000 related to the fiscal year 2016-17 implied subsidy payments which has been included in the contributions amount below. For fiscal year 2016-2017, the maximum benefit paid by the City, on an individual basis, for employees and retirees was: RetireesEmployees Unrepresented$ 12,199$ 16,163 SEIU Local 347 12,199 16,163 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: Cash BenefitImplied SubsidyTotal Annual required contribution$ 1,010,000$ 761,000$ 1,771,000 Interest on OPEB asset (464,804) - (465,000) Adjustment to annual required contribution 567,000 - 567,000 Annual OPEB cost (expense) 1,112,196 761,000 1,873,000 Contributions made 1,010,000 189,000 1,199,000 Decrease in OPEB asset (102,196) (572,000) (674,000) OPEB asset - beginning of year 7,150,774 7,150,774 OPEB asset - end of year$ 7,048,578$ (572,000)$ 6,476,774 65 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 14 – POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) D.Annual OPEB Cost and Net OPEB Obligation (Continued) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB asset for the current year and previous two years, were as follows: % of Annual AnnualOPEBOPEB OPEBAnnualCostAsset Fiscal Year EndedCostContributionContributed(Obligation) June 30, 20151,438,000$ 2,377,844$ 165.4%7,154,774$ June 30, 20161,374,000 1,370,000 99.7%7,150,774 June 30, 20171,873,000 1,199,000 64.0%6,476,774 The cash subsidy and implied subsidy trend information is as follows: Cash Subsid% of Annual y AnnualOPEBOPEB OPEBAnnualCostAsset Fiscal Year EndeCostContributionContributed(Obligation) d June 30, 20151,438,000$ 2,377,844$ 165.4%7,154,774$ June 30, 20161,374,000 1,370,000 99.7%7,150,774 June 30, 20171,112,196 1,010,000 90.8%7,048,578 Implied Subsid% of Annual y AnnualOPEBOPEB OPEBAnnualCostAsset Fiscal Year EndeCostContributionContributed(Obligation) d June 30, 2017761,000$ 189,000$ 24.8%(572,000)$ E.Funded Status and Funding Progress Actuarial valuations for OPEB plans involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. These actuarially determined amounts are subject to continual revisions as actual results are compared to past expectations and new estimates are made about the future. The schedule of funding progress presented immediately following the financial statements as required supplementary information, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the type of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The actuarial calculations of the OPEB plan reflect a long-term perspective. 66 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 14 – POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) E.Funded Status and Funding Progress (Continued) As of June 30, 2016, the most recent actuarial valuation date, the Plan was 88.8 percent funded. The actuarial accrued liability for benefits was $37.3 million, and the actuarial value of assets was $33.1 million, resulting in a UAAL of $4.2 million. The covered payroll (annual payroll of active employees covered by the Plan) was $28.7 million, and the ratio of UAAL to the covered payroll was 14.57 percent. The Plan is comprised of a Cash Subsidy component and an Implied Subsidy component. The Cash Subsidy component of the plan was 105% funded. The Cash Subsidy actuarial accrued liability for benefits was $31.4 million, and the Cash Subsidy actuarial value of assets was $33.0 million. F.Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend rate. Amounts determined regarding the funded status of the Plan and the ARC are subject to continual revision, as actual results are compared with past expectations, and new estimates are made about the future. In the June 30, 2016, actuarial valuation, the entry-age actuarial cost method was used. The actuarial assumptions include a 6.50 percent investment rate of return, which is based on the expected return on funds invested by PARS, and an annual healthcare cost trend rate based on actual premiums. The actuarial assumption for inflation was 3.00 percent, and the aggregate payroll increase was 3.25 percent used in the actuarial valuation. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2016 was 17 years. NOTE 15 – INDIVIDUAL FUND DISCLOSURES – DEFICIT FUND BALANCE Funds that have a deficit fund balance at June 30, 2017, are as follows: Deficit Fund FundBalance Major Funds: Public Library Special Revenue Fund(5,623,738)$ Non-Major Governmental Funds: State Park Special Revenue Fund(59,099) Surface Transportation Program Special Revenue Fund(49,342) Federal Grants Special Revenue Fund(141,416) 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. 67 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 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 $18,000 per participant per year. Employee contributions to certain plans are voluntary. During the year ended June 30, 2017, there were 1120 participants in the plans. The City’s contributions totaled $198,223, and employees’ contributions totaled $2,200,954. NOTE 17 – SELF-INSURANCE 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. Settlements have not exceeded coverages for each of the past three fiscal years. The annual member contribution is $1,178,530 for the property/liability program and the workers’ compensation program (based on estimated wages). At June 30, 2017, $90,000 was accrued by the City for general liability claims, and $3,100,756 was accrued for workers’ compensation claims and judgments. These accruals represent estimates of amounts to be paid for incurred and reported claims, as well as IBNR claims based upon past experience and modified for current trends and information. Changes in the reported claims liability since June 30, 2015, resulted in the following: Claims liability as of June 30, 2015$ 1,993,915 Claims and changes in estimates during the year ended June 30, 2016 1,430,171 Claims and payments during the year ended June 30, 2016 (974,271) Claims liability as of June 30, 2016 2,449,815 Claims and changes in estimates during the year ended June 30, 2017 1,919,471 Claims and payments during the year ended June 30, 2017 (1,178,530) Claims liability as of June 30, 2017$ 3,190,756 68 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 18 – NON-COMMITMENT DEBT A.1915 Act Limited Obligation Improvements Bonds – Golden Valley 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, 2017, was $300,000. B.1915 Act Limited Obligation Improvements Bonds – Vermont/Everett 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, 2017, was $405,000. 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, 2017 was $14,975,000. NOTE 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, 2017, 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, California 91355. 69 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 20 – SANTA CLARITA PUBLIC TELEVISION AUTHORITY 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 following entities have joined the SCPTA: Saugus Union School District, Newhall School District, Sulfur Springs School District, Castaic Union School District, and College of the Canyons. The SCPTA has a seven-member Board of Directors consisting of one member appointed by each school district, one member from the College, and one member 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, 2017, the City contributed $276,750. Separate financial statements for the Santa Clarita Public Television Authority are prepared biannually and can be obtained from the City’s administrative offices at 23920 Valencia Boulevard, Santa Clarita, California 91355. NOTE 21 – COMMITMENTS AND CONTINGENCIES A.Construction Commitments The City has active construction projects as of June 30, 2017. At year-end, the City’s commitments with contractors for infrastructure projects are as follows: Expenditures Contractto Date as ofRemaining ProjectAmountJune 30, 2017Commitments Pavement818,358$ 690,109$ $ 128,249 Bridges 25,100,842 10,131,061 14,969,781 Sidewalks 1,940,944 172,125 1,768,819 Medians 150,000 142,120 7,880 Trails 418,890 292,331 126,559 Traffic Signals 12,871,609 3,041,531 9,830,078 Street Signs 128,165 68,056 60,109 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. 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, 2017, as follows: Amount General Fund1,401,513$ Other governmental funds39,282,990 70 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 21 – COMMITMENTS AND CONTINGENCIES (CONTINUTED) C.Contingencies 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 the opinion of management and legal counsel, there are no liabilities that would have a substantial adverse effect on the financial position of the City as of June 30, 2017. NOTE 22 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (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, 2017, classified in the accompanying financial statements as follows: RDA Successor Agenc y Cash and investments pooled with City$ 229,290 Restricted: Cash and investments 11,040 Cash and investments with fiscal agent 1,524,624 Total$ 1,764,954 B.Land Held for Resale As of June 30, 2017, the Successor Agency has $93,398 of land held for resale, which is reported at net realizable value. The book value declined by $129,181 in the current year. 71 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 22 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED) C.Due From Other Governments Pursuant to Health and Safety Code section 34167.5, in February 2015, the State Controller’s Office (SCO) reviewed all asset transfers made by the former RDA to the City after January 1, 2011. As a result of this review, the SCO concluded that assets transferred after January 1, 2011, included unallowable transfers to the City totaling $14,628,194. In subsequent actions, the City returned property valued at $763,436 to the Successor Agency, leaving $13,864,758 in unallowable transfers to be returned by the City to the Successor Agency as of February 2015. The City has transferred certain assets to the Successor Agency. As of June 30, 2017, $7,734,479 of these unallowable transfers remains due from the City to the Successor Agency. D.Capital Assets BalanceBalance June 30, 2016Additions DeletionsJune 30, 2017 RDA Successor Agency: Depreciable assets: Site improvements$ 110,310$ -$ - $ 110,310 Infrastructure4,287,341 - - 4,287,341 -4,397,651 - 4,397,651 preciable Assets Total De Less accumulated depreciation: Site improvements19,856 4,412 - ,268 24 Infrastructure481,097 85,747 - 566,844 90,159500,953 - 591,112 Total Accumulated Depreciation (90,159)3,896,698 - preciable Assets, Net Total De ,806,539 3 $ (90,159)3,896,698$ -$ 3,806,539$ Total Capital Assets, Net The total depreciation expense charged to the RDA Successor Agency as of June 30, 2017, was $90,159. E.Long-Term Debt Classification Due WithinDue More BalanceBalance DeletionsJune 30, 2017One YeaThan One Year r June 30, 2016Additions RDA Successor Agency: Loans from the City of Santa Clarita15,687,058$ 367,005$ -$ 16,054,063$ -$ 16,054,063$ Tax Allocation Bonds: Series 200826,685,000 - (26,685,000) - - - Housing Set-Aside7,910,000 - (7,910,000) - - - Refunding Series 2017- 34,800,000 - 34,800,000 820,000 33,980,000 Less deferred amounts for unamortized discounts(121,666) 861,893 107,641 847,868 33,660 814,208 35,661,89334,473,334 (34,487,359) 35,647,868 853,660 34,794,208 Total Tax Allocation Bonds $ 36,028,89850,160,392$ (34,487,359)$ 51,701,931$ 853,660$ 50,848,271$ Total 72 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 22 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED) E.Long-Term Debt (Continued) 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 using a LAIF rate of 0.26 percent, which was in effect when the Oversight Board reinstated the loans on February 25, 2015. On September 22, 2015, the Committee on Budget and Fiscal Review of the California State Senate approved SB 107. A mandate of this legislation included a recalculation of the notes to the RDA Successor Agency using a 3 percent simple interest from the origination of the note, instead of the LAIF rate. As such, the City increased the amounts in the General Fund and Developer Fees Special Revenue Fund to reflect increased interest balances. The unpaid accrued interest of these notes is $2,548,616 and $1,271,975, respectively, and unpaid principal of $6,913,586 and $5,319,886, respectively. 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 nor payable out of any funds or properties other than those of the Successor Agency. Tax Allocation Bonds – Series 2008 and Housing Set-Aside As described under Tax Allocation Refunding Bonds – Series 2017 below, in February 2017, the Successor Agency refunded the Tax Allocation Bonds Series 2008 of $26,685,000 and Tax Allocation Bonds Housing Set-Aside of $7,910,000. The difference between the reacquisition price and carrying value of the refunded debt is reported as a deferred outflow of resources as of June 30, 2017, totaling $2,497,603. This amount will be amortized over the life of the refunding debt, as a component of interest expense. Tax Allocation Refunding Bonds – Series 2017 In February 2017, the Successor Agency issued Tax Allocation Refunding Bonds, Series 2017, in the amount of $34,800,000. Interest on the Tax Allocation Refunding Bonds, Series 2017, is paid as part of a variable rate between 2 percent and 5 percent payable on April 1 and October 1 of each year commencing on April 1, 2017. Principal payments are due annually in various amounts commencing October 1, 2017, through October 1, 2042. The unpaid balance as of June 30, 2017, was $34,800,000. Proceeds from the Tax Allocation Refunding Bonds, Series 2017, along with other funds, were used to redeem and defease through advance refunding all the outstanding balance of the Tax Allocation Bonds Series 2008. The refunding provided for a cumulative savings of $3,151,912 over the life of the bonds, resulting in an economic gain of $1,424,187 net of other funds to fund the redemption, or 4.20 percent of the refunded principal. As of June 30, 2017, the outstanding amount of the refunded Tax Allocation Bonds Series 2008 was $26,155,000, and $7,755,000 Housing Set-Aside. These amounts are considered defeased for financial reporting purposes. 73 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 22 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED) E.Long-Term Debt (Continued) Tax Allocation Refunding Bonds – Series 2017 (Continued) The annual debt service requirements on these bonds are as follows: Year Ending June 30,PrincipalInterestTotal 2018820,000$ 1,374,294$ $ 2,194,294 2019 800,000 1,354,094 2,154,094 2020 820,000 1,325,694 2,145,694 2021 850,000 1,288,044 2,138,044 2022 895,000 1,244,419 2,139,419 2023-2027 5,180,000 5,488,469 10,668,469 2028-2032 6,430,000 4,267,531 10,697,531 2033-2037 7,680,000 2,975,472 10,655,472 2038-2042 9,250,000 1,365,450 10,615,450 2043 2,075,000 41,500 2,116,500 Total$ 34,800,000$ 20,724,967$ 55,524,967 F.Deficit Net Position As of June 30, 2017, the RDA Successor Agency Private-Purpose Trust Fund had a deficit net position of $36,146,893. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County and potential asset sales. 74 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: $ 81,141,00883,823,198$ Taxes$ 321,97381,462,981$ 5,520,500 6,623,532 Licenses and permits 784,8257,408,357 265,576 323,076 Intergovernmental (81,084)241,992 7,147,163 7,834,241 Charges for services 563,0338,397,274 1,229,619 1,229,619 Investment income (692,014)537,605 470,300 470,300 Fines and forfeitures 236,570706,870 258,116 287,912 Other revenue (226,124)61,788 Total Revenues 97,909,68898,714,472 98,816,867 907,179 Expenditures: Operating: 37,588,11438,237,968 Personnel 951,07236,637,042 71,312,15356,564,546 25,585,81945,726,334 Operating 2,252,749 2,569,935 Capital outlay 191,1692,378,766 Capital Improvement Projects: 2,499,951 2,278,695 Personnel 71,6412,207,054 100,101 124,016 Operating 37,78486,232 119,215 119,215 Capital outlay -119,215 Total Expenditures 113,992,12899,774,529 87,154,643 26,837,485 Excess (deficiency) of revenues over (under) expenditures (1,060,057) (16,082,440) 11,662,224 27,744,664 Other financing sources (uses): 750,000 598,250 Other Financing Uses (598,250)- 13,502,54812,771,050 Transfers in (12,118,525)1,384,023 (18,323,693)(17,592,019) 13,147,796(5,175,897) Transfers out Total Other Financing Sources (Uses) (4,222,895)(4,070,969) (3,791,874) 431,021 Net Change in Fund Balances $ (20,305,335)(5,131,026)$ 7,870,350 28,175,685$ Fund Balance at Beginning of Year 141,144,916 Fund Balance at End of Year$ 149,015,266 75 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL BRIDGE AND THOROUGHFARE SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: $ 300,118300,118$ Investment income$ 3,960304,078$ 7,420,000 248,150 35,325283,475 Developer fees Total Revenues 548,2687,720,118 587,553 39,285 Expenditures: Operating: 337,303178,920 Personnel 233,629103,674 16,48016,480 Operating (67,750)84,230 4,4564,458 Capital outlay -4,456 Capital Improvement Projects: -- Personnel (74,001)74,001 3,427,546 9,475,270 Operating 8,146,1041,329,166 Capital outlay -- Debt service: 6,710,800 258,456 Debt services (70,470)328,926 Total Expenditures 10,338,204 10,091,965 1,924,453 8,167,512 Excess (deficiency) of revenues - over (under) expenditures (2,618,086) (9,543,697) (1,336,900) 8,206,797 Other financing sources (uses): (4,132) (2,540) Transfers out 40(2,500) Net Chane in Fund Balances$ (9,546,237)(2,622,218)$ (1,339,400) 8,206,837$ g Fund Balance at Beginning of Year 4,058,268 Fund Balance at End of Year$ 2,718,868 76 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL DEVELOPER FEES SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: $ 4,8504,850$ Investment income (loss)$ (5,174)(324)$ 1,633,080- Developer fees 392,5592,025,639 - 9,181 Other revenue - (9,181) Total Revenues 4,850 1,647,111 2,025,315 378,204 Expenditures: Operating: 1,686,467- 350,0001,336,467 Operating Capital Improvement Projects: 3,309,7811,674,713 Operating 3,230,70679,075 Total Expenditures 4,996,2481,674,713 1,415,542 3,580,706 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,669,863) (3,349,137) 609,773 3,958,910 Other financing sources (uses): 250,000- -250,000 Transfer in (71,780)(21,500) Transfer out 1(71,779) Total Other Financing Sources (Uses) 178,220(21,500) 178,221 1 Net Change in Fund Balance $ (1,691,363)$ (3,170,917) 787,994$ 3,958,911 Fund Balance at Beginning of Year 4,751,385 Fund Balance at End of Year $ 5,539,379 77 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PUBLIC LIBRARY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Taxes6,251,584$ 6,341,584$ 6,415,945$ 74,361$ Charges for services85,000 85,000 85,000 - Investment income- - 3,451 3,451 Other revenue150,000 150,000 176,123 26,123 Total Revenues 6,576,5846,486,584 6,680,519 103,935 Expenditures: Operating: Personnel251,039 238,113185,449 52,664 Operating4,837,028 5,281,970 5,019,185 262,785 Capital outlay47,000 47,000 42,945 4,055 Debt service: Principal retirement408,600 408,600 - 408,600 Interest and fiscal charges91,400 91,400 115,271 (23,871) Total Expenditures 6,067,0835,635,067 5,362,850 704,233 Excess (deficiency) of revenues - over (under) expenditures851,517 509,501 1,317,669 808,168 Other financing sources (uses): Transfers out(8,295) (5,565) (5,814) (249) Net Change in Fund Balances $ 503,936843,222$ 1,311,855$ 807,919$ Fund Balance at Beginning of Year(6,935,593) Fund Balance at End of Year$ (5,623,738) 78 CITY OF SANTA CLARITA, CALIFORNIA 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, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Taxes948,650$ 948,650$ 986,814$ 38,164$ Special assessments16,193,398 16,443,398 16,098,524 (344,874) Investment income272,791 272,791 68,525 (204,266) Total Revenues 17,664,83917,414,839 17,153,863 (510,976) Expenditures: Operating: Personnel806,692 1,879,305 1,768,011 111,294.00 Operating12,100,008 12,577,378 11,949,102 628,276 Capital outlay115,985 160,208 160,208 - Capital Improvement Projects: Personnel- - 117,184 (117,184) Operating3,050,020 7,281,502 3,966,158 3,315,344 Total Expenditures 21,898,39316,072,705 17,960,663 3,937,730 Excess (deficiency) of revenues over (under) expenditures1,342,134 (4,233,554) (806,800) 3,426,754 Other financing sources (uses): Transfers in10,000 150,600 150,600 - Transfers out(237,183) (99,362) (97,062) 2,300 Total Other Financing Sources (Uses) 51,238(227,183) 53,538 2,300 Net Change in Fund Balances$ (4,182,316)1,114,951$ (753,262) 3,429,054$ Fund Balance at Beginning of Year 32,586,876 Fund Balance at End of Yea$ 31,833,614 r 79 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FUNDING PROGRESS FOR THE YEAR ENDED JUNE 30, 2017 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): Schedule of Funding Progress (A)(B)(C) (D)(E)(F) (Unfunded) (Unfunded)Actuarial ActuarialActuarialLiability as ActuarialActuarialAccruedAccruedFundedAnnualPercentage of ValuationAssetLiabilityLiabilityRatioCoveredCovered Payroll DateValueEntry Age\[(B)-(A)\]\[(A)/(B)\]Payroll\[(C)/(E)\] 6/30/201219,928$ 30,879$ (10,951)$ 64.54%23,880$ 45.86% 6/30/201427,035 28,876 (1,841) 93.62%27,368 6.73% 6/30/201633,073 37,258 (4,185) 88.77%28,731 14.57% The plan is comprised of a cash subsidy component and an implied subsidy component. The funded status of the components of the plan is as follows (in thousands): Schedule of Funding Progress - Cash Subsidy Component (A)(B)(C) (D)(E)(F) (Unfunded) (Unfunded)Actuarial ActuarialActuarialLiability as ActuarialActuarialAccruedAccruedFundedAnnualPercentage of ValuationAssetLiabilityLiabilityRatioCoveredCovered Payroll DateValueEntry Age\[(B)-(A)\]\[(A)/(B)\]Payroll\[(C)/(E)\] 6/30/201219,928$ 30,879$ (10,951)$ 64.54%23,880$ 45.86% 6/30/201427,035 28,876 (1,841) 93.62%27,368 6.73% 6/30/201633,073 31,417 1,656 105.27%28,731 -5.76% Schedule of Funding Progress - Implied Subsidy Component (A)(B)(C) (D)(E)(F) (Unfunded) (Unfunded)Actuarial ActuarialActuarialLiability as ActuarialActuarialAccruedAccruedFundedAnnualPercentage of ValuationAssetLiabilityLiabilityRatioCoveredCovered Payroll Date*ValueEntry Age\[(B)-(A)\]\[(A)/(B)\]Payroll\[(C)/(E)\] 6/30/2016-$ 5,841$ (5,841)$ 0.00%28,731$ 20.33% * Based on most resent actuarial valuation available 80 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CHANGES IN THE CITY’S NET PENSION LIABILITY AND RELATED RATIOS LAST TEN YEARS* AS OF THE FISCAL YEAR ENDED JUNE 30, 2017 The Schedules of Changes in the City’s Net Pension Liability and Related Ratios are as follows: Measurement DateJune 30, 2016June 30, 2015June 30, 2014 Total Pension Liability Service cost$ 4,409,399$ 4,418,053$ 4,462,544 Interest 11,315,207 10,443,680 9,588,693 Difference between Expected and Actual Experience (305,665) 416,626 - Changes of Assumptions (3,009,808)- - Benefit Payments, Including Refunds of Employee Contributions (3,347,335) (2,971,092) (2,561,655) Net Change in Total Pension Liability 12,071,606 9,297,459 11,489,582 Total Pension Liability - Beginning 147,685,835 138,388,376 126,898,794 Total Pension Liability - Ending (a) $ 159,757,441$ 147,685,835$ 138,388,376 Plan Fiduciary Net Postion Contributions - Employer$ 3,959,503$ 3,740,145$ 3,562,246 Contributions - Employee 2,252,522 2,164,107 2,339,435 Net Investment Income 622,282 2,506,239 16,243,165 Administrative expenses (71,202) (131,529) - Benefit Payments, Including Refunds of Employee Contributions (3,347,335) (2,971,092) (2,561,655) Plan to Plan Resource Movement - 9,685 - Net Change in Fiduciary Net Position 3,415,770 5,317,555 19,583,191 Plan Fiduciary Net Postition - Beginning 116,829,771 111,512,216 91,929,025 Plan Fiduciary Net Postion - Ending (b) $ 120,245,541$ 116,829,771$ 111,512,216 Net pension liability - ending (a) - (b) $ 39,511,900$ 30,856,064$ 26,876,160 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.27%79.11%80.58% Covered Payroll $ 29,934,377$ 27,234,699$ 26,879,556 Plan Net Pension Liability as a Percentage of Covered Payroll 132.00%113.30%99.99% Notes: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes that occurred after June 30, 2014. 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: The discount rate was revised from 7.5% to 7.65% during the measurement period ending June 30, 2015 to be in accordance with GASB 68 paragraph 68. * Fiscal Year 2014-15 was the first year of implementation; therefore only three years are shown until a full 10-year trend is compiled. 81 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CITY CONTRIBUTIONS LAST TEN YEARS* AS OF THE FISCAL YEAR ENDED JUNE 30, 2017 The Schedule of City Contributions during the fiscal year is as follows: June 30, 2017June 30, 2016June 30, 2015June 30, 2014 Actuarially determined contribution$ 4,484,140$ 3,958,892$ 3,740,138$ 3,562,246 Contributions in relation to the actuarially determined contribution(4,484,140) (3,958,892) (3,740,138) (3,562,246) Contribution deficiency (excess)$ -$ -$ -$ - Covered Payroll$ 29,966,168$ 27,934,377$ 27,234,699$ 26,879,556 Contributions as a Percentage of Covered Payroll14.96%14.17%13.73%13.25% Valuation Date: The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2016-17 were from June 30, 2014 public agency valuations. Actuarial Cost methodEntry Age Normal Amortization methodLevel Percentage of Payroll, Closed Remaining amortization period18 years Asset valuation methodActuarial Value of Assets Inflation2.75% Salary increaseVaries by Entry Age and Service Investment rate of return7.65% Retirement ageThe probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. MortalityThe 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. 82 June 30, 2013June 30, 2012June 30, 2011June 30, 2010June 30, 2009June 30, 2008 $ 3,319,326$ 3,224,628$ 2,916,852$ 2,919,550$ 2,865,328$ 2,659,975 (3,319,326) (3,224,628) (2,916,852) (2,919,550) (2,865,328) (2,659,975) $ -$ -$ -$ -$ -$ - $ 25,256,659$ 24,807,314$ 24,940,516$ 25,336,721$ 26,145,818$ 23,355,540 13.14%13.00%11.70%11.52%10.96%11.39% 83 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2017 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 at the category level. The City reports the following categories: personnel, operating and capital outlay. Additionally, the City separately prepares a capital improvement projects budget. The City’s Department Heads, with approval of the City Manager, may make transfers of appropriations within certain line-items within a program, but may not exceed the total appropriated amounts for each category. City Manager may approve transfers that do not change the total appropriated amount within the fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the category 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. 84 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2017 For the year ended June 30, 2017, expenditures exceeded appropriations in the following categories (legal level of budgetary control) of the respective funds: Excess Expenditures Over FundAppropriationsExpendituresAppropriations Major Governmental Funds: Bridge and Thoroughfare Special Revenue Fund Operating - Operating$ 16,480$ 84,230$ (67,750) Capital Improvement Projects - Personnel 74,001- (74,001) Debt Service - Debt Services 258,456 328,926 (70,470) Public Library Special Revenue Fund Debt Service - Interest and Fiscal Charges 91,400 115,271 (23,871) Transfers Out 5,565 5,814 (249) Landscape Maintenance District #1 Special Revenue Fund Capital Improvement Projects - Personnel 117,184- (117,184) Non-Major Governmental Funds: Gas Tax Special Revenue Fund Capital Improvement Projects - Personnel 39,850- (39,850) TDA Special Revenue Fund Capital Improvement Projects - Personnel 22,389- (22,389) Traffic Safety Special Revenue Fund Transfers Out 400,000 411,036 (11,036) Air Quality Management District Special Revenue Fund Capital Improvement Projects - Personnel 25,166- (25,166) Stormwater Special Revenue Fund Capital Improvement Projects - Personnel - 4,976 (4,976) Public Education and Government Special Revenue Fund Operating - Operating 50,000 81,153 (31,153) Proposition C Special Revenue Fund Capital Improvement Projects - Personnel 67,152- (67,152) Federal Grants Special Revenue Fund Capital Improvement Projects - Personnel 131,158- (131,158) Measure R Special Revenue Fund Capital Improvement Projects - Personnel 57,004- (57,004) Tourism Marketing District Special Revenue Fund Operating - Personnel 19,328 19,410 (82) Open Space Preservation District Special Revenue Fund Transfers Out 641,112 641,173 (61) General Capital Projects Fund Capital Improvement Projects - Personnel 399,216- (399,216) 85 CITY OF SANTA CLARITA, CALIFORNIA NON-MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 The Special Revenue Funds are used to account for proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. 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 with the districts. State Par k – 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. Library Facilities Fees – To account for monies received from the library facilities developer fees, which are restricted for use on library facilities. 86 CITY OF SANTA CLARITA, CALIFORNIA NON-MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds (Continued) Public Education and Government – To account for the one-percent (1%), 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%) 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. 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 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. 87 CITY OF SANTA CLARITA, CALIFORNIA NON-MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 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. 88 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Special BikewayGas TaxProposition AAssessment Assets: Cash and investments-$ 2,425,945$ 1,285,926$ 7,713,556$ Receivables: Accounts, net- 21,657 - 36,261 Interest- 9,637 5,507 34,731 Taxes- - - 155,445 Loans- - - - Due from other governments139,785 - - - Land held for resale- - - - Restricted assets: Cash and investments- - - - Cash and investments with fiscal agents- - - - Total Assets $ 2,457,239139,785$ 1,291,433$ 7,939,993$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities$ 34,066$ 222,322$ 400$ 187,997 Due to other governments - - - - Due to other funds 21,894 - - 43,232 Total Liabilities 55,960 222,322 400 231,229 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund balances (deficit): Restricted 83,825 2,234,917 1,291,033 7,708,764 Assigned - - - - Unassigned - - - - Total Fund Balances (Deficit) 83,825 2,234,917 1,291,033 7,708,764 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 139,785$ 2,457,239$ 1,291,433$ 7,939,993 (Continued) 89 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds State ParkTDATraffic SafetyCDBG Assets: Cash and investments$ 5,899,518-$ $ -$ - Receivables: Accounts, net - - - - Interest - 25,264 - - Taxes - - - - Loans - - - 94,575 Due from other governments 60,260 - 40,977 110,020 Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total Assets $ 60,260$ 5,924,782$ 40,977$ 204,595 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities$ 342$ 323,424$ -$ 64,272 Due to other governments - - - - Due to other funds 58,757 - 40,977 45,748 Total Liabilities 59,099 323,424 40,977 110,020 Deferred Inflows of Resources: Unavailable revenues 60,260 - - 94,575 Total Deferred Inflows of Resources 60,260 - - 94,575 Fund balances (deficit): Restricted 5,601,358 - - Assigned - - - - Unassigned (59,099) - - - Total Fund Balances (Deficit) (59,099) 5,601,358 - - Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 60,260$ 5,924,782$ 40,977$ 204,595 (Continued) 90 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Surface TransportationBJA Law AQMDStormwaterProgramEnforcement Assets: Cash and investments$ 585,358$ 5,616,495$ -$ - Receivables: Accounts, net - 6,345 - - Interest 2,507 24,036 - - Taxes - 97,613 - - Loans - - - - Due from other governments 71,288 - 49,343 - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total Assets $ 659,153$ 5,744,489$ 49,343$ - Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities$ 69,946$ 134,792$ 49,342$ - Due to other governments - - - - Due to other funds - - - - Total Liabilities 69,946 134,792 49,342 - Deferred Inflows of Resources: Unavailable revenues - - 49,343 - Total Deferred Inflows of Resources - - 49,343 - Fund balances (deficit): Restricted 589,207 5,609,697 - - Assigned - - - - Unassigned - - (49,342) - Total Fund Balances (Deficit) 589,207 5,609,697 (49,342) - Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 659,153$ 5,744,489$ 49,343$ - (Continued) 91 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Public SupplementalLibraryEducation and Law GrantHOMEFacilities FeesGovernment Assets: Cash and investments$ 123,305$ 49,835$ 1,239,428$ 1,709,253 Receivables: Accounts, net - - - - Interest 528 213 5,308 7,320 Taxes - - - 115,144 Loans 2,382,399- - - Due from other governments 155,172 - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total Assets $ 279,005$ 2,432,447$ 1,244,736$ 1,831,717 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities$ 64,914$ -$ -$ 20,431 Due to other governments - - - - Due to other funds - - - - Total Liabilities 64,914 - - 20,431 Deferred Inflows of Resources: Unavailable revenues 2,382,399- - - Total Deferred Inflows of Resources 2,382,399- - - Fund balances (deficit): Restricted 214,091 50,048 1,244,736 1,811,286 Assigned - - - - Unassigned - - - - Total Fund Balances (Deficit) 214,091 50,048 1,244,736 1,811,286 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 279,005$ 2,432,447$ 1,244,736$ 1,831,717 (Continued) 92 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Tourism Marketing Proposition CFederal GrantsMeasure RDistrict Assets: Cash and investments 2,952,975161,247$ 6,773,210$ 940,471$ Receivables: Accounts, net -- - - Interest -12,646 29,005 4,027 Taxes -- - 62,258 Loans -- - - Due from other governments 996,1573,258,484 - - Land held for resale -- - - Restricted assets: Cash and investments -- - - Cash and investments with fiscal agents -- - - Total Assets $ 1,157,4046,224,105$ 6,802,215$ 1,006,756$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities $ 734,969397,700$ 21,491$ 28,784$ Due to other governments -- - - Due to other funds -2,883,813 - - Total Liabilities 734,9693,281,513 21,491 28,784 Deferred Inflows of Resources: Unavailable revenues 563,8512,742,295 - - Total Deferred Inflows of Resources 563,8512,742,295 - - Fund balances (deficit): Restricted 6,780,724200,297 977,972 Assigned -- - - Unassigned (141,416)- - - Total Fund Balances (Deficit) (141,416)200,297 6,780,724 977,972 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 6,224,105$ 1,157,404$ 6,802,215$ 1,006,756 (Continued) 93 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special Revenue Funds Housing MiscellaneousParkSuccessor OSPDGrantsDedicationAgency Assets: Cash and investments $ 168,0254,438,909$ 7,991,186$ 347,902$ Receivables: Accounts, net -- - - Interest -19,009 34,221 1,490 Taxes -53,080 - - Loans -- - - Due from other governments 203,968- - - Land held for resale -- - 86,889 Restricted assets: Cash and investments -- - 206,386 Cash and investments with fiscal agents -380 - - Total Assets $ 371,9934,511,378$ 8,025,407$ 642,667$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities $ 45,62665,482$ 151,451$ -$ Due to other governments -- - 34,479 Due to other funds -- - - Total Liabilities 45,62665,482 151,451 34,479 Deferred Inflows of Resources: Unavailable revenues 16,235- - - Total Deferred Inflows of Resources 16,235- - - Fund balances (deficit): Restricted 310,1324,445,896 7,873,956 608,188 Assigned -- - - Unassigned -- - - Total Fund Balances (Deficit) 310,1324,445,896 7,873,956 608,188 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,511,378$ 371,993$ 8,025,407$ 642,667 (Continued) 94 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Special RevenueDebt Service Capital Projects Funds FundsFund TourismGeneralPublicPublic MarketingCapitalFinancingFinancing BureauProjectsAuthorityAuthority Assets: Cash and investments$ 41,640$ 2,257,550$ 10$ 3,368 Receivables: Accounts, net - - - - Interest 178 - - - Taxes - - - - Loans - - - - Due from other governments - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - 6,774 Total Assets $ 41,818$ 2,257,550$ 10$ 10,142 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities$ 254,966-$ $ -$ - Due to other governments - - - - Due to other funds - - - - Total Liabilities 254,966- - - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund balances (deficit): Restricted 41,818 - - 10,142 Assigned 2,002,584- 10 - Unassigned - - - - Total Fund Balances (Deficit) 41,818 2,002,584 10 10,142 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 41,818$ 2,257,550$ 10$ 10,142 (Continued) 95 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Total Non-major Governmental Funds Assets: $ 52,725,112 Cash and investments Receivables: 64,263 Accounts, net 215,627 Interest 483,540 Taxes 2,476,974 Loans 5,085,454 Due from other governments 86,889 Land held for resale Restricted assets: 206,386 Cash and investments 7,154 Cash and investments with fiscal agents $ 61,351,399 Total Assets Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: $ 2,872,717 Accounts payable and accrued liabilities 34,479 Due to other governments 3,094,421 Due to other funds 6,001,617 Total Liabilities Deferred Inflows of Resources: 5,908,958 Unavailable revenues Total Deferred Inflows of Resources 5,908,958 Fund balances (deficit): Restricted 47,688,087 2,002,594 Assigned Unassigned (249,857) Total Fund Balances (Deficit) 49,440,824 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 61,351,399 96 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Special BikewayGas TaxProposition AAssessment Revenues: Taxes$ -$ -$ -$ - Special assessments - - 5,628,388- Intergovernmental 119,875 4,181,240 3,890,902 - Charges for services - - - - Investment income (loss) (1,149) 5,468 17,177 20,838 Fines and forfeitures - - - - Developer fees - - - - Other revenue - 8,958 - 41,474 Total Revenues 118,726 4,195,666 3,908,079 5,690,700 Expenditures: Current: General government - 26,921 3,120,820- Public safety - - - - Recreation and community services - - - - Public works 9,736 4,181,078 1,321,334- Community development - - - - Neighborhood services 60,000 - - - Capital outlay 80,069 174,135 133,424 28,394 Debt service: Principal - - - - Interest and fiscal charges - - - - Total Expenditures 149,805 4,382,134 133,424 4,470,548 Excess (Deficiency) of Revenues Over (Under) Expenditures (31,079) (186,468) 3,774,655 1,220,152 Other Financing Sources (Uses): Transfers in 242,581- - 20,420 Transfers out (110,591)- (2,483,864) (6,589) Total Other Financing Sources (Uses) 131,990- (2,483,864) 13,831 Net Change in Fund Balances (31,079) (54,478) 1,290,791 1,233,983 Fund Balances (Deficit), Beginning of Year 114,904 2,289,395 242 6,474,781 Fund Balances, End of Year$ 83,825$ 2,234,917$ 1,291,033$ 7,708,764 (Continued) 97 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds State ParkTDATraffic SafetyCDBG Revenues: Taxes$ -$ -$ -$ - Special assessments - - - - Intergovernmental 1,162 5,614,065 757,732- Charges for services - - - - Investment income (loss) - (37,871) 286 - Fines and forfeitures - 410,750- - Developer fees - - - - Other revenue - - - - Total Revenues 1,162 5,576,194 411,036 757,732 Expenditures: Current: General government - - - - Public safety - - - - Recreation and community services 60,261 - - - Public works 7,715,221- - - Community development - - 593,856- Neighborhood services - - - - Capital outlay - 99,377 - 55,271 Debt service: Principal - - 100,000- Interest and fiscal charges - - - 8,605 Total Expenditures 60,261 7,814,598 757,732- Excess (Deficiency) of Revenues Over (Under) Expenditures (59,099) (2,238,404) 411,036 - Other Financing Sources (Uses): - - - Transfers in - Transfers out - (411,036)- - Total Other Financing Sources (Uses) - (411,036)- - Net Change in Fund Balances (59,099) (2,238,404) - - Fund Balances (Deficit), Beginning of Year 7,839,762- - - Fund Balances, End of Year$ (59,099)$ 5,601,358$ -$ - (Continued) 98 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Surface TransportationBJA Law AQMDStormwaterProgramEnforcement Revenues: Taxes$ --$ -$ -$ Special assessments 3,192,574- - - Intergovernmental -280,442 826,665 39,292 Charges for services -- - - Investment income (loss) 13,8192,994 - - Fines and forfeitures - - - - Developer fees - - - - Other revenue 339,574- - - Total Revenues 283,436 3,545,967 826,665 39,292 Expenditures: Current: General government - 4,100 - - Public safety - - - 39,292 Recreation and community services - - - - Public works 405,189 3,347,916 875,308 - Community development - - - - Neighborhood services - - - - Capital outlay 6,371 34,464 - - Debt service: Principal - - - - Interest and fiscal charges - - - - Total Expenditures 411,560 3,386,480 875,308 39,292 Excess (Deficiency) of Revenues Over (Under) Expenditures (128,124) 159,487 (48,643) - Other Financing Sources (Uses): - 3,690 - 845 Transfers in - (30,072) - - Transfers out Total Other Financing Sources (Uses) - (26,382) - 845 Net Change in Fund Balances (128,124) 133,105 (48,643) 845 717,331 5,476,592 (699) (845) Fund Balances (Deficit), Beginning of Year Fund Balances, End of Year$ 589,207$ 5,609,697$ (49,342)$ - (Continued) 99 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Public SupplementalLibraryEducation and Law GrantHOMEFacilities FeesGovernment Revenues: Taxes $ --$ -$ 474,375$ Special assessments -- - - Intergovernmental 34,162572,317 - - Charges for services -- - - Investment income (loss) 310490 4,547 5,916 Fines and forfeitures -- - - Developer fees -- 389,332 - Other revenue -- - - Total Revenues 34,472572,807 393,879 480,291 Expenditures: Current: General government -- - 271,802 Public safety -389,483 - - Recreation and community services -- - - Public works -- - - Community development -- - - Neighborhood services -- - - Capital outlay -- - 81,153 Debt service: Principal -- - - Interest and fiscal charges -- - - Total Expenditures -389,483 - 352,955 Excess (Deficiency) of Revenues Over (Under) Expenditures 34,472183,324 393,879 127,336 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances 183,324 34,472 393,879 127,336 Fund Balances (Deficit), Beginning of Year 30,767 15,576 850,857 1,683,950 Fund Balances, End of Year $ 214,091$ 50,048$ 1,244,736$ 1,811,286 (Continued) 100 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Tourism FederalMarketing Proposition CGrantsMeasure RDistrict Revenues: Taxes$ --$ -$ -$ Special assessments -- - - Intergovernmental 205,9094,146,628 2,421,136 - Charges for services -- - 678,368 Investment income (loss) -5,278 19,993 3,933 Fines and forfeitures -- - - Developer fees -- - - Other revenue -- - - Total Revenues 205,9094,151,906 2,441,129 682,301 Expenditures: Current: General government -- - 547,550 Public safety -- - - Recreation and community services -- - - Public works 887,812136,531 149,327 - Community development -- - - Neighborhood services -- - - Capital outlay 141,4252,518,635 - - Debt service: Principal -- - - Interest and fiscal charges -- - - Total Expenditures 1,029,2372,655,166 149,327 547,550 Excess (Deficiency) of Revenues Over (Under) Expenditures (823,328)1,496,740 2,291,802 134,751 Other Financing Sources (Uses): Transfers in - - - - Transfers out (1,304,217) (23,321) - - Total Other Financing Sources (Uses) (1,304,217) (23,321) - - Net Change in Fund Balances 192,523 (846,649) 2,291,802 134,751 Fund Balances (Deficit), Beginning of Year 7,774 705,233 4,488,922 843,221 Fund Balances, End of Year$ 200,297$ (141,416)$ 6,780,724$ 977,972 (Continued) 101 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special Revenue Funds Housing MiscellaneousParkSuccessor OSPDGrantsDedicationAgency Revenues: Taxes $ --$ -$ -$ Special assessments -2,399,530 - - Intergovernmental 588,842- - - Charges for services -121,442 - - Investment income (loss) -7,918 27,456 908 Fines and forfeitures -- - - Developer fees -- 1,513,444 - Other revenue 24,0241,000 - 28,033 Total Revenues 612,8662,529,890 1,540,900 28,941 Expenditures: Current: General government 531,688570,544 - - Public safety 81,851- - - Recreation and community services -- - - Public works 18,441- - - Community development -- - - Neighborhood services -- 503,825 - Capital outlay -3,074,032 245,029 - Debt service: Principal -- - - Interest and fiscal charges -- - - Total Expenditures 631,9803,644,576 748,854 - Excess (Deficiency) of Revenues Over (Under) Expenditures (1,114,686) (19,114) 792,046 28,941 Other Financing Sources (Uses): Transfers in 600 23,321 - - Transfers out (641,173) (250,000)- - Total Other Financing Sources (Uses) (640,573) 23,321 (250,000) - Net Change in Fund Balances (1,755,259) 4,207 542,046 28,941 Fund Balances (Deficit), Beginning of Year 6,201,155 305,925 7,331,910 579,247 Fund Balances, End of Year$ 4,445,896$ 310,132$ 7,873,956$ 608,188 (Continued) 102 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Special RevenueDebt Service FundCapital Projects FundFund TourismGeneralPublic Public MarketingCapitalFinancingFinancing BureauProjectsAuthorityAuthority Revenues: Taxes$ -$ -$ -$ - Special assessments - - - - Intergovernmental - - - - Charges for services 7,546 31,000 - - Investment income (loss) 123 - - 18,377 Fines and forfeitures - - - - Developer fees - - - - Other revenue 10,000 - - - Total Revenues 17,669 31,000 - 18,377 Expenditures: Current: General government 8,545 - - - Public safety - - - - Recreation and community services - - - - Public works 2,101,691- - - Community development - - - - Neighborhood services - 40,853 - - Capital outlay - 275,636 - - Debt service: Principal - - 2,013,868- Interest and fiscal charges - - 784,555- Total Expenditures 8,545 2,418,180 2,798,423- Excess (Deficiency) of Revenues Over (Under) Expenditures 9,124 (2,387,180) (2,780,046)- Other Financing Sources (Uses): 2,547,928- 635,917 2,786,788 Transfers in - (635,917)- - Transfers out Total Other Financing Sources (Uses) 2,547,928- 2,786,788- Net Change in Fund Balances 9,124 160,748 - 6,742 Fund Balances (Deficit), Beginning of Year 32,694 1,841,836 10 3,400 Fund Balances, End of Year$ 41,818$ 2,002,584$ 10$ 10,142 (Continued) 103 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2017 Total Non-major Governmental Funds Revenues: $ 474,375 Taxes 11,220,492 Special assessments 23,680,369 Intergovernmental 838,356 Charges for services 116,811 Investment income (loss) 410,750 Fines and forfeitures 1,902,776 Developer fees 453,063 Other revenue 39,096,992 Total Revenues Expenditures: Current: 5,081,970 General government 510,626 Public safety 60,261 Recreation and community services 21,149,584 Public works 593,856 Community development 604,678 Neighborhood services 6,947,415 Capital outlay Debt service: 2,113,868 Principal 793,160 Interest and fiscal charges Total Expenditures 37,855,418 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,241,574 Other Financing Sources (Uses): 6,262,090 Transfers in (5,896,780) Transfers out Total Other Financing Sources (Uses) 365,310 Net Change in Fund Balances 1,606,884 47,833,940 Fund Balances (Deficit), Beginning of Year Fund Balances, End of Year$ 49,440,824 104 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL BIKEWAY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental-$ -$ $ 119,875$ 119,875 Investment income (loss) 141,401 139,785 (1,149) (140,934) Total Revenues 141,401 139,785 118,726 (21,059) Expenditures: Capital Improvement Projects: Operating 141,401 254,689 149,805 104,884 Total Expenditures 141,401 254,689 149,805 104,884 Net Change in Fund Balance $ (114,904)-$ (31,079)$ 83,825 Fund Balance at Beginning of Year 114,904 Fund Balance at End of Year $ 83,825 105 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL GAS TAX SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental4,348,923$ 4,181,240$ 4,181,240$ -$ Investment income2,500 5,467 5,468 1 Other revenue- 8,958 8,958 - Total Revenues 4,195,6654,351,423 4,195,666 1 Expenditures: Operating: Personnel2,171,351 2,190,495 1,991,131 199,364 Operating1,785,794 1,982,542 1,900,881 81,661 Capital outlay211,840 201,971 176,056 25,915 Capital Improvement Projects: Personnel- - 39,850 (39,850) Operating1,960,306 2,380,493 274,216 2,106,277 Total Expenditures 6,755,5016,129,291 4,382,134 2,373,367 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,559,836)(1,777,868) (186,468) 2,373,368 Other financing sources (uses): Transfers in 242,581242,581 242,581 - Transfer out(127,385) (111,555) (110,591) 964 Total Other Financing Sources (Uses) 131,026115,196 131,990 964 Net Change in Fund Balance $ (2,428,810)(1,662,672)$ (54,478) 2,374,332 Fund Balance at Beginning of Year2,289,395 Fund Balance at End of Year 2,234,917$ 106 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PROPOSITION A SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental3,906,881$ 3,975,326$ 3,890,902$ (84,424)$ Investment income- - 17,177 17,177 Other revenue- - - - Total Revenues 3,975,3263,906,881 3,908,079 (67,247) Expenditures: Capital Improvement Projects: Operating1,002,651 1,351,867 133,424 1,218,443 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,623,4592,904,230 3,774,655 1,151,196 Other financing sources (uses): Transfer out(2,904,230) (2,637,571) (2,483,864) 153,707 Net Change in Fund Balance $ (14,112)-$ 1,290,791 1,304,903$ Fund Balance at Beginning of Year242 Fund Balance at End of Year 1,291,033$ 107 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL SPECIAL ASSESSMENT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Special assessments$ 5,381,116$ 5,477,856$ 5,628,388$ 150,532 Charges for services 50,600 50,600 - (50,600) Investment income - - 20,838 20,838 Other revenue - - 41,474 41,474 Total Revenues 5,431,716 5,528,456 5,690,700 162,244 Expenditures: Operating: Personnel 328,697 288,255 257,828 30,427 Operating 4,584,397 4,576,427 3,859,688 716,739 Capital outlay 400,207 402,545 350,494 52,051 Capital Improvement Projects: Operating - 4,052 2,538 1,514 Total Expenditures 5,313,301 5,271,279 4,470,548 800,731 Excess (Deficiency) of Revenues Over (Under) Expenditures 118,415 257,177 1,220,152 962,975 Other financing sources (uses): Transfers in 1,173,047 1,073,230 20,420 1,052,810 Transfer out (1,037,357) (1,059,257) (6,589) (1,052,668) Total Other Financing Sources (Uses) 135,690 13,973 13,831 142 Net Change in Fund Balance $ 254,105$ 271,150 1,233,983$ 963,117 Fund Balance at Beginning of Year 6,474,781 Fund Balance at End of Year $ 7,708,764 108 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL STATE PARK SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental62,393$ 62,393$ 1,162$ (61,231)$ Expenditures: Operating: Personnel35,49334,904 34,665 239 Operating26,900 26,900 25,596 1,304 Total Expenditures 61,80462,393 60,261 1,543 Net Change in Fund Balance $ 589-$ (59,099) (59,688)$ Fund Balance at Beginning of Year- Fund Balance at End of Year (59,099)$ 109 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL TRANSPORTATION DEVELOPMENT ACT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental8,009,166$ 5,776,433$ 5,614,065$ (162,368)$ Investment income (loss)- - (37,871) (37,871) Total Revenues 5,776,4338,009,166 5,576,194 (200,239) Expenditures: Capital Improvement Projects: Personnel - - 22,389 (22,389) Operating5,153,83213,612,196 7,792,209 5,819,987 Total Expenditures 5,153,832 13,612,196 7,814,598 5,797,598 Net Change in Fund Balance $ 2,855,334$ (7,835,763) (2,238,404)$ 5,597,359 Fund Balance at Beginning of Year 7,839,762 Fund Balance at End of Year $ 5,601,358 110 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL TRAFFIC SAFETY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Investment income$ -$ -$ 286$ 286 Fines and forfeitures 400,000 400,000 410,750 10,750 Total Revenues 400,000 400,000 411,036 11,036 Other financing sources (uses): Transfer out (400,000) (400,000) (411,036) (11,036) Net Change in Fund Balance $ -$ - -$ - Fund Balance at Beginning of Year - Fund Balance at End of Year $ - 111 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental1,287,984$ 757,732$ 757,732$ -$ Expenditures: Operating: Personnel204,688 209,782 199,735 10,047 Operating5,4755,475 3,321 2,154 Capital outlay389,956464,591 390,800 73,791 Capital Improvement Projects: Operating499,522 554,811 55,271 499,540 Debt Service: Debt Services108,605 108,605 108,605 - Total Expenditures 1,343,2641,208,246 757,732 585,532 Net Change in Fund Balance $ 79,738$ (585,532) -$ 585,532 Fund Balance at Beginning of Year - Fund Balance at End of Year $ - 112 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL AIR QUALITY MANAGEMENT DISTRICT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental$ 257,000$ 275,700$ 280,442$ 4,742 Investment income - - 2,994 2,994 Total Revenues 257,000 275,700 283,436 7,736 Expenditures: Operating: Operating 10,778 10,778 7,922 2,856 Capital outlay 8,300 8,675 6,476 2,199 Capital Improvement Projects: Personnel - - 25,166 (25,166) Operating 578,931 690,547 371,996 318,551 Total Expenditures 598,009 710,000 411,560 298,440 Net Change in Fund Balance $ (341,009)$ (434,300) (128,124)$ 306,176 Fund Balance at Beginning of Year 717,331 Fund Balance at End of Year $ 589,207 113 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL STORMWATER SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Special assessments82,359$ 82,359$ 3,192,574$ 3,110,215$ Investment income50,000 50,000 13,819 (36,181) Charges for services14,310 14,310 - (14,310) Other revenue3,314,616 3,314,616 339,574 (2,975,042) Total Revenues 3,461,2853,461,285 3,545,967 84,682 Expenditures: Operating: Personnel1,330,538 1,352,248 1,342,990 9,258 Operating1,435,703 1,435,703 1,394,129 41,574 Capital outlay628,976 972,574 353,418 619,156 Capital Improvement Projects: Personnel- - 4,976 (4,976) Operating- 309,838 290,967 18,871 Total Expenditures 4,070,3633,395,217 3,386,480 683,883 Excess (Deficiency) of Revenues Over (Under) Expenditures (609,078)66,068 159,487 768,565 Other financing sources (uses): Transfers in 3,6903,690 3,690 - Transfer out(42,951) (30,131) (30,072) (59) Total Other Financing Sources (Uses) (26,441)(39,261) (26,382) (59) Net Change in Fund Balance $ (635,519)26,807$ 133,105 768,506$ Fund Balance at Beginning of Year5,476,592 Fund Balance at End of Year 5,609,697$ 114 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL SURFACE TRANSPORTATION PROGRAM SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental-$ 905,259$ 826,665$ (78,594)$ Expenditures: Capital Improvement Projects: Operating- 905,259 875,308 29,951 Net Change in Fund Balance $ --$ (48,643) (48,643)$ Fund Balance at Beginning of Year(699) Fund Balance at End of Year (49,342)$ 115 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL BJA LAW ENFORCEMENT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental$ -$ 40,817$ 39,292$ (1,525) Expenditures: Operating: Operating - 40,817 39,292 1,525 Other financing sources (uses): Transfers in 846 845 1 Net Change in Fund Balance $ -$ 846 845$ - Fund Balance at Beginning of Year (845) Fund Balance at End of Year $ - 116 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL SUPPLEMENTAL LAW GRANT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental-$ 435,949$ 572,317$ 136,368$ Investment income- - 490 490 Total Revenues 435,949- 572,807 136,858 Expenditures: Operating: Operating- 466,717 389,483 77,234 Net Change in Fund Balance $ (30,768)-$ 183,324 214,092$ Fund Balance at Beginning of Year30,767 Fund Balance at End of Year 214,091$ 117 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL HOME SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental-$ 33,000$ 34,162$ 1,162$ Investment income- - 310 310 Net Change in Fund Balance $ 33,000-$ 34,472 1,472$ Fund Balance at Beginning of Year15,576 Fund Balance at End of Year 50,048$ 118 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL LIBRARY FACILITIES FEES SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Investment income-$ -$ 4,547$ 4,547$ Developer fees225,000 225,000 389,332 164,332 Total Revenues 225,000225,000 393,879 168,879 Fund Balance at Beginning of Year850,857 Fund Balance at End of Year 1,244,736$ 119 CITY OF SANTA CLARITA, CALIFORNIA 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, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Taxes$ 508,000$ 508,000$ 474,375$ (33,625) Investment income 10,116 10,116 5,916 (4,200) Total Revenues 518,116 518,116 480,291 (37,825) Expenditures: Operating: Operating 190,000 290,000 271,802 18,198 Capital outlay 25,000 50,000 81,153 (31,153) Total Expenditures 215,000 340,000 352,955 (12,955) Net Change in Fund Balance $ 303,116$ 178,116 127,336$ (50,780) Fund Balance at Beginning of Year 1,683,950 Fund Balance at End of Year $ 1,811,286 120 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PROPOSITION C SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental$ 8,443,450$ 10,187,004$ 4,146,628$ (6,040,376) Investment income - - 5,278 5,278 Total Revenues 8,443,450 10,187,004 4,151,906 (6,035,098) Expenditures: Capital Improvement Projects: Personnel - - 67,152 (67,152) Operating 5,418,360 6,203,331 2,588,014 3,615,317 Total Expenditures 5,418,360 6,203,331 2,655,166 3,548,165 Excess (Deficiency) of Revenues Over (Under) Expenditures 3,025,090 3,983,673 1,496,740 (2,486,933) Other financing sources (uses): Transfer out (3,024,082) (2,314,854) (1,304,217) 1,010,637 Net Change in Fund Balance $ 1,008$ 1,668,819 192,523$ (1,476,296) Fund Balance at Beginning of Year 7,774 Fund Balance at End of Year $ 200,297 121 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL FEDERAL GRANTS SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental3,142,131$ 14,442,094$ 205,909$ (14,236,185)$ Expenditures: Capital Improvement Projects: Personnel- - 131,158 (131,158) Operating3,141,131 15,856,394 898,079 14,958,315 Total Expenditures 15,856,3943,141,131 1,029,237 14,827,157 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,414,300)1,000 (823,328) 590,972 Other financing sources (uses): Transfer out- - (23,321) 23,321 Total Other Financing Sources (Uses) -- (23,321) 23,321 Net Change in Fund Balance $ (1,414,300)1,000$ (846,649) 614,293$ Fund Balance at Beginning of Year705,233 Fund Balance at End of Year (141,416)$ 122 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL MEASURE R SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental2,430,312$ 2,472,892$ 2,421,136$ (51,756)$ Investment income- - 19,993 19,993 Total Revenues 2,430,312 2,472,892 2,441,129 (31,763) Expenditures: Capital Improvement Projects: Personnel 57,004 (57,004) Operating 2,587,499 2,781,304 92,323 2,688,981 Total Expenditures 2,587,499 2,781,304 149,327 2,631,977 Excess (Deficiency) of Revenues Over (Under) Expenditures (157,187) (308,412) 2,291,802 2,600,214 Other financing sources (uses): Transfer out (3,149,384) - - - Net Change in Fund Balance $ (3,306,571)$ (308,412) 2,291,802$ 2,600,214 Fund Balance at Beginning of Year 4,488,922 Fund Balance at End of Year $ 6,780,724 123 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL TOURISM MARKETING DISTRICT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Charges for services653,948$ 653,948$ 678,368$ 24,420$ Investment income1,000 1,000 3,933 2,933 Total Revenues 654,948654,948 682,301 27,353 Expenditures: Operating: Personnel19,539 19,32819,410 (82) Operating570,103 620,103 528,140 91,963 Total Expenditures 639,431589,642 547,550 91,881 Net Chane in Fund Balance g$ 15,51765,306$ 134,751 119,234$ Fund Balance at Beginning of Year843,221 Fund Balance at End of Year 977,972$ 124 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Special assessments$ 2,393,297$ 2,393,297$ 2,399,530$ 6,233 Charges for services 86,654 86,654 122,442 35,788 Investment income 5,000 5,000 7,918 2,918 Total Revenues 2,484,951 2,484,951 2,529,890 44,939 Expenditures: Operating: Personnel 239,395 239,096 208,048 31,048 Operating 317,120 598,556 350,576 247,980 Capital outlay 11,941 3,124,846 3,072,443 52,403 Capital Improvement Projects: Operating - 81,212 13,509 67,703 Total Expenditures 568,456 4,043,710 3,644,576 399,134 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,916,495 (1,558,759) (1,114,686) 444,073 Other financing sources (uses): Transfers in 600 600 - Transfer out (884,249) (641,112) (641,173) (61) Total Other Financing Sources (Uses) (884,249) (640,512) (640,573) (61) Net Chane in Fund Balance$ (2,199,271)1,032,246$ (1,755,259) 444,012$ g Fund Balance at Beginning of Year6,201,155 Fund Balance at End of Year 4,445,896$ 125 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL MISCELLANEOUS GRANTS SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Intergovernmental507,208$ 684,520$ 588,742$ (95,778)$ Other revenue54,859 54,859 24,124 (30,735) Total Revenues 739,379562,067 612,866 (126,513) Expenditures: Operating: Operating452,208 575,660 532,404 43,256 Capital Outlay155,000 157,471 92,989 64,482 Capital Improvement Projects: Operating54,859 194,937 6,587 188,350 Total Expenditures 928,068662,067 631,980 296,088 Excess (Deficiency) of Revenues Over (Under) Expenditures (188,689)(100,000) (19,114) 169,575 Other financing sources (uses): Transfers in 23,321- 23,321 - Net Change in Fund Balance $ (165,368)(100,000)$ 4,207 169,575$ Fund Balance at Beginning of Year305,925 Fund Balance at End of Year 310,132$ 126 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PARK DEDICATION SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Investment income-$ 2,500$ 27,456$ 24,956$ Developer fees- 2,601,751 1,513,444 (1,088,307) Total Revenues 2,604,251- 1,540,900 (1,063,351) Expenditures: Capital Improvement Projects: Personnel - - 766 765 Operating 975,700 2,060,339 748,088 1,312,251 Total Expenditures 975,700 2,060,339 748,854 1,313,016 Excess (Deficiency) of Revenues Over (Under) Expenditures (975,700) 543,912 792,046 249,665 Other financing sources (uses): Transfer out (250,000)- (250,000) - Net Change in Fund Balance $ (975,700)$ 293,912 542,046$ 249,665 Fund Balance at Beginning of Year 7,331,910 Fund Balance at End of Year $ 7,873,956 127 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL HOUSING SUCCESSOR AGENCY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Revenues: Investment income-$ -$ 908$ 908$ Other revenue28,034 28,034 28,033 (1) Total Revenues 28,03428,034 28,941 907 Net Change in Fund Balance $ 28,03428,034$ 28,941 907$ Fund Balance at Beginning of Year579,247 Fund Balance at End of Year 608,188$ 128 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL TOURISM MARKETING BUREAU SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Charges for services$ 11,300$ 11,300$ 7,546$ (3,754) Investment income 401 401 123 (278) Other revenue - 25,000 10,000 (15,000) Total Revenues 11,701 36,701 17,669 (19,032) Expenditures: Operating: Operating 62,600 45,210 7,708 37,502 Capital Outlay 837 837 837 - Total Expenditures 63,437 46,047 8,545 37,502 Net Change in Fund Balance $ (51,736)$ (9,346) 9,124$ 18,470 Fund Balance at Beginning of Year 32,694 Fund Balance at End of Year $ 41,818 129 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL GENERAL CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Other revenue-$ -$ 31,000$ 31,000$ Expenditures: Capital Improvement Projects: Personnel- - 399,216 (399,216) Operating2,178,235 4,170,761 2,018,964 2,151,797 Total Expenditures 4,170,7612,178,235 2,418,180 1,752,581 Excess (Deficiency) of Revenues Over (Under) Expenditures (4,170,761)(2,178,235) (2,387,180) 1,783,581 Other financing sources (uses): Transfers in 2,547,9282,029,315 2,547,928 - Net Change in Fund Balance $ (1,622,833)(148,920)$ 160,748 1,783,581$ Fund Balance at Beginning of Year1,841,836 Fund Balance at End of Year 2,002,584$ 130 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PUBLIC FINANCING AUTHORITY CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted AmountsFinal Budget OriginalFinalActualPositive/(Negative) Other financing sources (uses): Transfers in $ 876,751$ 635,917$ 635,917$ - Transfer out (876,751) (635,917) (635,917) - Net Change in Fund Balance $ -$ - -$ - Fund Balance at Beginning of Year 10 Fund Balance at End of Year $ 10 131 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL PUBLIC FINANCING AUTHORITY DEBT SERVICE FUND FOR THE YEAR ENDED JUNE 30, 2017 Variance with Budgeted Amounts Final Budget OriginalFinalActualPositive/(Negative) Revenues: Investment income-$ -$ 18,377$ 18,377$ Expenditures: Debt Service: Debt Services- 2,798,424 2,798,423 1 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,798,424)- (2,780,046) 18,378 Other financing sources (uses): Transfers in 2,798,4243,167,276 2,786,788 (11,636) Net Change in Fund Balance $ -3,167,276$ 6,742 6,742$ Fund Balance at Beginning of Year3,400 Fund Balance at End of Year 10,142$ 132 CITY OF SANTA CLARITA, CALIFORNIA INTERNAL SERVICE FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 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. 133 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2017 SelfComputerVehicle InsuranceReplacementReplacementTotals Assets: Current assets: Cash and investments4,462,216$ 2,291,482$ 4,052,508$ 10,806,206$ Receivables: Accounts- - 2,375 2,375 Interest20,799 9,813 17,354 47,966 Prepaid costs- 21,410 - 21,410 Total Current Assets4,483,015 2,322,705 4,072,237 10,877,957 Noncurrent assets: Capital assets: Equipment, net of accumulated depreciation- 153,626 1,090,091 1,243,717 Total Assets 2,476,3314,483,015 5,162,328 12,121,674 Deferred Outflows of Resources: Deferred outflows related to pensions41,745 - - 41,745 Liabilities: Current liabilities: Accounts payable and accrued liabilities16,921 37,289 - 54,210 Compensated absences 6,368 - - 6,368 Claims and judgments1,972,069 - - 1,972,069 Total Current Liabilities1,995,358 37,289 - 2,032,647 Noncurrent liabilities: Net pension liability145,116 - - 145,116 Claims and judgments1,218,687 - - 1,218,687 Total Non-current Liabilities1,363,803 - - 1,363,803 Total Liabilities 37,2893,359,161 - 3,396,450 Deferred Inflows of Resources: Deferred inflows related to pensions7,009 - - 7,009 Net position: Net investment in capital assets- 153,626 1,090,091 1,243,717 Unrestricted 1,158,590 2,285,416 4,072,237 7,516,243 Total Net Position $ 1,158,590$ 2,439,042$ 5,162,328$ 8,759,960 134 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2017 SelfComputerVehicle InsuranceReplacementReplacementTotals Operating Revenues: Charges for services1,987,020$ 740,220$ 154,391$ 2,881,631$ Other revenues75,843 - - 75,843 Total Operating Revenues 740,2202,062,863 154,391 2,957,474 Operating Expenses: Administration and personnel services198,837 - - 198,837 Services and supplies1,344,379 324,539 - 1,668,918 Depreciation and expense- 48,464 173,450 221,914 Total Operating Expenses 373,0031,543,216 173,450 2,089,669 Operating Income (Loss) 367,217519,647 (19,059) 867,805 Nonoperating Revenues: Investment income6,422 7,884 11,860 26,166 Gain (loss) on disposal of fixed assets- 860 10,851 11,711 Total Net Nonoperating Revenues 8,7446,422 22,711 37,877 Income before transfers 375,961526,069 3,652 905,682 Transfers Transfers in79,052 - - 79,052 Transfers out(478,376) - - (478,376) Total Transfers -(399,324) - (399,324) Change in net position 375,961126,745 3,652 506,358 Net Position Net Position at Beginning of the Year1,031,845 2,063,081 5,158,676 8,253,602 $ 2,439,0421,158,590$ 5,162,328$ 8,759,960$ Net Position at End of the Year 135 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2017 SelfComputerVehicle InsuranceReplacementReplacementTotals Cash flows from operating activities: Cash received from customers and users$ 2,062,863$ 740,623$ 157,122$ 2,960,608 Cash paid to suppliers for goods and services (613,574) (487,531) (1,101,157)(52) Cash paid to employees for services (195,088) - (195,088)- Net Cash Provided by Operating Activities 1,254,201 253,092 157,070 1,664,363 Cash flows from non-capital financing activities: Cash transfers out (478,376) - (478,376)- Cash transfers in 79,051 - - 79,051 Net Cash Provided (Used in) Non-capital Financing Activities (399,325) - (399,325)- Cash flows from capital and related financing activities: Acquisition and construction of capital assets - (35,139) (315,058) (350,197) Proceeds from sales of capital assets - 860 10,851 11,711 Net Cash (Used in) Capital and Related Financing Activities - (34,279) (304,207) (338,486) Cash flows from investing activities: Interest received (4,534) 3,195 4,890 3,551 Net Cash Provided by Investing Activities (4,534) 3,195 4,890 3,551 Net Increase (Decrease) in Cash and Cash Equivalents 850,342 222,008 (142,247) 930,103 Cash and Cash Equivalents, Beginning of Fiscal Year 3,611,874 2,069,474 4,194,755 9,876,103 $ 2,291,4824,462,216$ 4,052,508$ 10,806,206 Cash and Cash Equivalents, End of Fiscal Yea r Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss)519,647$ 367,217$ (19,059)$ 867,805$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation - 48,464 173,450 221,914 Change in deferred amounts related to pensions (30,146) - - (30,146) Change in net pension liability 31,796 - - 31,796 Decrease in accounts receivable - 403 2,731 3,134 Decrease in prepaid expense - 51,391 - 51,391 Decrease in accounts payable (10,136) (214,383) (52) (224,571) Increase in claims and judgments 740,941 - 740,941- Increase in compensated absences 2,099 - - 2,099 Total Adjustments 734,554 (114,125) 176,129 796,558 Net Cash Provided by Operating Activities $ 1,254,201$ 253,092$ 157,070$ 1,664,363 136 CITY OF SANTA CLARITA, CALIFORNIA AGENCY FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 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 for 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 Santa Clarita Public Television Authority, for with the City performs administrative functions. 137 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 Communit y AssessmentAssessmentFacilities DistrictDistrictDistrict No. 92-2No. 99-1No. 2002-1 Assets: Cash and investments165,615$ 90,214$ 869,775$ Receivables: Interest710 386 3,718 Taxes418 3,291 - Restricted assets: Cash and investments with fiscal agents55,933 59,788 1,645,255 Capital assets: Land- - - Building, net of accumulated depreciation- - - Total Assets $ 153,679222,676$ 2,518,748$ Liabilities: Accounts payable-$ 124$ -$ Due to external parties222,676 153,555 2,518,748 Total Liabilities $ 153,679222,676$ 2,518,748$ 138 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2017 Santa Clarita Watershed andSanta Clarita RecreationPublic ConservancTelevision y AuthoritAuthoritTotals yy $ 44,4853,933$ 1,174,022$ -- 4,814 -- 3,709 -- 1,760,976 -9,937,976 9,937,976 -79,014 79,014 $ 44,48510,020,923$ 12,960,511$ $ -$ -$ 124 10,020,923 44,485 12,960,387 $ 10,020,923$ 44,485$ 12,960,511 139 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 BalanceBalance July 1, 2016AdditionsDeletionsJune 30, 2017 Assessment District No. 92-2 Assets Cash and investments147,790$ 86,782$ 68,957$ 165,615$ Receivables: Interest366 709 365 710 Taxes 1,815 418 1,815 418 Restricted assets: Cash and investments with fiscal agents 55,909 24 55,933 Total Assets $ 205,880$ 87,933$ 71,137$ 222,676 Liabilities Due to external parties$ 205,880$ 87,933$ 71,137$ 222,676 Total Liabilities $ 205,880$ 87,933$ 71,137$ 222,676 Assessment District No. 99-1 Assets Cash and investments$ 85,031$ 79,969$ 74,786$ 90,214 Receivables: Interest 210 386 210 386 Taxes 2,972 3,291 2,972 3,291 Restricted assets: Cash and investments with fiscal agents 59,723 54,851 54,786 59,788 Total Assets $ 147,936$ 138,497$ 132,754$ 153,679 Liabilities Accounts payable$ 6,318-$ $ 6,194$ 124 Due to external parties 147,936 132,180 126,561 153,555 Total Liabilities $ 147,936$ 138,498$ 132,755$ 153,679 (Continued) 140 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 BalanceBalance July 1, 2016AdditionsDeletionsJune 30, 2017 Community Facilities District No. 2002-1 Assets Cash and investments844,620$ 1,220,445$ 1,195,290$ 869,775$ Receivables: Interest2,087 3,718 2,087 3,718 Restricted assets: Cash and investments with fiscal agents1,643,939 2,349,334 2,348,018 1,645,255 Total Assets$ 3,573,4972,490,646$ 3,545,395$ 2,518,748$ Liabilities Due to external parties2,490,646$ 3,573,497$ 3,545,395$ 2,518,748$ Total Liabilities$ 3,573,4972,490,646$ 3,545,395$ 2,518,748$ Santa Clarita Watershed Recreation and Conservancy Authority Assets Cash and investments4,431$ 2$ 500$ 3,933$ Land9,937,976 - - 9,937,976 Building, net of accumulated depreciation82,776 - 3,762 79,014 Total Assets$ 210,025,183$ 4,262$ 10,020,923$ Liabilities Accounts payable500$ 3,750$ 4,250$ -$ Due to external parties10,024,683 3,748 7,508 10,020,923 Total Liabilities$ 7,49810,025,183$ 11,758$ 10,020,923$ (Continued) 141 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 BalanceBalance July 1, 2016AdditionsDeletionsJune 30, 2017 Santa Clarita Public Television Authority Assets Cash and investments4$ 276,783$ 232,302$ 44,485$ Total Assets $ 276,7834$ 232,302$ 44,485$ Liabilities Accounts payable3,750$ -$ 3,750$ -$ Due to (from) external parties(3,746) 276,783 228,552 44,485 Total Liabilities $ 276,7834$ 232,302$ 44,485$ Total Agency Funds Assets Cash and investments1,081,876$ 1,663,981$ 1,571,835$ 1,174,022$ Receivables: Interest2,663 4,813 2,662 4,814 Taxes4,787 3,709 4,787 3,709 Restricted assets: Cash and investments with fiscal agents1,759,571 2,404,209 2,402,804 1,760,976 Capital assets: Land9,937,976 - - 9,937,976 Building, net of accumulated depreciation82,776 - 3,762 79,014 Total Assets $ 4,076,71212,869,649$ 3,982,088$ 12,960,511$ Liabilities Accounts payable4,250$ 10,068$ 14,194$ 124$ Due to external parties12,865,399 4,074,141 3,979,153 12,960,387 Total Liabilities $ 4,084,20912,869,649$ 3,993,347$ 12,960,511$ 142 STATISTICAL SECTION CITY OF SANTA CLARITA, CALIFORNIA STATISTICAL SECTION This part of the City of Santa Clarita’s comprehensive annual financial report presents detail 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. 144-153 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. 154-168 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. 169-175 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. 176-177 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. 178-180 143 City of Santa Clarita Net Position by Component (1) Last Ten Fiscal Years Ended June 30, 2017 (accrual basis of accounting) FISCAL YEAR 16-1715-1614-1513-14 Governmental Activities Net investment in capital assets$ 867,144,998 $ 810,324,041 $ 818,817,043 $ 799,926,613 Restricted for: Capital projects - - - - Debt service - - - - Specific projects and programs 87,272,724 70,773,322 73,541,304 71,643,713 Total restricted 87,272,724 70,773,322 73,541,304 71,643,713 Unrestricted 104,942,438 115,356,272 79,211,600 52,551,033 Total governmental activities net position1,059,360,160 996,453,635 971,569,947 924,121,359 $$$$ Business-Type Activities Net investment in capital assets79,589,102$ 76,687,260 $ 78,495,871 $ 83,296,545 $ Unrestricted(1,202,632) 3,101,763 2,766,972 2,250,491 Total business-type activities net position78,386,470 79,789,023 81,262,843 85,547,036 $$$$ Primary Government Net investment in capital assets946,734,100 $ 887,011,301 $ 897,312,914 $ 883,223,158 $ Restricted87,272,724 70,773,322 73,541,304 71,643,713 Unrestricted103,739,806 118,458,035 81,978,572 54,801,524 Total primary government net position1,137,746,630 1,076,242,658 1,052,832,790 1,009,668,395 $$$$ Note: (1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets, restricted and unrestricted. Net position is considered restricted only when (a) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (b) enabling legislation is enacted by the City. Source: City of Santa Clarita, Administrative Services Department - Finance Division 144 FISCAL YEAR 12-1311-1210-1109-1008-0907-08 $ 738,271,282 $ 743,281,558 $ 717,613,095 $ 657,644,168 $ 629,621,720 $ 672,306,820 14,292,447 3,275,312 3,452,815 4,769,573 4,769,573 45,993,804 - - - - - 632,680 54,229,493 46,915,965 30,201,655 85,895,468 92,644,739 61,018,399 68,521,940 50,191,277 33,654,470 90,665,041 97,414,312 107,644,883 65,706,424 79,141,211 67,397,688 63,218,255 98,512,704 66,249,901 872,499,646 872,614,046 818,665,253 811,527,464 825,548,736 846,201,604 $$$$$$ $ 73,778,640 76,561,407 $ 75,416,868 $ 67,911,725 $ 66,478,547 $ 63,526,242 $ 3,099,419 3,835,316 503,446 (176,196) 3,603,396 2,957,611 80,396,723 76,878,059 75,920,314 67,735,529 70,081,943 66,483,853 $$$$$$ $ 817,060,198 814,832,689 $ 793,029,963 $ 725,555,893 $ 696,100,267 $ 735,833,062 $ 50,191,277 68,521,940 33,654,470 90,665,041 97,414,312 107,644,883 82,240,630 69,541,740 67,901,134 63,042,059 102,116,100 69,207,512 952,896,369 949,492,105 894,585,567 879,262,993 895,630,679 912,685,457 $$$$$$ 145 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2017 (accrual basis of accounting) FISCAL YEAR 16-1715-1614-1513-14 Expenses Governmental Activities General government44,390,099 $ 39,155,006 $ 46,224,813 $ 41,807,284 $ Public safety25,231,712 23,778,931 22,235,368 22,187,434 Public works23,563,825 38,223,035 36,103,144 26,183,862 Recreation and community service16,224,154 15,594,958 22,619,337 22,550,301 Community development7,057,301 10,505,906 5,720,237 6,193,101 Neighborhood Services1,815,637 - - - Unallocated infrastructure depreciation18,833,113 18,342,933 18,072,657 17,561,539 Interest on long-term debt1,378,888 2,194,181 1,827,094 1,872,832 Total governmental activities expenses138,494,729 147,794,950 152,802,650 138,356,353 Business-Type Activities Transit29,858,499 28,127,407 28,062,668 26,819,161 Total business-type activities expenses29,858,499 28,127,407 28,062,668 26,819,161 Total primary government expenses168,353,228 175,922,357 180,865,318 165,175,514 $$$$ Program Revenues Governmental Activities Charges for services: General government6,740,507 $ 22,914,059 $ $ 26,783,616 $ 31,970,148 Public safety 1,231,974 1,162,551 1,605,059 1,847,403 Public works 11,549,806 16,407,616 13,056,586 12,463,046 Recreation and community service 6,191,011 8,142,336 4,525,662 4,390,686 Community development 1,906,079 1,843,296 1,774,482 1,961,243 Neighborhood Services 25,044,704 - - - Operating grants and contributions 5,977,971 7,687,397 12,561,608 19,421,199 Capital grants and contributions 55,220,052 23,629,474 30,107,231 22,530,841 Total governmental activities program revenues113,862,104 81,786,729 90,414,244 94,584,566 Business-Type Activities Charges for services: Transit 7,231,136 7,546,433 6,779,579 7,587,497 Operating grants and contributions 8,459,236 9,153,499 8,228,348 8,984,127 Capital grants and contributions 9,138,643 3,504,305 1,423,440 10,804,747 Total business-type activities program revenues24,829,015 20,204,237 16,431,367 27,376,371 Total primary government revenues$ 101,990,966 138,691,119 $ 106,845,611 $ 121,960,937 $ Source: City of Santa Clarita, Administrative Services Department - Finance Division 146 FISCAL YEAR 12-1311-1210-1109-1008-0907-08 $ 35,921,943 $ 33,664,470 $ 47,048,462 $ 32,116,335 $ 30,094,380 $ 27,488,731 19,940,098 27,391,075 21,280,904 17,912,704 17,489,870 16,482,917 28,651,261 30,623,718 25,799,166 26,758,527 48,514,645 30,549,888 21,809,820 19,282,538 11,281,552 27,835,763 32,747,618 21,817,251 7,214,293 5,896,640 11,547,650 13,831,341 9,761,681 9,257,881 - - - - - - 15,163,864 16,844,238 16,392,901 15,545,626 14,405,047 13,128,617 1,992,574 3,391,058 4,650,566 5,476,918 5,786,174 3,127,998 130,693,853 137,093,737 138,001,201 139,477,214 158,799,415 121,853,283 25,653,753 24,930,635 24,127,043 23,348,708 22,299,379 21,506,317 25,653,753 24,930,635 24,127,043 23,348,708 22,299,379 21,506,317 162,024,372 156,347,606 162,128,244 162,825,922 181,098,794 143,359,600 $$$$$$ $ 24,323,027 $ 13,719,117 $ 398,181 $ 396,651 $ 621,624 $ 2,737,355 2,284,334 2,079,109 2,305,608 2,194,038 1,898,022 2,291,100 9,943,014 7,209,724 4,929,602 3,162,052 260,524 355,817 4,371,888 4,156,386 4,220,977 3,956,933 3,849,699 3,875,539 1,611,184 5,152,484 12,059,509 15,937,913 35,138,334 26,341,684 - - - - - - 9,061,950 16,032,433 14,090,686 16,224,269 9,931,109 22,600,793 33,585,797 28,616,388 31,325,725 15,249,634 38,785,576 39,003,536 85,181,194 76,965,641 69,330,288 57,121,490 90,484,888 97,205,824 6,863,086 6,616,778 6,573,879 3,181,614 3,299,263 3,216,239 8,579,209 7,385,264 6,913,534 10,260,579 13,653,177 11,876,720 8,513,238 5,041,992 13,043,418 - - 617,421 23,955,533 19,044,034 26,530,831 13,442,193 16,952,440 15,710,380 96,009,675 95,861,119 70,563,683 112,916,204 107,437,328 109,136,727 $$$$$$ (Continued) 147 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2017 (accrual basis of accounting) FISCAL YEAR 16-1715-1614-1513-14 Net Revenues (expenses): Governmental activities(24,632,625)$ (66,008,221)$ (62,388,406) $ (43,771,787) $ Business-type activities(5,029,484) (7,923,170) (11,631,301) 557,210 Total net revenues (expenses)(29,662,109) (73,931,391) (74,019,707) (43,214,577) $$ General Revenue and Other Changes in Net Position Governmental activities Taxes: Sales taxes$ 36,147,727$ 37,807,385$ 34,355,412 $ 33,480,522 Property taxes39,924,74940,072,59738,556,890 35,652,080 Franchise taxes8,208,3478,392,7898,512,818 7,796,070 Real property transfer taxes1,275,3631,383,4731,169,780 947,470 Transient occupancy taxes3,639,2643,813,4373,124,904 2,781,527 Unrestricted revenue in lieu of motor vehicle taxes144,665129,05385,703 86,531 Unrestricted revenue in lieu of sales taxes - - - - Grants and contributions not restricted to specific programs - - - - Unrestricted investment earnings1,052,2544,142,9592,240,594 2,090,322 Miscellaneous revenue737,5131,080,771678,937 781,986 Gain on sale of capital asset11,711459,70927,410 18,174 Transfers(3,602,443)(6,390,264)(7,329,516) (5,692,032) Reversal of Allowance for Notes to RDA Successor Ag - 12,633,832 - - e Capital Contributions - 15,780,230 - - Total governmental activities87,539,15090,891,909109,836,994 77,942,650 Business-type activities Unrestricted investment earnings (28,735) 59,08617,592 4,791 Gain on sale of capital asset 53,223 - - - Miscellaneous revenue - - - - Transfers3,602,4436,390,2647,329,516 5,692,032 Total business-type activities3,626,9316,449,3507,347,108 5,696,823 Total primary government91,166,081 97,341,259 83,639,473 117,184,102 $$$$ Extraordinary Item Gain from dissolution of former redevelopment agency of the City of Santa Clarita- - -$ -$ Change in Net Position Governmental activities62,906,525$ 24,883,688$ 47,448,588 $ 34,170,863 $ Business-type activities(1,402,553)(1,473,820)(4,284,193) 6,254,033 Total primary government61,503,972 23,409,868 43,164,395 40,424,896 $$$$ Source: City of Santa Clarita, Administrative Services Department - Finance Division 148 FISCAL YEAR 12-1311-1210-1109-1008-0907-08 $ (68,670,913) $ (60,128,096) $ (68,670,913) $ (82,355,724) $ (68,314,527) $ (24,647,459) 2,403,788 (5,886,601) 2,403,788 (9,906,515) (5,346,939) (5,795,937) (66,267,125) (66,014,697) (66,267,125) (92,262,239) (73,661,466) (30,443,396) $$$$$$ $ 28,828,139 32,057,358 $ 27,701,757 $ 24,511,238 $ 27,751,506 $ 29,076,388 $ 34,818,426 32,341,369 24,996,219 25,126,278 26,820,068 24,482,930 6,920,244 7,141,953 6,697,241 6,407,923 6,704,074 6,028,903 706,180 590,474 3,082,456 4,564,687 4,816,638 836,824 2,556,774 2,380,547 2,106,521 2,050,857 2,260,708 2,433,651 91,062 - - - - - - 3,316,058 - 3,221,498 3,083,353 8,490,865 - 87,883 812,475 896,708 1,015,413 1,252,281 (82,870) 1,509,201 3,756,112 4,871,133 6,020,940 4,566,884 310,676 5,372,890 9,148,163 4,161,677 3,193,421 - - - - - - - (5,187,224) (6,844,199) (5,808,300) (7,477,547) (8,006,128) (8,431,120) - - - - - - - - - - - - 69,935,278 73,663,605 75,808,702 68,334,452 73,659,993 68,737,606 29,660 147 (27,303) 82,554 - 48,961 - - - - - - - - - 938,901 - - 5,187,224 6,844,199 5,808,300 7,477,547 8,006,128 8,431,120 5,216,884 6,844,346 5,780,997 7,560,101 8,945,029 8,480,081 75,152,162 80,507,951 81,589,699 75,894,553 82,605,022 77,217,687 $$$$$$ $ 40,413,284 -$ -$ -$ -$ -$ $ 1,264,365 $ 53,948,793 $ 7,137,789 $ (14,021,272) $ 5,345,466 $ 44,090,147 7,620,672 957,745 8,184,785 (2,346,414) 3,598,090 2,684,144 8,885,037 54,906,538 15,322,574 (16,367,686) 8,943,556 46,774,291 $$$$$$ 149 City of Santa Clarita Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2017 (modified accrual basis of accounting) FISCAL YEAR 16-1715-1614-1513-14 General Fund Reserved$ -$ - Unreserved - - Nonspendable$ 15,745,704 $ 11,108,252 11,024,338 11,519,143 Restricted - - Committed - - Assigned 79,367,084 79,367,084 55,336,807 51,718,096 Unassigned 53,902,478 50,669,580 50,141,486 45,654,640 Total general fund$ 141,144,916 149,015,266 $ 116,502,631 $ 108,891,879 $ All Other Governmental Funds Reserved$ -$ - Unreserved: Special revenue funds - - Debt service fund - - Capital projects fund - - Nonspendable$ 108,415$ 1,134,103 1,455,067 606,996 Restricted 87,532,962 86,240,243 85,763,293 84,268,720 Committed 14,000 14,000 14,000 612,829 Assigned 2,151,360 1,881,728 1,843,822 3,412,127 Unassigned (5,897,790) (6,975,198) (8,633,303) (9,300,647) Total all other governmental funds83,908,947 $ $ 82,294,876 $ 80,442,879 $ 79,600,025 FUND BALANCES Fiscal Year Ended June 30, 2017 All Other 0 Governmental Funds General Fund 36% 64% Note: Beginning in fiscal year 2011, the fund balance classification changed in accordance with GASB 54. Source: City of Santa Clarita, Administrative Services Department - Finance Division 150 FISCAL YEAR 12-1311-1210-1109-1008-0907-08 $ -$ -$ 19,546,015 -$ $ 32,617,139 $ 34,920,547 - - 58,211,508 - 41,674,470 31,153,879 11,910,059 18,902,350 23,845,861 - - - - - - - - - - 66,257 12,356,339 - - - 47,106,536 309,078 572,781 - - - 35,320,706 50,664,338 46,915,238 - - - $ 94,337,301 $ 69,942,023 $ 83,690,219 $ 77,757,523 $ 74,291,609 $ 66,074,426 $ -$ -$ 51,195,454 -$ $ 70,667,494 $ 51,972,970 - - 2,109,198 - (7,048,095) 28,377,796 - - (24,048,962) - (17,004,471) (15,873,835) - - 33,725,531 - 34,502,270 38,050,255 670,612 28,885,983 28,813,152 - - - 68,957,999 46,915,965 57,205,072 - - - 716,826 - - - - - 4,466,367 3,275,312 3,637,410 - - - (10,665,597) (56,718,519) (72,692,440) - - - $ 64,146,207 $ 22,358,741 $ 16,963,194 $ 62,981,221 $ 81,117,198 $ 102,527,186 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years 120 $102.53 100 $82.29 $80.44 $81.12 80 $79.6 $64.14 $62.98 60 40 $22.36 20 $16.96 0 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year 151 ity of Santa Clarita C hanges in Fund Balances of Governmental Funds C ast Ten Fiscal Years Ended June 30, 2017 L modified accrual basis of accounting) ( FISCAL YEAR 16-1715-1614-1513-14 Revenues: Taxes89,340,115 $ 91,598,734 $ 85,789,556 $ 80,285,660 $ Licenses and permits7,408,357 7,283,898 5,567,280 5,366,972 Developer fees4,211,890 6,272,799 10,764,554 2,600,997 Investment income1,030,146 3,937,618 2,026,507 1,911,491 Intergovernmental23,922,361 31,380,753 31,953,692 34,355,734 Fines and forfeitures1,117,620 973,753 1,261,752 1,661,157 Service charges36,639,646 36,828,067 37,738,754 42,156,582 Other revenues690,974 1,789,724 511,117 5,943,608 Total Revenues164,361,109 180,065,346 175,613,212 174,282,201 Expenditures: Current: General government41,138,676 35,969,981 43,196,168 36,294,205 Public safet 23,777,171 25,214,091 22,188,641 22,137,338 y Public works43,459,620 21,327,662 36,082,625 24,385,865 Recreation and community service20,446,596 37,937,050 21,007,651 20,498,108 Community development6,583,484 10,673,993 5,883,441 6,185,263 Neighborhood services1,667,058 Capital outlay 9,759,258 10,562,953 23,224,180 36,580,589 Debt service: Principal2,167,429 2,852,140 1,992,479 1,837,174 Interest, professional services and fiscal charges1,237,357 4,539,815 1,850,703 1,885,546 Redemption of district credits- - 5,105,402 - Total Expenditures151,673,569 147,640,765 160,531,290 149,804,088 Excess of Revenues Over (Under) Expenditures12,687,540 32,424,581 15,081,922 24,478,113 Other Financing Sources (Uses) Revenue bonds issued/issuance premium- 32,997,352 - - Proceeds of long-term debt- (32,907,353) - - Escrow payment, costs of bonds issuance and others- - Proceeds from capital lease -- Transfers in8,046,713 11,940,563 7,850,640 9,757,447 Transfers out(11,249,832) (17,960,861) (14,478,956) (15,524,498) Issuance of district credits 11,297,334 - Total Other Financing Sources (Uses)(3,203,119) (5,930,299) (6,628,316) 5,530,283 Extraordinary Item: Dissolution of Santa Clarita Redevelopment Agenc -- - - y Net change in fund balances9,484,421 26,494,282 8,453,606 30,008,396 Fund balances - Beginning of Year223,439,792 196,945,510 188,491,904 158,483,508 Fund balances - End of Year232,924,213 223,439,792 196,945,510 188,491,904 $$$$ Debt service as percentage of noncapital expenditures2.24%5.72%2.80%3.26% Source: City of Santa Clarita, Administrative Services Department - Finance Division 152 FISCAL YEAR 12-1311-1210-1109-1008-0907-08 $ 73,972,006 $ 73,625,713 $ 72,474,882 $ 80,714,829 $ 87,659,599 $ 88,088,786 4,246,957 4,097,709 3,675,424 4,093,250 3,697,218 5,256,748 15,828,388 7,181,986 282,776 3,053,363 15,763,070 22,290,808 1,702,006 2,739,794 3,798,498 5,485,925 10,749,728 8,287,441 27,452,216 28,375,142 19,780,700 33,881,145 28,882,884 24,247,611 2,114,166 1,674,085 1,891,500 1,936,318 1,759,371 2,121,570 36,311,324 28,145,012 23,608,272 10,812,521 8,375,771 9,931,041 332,146 6,425,792 7,685,141 7,234,923 5,077,400 3,368,879 161,959,209 152,265,233 133,197,193 147,212,274 161,965,041 163,592,884 35,433,288 50,816,449 42,213,597 27,951,510 27,250,056 25,965,196 19,894,859 25,412,420 21,230,594 17,862,129 17,439,295 16,342,979 27,968,407 20,753,607 34,210,327 20,594,575 42,937,168 25,977,763 19,824,550 19,523,584 21,853,319 20,048,430 20,126,412 20,156,343 7,252,424 5,923,872 11,575,365 10,849,942 7,095,386 7,583,236 23,837,533 27,403,439 21,311,885 46,183,268 41,826,511 44,906,802 1,750,538 2,338,787 2,246,218 2,611,372 2,072,341 1,927,198 2,039,144 3,743,134 4,796,695 5,411,152 5,279,549 4,632,979 14,368,419 - - - - - 152,369,162 155,915,292 159,438,000 151,512,378 164,026,718 147,492,496 9,590,047 (3,650,059) (26,240,807) (4,300,104) (2,061,677) 16,100,388 - - - - - - - - - - 54,235,000 - - - - - - (226,682) - 252,068 - - - - 9,069,495 16,538,674 50,869,852 18,953,115 12,150,426 43,112,541 (14,256,719) (29,810,448) (64,714,376) (28,930,662) (23,281,554) (54,668,661) 12,270,335 - - - - - 7,083,111 (13,019,706) (13,844,524) (9,977,547) (11,131,128) 42,452,198 8,317,116 - - - - - 16,673,158 (8,352,649) (40,085,331) (14,277,651) (13,192,805) 58,552,586 141,810,350 100,653,413 140,738,744 155,016,395 168,601,612 110,049,026 158,483,508 92,300,764 100,653,413 140,738,744 155,408,807 168,601,612 $$$$$$ 2.95%4.40%5.96%6.84%5.54%5.16% 153 City of Santa Clarita (1)and Actual Values of Taxable Property Assessed Values Last Ten Fiscal Years STATE ASSESSEDLOCALLY ASSESSED SECURED (UTILITY)SECURED FiscalIMPROVE-PERSONALIMPROVE-PERSONALOTHER YearLANDMENTSPROPERTYTOTALLANDMENTSPROPERTYEXEMPTIONSTOTAL 1,515,305 6,727,866 - 8,243,171 9,899,005,161 98,107,607 10,912,016,138 (214,371,451) 20,694,757,455 2007-08 1,515,305 330,866 - 1,846,171 10,259,253,083 95,440,322 11,386,047,165 (203,174,372) 21,537,566,198 2008-09 1,750,395 2,264,780 - 4,015,175 9,416,163,697 105,296,475 11,115,441,327 (323,630,904) 20,313,270,595 2009-10 1,750,395 2,264,780 - 4,015,175 9,160,567,699 112,335,544 11,280,024,994 (330,372,395) 20,222,555,842 2010-11 1,431,971 2,264,780 - 3,696,751 9,097,382,703 107,089,927 11,485,773,659 (372,583,638) 20,317,662,651 2011-12 1,431,971 2,264,780 - 3,696,751 8,882,930,332 111,202,431 11,516,988,299 (400,045,608) 20,111,075,454 2012-13 1,431,971 2,264,780 - 3,696,751 9,989,545,816 107,166,367 13,726,755,146 (412,668,046) 23,410,799,283 2013-14 1,431,971 2,264,780 - 3,696,751 10,820,572,961 103,844,310 14,749,259,449 (453,562,893) 25,220,113,827 2014-15 1,431,971 2,264,780 - 3,696,751 11,358,919,366 109,544,613 15,476,133,167 (471,097,603) 26,473,499,543 2015-16 1,431,971 2,264,780 - 3,696,751 11,931,551,116 123,045,242 16,179,111,473 (348,794,590) 27,884,913,241 2016-17 ASSESSED VALUATION by CATEGORIES (Total Secured and Unsecured) Fiscal Year Ended June 30, 2017 PERSONAL PROPERTY 2.31% LAND 41.08% IMPROVEMENTS 56.62% Note: (1) Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code. (2) Direct Rate includes Redevelopment Agency areas. Source: HdL Coren & Cone, County of Los Angeles, Auditor-Controller Office, Combined Tax Rolls 2016-17 154 LOCALLY ASSESSEDTOTALS HOME- UNSECUREDBEFORETAXABLE%TOTALOWNER IMPROVE-PERSONALOTHEROTHERASSESSEDINCR.DIRECTPROPERTY RATE (2) MENTSPROPERTYEXEMPTIONSTOTALEXEMPTIONSALUE(DECR.)TAX RELIEF V 558,804,055 264,708,723 (32,916,267) 790,596,511 21,740,884,855 21,493,597,137 13.63%0.07531%220,192,568 611,636,166 293,355,474 (33,951,806) 871,039,834 22,647,578,381 22,410,452,203 4.27%0.07268%223,396,120 600,420,921 359,543,253 (15,127,698) 944,836,476 21,600,880,848 21,262,122,246 -1.08%0.07432%224,731,598 553,829,644 346,874,191 (13,331,377) 887,372,458 21,457,647,247 21,113,942,935 -0.70%0.07392%223,277,279 548,430,090 314,286,482 (15,137,342) 847,579,230 21,556,659,612 21,168,938,632 0.26%0.07291%220,496,294 534,947,944 349,415,601 (13,693,787) 870,669,758 21,399,181,358 20,985,441,963 -0.87%0.07183%216,163,460 541,533,568 329,350,845 (15,907,716) 854,976,697 24,698,048,493 24,269,472,731 15.65%0.09170%236,577,388 561,740,289 339,544,656 (13,152,888) 888,132,057 26,578,658,416 26,111,942,635 7.59%0.09163%232,799,644 569,926,540 299,024,341 (15,283,837) 853,667,044 27,817,244,778 27,330,863,338 4.67%0.09169%230,402,082 547,111,240 265,891,622 (15,791,822) 797,211,040 29,050,407,444 28,685,821,032 4.96%0.09259%226,031,427 TOTAL ASSESSED VALUATION (Values) Taxable Last Ten Fiscal Years 35,000 30,000 $28,686 $27,331 $26,112 $24,269 25,000 $22,410 $21,262 $21,169 $21,114 $20,985 20,000 15,000 10,000 5,000 - 08-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year 155 City of Santa Clarita Redevelopment Agency (1) Assessed Values (2)and Actual Values of Taxable Property Last Ten Fiscal Years STATE ASSESSEDLOCALLY ASSESSED SECURED (UTILITY)SECURED FISCAL IMPROVE-PERSONALIMPROVE-PERSONALOTHER EARLANDMENTSPROPERTYTOTALLANDMENTSPROPERTYEXEMPTIONSTOTAL Y 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/AN/AN/AN/AN/AN/AN/AN/AN/A 2013-14 N/AN/AN/AN/AN/AN/AN/AN/AN/A 2014-15 N/AN/AN/AN/AN/AN/AN/AN/AN/A 2015-16 N/AN/AN/AN/AN/AN/AN/AN/AN/A 2016-17 N/N/N/AN/AN/AN/AN/AN/AN/A AA (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 of that 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-Controller/Tax Division 156 LOCALLY ASSESSEDTOTALS HOME- UNSECUREDTOTALSTAXABLEOWNER IMPROVE-PERSONALOTHERBEFOREASSESSEDALUEPROPERTY V MENTSPROPERTYEXEMPTIONSTOTALBASE YEARBASE YEARALUEGROWTHTAX RELIEF V 48,299,529 28,204,577 (217,300) 76,286,806 615,064,595 (266,351,517) 348,713,078 84,256,291 2,034,432 48,437,084 39,771,667 (77,000) 88,131,751 651,935,348 (266,351,517) 385,583,831 36,870,753 2,002,848 46,361,945 34,102,838 (84,500) 80,380,283 636,114,144 (266,351,517) 369,762,627 (15,821,204) 1,921,661 62,307,206 21,240,432 (84,500) 83,463,138 615,079,251 (266,351,517) 348,727,734 (21,034,893) 1,871,456 46,665,422 34,353,633 (102,000) 80,917,055 613,323,930 (266,351,517) 346,972,413 (1,755,321) 1,865,922 N/AN/AN/AN/A N/AN/N/AN/AN/A A N/AN/AN/AN/A N/AN/AN/AN/AN/A N/AN/AN/AN/A N/AN/AN/AN/AN/A N/AN/AN/AN/AN/AN/N/AN/AN/A A N/AN/AN/AN/AN/AN/N/AN/AN/A A 157 City of Santa Clarita Assessed Values—Taxable Property Last Ten Fiscal Years FISCAL YEAR CATEGORY16-1715-1614-1513-1412-13 Residential$21,784,467,001 $ 20,809,579,112$ 19,755,522,402 $ 18,138,258,224 $ 14,971,655,728 Commercial3,248,599,972 3,059,958,633 2,952,772,231 2,847,760,176 2,794,405,083 Industrial1,706,030,432 1,799,119,742 1,642,718,866 1,561,091,316 1,413,623,056 Irrigated 2,960,760 2,936,120 2,834,466 2,827,311 2,796,388 Dry farm - - - - - Recreational 99,802,827 104,324,505 101,870,300 100,138,918 104,981,278 Institutional 213,333,035 162,056,819 142,862,940 136,824,169 132,119,758 Government 356,714 220,358 216,042 215,066 210,850 Miscellaneous 309,530 348,240 341,421 1,017,342 864,299 acant land 449,270,431 419,750,992 507,997,067 509,125,263 565,117,297 V SBE Nonunitary 3,696,751 3,696,751 3,696,751 3,696,751 3,696,751 Possessory Int.117,718,179 115,205,002 112,978,072 113,541,478 125,301,717 Unsecured 797,363,610 853,667,044 888,132,057 854,976,697 870,669,758 Unknown 20 20 20 20 - TOTALS:$ 28,423,909,262 $ 27,330,863,338 $ 26,111,942,635 $ 24,269,472,731 $ 20,985,441,963 ASSESSED VALUE -TAXABLE PROPERTY Last Ten Fiscal Years 25,000 Residential 20,000 Commercial 15,000 Industrial 10,000 Vacant land 5,000 All others - 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year 158 FISCAL YEAR 11-1210-1109-1008-0907-08 $ 15,212,586,674 $ 15,239,936,469 $ 15,094,074,637 $ 16,493,025,013 $ 16,165,919,271 2,748,247,727 2,820,296,027 2,729,669,423 2,541,908,257 2,081,576,763 1,455,126,754 1,463,696,151 1,451,053,867 1,420,480,569 1,293,080,539 3,016,072 3,004,749 3,630,743 3,559,558 3,489,768 - -- -- 106,506,146 121,791,852 121,511,353 119,459,165 114,868,032 125,982,002 127,363,481 125,868,861 136,418,924 130,907,129 206,717 205,173 206,850 201,629 197,676 847,359 841,034 843,038 - 810,312 533,608,937 308,820,538 636,182,476 664,562,300 664,792,342 3,696,751 4,015,175 3,573,175 1,073,171 8,243,171 131,534,263 136,599,828 150,671,347 158,723,783 239,115,623 847,579,230 887,372,458 944,836,476 871,039,834 790,596,511 - - -- - $ 21,168,938,632 $ 21,113,942,935 $ 21,262,122,246 $ 22,410,452,203 $ 21,493,597,137 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. 159 City of Santa Clarita Assessed Values—Use Category Summary Fiscal Year 2016-17 NET ASSESSEDTAXABLE CATEGORYPARCELSALUEPERCENTEXEMPTIONSALUEPERCENT VV Residential 21,804,896,574 56,146 $ 75.1%20,429,573 $ 21,784,467,001 $ 76.64% Commercial 3,308,145,028 910 11.4%59,545,056 $ 3,248,599,972 11.43% Industrial 1,903,517,588 722 6.6%197,487,156 $ 1,706,030,432 6.00% Irrigated 2,960,760 6 0.0%-$ 2,960,760 0.01% Recreational 102,696,921 34 0.4%2,894,094 $ 99,802,827 0.35% Institutional 538,719,815 98 1.9%325,386,780 $ 213,333,035 0.75% Government 356,714 5 0.0%-$ 356,714 0.00% Miscellaneous 309,530 6 0.0%-$ 309,530 0.00% acant land V 453,291,202 3,818 1.6%4,020,771 $ 449,270,431 1.58% SBE Nonunitary 3,696,751 (13) 0.0%-$ 3,696,751 0.01% Possessory Int. 118,813,679 (2,226) 0.4%1,095,500 $ 117,718,179 0.41% Unsecured 813,155,432 (6,122) 2.8%15,791,822 $ 797,363,610 2.81% Unknown 20 25 0.0%-$ 20 0.00% TOTALS: 53,409 29,050,560,014 100.00%626,650,752 28,423,909,262 100.00% $$$ ASSESSED VALUE by USE CATEGORY NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2016-17 Fiscal Year 2016-17 All Others Industrial All Others 5.93% 6.00% Industrial 7.00% 6.55% Commercial 11.43% Commercial 11.39% Residential Residential 76.64% 75.06% Source: HdL Coren & Cone, Los Angeles County Assessor 2016-17 Combined Tax Rolls. 160 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) Last Ten Fiscal Years CASTAIC LOSLAKECOUNTYCOUNTY FiscalANGELESWATERSCHOOLSANITATIONFLOOD YearGENERALCOUNTYAGENCYDISTRICTSDISTRICTSCONTROLTOTAL 2007-08 -1.000000 0.040000 - 1.114050 - 0.074050 2008-09 1.000000 0.040000 - - 1.117110 - 0.077110 2009-10 1.000000 0.060750 - - 1.150565 - 0.089815 2010-11 1.000000 0.070600 - - 1.157430 - 0.086830 2011-12 1.000000 0.070600 - - 1.162057 - 0.091457 2012-13 1.000000 0.070600 - - 1.183435 - 0.112835 2013-14 1.000000 0.070600 - - 1.190930 - 0.120330 2014-15 1.000000 0.070600 - - 1.189170 - 0.118570 2015-16 1.000000 0.070600 - - 1.186670 - 0.116070 2016-17 1.190036 1.000000 0.070600 - - - 0.119436 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2016-17 1.200000 GENERAL 1.000000 0.800000 0.600000 0.400000 SCHOOL CASTAIC LAKE 0.200000 DISTRICTS SANITATION WATER AGENCY DISTRICTS 0.000000 LA COUNTYFLOOD CONTROL Source: HdL Coren & Cone, Los Angeles County Assessor 2016-17 Tax Rate Table 161 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 RatesRDA Incremental RateTotal Direct Rate City ShareProp. 13 Total City of 1%plus applicable Roll Yearper Prop. 13Debt Ratesvoter-approved debt Rates 2016-170.1227500.0000000.1227500.00000%0.09259% Agency2016-17 Notes: General fund tax rates are City of Santa Clarita Tax District 1 (249.01)0.05730 Castaic Lake Water Agency (302.01) 0.05780 representative and based upon the direct Children's Institutional Tuition Fund (400.21) 0.00283 and overlapping rates for the largest Consolidated Fire Protection District of LA Co. (007.30) 0.16340 General Fund tax rates area (TRA) by net County School Service Fund Newhall (581.06) 0.00801 taxable value. Total Direct Rate is the County School Service Hart William S. Hart (757.06) 0.00034 weighted average of all individual direct County School Services (400.15) 0.00143 rates applied by the government preparing Development Center Handicapped Minor Newhall (581.07) 0.00088 the statistical section information. The percentages presented in the columns Educational Augmentation Fund Impound (400.01) 0.13380 Educational Revenue Augmentation Fund (ERAF) (400.00) 0.08260 above do not sum across rows. In 1978 Greater LA Co. Vector Control (061.80) 0.00032 California voters passed Proposition 13, Santa Clarita Library (249.56) 0.02360 which set the property tax at a 1.00% fixed LA County Fire - Ffw (007.31) 0.00323 amount. This 1.00% is shared by all the LA County Flood Control Improvement District (030.10) 0.00176 taxing agencies for which the subject LA County Flood Control Maintenance (030.70) 0.00996 property resides within. In addition to the LA County General (001.05) 0.14050 1.00% fixed amount, property owners are LA County Accum Cap Outlay (001.20) 0.00009 charged taxes as a percentage of assessed Newhall School District (581.01) 0.08350 property values for the payment of any Santa Clarita Community College (814.04) 0.03740 voter-approved bonds. 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) 0.0706000 Newhall Elementary School District Debt Services 1999 Ser. B (581.53)0.0181400 Newhall Elementary School District Debt Services 1999 Ser. A (581.52)0.0181400 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.54)0.0055160 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55)0.0055160 Santa Clarita Community College Debt Services 2005 Refunding Bonds (810.0055160 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52)0.0055160 Santa Clarita Community College Debt Services 2006 Ser. 2012 0.0055160 William S. Hart Un.Hsd Debt Services (757.51) 0.0123775 William S. Hart Un.Hsd Debt Services 2008 Ser. B 0.0123775 William S. Hart Un.Hsd Debt Services 2008 Ser. C 0.0123775 William S. Hart Unified Debt Services 2001 Ser. B (757.52) 0.0123775 William S. Hart Unified Debt Services 2008 Ser. A (757.53) 0.0123775 Total Tax Rate 0.1963475 Source: HdL Coren & Cone, Los Angeles County Assessor 2015/16 Tax Rate Table 162 City of Santa Clarita Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years Ago FISCAL YEAR 2016-17FISCAL YEAR 2007-08 PERCENT ofPERCENT of NumberTOTALTOTAL CITYNumberTOTALTOTAL CITY ofASSESSEDASSESSEDofASSESSEDASSESSED VALUEVALUEOWNER/TAXPAYERParcelsVALUEVALUE OWNER/TAXPAYERParcels Valencia Town Center Venture LP 17 $ 373,410,918 1.31%Valencia Town Center Venture33 283,521,378 $ 1.32% PFI Valencia LLC 162,999,991 9 0.57EQR Valencia LLC 218 91,285,050 0.42 Park Sierra Properties 137,221,005 15 0.48Thomas Properties Group LLC33 80,214,294 0.37 Saugus Colony Limited 115,920,176 19 0.41Casden Santa Clarita LLC 25 78,029,956 0.36 EQR Valencia LLC 218 102,883,391 0.36RREEF America REIT II Corp2 72,650,100 0.34 EQR The Oaks LLC 100,807,520 28 0.35Prado Town Center West LLC266 72,467,884 0.34 Valenica Biomedical Park LLC4 99,365,463 0.35Walmart Real Estate Business Tru 66,277,181 5 0.31 s ARC SLSTCCA001 LLC 97,464,000 4 0.34ERP Operating 65,098,719 5 0.30 RREEF America Reit II Corp 82,135,034 2 0.29C-Native Exchange I LLC Time Wa - 61,413,539 0.29 80,817,697 6 0.28Prism River Oaks ETAL 53,641,335 7 0.25 Aerospace Dynamics International In Total 1,353,025,195 322 4.76% 594 924,599,436 4.30% All Others 27,070,884,067 95.24 20,568,997,701 95.70 Total Assessed Valuation$ 28,423,909,262 100.00%$ 21,493,597,137 100.00% NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone, LA County Assessor 2016/17 Combined Tax Rolls 163 City of Santa Clarita Property Tax Levies, Tax Collections and Delinquencies Last Ten Fiscal Years COLLECTIONSTOTAL PERCENT FISCALTAXESPERCENTIN SUBSEQUENCOLLECTIONSCOLLECTIONS T YEARLEVIEDCOLLECTIONSCOLLECTIONSYEARSTO DATETO DATE 2007-08 13,754,184 14,483,825 95.0%32,577 13,786,761 95.19% 2008-09 11,361,604 11,925,285 95.3%16,722 11,378,326 95.41% 2009-10 13,711,940 14,202,626 96.5%- 13,711,940 96.55% 2010-11 13,829,640 14,172,030 97.6%50,605 13,880,246 97.94% 2011-12 13,999,770 14,299,999 97.9%49,862 14,049,633 98.25% 2012-13 18,297,746 18,634,850 98.2%- 18,297,746 98.19% 2013-14 21,128,332 21,446,963 98.5%- 21,128,332 98.51% 2014-15 22,795,838 23,131,317 98.5%- 22,795,838 98.55% 2015-16 23,957,604 24,304,887 98.6%- 23,957,604 98.57% 25,178,564 25,483,385 98.8%- 25,178,564 98.80% 2016-17 TAX COLLECTIONS & DELINQUENCY -LAST TEN FISCAL YEARS 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 2007-082008-092009-102010-112011-122012-132013-142014-152015-162016-17 FISCALYEAR LEVIESCOLLECTIONSDELINQUENT 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. All 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 164 City of Santa Clarita Successor Agency Top Property Owners Based on Net Values Fiscal Year 2016-17 SecuredUnsecuredCombined o o o %f%f%f ParcelsValueParcelsValuesValue OwnerPrimary Use Net AVNet AVNet AV Time Warner Cable- $ 0.00%3 - 43,041,370 $ 57.84%43,041,370 $ 11.09%Unsecured 1 2Saugus Station LLC 18,260,3946 3.16% 18,260,3944.71%Vacant 16,904,00020 16,904,0004.36%Industrial 32.93% Casden Santa Clarita LLC (Pending Appeals On Parcels) 1 1.78% 10,276,0222.65%Residential 4Lyons Properties Limited10,276,022 (Pending Appeals On Parcels) 8,841,9912 1.53% 8,841,9912.28%Commercial 5Telfair Corporation (Pending Appeals On Parcels) David Weiswasser Trust 8,247,0252 1.43% 8,247,0252.13%Commercial 6 25805 San Fernando LLC 8,205,3601 1.42% 8,205,3602.11%Residential 7 RFT Sprouts LLC, et. al. 7,854,5883 1.36% 7,854,5882.02%Commercial 8 23801 San Fernando Rd Landco LLC1 7,416,673 1.28% 7,416,6731.91%Residential 9 7,038,1583 1.22% 7,038,1581.08%Institutional 10Peter and Barbara Coeler, et. al. (Pending Appeals On Parcels) Top Ten Total 93,044,211 39 $ 16.11%3 43,041,370 $ 57.84%136,085,581 $ 34.34% Agency Total 577,741,713 74,419,812 652,161,525 Incremental Net AV Total $ 331,567,154 28.06%$ 76.20%388,055,314 56,488,160 $ 35.07% Source: HdL Coren & Cone 165 City of Santa Clarita Successor Agency Project Area Assessment Appeals Summary and Tax Collection History Fiscal Years 2009-10 Through 2016-17 Project Area Assessment Appeals Summary—FY 2016-17 Estimated No. of No. of Estimated No. Reduction on Total No. of Resolved Successful Average No. & Value of of Appeals Pending Appeals Appeals AppealsAppealsReductionAppeals PendingAllowedAllowed 30525821351%39 / $97,919,2223241,457,339 $ Tax Collection History For Fiscal Years 2009-10 Through 2016-17 Current Year Current Year Prior Year Collection Total Collection CollectionCollectionPercentagePercentage YearTax LevyTotal 2009-104,068,572 $ 3,885,719 $ 42,260 $ 3,927,979 $ 96%97% 2010-113,618,835 2,744,263 (204,741) 2,539,523 76%70% (1) 2011-12 2,934,904 3,762,457 218,094 3,152,998 78%84% (2) 2012-13 2,786,791 3,485,808 275,290 3,062,081 80%88% (2) 2013-14 2,828,495 3,526,463 815,124 3,643,619 80%103% (2) 2014-15 3,185,967 3,836,835 158,652 3,344,619 83%87% (2) 2015-16 3,430,748 3,579,829 518,292 3,704,259 96%103% (2) 2016-17 3,819,731 4,063,020 797,178 3,983,145 94%98% 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. Sources: Ledgers and 2011-12 Revenue & Collection from Year-End Adjsuted Gross TI Collection by CRA (1) reports from Los Angeles County Auditor-Controller. (2) Sources: Ledgers and special reports from Los Angeles County Auditor-Controller commencing February 2012 pursuant to AB X 1 26. 166 City of Santa Clarita Charge Detail Report for CFD 2002-1 (Valencia Town Center) Fiscal Year 2016-17 LAND STRUCTURE TOTAL ASSESSOR’S ASSESSED ASSESSED ASSESSED TAXABLE PARCEL NUMBERPROPERTY OWNERVALUES ($)VALUES ($)VALUES ($)ACREAGE 2861-058-071Valencia Town Center Venture LP1,261,095 $ $ 192,163 $ 1,453,258 0.84 2861-058-072Valencia Town Center Venture LP3,495,554 18,172,669 21,668,223 4.81 2861-058-073Valencia Town Center Venture LP27,624,175 3,404,070 31,028,245 15.68 2861-058-076Valencia Town Center Venture LP879,987 87,398 967,385 1.18 2861-058-077Valencia Town Center Venture LP4,751,549 406,423 5,157,972 6.70 2861-058-081Valencia Town Center Venture LP16,068,719 169,909,906 185,978,625 14.34 2861-058-084Valencia Town Center Venture LP3,314,888 9,608,384 12,923,272 2.05 2861-058-085Valencia Town Center Venture LP432,372 216,184 648,556 0.33 Totals:$ 57,828,339 $ 259,825,536 201,997,197 $ 45.94 167 MAX TAX RATE APPLIED CLASS($)MAX TAXRATE ($)CHARGE ($) 135,630 $ 30,075 $ 26,396 $ 22,281 $ 135,630 171,380 26,396 126,966 135,630 558,748 26,396 413,947 135,630 42,186 26,396 31,253 135,630 238,720 26,396 176,855 35629.885 & 239,997.35 1&2 510,999 26,400 378,572 1 35,630 73,041 26,396 54,112 1 35,630 11,687 26,396 8,658 $ 1,212,644 168 City of Santa Clarita Ratio of Outstanding Debt by Type Last Ten Fiscal Years GOVERNMENTAL ACTIVITIES CERTIFICATES TAX ALLOCATION FISCALPRIVATE CAPITAL (1) (3)(4) OF PARTICIPATIONBONDS YEARLOANSBONDS (2)PLACEMENT LEASE (5)LEASESTOTAL 15,525,000 15,790,000 3,593,734 13,575,000 - 29,860,000 8,850,000 23,676 87,217,410 2007-08 2008-09 15,525,000 14,790,000 2,823,907 13,330,000 - 29,860,000 8,850,000 11,370 85,190,277 2009-10 15,525,000 13,760,000 2,017,793 13,075,000 - 29,460,000 8,730,000 1,624 82,569,417 15,525,000 12,700,000 1,413,786 12,805,000 - 29,040,000 8,605,000 - 80,088,786 2010-11 15,490,000 11,610,000 1,040,000 12,525,000 - - 242,417 - 40,907,417 2011-12 10,480,549 15,379,349 810,000 12,316,280 - - 201,880 - 39,188,058 2012-13 9,323,138 15,291,374 580,000 12,002,622 - - 154,705 - 37,351,839 2013-14 8,128,138 15,175,988 300,000 11,673,964 - - 217,615 - 35,495,705 2014-15 2015-16 - 200,000 - 26,012,352 6,328,411 - 138,877 - 32,679,640 - 100,000 25,262,456 4,984,543 - 60,444 - 30,407,443 2016-17 - NOTES: 1In 1991 the anta larita Public Financing Authority issued 22,940,000 aggregate principal amount o ()SC$f 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 by the Certificates of Participation Series 1997 of $19,670,000. As a result, the 1991 Series certificates are considered to be defeased and the liability for 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. -On July 15, 2015, the Santa Clarita Public Financing Authority entered into a Private Placement Lease agreement for $6,985,000 to refinance the outstanding 2005 Series certificates. As a result, the 2005 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 $3,200,000 in Certificates of Participation for the acquisition of parkland. In 2006 the COP Series 2001 were considered defeased and the liability for those certificates was removed from the general long-term debt. 2 n January 16, 2007, the anta larita Public Financing Authority issued 13,785,000 Lease Revenue ()OSC$ Bonds (Golden Valley Road), Series 2007 for the acquisition of right-of-way. - On June 22, 2016, the Santa Clarita Public Financing Authority issued $10,320,000 in Series 2016A Lease Revenue Bonds (Golden Valley Road) to advance refund $11,260,000 of oustanding 2007 Series bonds. As a result, the 2007 Series were considered defeased and the liability for those bonds was removed from the general long-term debt. -On June 22, 2016, the Santa Clarita Public Financing Authority issued $14,020,000 in Series 2016B Lease Revenue Refunding Bonds (OSPD) to advance refund $15,070,000 of outstanding 2007 Series certificates. (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. -On June 22, 2016, the Santa Clarita Public Financing Authority issued $14,020,000 in Series 2016B Lease Revenue Refunding Bonds (OSPD) to advance refund $15,070,000 of outstanding 2007 Series certificates. As a result, the 2007 Series were considered defeased and the liability for those bonds was removed from the general long-term debt. 4 n June 1, 2008, the anta larita Redevelopment Agency issued 29,860,000 in Non-Housing Tax Allocation ()OSC$ Bonds and $8,850,000 in Low/Mod Housing Tax Allocations Bonds to fund certain redevelopment projects within the Newhall Redevelopment Project area. Upon the dissolution of redevelopment agencies in the State of California effective February 1, 2012, the bonds were transferred to the RDA Successor Agency. 5 n July 15, 2015, the anta larita Public Financing Authority entered into a Private Placement Lease agreement or 6,985,000 to reinance the ()OSCf$f outstanding 2005 Series certificates. Sources: City of Santa Clarita, Administrative Services Department - Finance Division 169 PERCENTAGE BUSINESS-TYPE ACTIVITIESOFOUTSTANDING TOTALTAXABLEDEBTDEBT TO LEASEPRIMARYASSESSEDPERPERSONAL PAYABLETOTALGOVERNMENTVALUECAPITAINCOME 870,149 870,149 88,087,559 0.41%500 6%500 07-08 485,304 485,304 85,675,581 0.38%484 5%484 08-09 248,304 248,304 82,817,721 0.39%466 5%466 09-10 454 -- 80,088,786 0.38%454 N/ A 10-11 231 -- 40,907,417 0.19%231 N/ A 11-12 -- 39,188,058 0.19%191 N/191 A 12-13 179 -- 37,351,839 0.15%179 N/ A 13-14 166 -- 35,495,705 0.14%166 N/ A 14-15 -- 32,679,640 0.12%149 N/149 A 15-16 141 -- 30,407,443 0.11%141 N/ A 16-17 OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years 600 500 $454 $500 $484 $466 400 300 200 $179 $231 $166 $191 $149 $141 100 0 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year 170 City of Santa Clarita Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years PERCENTAGE OUTSTANDING GENERAL BONDED DEBTOF TAXABLEDEBT FISCALREVENUECERTIFICATES OFASSESSEDPER YEARPOPULATION (1)BONDS PARTICIPATIONTOTALVALUECAPITA 2007-08 13,575,000 177,045 31,315,000 44,890,000 0.21%255 2008-09 13,330,000 177,150 30,315,000 43,645,000 0.19%246 2009-10 13,075,000 177,641 29,285,000 42,360,000 0.20%238 2010-11 12,805,000 176,971 28,225,000 41,030,000 0.19%233 2011-12 12,525,000 177,445 27,100,000 39,625,000 0.19%223 2012-13 12,316,280 204,951 25,859,898 38,176,178 0.18%186 2013-14 12,002,622 209,130 24,614,512 36,617,134 0.15%175 2014-15 11,673,964 213,231 23,304,126 34,978,090 0.13%164 2015-16 26,012,352 219,611 - 26,012,352 0.10%118 2016-17 25,262,456 216,350 - 25,262,456 0.09%117 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years 350 300 $233 $223 250 $246 $255 $238 $175 $164 200 150$186 100 $117 $118 50 0 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year Source: (1) State of California, Finance Department 171 City of Santa Clarita Direct and Overlapping Tax and Assessment Debt June 30, 2017 2016-17 Assessed Valuation: $28,685,821,032 (Net of Redevelopment Agency Incremental Value of $388,055,314) 2016-17 Population: 216,350 PercentCity’s Share Total DebtApplicableof Debt Toity 06/30/201706/30/2017 C(1) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Santa Clarita Community College District262,836,240 $ 71.191%187,115,748 $ William S. Hart Union High School District359,655,434 71.180%256,002,738 $ William S. Hart Union High School District Community Facilities District No. 87-1155,000 100.000%155,000 $ William S. Hart Union High School District Community Facilities District No. 90-1370,000 100.000%370,000 $ William S. Hart Union High School District Community Facilities District No. 2015-124,930,000 100.000%24,930,000 $ Los Angeles County Community College and Unified School Districts13,662,990,000 0.00001%1,366 $ Castaic Union School District12,649,827 27.406%3,466,812 $ Newhall School District 61.035%6,826,765 11,185,000 $ Newhall School District School Facilities Improvement District No. 2011-160,000,000 61.836%37,101,600 $ Saugus Union School District28,123,928 82.808%23,288,862 $ Saugus Union School District School Facilities Improvement District No. 2014-120,000,000 83.833%16,766,600 $ Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N 100.000%7,415,000 7,415,000 $ o 100.000%8,165,000 8,165,000 $ Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N o Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N 16,120,000 100.000%16,120,000 $ o Saugus-Hart School District Community Facilities District No. 2000-1 10,520,000 100.000%10,520,000 $ Sulphur Springs Union School District 48,623,086 92.713%45,079,922 $ Sulphur Springs Union School District Community Facilities District No. 2002-1 25,265,000 100.000%25,265,000 $ City of Santa Clarita Open Space and Parkland Assessment District 14,506,483 100.000%14,506,483 $ City of Santa Clarita Community Facilities District No. 2002-1 14,975,000 100.000%14,975,000 $ City of Santa Clarita 1915 Act Bonds 705,000 100.000%$ 705,000 Los Angeles County Regional Park and Open Space Assessment District 38,895,000 2.133%$ 829,630 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT$ 699,606,526 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations$ 2.133%42,586,967 1,996,576,065 $ Los Angeles County Superintendent of Schools Certificates of Participation 7,204,988 2.133%$ 153,682 14,104,623 72.647%10,246,585 $ Los Angeles County Sanitation District No. 32 Authorit y Santa Clarita Community College District Certificates of Participation 9,580,000 71.191%6,820,098 $ William S. Hart Union High School District Certificates of Participation 6,000,000 71.180%4,270,800 $ Castaic Union School District Certificates of Participation 3,665,000 27.406%1,004,430 $ Saugus Union School District Certificates of Participation 24,700,000 82.808%20,453,576 $ Sulphur Springs Union School District Certificates of Participation 25,375,000 92.713%23,525,924 $ Los Angeles Unified School District Certificates of Participation 239,440,000 0.00001%$ 24 City of Santa Clarita Obligations 15,900,960 100.000%15,900,960 $ Total Gross Direct and Overlapping General Fund Debt$ 124,963,046 Total Net Direct and Overlapping General Fund Debt$ 124,963,046 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 35,647,868 100.000%35,647,868 Total Direct Debt$ 30,407,443 Gross Total Overlapping Debt 844,316,481 Net Total Overlapping Debt$ 844,316,481 GROSS COMBINED TOTAL DEBT$ 860,217,440 NET COMBINED TOTAL DEBT$ 860,217,440 (1) Percentage of overlapping debt applicable to the city is estimated using taxable assed property value. Applicable percentages were estimated determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable (2) Includes $100,000 HUD Loans, $4,984,543 Private Placement Lease, $10,755,973 Series 2016A GVR Lease Revenue Bonds, and $60,443.7 lease obligations. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Ratios to -7 Assessed Valuation: 20161 Direct Debt ($14,506,483)…………………………………………………………………0.05% Total Overlapping Tax and Assessment Debt……………………………………………...2.44% Total Direct Dept ($30,407,443)………………………………………………………….0.11% Gross Combined Total Debt…………………………………………………………………3.00% Net Combined Total Debt……………………………………………………………………3.00% Ratios to Redevelopment Successor Agency Incremental Valuation ($388,055,314): Total Overlapping Tax Increment Debt……………………………………………………..9.19% Source: MuniServices, LLC 172 City of Santa Clarita Legal Debt Margin Information Last Ten Fiscal Years FISCAL YEAR 16-1715-1614-1513-1412-13 Assessed valuation$ 28,685,821,032 $ 27,330,863,338 $ 26,111,942,635 $ 24,269,472,731 $ 20,985,441,963 Conversion percentage25%25%25%25%25% Adjusted assessed valuation7,171,455,258 6,832,715,835 6,527,985,659 6,067,368,183 5,246,360,491 Debt limit percentage15%15%15%15%15% Debt limit 1,075,718,289 1,024,907,375 979,197,849 910,105,227 786,954,074 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin 1,075,718,289 1,024,907,375 979,197,849 910,105,227 786,954,074 $$$$$ Total debt applicable to the limit as a percentage of debt limit0%0%0%0%0% Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarita, Administrative Services Department - Finance Division 173 FISCAL YEAR 11-1210-1109-1008-0907-08 $ 21,168,938,632 $ 21,113,942,935 $ 21,262,122,246 $ 22,410,452,203 $ 21,493,597,137 25%25%25%25%25% 5,292,234,658 5,278,485,734 5,315,530,562 5,602,613,051 5,373,399,284 15%15%15%15%15% 793,835,199 791,772,860 797,329,584 840,391,958 806,009,893 - - - - - 793,835,199 791,772,860 797,329,584 840,391,958 806,009,893 $$$$$ 0%0%0%0%0% LEGAL DEBT MARGIN Last Ten Fiscal Years 1,200 1,000 800 600 400 200 0 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year 174 Cit of Santa Clarita y ed Revenue Coverae Pled gg Last Ten Fiscal Years TRANSIT LESSNET DEBT SERVICE FiscalTRANSITOPERATINGAVAILABLE REVENUES 1EXPENSES 2 eaREVENUESPrincipalInterestCOVERAGE Yr()() 2007-08 22,204,777 24,888,921 2,684,144 366,720 60,298 1.72% 2008-09 23,014,324 26,612,418 3,598,094 384,846 42,172 1.60% 2009-10 23,525,855 21,179,438 (2,346,417) 236,999 23,149 1.23% 2010-11 24,270,533 32,507,582 8,237,048 248,304 11,844 0.80% 2011-12 25,175,688 26,133,433 957,745 - - - 2012-13 25,901,822 29,420,486 3,518,664 - - - 2013-14 27,044,874 33,298,907 6,254,034 - - - 2014-15 28,292,380 24,008,186 (4,284,194) - - - 2015-16 28,327,301 26,853,481 (1,473,820) - - - 2016-17 30,072,872 28,670,319 (1,402,553) - - - (1) Includes Other revenues, Transfers in and Capital contributions NOTE: (2) Includes Transfers out and Other expenses 175 City of Santa Clarita Demographic and Economic Statistics Last Ten Calendar Years AVERAGEAVERAGEPER CITY OFANNUALLOS ANGELESANNUALCAPITTOTAL A SANTA CLARITPERCENTAGCOUNTYPERCENTAGEPERSONALPERSONALUNEMPLOYMENT AE POPULATION (1)POPULATION (1)INCOME (2)INCOME (2)RATE (3) EARINCREASEINCREASE Y 177,045 0.22%9,785,474 0.05%44,727 567,707,000 4.70% 2008 177,150 0.43%9,801,096 0.16%43,119 550,832,000 7.70% 2009 177,641 0.54%9,822,121 0.21%43,999 565,365,000 7.70% 2010 176,971 0.15%9,818,605 -0.04%44,423 575,044,998 7.60% 2011 177,445 0.64%9,884,632 0.67%46,337 604,831,837 6.90% 2012 204,951 15.50%9,958,091 0.74%48,425 635,891,798 6.60% 2013 209,130 2.04%10,041,797 0.84%50,751 673,073,539 4.70% 2014 213,231 1.96%10,136,559 0.94%54,526 727,377,241 6.40% 2015 219,611 2.99%10,241,335 1.03%N/AN/A4.70% 2016 225,512 2.69%10,241,278 0.00%N/AN/A4.40% 2017 POPULATION INCREASE Last Ten Fiscal Years 17.00% 15.50% 15.00% 13.00% 11.00% 9.00% 7.00% 5.00% 2.99% 3.00% 2.69% 2.04% 1.96% 0.54% 0.15% 0.64% 0.43% 1.00%0.22% -1.00% 2008200920102011201220132014201520162017 YEAR (1) State of California, Finance Department, as of 1/1/2017 Sources: (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), Oct 30, 2017 Note:Reduction in 2017 population numbers due to change in the county controls. The primary factor was a lowering of the estimated school enrollment. 176 City of Santa Clarita Principal Employers Current Fiscal Year and Nine Fiscal Years Ago 2017*2008 PERCENTPERCENT NUMBERofNUMBERof ofTOTALofTOTAL EMPLOYEREMPLOYEEEMPLOYMENTEMPLOYEREMPLOYEEEMPLOYMENT SS Six Flags Magic MountainMountain 11.07%3,200 14.62%3,689 Princess CruisesPrincess Cruises 7.01%2,026 8.32%2,100 Henry Mayo Newhall Henry Mayo Newhall Memorial HospitalMemorial Hospital 6.74%1,948 4.80%1,212 Boston Scientific 3.11%HR Textron845 900 3.35% The Master's College 2.63%The Master's College755 760 2.99% Cal Arts 2.42%Speciality Laboratories725 700 2.87% Woodward HRT (formerly HR Textron) 2.25%Arvato Services586 650 2.32% Walmart 2.16%Cal Arts500 624 1.98% Aerospace Dynamics 2.10%Aerospace Dynamics450 608 1.78% Quest Diagnostics (formerly Speciality 2.06%Fanfare Media Works407 594 1.61% (1) (1) Largest firmsLargest firms 41.55%12,010 44.66%11,269 All othersAll others 58.45%16,893 55.34%13,963 Grand total28,903 100.00%Grand total25,232 100.00% * As of March 2017 NOTE: (1)Non-governmental employers Source: 2017 Economic Outlook Santa Clarita Valley Economic Dev Corp & College of the Canyons 2008 CAFR 177 City of Santa Clarita Full-Time and Part-Time City Employees by Function Last Ten Fiscal Years FISCAL YEAR Function16-1715-1614-1513-1412-1311-1210-1109-1008-0907-08 General government150.00 9 1.00 8 7.60 8 7.60 8 9.60 8 4.35 8 5.75 8 9.75 91.75 95.75 Public safety (1) -- - - - - - - - - Public works 131.50 128.50 125.00 1 22.00 1 29.00 1 26.00 1 27.00 1 28.00 136.50 135.50 Communit developmen44.00 37.00 41.00 4 1.00 3 2.00 3 0.50 3 3.00 3 3.00 35.00 36.00 y Parks and Recreation63.90 112.15 111.15 1 09.15 1 08.15 1 05.90 1 06.50 1 10.50 110.50 111.50 Transit 12.00 12.00 11.00 1 1.00 1 1.00 1 3.00 1 2.00 1 2.00 11.00 14.00 Totals 383.65 398.40 375.75 3 70.75 3 69.75 3 59.75 3 64.25 3 73.25 384.75 392.75 CITY OF SANTA CLARITA -EMPLOYEES Last Ten Fiscal Years 398.40 400.00 392.75 390.00 383.65 384.75 380.00 375.75 373.25 370.75 369.75 370.00 364.25 359.75 360.00 350.00 340.00 07-0808-0909-1010-1111-1212-1313-1414-1515-1616-17 Fiscal Year (1)Police and Fire services have been provided by the Count y Source: City of Santa Clarita, Administrative Services Department - Finance Division 178 Operating Indicators by Function Last Ten Fiscal Years FISCAL YEAR Function16-1715-1614-1513-1412-1311-1210-1109-1008-0907-08 Police: Parking citations issued 13,133 9,035 4 ,765 4,786 5,726 5,521 6,577 5,114 4,126 5,257 (1) Parking revenue collected$ 470,843 $ 379,384 $ 320,682 $ 323,040 $ 341,607 $ 335,663 $ 323,408 $ 238,478 $ 235,634 $ 288,076 Public works: Street resurfacing (miles) 45.0 15.5 80.0 20.9 18.0 24.0 24.0 33.8 14.0 15.4 Parks and Recreation: Number of recreation classes 2,992 2,918 2 ,189 2,557 2,548 2,106 2,080 2,447 2,284 2,393 Number of facility rentals (times) 19,924 13,390 19,018 14,604 13,000 11,042 10,754 10,239 9,801 9,767 Transit: Number of customers served 3,167,021 2,864,351 3,422,015 3,540,969 3,661,302 3,612,060 3,724,490 3,922,052 4,210,842 3,821,299 (2) 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 Clarita, Administrative Services Department - Finance Division 179 City of Santa Clarita Capital Assets Statistics by Function Last Ten Fiscal Years FISCAL YEAR Function16-1715-1614-1513-1412-1311-1210-1109-1008-0907-08 Public works: Streets (miles) 537 516 497 496 496 496 496 496 496 496 (1) Street lights 17,843 17,843 17,843 17,843 17,843 15,081 14,963 14,939 14,739 14,429 Traffic signals (City Jurisdiction)186 180 180 177 177 170 171 166 172 176 Traffic signals (Joint Jurisdiction)5 5 5 5 5 1 6 6 4 5 Parks and recreation: Number of parks 32 32 29 32 29 23 24 20 20 20 Community centers 2 2 2 2 1 1 1 1 1 1 Transit: Stations 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 (989) 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 180 23920 Valencia Blvd. Suite 300 Santa Clarita, CA 91355 santa-clarita.com CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND Financial and Compliance Report For the Year Ended June 30, 2017 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND Financial and Compliance Report For the Year Ended June 30, 2017 Table of Contents Page INDEPENDENT AUDITORS’ REPORT ....................................................................................................... 1 BASIC FINANCIAL STATEMENTS Balance Sheet ......................................................................................................................................... 3 Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 4 Notes to Financial Statements ................................................................................................................ 5 REQUIRED SUPPLEMENTARY INFORMATOIN Schedule of Revenues, Expenditures and Changes in Fund balance – Budget and Actual and related Note to RSI ......................................................................................... 7 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS INCLUDING APPLICABLE PROVISIONS OF ASSEMBLY BILL 2766 (AB 2766) CHAPTER 1705 (HEALTH AND SAFETY CODE SECTIONS 44220 THROUGH 44247) BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ..................................................................................... 8 INDEPENDENT AUDITORS’ 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 Air Quality Improvement Special Revenue Fund (Fund) of the City of Santa Clarita, California (City) as of and for the year ended June 30, 2017, 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. Auditors’ 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 auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund of the City as of June 30, 2017, and the changes in financial position for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Emphasis of 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, 2017, or 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 schedule of revenues, expenditures, and changes in fund balance – budget and actual on page 7 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 for the Fund 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 28, 2017, 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. Rancho Cucamonga, California December 28, 2017 2 BASIC FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND BALANCE SHEET JUNE 30, 2017 ASSETS Pooled cash and investments585,358$ Interest receivable 2,507 Due from South Coast Air Quality Management District71,288 Total assets$ 659,153 LIABILITIES AND FUND BALANCE Liabilities Accounts payable and accrued liabilities$ 69,946 Fund Balance Restricted589,207 Total liabilities and fund balance$ 659,153 See accompanying notes to financial statements. 3 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2017 REVENUES Assembly Bill 2766 Revenues280,442$ Investment income2,994 Total revenues 283,436 EXPEDITURES Administrative3,902 Air quality improvement program 407,658 Total expenditures 411,560 Net change in fund balance(128,124) Fund balance, beginning of year 717,331 Fund balance, end of year$ 589,207 See accompanying notes to financial statements. 4 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation: The Air Quality Improvement Special Revenue Fund’s (Fund) financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The financial statements reflect the financial position and changes in financial position of the Air Quality Improvement Special Revenue Fund (Fund) of the City of Santa Clarita, California (City) only. 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. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City and changes in financial position thereof for the year then ended in conformity with generally accepted accounting principles in the United States of America. 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. 5 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. 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 resources. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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, 2017 is $585,358. 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 are unrated, and average maturity is 30 days or less. The Fund recognizes its position in the City investment pool at fair value based on information provided by the City. Deposits and withdrawals to the pool are made on the basis of $1 and not fair value. Accordingly, the inputs used to measure fair value are uncategorized and not defined as Level 1, Level 2, or Level 3. Additional information regarding interest rate risk, concentration of credit risk, custodial credit risk and fair value measurements of the City’s pooled cash and investments is presented in the City’s Comprehensive Annual Financial Report. 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. 6 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2017 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 legal level of budgetary control (i.e. the level at which expenditures may not legally exceed appropriation) is the category. For the year ended June 30, 2017, expenditures exceeded appropriations in the category level (legal level of budgetary control) as follow: Excess Expenditures over Appropriations Expenditures Appropriations Description $(25,166) Capital improvement projects - Personnel$-25,166 Expenditures are in excess of appropriations due to appropriation for personnel cost is budgeted under operating cost related to Capital improvement projects. The following is the budget comparison schedule for the Fund for the year ended June 30, 2017: Variance with Final Budget ActualPositive OriginalFinalAmounts(Negative) REVENUES Intergovernmental$ 275,000$ 275,700$ 280,442$ 4,742 Investment income-- 2,9942,994 Total revenues275,000275,700283,4367,736 EXPENDITURES Operating: Operating10,778 10,778 7,9222,856 Capital outlay8,300 8,675 6,4762,199 Capital improvement projects: Personnel- -25,166(25,166) Operating578,931690,547 371,996318,551 Total expenditures598,009710,000 411,560298,440 et change in fund balance N $ (434,300)(323,009)$ (128,124)$ 306,176 Fund balance, beginning of year717,331 Fund balance, end of year$ 589,207 7 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS, INCLUDING APPLICABLE PROVISIONS OFASSEMBLY BILL 2766 (AB 2766) CHAPTER 1705 (HEALTH AND SAFETY CODE SECTIONS 44220 THROUGH 44247) BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 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 (Fund) of the City of Santa Clarita, California (City) as of and for the year ended June 30, 2017, and the related notes to the financial statements, and have issued our report thereon dated December 28, 2017. Our report included an emphasis of matter indicating that the financial statements present only the Fund and do not present the financial position or changes in financial position of the City. Our report also included an explanatory paragraph stating that the financial statements do not include Management’s Discussion and Analysis. 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 of the Fund (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 City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. Adeficiency 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 entity’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. 8 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW 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 applicable provisions of AB 2766, Chapter 1705 (Health and Safety Code Sections 44220 through 44247), 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rancho Cucamonga, California December 28, 2017 9 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) Financial Report Year Ended June 30, 2017 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) Financial Report Year Ended June 30, 2017 Table of Contents Page INDEPENDENT AUDITORS’ REPORT ................................................................................................. 1 FINANCIAL STATEMENTS Statement of Net Position ................................................................................................................. 3 Statement of Revenues, Expenses and Changes in Net Position ...................................................... 4 Statement of Cash Flows .................................................................................................................. 5 Notes to Financial Statements .......................................................................................................... 6 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Transit Fund’s Proportionate Share of the Net Pension Liability ......................... 16 Schedule of the Transit Fund’s Contributions ................................................................................ 17 INDEPENDENT AUDITORS’ 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 Transit Enterprise Fund (Transit Fund), an enterprise fund of the City of Santa Clarita, California (the City), as of and for the year ended June 30, 2017, 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. Auditors’ 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. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW 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, 2017, 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. Emphasis of a Matter As discussed in Note 1 to the financial statements, the financial statements present only the Transit Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2017, 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 Accounting principles generally accepted in the United States of America require that the schedule of proportionate share of the net pension liability, and schedule of contributions 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. 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 28, 2017, 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. Rancho Cucamonga, California December 28, 2017 2 FINANCIAL STATEMENTS THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) STATEMENT OF NET POSITION JUNE 30, 2017 ASSETS Current assets Pooled cash and investments$ 2,363 Accounts receivable277 Prepaids117,979 Due from other governments8,690,543 Total current assets8,811,162 Noncurrent assets Capital assets Nondepreciable assets15,089,616 Depreciable assets, net64,499,486 Total noncurrent assets79,589,102 Total assets88,400,264 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions399,450 LIABILITIES Current liabilities Accounts payable7,586,586 Compensated absences payable57,605 Due to the City of Santa Clarita1,286,112 Total current liabilities8,930,303 Noncurrent liabilities Compensated absences payable27,288 Net pension liability1,388,588 Total noncurrent liabilities1,415,876 Total liabilities10,346,179 DEFERRED INFLOWS OR RESOURCES Deferred inflows related to pensions67,065 NET POSITION Net investment in capital assets79,589,102 Unrestricted(1,202,632) Total net position$ 78,386,470 See notes to financial statements. 3 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION JUNE 30, 2017 Operating revenues: Metrolink and EZ pass revenues$ 196,900 Fixed-route passenger fares 3,135,404 Dial-A-Ride passenger fares 115,905 County of Los Angeles operating assistance2,223,854 Specialized transit services 1,017,089 Miscellaneous revenues 541,982 Total operating revenues 7,231,134 Operating expenses: Salaries and benefits 1,348,603 Administrative services 3,095,692 Contract transportation services18,848,994 Insurance 90,558 Supplies, utilities and other 1,103,326 Depreciation 5,371,324 Total operating expenses 29,858,497 Operating loss (22,627,363) Nonoperating revenues (expenses): Proposition A discretionary 4,427,993 Proposition A specialized transportation806,544 Proposition C expansion 193,792 Proposition C BSIP 50,302 Proposition C transit mitigation 12,384 Proposition C MOSIP 8,390 Proposition C security allocation 208,461 Measure R bus operations 2,488,096 Intergovernmental revenues 260,377 Transit mitigation fees 23,400 Unrealized loss on investments (28,735) Gain on disposal of capital assets53,223 Total nonoperating revenues8,504,227 Loss before contributions and transfers(14,123,136) Capital contributions: Federal Transit Administration capital grants8,716,021 Proposition C MOSIP 402,119 Total capital contributions 9,118,140 Transfers from the City of Santa Clarita3,788,081 Transfers to the City of Santa Clarita(185,638) Change in net position (1,402,553) Net position, beginning of year79,789,023 Net position, end of year$ 78,386,470 See notes to financial statements. 4 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) STATEMENT OF CASH FLOWS JUNE 30, 2017 Cash flows from operating activities: Cash received from customers and users6,689,185$ Cash payments to suppliers of goods and services(16,641,360) Cash payments to employees(2,020,923) Cash received from other sources541,982 Net cash used in operating activities(11,431,116) Cash Flows from noncapital financing activities: Cash transfers out to the City of Santa Clarita(185,638) Cash transfers in from the City of Santa Clarita3,788,081 Federal and state funding received2,732,995 Net cash provided by noncapital financing activities6,335,438 Cash flows from capital and related financing activities: Federal and state capital contributions9,118,140 Acquisition of capital assets(8,273,166) Net cash provided by capital and related financing activities844,974 Cash flows from investing activities: Interest received (17,089) Net decrease in cash and cash equivalents(4,267,793) Pooled cash and cash equivalents Beginning of year 4,270,156 End of year$ 2,363 Reconciliation of operating loss to net cash used in operating activities Operating loss$ (22,627,363) Adjustments to reconcile operating loss to net cash used in operating activities Depreciation 5,371,324 Pension Expense 304,247 Changes in operating assets and liabilities: Decrease in accounts receivable31 Decrease in prepaids 97,603 Increase in accounts payable and accrued liabilities4,422,878 Increase in compensated absences2,496 Increase in due to the City of Santa Clarita1,286,112 Payments related to deferred outflows for contributions subsequent to the measurement date (288,444) Total adjustments11,196,247 Net cash used in opearting activities(11,431,116)$ See notes to financial statements. 5 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of business: The financial statements of the Transit Enterprise Fund (Transit Fund) of the City of Santa Clarita, California (City) are intended to present the financial position and results of the bus line services operation. The financial statements of the Transit Fund are included as a business-type (enterprise fund) activity in the basic financial statements of the City. A summary of the Transit 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., specializing in 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 Transit 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 Transit 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 Transit Fund’s cash balance. Cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition, and the Transit Fund’s participation in the City investment pool are considered to be cash and cash equivalents. Each City fund owns a share of pooled cash and investments and interest income was apportioned based on its average month-end cash balances in proportion to the total of the pooled cash and investments. Prepaids: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. 6 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Administrative services: The Transit 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. 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 acquisition 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 Buildingand improvements 5-50 years Equipment5-25years Pension: The Transit 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 of the City of Santa Clarita. All amounts and disclosures are presented on a cost-sharing perspective where the Transit Fund is a participant in the City’s plan. For purposes of measuring the net pension liability, deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the California Public Employees Retirement System (CalPERS) plan and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Net position: Net position represents the difference between assets and deferred outflows, and liabilities and deferred inflows, and is classified into three categories: nt in capital assets: Net investmeThis 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 Transit Fund’s policy is to apply restricted resources first. 7 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 Transit Fund in the fiscal year earned. The outstanding balance as of June 30, 2017 was $84,893 of which $57,605 was considered due within one year, and $27,288 was considered due in more 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 in the financial statements and accompanying notes. Actual results could differ from these estimates. Pronouncements Issued But Not Yet Adopted: GASB Statement No. 75 – In June 2015, GASB issued Statement No. 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). This Statement is effective for fiscal years beginning after June 15, 2017, or the 2017-2018 fiscal year. The Transit Fund has not determined the effect on the financial statements. GASB Statement No. 80 – In January 2016, GASB issued Statement No. 80, Blending Requirements for Certain Component Units – An Amendment of GASB Statement No. 14. The objective of the Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. This Statement amends the blending requirements established in paragraph 53 of Statement No. 14, The Financial Reporting Entity, as amended. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The Statement is effective for the reporting periods beginning after June 15, 2016. The Transit Fund has not determined the effect of the statement. GASB Statement No. 81 – In March 2016, GASB issued Statement No. 81, Irrevocable Split–Interest Agreements.The objective of the Statement is to improve financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. The Statement requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, the Statement requires that a government recognize assets representing its beneficial interests in irrevocable split-interest agreements that are administered by a third party, if the government controls the present service capacity of the beneficial interests. The Statement requires that a government recognize revenue when the resources become applicable to the reporting period. The Statement is effective for the reporting periods beginning after December 15, 2016, or the 2017-18 fiscal year. The Transit Fund has not determined the effect of the Statement. GASB Statement No. 83 – In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations.This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital asset should recognize a liability based on the guidance in this Statement. This Statement also requires disclosure of information about the nature of a government’s ARO, the methods and assumptions used for the estimates of the liabilities, and the estimated remaining useful life of the associated tangible capital assets. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018, or the 2018-19 fiscal year. The Transit Fund has not determined the effect of the Statement. 8 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pronouncements Issued But Not Yet Adopted (Continued): GASB Statement No. 84 – In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018, or the 2019-20 fiscal year. The Transit Fund has not determined the effect of this Statement. GASB Statement No. 85 – In March 2017, GASB issued Statement No. 85, Omnibus 2017. The objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits \[OPEB\]). The Statement is effective for the reporting periods beginning after June 15, 2017, or 2017-2018 fiscal year. The Transit Fund has not determined the effect of the Statement. NOTE 2 – POOLED CASH AND INVESTMENTS The Transit Fund’s cash and investment balance of $2,363 is held in the City investment pool. The City investment pool is not rated and is not registered with the Securities Exchange Commission (SEC). The Transit Fund’s position in the City investment pool at June 30, 2017 is stated at fair value. For further information regarding the City Pool, refer to the City of Santa Clarita Comprehensive Annual Financial Report. Fair Value Measurement For investments, the City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. As of June 30, 2017, the Transit Fund held no individual investments. Deposits and withdrawals from the City Pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of the Transit Fund’s proportionate share of investments in the City investment pool is based on uncategorized inputs not defined as Level 1, Level 2, or Level 3. NOTE 3 – DUE FROM OTHER GOVERNMENTS Due from other governments consists of the following at June 30, 2017: Agency Los Angeles County2,946,043$ Federal Transit Administration5,425,395 Other Agencies319,105 $ 8,690,543 9 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 4 – CAPITAL ASSETS Changes in capital assets of the Fund at June 30, 2017 consisted of the following: BalanceBalance June 30, 2016AdditionsDeletionsTransfersJune 30, 2017 Non-depreciable assets: Land10,787,880$ -$ -$ -$ 10,787,880$ Intangible4,300,000 - - - 4,300,000 Construction1,736 - - - 1,736 Total non-depreciable assets15,089,616 - - - 15,089,616 Depreciable assets: Site improvements12,941,276 - - - 12,941,276 Building and improvements41,483,799 - - - 41,483,799 Equipment49,540,292 8,284,045 (2,002,436) - 55,821,901 Total depreciable assets103,965,367 8,284,045 (2,002,436) - 110,246,976 Less accumulated depreciation Site improvements(2,695,370) (568,221) - - (3,263,591) Building and improvements(11,042,386) (883,347) - - (11,925,733) Equipment(28,629,967) (3,919,756) 1,991,557 - (30,558,166) Total accumulated depreciation(42,367,723) (5,371,324) 1,991,557 - (45,747,490) Total depreciable assets, net61,597,644 2,912,721 (10,879) - 64,499,486 Total capital assets, net76,687,260$ 2,912,721$ (10,879)$ -$ 79,589,102$ NOTE 5 – TRANSFERS TO/FROM THE CITY OF SANTA CLARITA During the year ended June 30, 2017, the Transit Fund transferred $185,638 to the City of Santa Clarita support of transit operations. Transfers to the Transit Fund from the City in the amount of $3,788,081 were made as follows: Proposition A$1,489,323 Proposition C2,298,758 $3,788,081 NOTE 6 – PENSION PLAN Plan Description All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Pension Plan, an agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. The employees are participants in the Miscellaneous Plan of the City. Accordingly, all amounts and disclosures are presented on a cost-sharing perspective where the Transit Fund is a participant in the City’s plan. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. 10 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 – PENSION PLAN (CONTINUED) Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Plans’ provisions and benefits in effect at June 30, 2017, are summarized as follows: Miscellaneous Tier 1 Tier 2Tier 3 Formula2.7% at 552% at 602% at 62 Benefit vesting schedule5 years of service5 years of service5 years of service Benefit paymentsmonthly for lifemonthly for lifemonthly for life Retirement age556062 Monthly benefits, as a % of annual salary2.7%2.0%2.0% Required employee contribution rates*8%7%5.75% Required employer contribution rates 15.035%15.035%6.25% Tier 1 Tier 2Tier 3 Applies to:Employees hired before Employees hired Employees hired January 1, 2013 or later April 9, 2011, including between April 9, 2011 those hired as part time and December 31, 2012, (if employee has not seasonal (PTS) who or those hired January been a CalPERS later convert to regular 1, 2013 or later, who member with a public have been a CalPERS agency, or in a full time employees. member with a public reciprocal plan within agency or in a the last 6 months) reciprocal plan within the last 6 months). Also includes PTS who later convert to regular full time employees *For unrepresented Tier 1 participants, the City pays 4% of the required employee contribution. For the SEIU Tier 1 participants, the City pays 3% of the required employee contributions. The City does not pay any portion of the employee contribution for Tier 2 or Tier 3 participants. These payments are classified as employee contributions in accordance with GASB 68. 11 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 – PENSION PLAN (CONTINUED) Contributions Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. Funding contributions for Plan are determined annually on an actuarial basis as of June 30 by CalPERS. 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 rates of employees. The expense associated with contributions for the Transit Fund employees is charged to payroll at the required rates previously noted. Contributions recognized by the pension plan, and contributed by the Transit Fund for the year ended June 30, 2017 were $157,589. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2017, the net pension liability reported by the Transit Fund for its proportionate share of the net pension liability of the Plan, as allocated by the City, was $1,388,588. The Transit Fund’s net pension liability was measured as the proportionate share of the City’s net pension liability for the Miscellaneous Plan. The net pension liability of the Plan was measured as of June 30, 2016, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2015 rolled forward to June 30, 2016 using actuarial update procedures. The Transit Fund’s proportion of the net pension liability was based on actual contributions paid by the Transit Fund in relation to the total City’s contribution paid for the Miscellaneous Plan, as determined by the City. The Transit Fund’s proportion of the net pension liability for the Plan as of June 30, 2015 and 2016 were as follows: Proportion - June 30, 20153.51419% Proportion - June 30, 20163.51419% Change - Increase (Decrease)0.00000% For the year ended June 30, 2017, the Transit Fund recognized pension expense of $304,247. At June 30, 2017, the Transit Fund reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: DeferredDeferred OutflowsInflows of Resourcesof Resources Difference between expected and actual experience$233,727$(8,301) Changes of assumptions-(58,764) Net difference between projected and actual earnings on pension plan investments8,134 - Contributions subsequent to the measurement date157,589 - Total$399,450$(67,065) 12 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 – PENSION PLAN (CONTINUED) The amount of $157,589 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense as follows: Deferred Outflows/(Inflows) Fiscal Year Ending of Resources 201813,861$ 201913,860 202089,134 202157,941 Total174,796$ Actuarial Assumptions The total pension liabilities in the June 30, 2015 actuarial valuation for the City’s Miscellaneous Plan was determined using the following actuarial assumptions applied to all periods included in the measurement: Miscellaneous Valuation DateJune 30, 2015 Measurement DateJune 30, 2016 Actuarial Cost MethodEntry-Age Normal Cost Method Actuarial Assumptions: Discount Rate7.65% Inflation2.75% Payroll Growth3.3% to 14.2% Projected Salary Increase3.30% - 14.20% (1) Investment Rate of Return7.65% Mortality(2) (1) Depending on age, service and type of employment (2) Derived using CalPERS Membership Data for all Funds The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period 1997 to 2011. Further details of the Experience Study can found on the CalPERS website. 13 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 – PENSION PLAN (CONTINUED) Discount Rate The discount rate used to measure the total pension liability was 7.65 percent for each plan. 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 the district’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each 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. In determining the long-term expected 7.65 percent rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long- term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. New StrategicExpected Real RateExpected Real Rate Asset ClassAllocationof Return 1-10 Years (a)of Return 11+ Years (b) Global Equity51.0%5.25%5.71% Global Debt Securities20.0%0.992.43 Inflation Assets6.0%0.453.36 Private Equity10.0%6.836.95 Real Assets10.0%4.505.13 Infrastructure and Forestland2.0%4.505.09 Liquidity1.0%-0.55-1.05 100% (a) An expected inflation rate of 2.5% used for this period (b) An expected inflation rate of 3.0% used for this period Sensitivity of the Transit Fund’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the Transit Fund’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the Transit Fund’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: 1% DecreaseCurrent Discount1% Increase (6.65%)Rate (7.65%)(8.65%) Transit Fund's proportionate share of the net pension liability2,277,528$ 1,388,588$ 663,346$ 14 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 – PENSION PLAN (CONTINUED) Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the City’s CAFR, as well as the separately issued CalPERS financial reports. NOTE 7 – ADMINISTRATIVE AND PERSONNEL COSTS Certain general and administrative costs are allocated to the Transit Fund based upon an approved cost allocation plan. Such allocated costs were $750,000 for the year ended June 30, 2017. 15 REQUIRED SUPPLEMENTARY INFORMATION THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) SCHEDULE OF THE TRANSIT FUND’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY FOR THE YEAR ENDED JUNE 30, 2017 201620152014 Proportion of the collective net pension liability3.51419%3.51419%3.51419% Proportionate share of the collective net pension liability1,388,588$ 1,084,341$ 944,480$ Covered payroll**981,713$ 957,079$ 944,599$ Proportionate Share of the collective net pension liability as a percentage of covered payroll141.45%113.30%99.99% Plan fiduciary net position as a percentage of the total pension liability75.27%79.11%80.58% Note to Schedule: * Fiscal year 2015 was the first year of implementation, therefore, only three years are shown. Changes of Assumptions - The discount rate was changed from 7.5% at the June 30, 2014 measurement date to 7.65% at the June 30, 2015 measurement date. 16 THE TRANSIT ENTERPRISE FUND OF THE CITY OF SANTA CLARITA (AN ENTERPRISE FUND OF THE CITY OF SANTA CLARITA, CALIFORNIA) SCHEDULE OF THE TRANSIT FUND’S CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2017 201720162015 Actuarially determined contributions $ 157,588$ 139,129$ 131,436 Contributions in relation to the actuarially determined contribution(157,588) (139,129) (131,436) Contribution deficiency (excess)$-$-$- Covered payroll$ 1,052,000$ 981,713$ 957,079 Contributions as a percentage of covered payroll14.98%14.17%13.73% Note to Schedule: *Fiscal year 2015 was the first year of implementation, therefore, only three years are shown. 17 CITY OF SANTA CLARITA, CALIFORNIA SINGLE AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 2017 CITY OF SANTA CLARITA, CALIFORNIA SINGLE AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS PAGE Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with 1 Government Auditing Standards Independent Auditors’ Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3 Schedule of Expenditures of Federal Awards 5 Notes to Schedule of Expenditures of Federal Awards 7 Schedule of Findings and Questioned Costs I.Summary of Auditors’ Results 8 II.Financial Statement Findings 9 III.Federal Award Findings and Questioned Costs 10 Schedule of Prior Year Audit Findings and Recommendations 11 INDEPENDENT AUDITORS’ 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 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 governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Santa Clarita, California (City), as of and for the year ended June 30, 2017, 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 28, 2017. 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. Adeficiency 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 entity’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. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rancho Cucamonga, California December 28, 2017 2 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on Compliance for Each Major Federal Program We have audited the City of Santa Clarita, California’s (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, 2017. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors’ 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 by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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, 2017. 3 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW 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 the Uniform Guidance, 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. Adeficiency 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 over compliance 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 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, 2017, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 28, 2017, which contained unmodified opinions on those financial statements. 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 the Uniform Guidance 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. Rancho Cucamonga, California December 28, 2017 4 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 FederalPass-Through/Amount Federal grantor / pass-throughCFDAIdentificationFederalProvided to grantor / program or cluster titleNumberNumberExpendituresSubrecipients U.S. Department of Housing and Urban Development Direct Assistance: Community Development Block Grant/Entitlement Grants14.218B-14-MC-06-05764,667$ 58$ Community Development Block Grant/Entitlement Grants 14.218B-15-MC-06-0576150,145 49,034 Community Development Block Grant/Entitlement Grants14.218B-16-MC-06-0576602,920 511,488 Subtotal CDBG Entitlement Grants Cluster757,732 560,580 Total U.S. Department of Housing and Urban Development 560,580757,732 U.S. Department of Justice Direct Assistance: Edward Byrne Memorial Justice Assistance Grant Program16.7382014-DJ-BX-031911,080 - Edward Byrne Memorial Justice Assistance Grant Program16.7382015-DJ-BX-03033,534 - Edward Byrne Memorial Justice Assistance Grant Program16.7382016-DJ-BX-040824,677 - Subtotal Edward Byrne Memorial Justice Assistance Grant Program39,291 - Total U.S. Department of Justice -39,291 U.S. Department of Labor Workforce Investment Act (WIA) Cluster: gh the Antelope Valley Workforce Development Consortium: Passed throu Workforce Investment Act - Adult Program17.258ADW091001366,753 - Workforce Investment Act - Dislocated Worker Formula Grants17.278ADW091001164,936 - Subtotal WIA Cluster -531,689 Total U.S. Department of Labor -531,689 U.S. Department of Transportation Passed through the State of California, Transportation Department: Highway Planning and Construction20.205HSIPL-5450(085)1,495 - Highway Planning and Construction20.205BPMPL-5450(086)2,929 - Highway Planning and Construction20.205BHLS-5405(082)906,222 - Highway Planning and Construction20.205BHLO-5450(066)/BHLS-5450(008)30,780 - Highway Planning and Construction20.205HSIPL-5450(084)3,997 - Highway Planning and Construction20.205CML-5450(083)72,667 - Highway Planning and Construction20.205STPL-5450(078)/(089)875,308 - Subtotal Highway Planning and Construction Cluster1,893,398 - See accompanying notes to Schedule of Expenditures of Federal Awards 5 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 FederalPass-Through/Amount Federal grantor / pass-throughCFDAIdentificationFederalProvided to grantor / program or cluster titleNumberNumberExpendituresSubrecipients U.S. Department of Transportation (Continued) Direct Assistance: Federal Transit Formula Grants20.500$ -39,656$ CA-04-0246-00 Federal Transit Formula Grants20.507 -12,114 CA-90-Y276-01 Federal Transit Formula Grants20.507 -42,525 CA-90-Y276-01 Federal Transit Formula Grants20.507 -76,590 CA-90-Y276-01 Federal Transit Formula Grants20.507 -1,203,582 CA-90-Y276-01 Federal Transit Formula Grants20.507 -237,317 CA-90-Y276-01 Federal Transit Formula Grants20.507 -3,848,579 CA-90-Y276-01 Federal Transit Formula Grants20.507 -39,508 CA-90-Y719-01 Federal Transit Formula Grants20.507 -636,831 CA-90-Y851-01 Federal Transit Formula Grants20.507 -772,957 CA-2016-044-00 Federal Transit Formula Grants20.507 -262,043 CA-2016-051-00 Federal Transit Formula Grants20.507 -1,556,433 CA-95-X137-01 Subtotal Federal Transit Cluster -8,728,135 Total U.S. Department of Transportation -10,621,533 U.S. Department of Homeland Security Direct Assistance: Pre-Disaster Mitigation97.047 -11,145 LPDM10-PJ06 2012-1001 Total U.S. Department of Homeland Security -11,145 Total Federal Awards$ 560,58011,961,390$ See accompanying notes to Schedule of Expenditures of Federal Awards 6 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A.General The accompanying Schedule of Expenditures of Federal Awards presents the activity of federal award programs of the City of Santa Clarita, California (City). The City’s reporting entity is defined in Note 1 of the City’s financial statements. All federal awards received directly from federal agencies as well as federal awards passed through from other government agencies are included on the Schedule of Expenditures of Federal Awards. B.Basis of Accounting 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 for the enterprise funds. Expenditures/expenses are recognized following the cost principles contained within Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass- through entity identifying numbers are presented where available. The City has elected to use the 10-percent de minimis cost rate as allowed under the Uniform Guidance, when applicable. C.Relationship to Federal Financial Reports Amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree with the amounts reported in the related federal financial reports. However, certain federal financial reports are filed based on cash expenditures. As such, certain timing differences may exist in the recognition of revenues and expenditures between the Schedule of Expenditures of Federal Awards and the federal financial reports. 7 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 I. SUMMARY OF AUDITORS’ RESULTS FINANCIAL STATEMENTS Type of auditors' report issued on whether the financial statements audited were prepared in accordance with GAAP:Unmodified Internal control over financial reporting: Material Weaknesses identified?No Significant Deficiencies identified?None reported Noncompliance material to financial statements noted?No FEDERAL AWARDS Internal control over major federal programs: Material Weaknesses identified?No Significant Deficiencies identified?None reported Type of auditors' report issued on compliance for major federal programs:Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200 section 200.516(a)?No Identification of major federal programs: CFDA NumberName of Federal Program or Cluster 14.218CDBG Entitlement Grants Cluster 20.507Federal Transit Cluster Dollar threshold used to distinguish between Type A and Type B programs:750,000$ Auditee qualified as low-risk auditee?No 8 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 II. FINANCIAL STATEMENT FINDINGS None noted. 9 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2017 III. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None noted. 10 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF PRIOR YEAR AUDIT FINDINGS AND RECOMMENDATIONS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Financial Statement Findings Finding No.AreaStatus of Corrective Action 2016-001PayrollImplemented 2016-002Accounts PayableImplemented 2016-003Journal EntriesImplemented Federal Awards Findings Compliance Finding No.Program CFDA No.Status of Corrective ActionRequirements 2016-004Community Development Block Grant (CDBG)14.218Subrecipients - Risk AssessmentImplemented 2016-005Community Development Block Grant (CDBG)14.218Allowable Costs - CompensationImplemented 2016-006Community Development Block Grant (CDBG)14.218Cash Management - Cost Implemented Principals 11 To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California 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 of Santa Clarita, California, (City) for the year ended June 30, 2017. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 22, 2017. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2016-2017. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimate of the: The measurement of fair value of investments is based on observable market inputs and information from the City’s safekeeping custodian banks, Amounts related to the City’s other postemployment benefit (OPEB) asset are based on actuarial valuations, Amounts related to the net pension liability, deferred outflows of resources and deferred inflows of resources, pension expense, and the related disclosures, are based on actuarial valuations. We evaluated the key factors and assumptions used to develop these estimates in determining that they appeared reasonable in relation to the financial statements taken as a whole. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: Note 2 to the financial statements discloses authorized investments, interest rate and credit risks, and fair value measurements. Note 13 to the financial statements discloses the City’s agent-multiple employer pension plan’s net pension liability, and related deferred inflows and outflows of resources, and pension expense. The valuation of the net pension liability and related deferred inflows and outflows are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return and discount rates. As disclosed in Note 13, a 1% increase or decrease in the discount rate has a significant effect on the City’s net pension liability. Note 22 to the financial statements discloses the refunding of the Successor Agency’s Tax Allocation Bonds, Series 2008 and Housing Set-Aside Tax Allocation Bonds, Series 2008. In accordance with generally accepted accounting principles, the difference between the reacquisition price of the refunded bonds and the carrying amount of the refunded bonds is being deferred and amortized as a component of interest expense over the remaining life of the refunded bonds. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 28, 2017. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 2 Other Matters We applied certain limited procedures to management’s discussion and analysis, schedule of revenues, expenditures and changes in fund balance – budget and actual for the General fund and each major special revenue fund, schedule of funding progress, schedule of changes in the City’s net pension liability and related ratios, and schedule of contributions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual nonmajor fund financial statements budgetary comparison schedules and the schedule of expenditures of federal awards, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. Such information has 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 it. Restriction on Use This information is intended solely for the 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. Rancho Cucamonga, California December 28, 2017 3 CITY OF SANTA CLARITA, CALIFORNIA Independent Accountants’ Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit Calculation For the Fiscal Year Ended June 30, 2017 INDEPENDENT ACCOUNTANTS’ REPORT ON APPLYING AGREED-UPON PROCEDURES RELATED TO THE ARTICLE XIII-B APPROPRIATIONS LIMIT CALCULATION 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, which were agreed to by the City of Santa Clarita, California (City) (the specified party), to the Appropriations Limit Calculation of the City prepared in accordance with Article XIII-B of the California Constitution for the fiscal year ended June 30, 2017. The City’s management is responsible for the Appropriations Limit Calculation. The sufficiency of the procedures is solely the responsibility of the City. 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 associated findings are as follows: 1.We obtained the completed worksheets setting forth the calculations necessary to establish the City’s appropriation limit and compared the 2016-2017 limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were 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. Refer to Attachment A for completed worksheets. Findings: No exceptions were found as a result of this procedure. 2.We added last year’s limit to the annual adjustment amount and compared the resulting amount to the 2016-17 appropriations limit. Findings: No exceptions were found as a result of this procedure. 3.We compared the current year information to the worksheets described in No. 1 above. Findings : No exceptions were found as result of this procedure. 4.We compared the prior year appropriations limit to the prior year appropriations limit adopted by the City Council. Findings : No exceptions were found as result of this procedure. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the America Institute of Certified Public Accountants. We were not engaged to, and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the City’s Appropriations Limit Calculation. Accordingly, we do not express such an opinion or conclusion. 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 appropriation limit for the base year, as defined by Article XIII-B of the California Constitution. This report is intended solely for the 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. Rancho Cucamonga, California December 28, 2017 2 CITY OF SANTA CLARITA, CALIFORNIA ATTACHMENT A – APPROPRIATIONS LIMIT CALCULATIONS JUNE 30, 2017 AmountSource A.Appropriations Limit FY 2015-2016$336,642,584Prior year appropriations limit adopted by the City B.Calculation Factors: 1Population Increase %1.01720State Department of Finance 2 Inflation Increase %1.05370State Department of Finance 3Total Adjustment %1.07182(B.1 x B.2) C.Annual Adjustment Increase24,178,896\[(B.3-1)xA)\] her Adjustments: D.Ot 1Loss Responsbility ( - )- 2Transfer to Private ( - )- 3Transfer for Fees ( - )- 4Assumed Responsbility ( + )- - E.Total Adjustments24,178,896(C+D) F.Appropriations Limit FY 2016-2017$360,821,480(A+E) 1 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND Financial Report For the Year Ended June 30, 2017 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND Financial Report For the Year Ended June 30, 2017 Table of Contents Page INDEPENDENT AUDITORS’ REPORT ................................................................................................. 1 BASIC FINANCIAL STATEMENTS Balance Sheet ................................................................................................................................... 3 Statement of Revenues, Expenditures and Changes in Fund Balance .............................................. 4 Notes to Financial Statements .......................................................................................................... 5 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................................................................... 8 Note to Required Supplementary Information ................................................................................. 9 INDEPENDENT AUDITORS’ 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 Open Space Preservation District Special Revenue Fund (Fund) of the City of Santa Clarita, California (City) as of and for the year ended June 30, 2017, 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. Auditors’ 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 auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 10681 Foothill Blvd., Suite 300, Rancho Cucamonga, CA 91730 909.466.4410 909.466.4431 vtdcpa.com P FW Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund of the City as of June 30, 2017, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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, 2017, 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 schedule of revenues, expenditures, and changes in fund balance – budget and actual on page 8 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. 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 28, 2017, 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. Rancho Cucamonga, California December 28, 2017 2 BASIC FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND BALANCE SHEET JUNE 30, 2017 Assets Pooled cash and investments4,438,909$ Receivables: Interest19,009 Special assessments53,080 Restricted assets Cash and investments with fiscal agents380 Total assets $ 4,511,378 Liabilities and fund balance Liabilities Accounts payable and accrued liabilities$ 65,482 Fund balance Restricted for Open Space Preservation4,445,516 Restricted for debt service380 al fund balance Tot4,445,896 Total liabilities and fund balance $ 4,511,378 See notes to financial statements. 3 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2017 Revenues Special assessments$2,399,530 Investment income7,918 Other revenues122,442 Total revenues 2,529,890 Expenditures Current: Open Space Preservation570,544 Capital outlay3,074,032 Total expenditures 3,644,576 Excess of revenues over (under) expenditures (1,114,686) Other financing sources (uses): Transfers in from other funds of the City of Santa Clarita600 Transfers to other funds of the City of Santa Clarita(641,173) Total net other financing sources (uses) (640,573) Net change in fund balance (1,755,259) Fund balance, beginning of year 6,201,155 Fund balance, end of year $4,445,896 See notes to financial statements. 4 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 OpenSpace Preservation District (the District) pursuant to the provisions of the Landscape and Lighting Act of1972, being Part 2 of Division 15 of the California Street and Highway Code. The purpose of the District isto 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 byspecial assessments levied on parcels within the City boundaries. The boundaries of the District are thesame as the boundaries of the City. The City established the Open Space Preservation District Special Revenue Fund (Fund) to account for theactivities of the District. The City has title of the constructed assets within the boundaries of the District. Any debt issued for activities of the District are issued in the name of the City. Basis of presentation: The Fund’s statements are prepared in conformity with accounting principlesgenerally accepted in the United States of America (U.S. GAAP). The Fund is presented as a Special Revenue Fund of the City. The Governmental AccountingStandards Board (GASB) is the acknowledged standard-setting body for establishing accounting andfinancial reporting standards followed by governmental entities in the United States. The financialstatements were prepared from only the accounts of the Fund and, therefore, do not present the financial position or results of operations of the City and changes in financial position thereof for the year then ended in conformity with generally accepted accounting principles in the United States of America. Fund financial statements: Governmental fund financial statements include a balance sheet and astatement of revenues, expenditures, and changes in fund balance. The Fund is accounted for on a spending or “current financial resources” measurement focusand the modified accrual basis of accounting. Accordingly, only current assets and current liabilities areincluded on the balance sheet. The statement of revenues, expenditures, and changes in fund balancepresent increases (revenues and other financing sources) and decreases (expenditures and otherfinancing uses) in the fund balance. The primary revenue sources are special assessments and interestrevenue. Under the modified accrual basis of accounting, revenues are recognized in the accountingperiod 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 fiscalperiod, except for special assessments, which are within 60 days. 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 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 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 maturities of three months or less from the date of acquisition. Each City fund owns ashare of pooled cash and investments, which are separately maintained, and interest income wasapportioned based on its average month-end cash balances to the total of the pooled cash andinvestments. 5 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Special assessments: Special assessment taxes are attached as enforceable liens on real property onJuly 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 taxesare determined annually based on property values, subject to limits based on Proposition 13, as ofJanuary 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. Fund Balance: In the Fund’s financial statements, fund balance is classifiedas 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 restricted fund balance. Use of estimates: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions. These estimates and assumptions affect the reportedamounts 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 andassumptions. NOTE 2 – CASH AND INVESTMENTS The Fund’s pooled cash and investments at June 30, 2017 was $4,438,909. Additionally, the fund held $380 of restricted cash and investments with fiscal agent. The deposit and investment disclosures required by GASB Statement No. 40, Deposit and InvestmentRisk Disclosures,as they relate to the pooled cash and investments, are reported in the annual report ofthe City. The pooled cash and investments are unrated, and average maturity is 30 days or less. The Fund recognizes its position in the City investment pool at fair value based on information provided by the City. Deposits and withdrawals to the pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of the Fund’s investment in the City Investment Pool is based on uncategorized inputs not defined as Level 1, Level 2, or Level 3. Additional information regarding interest rate risk, concentration of credit risk, custodial credit risk and fair value measurements of the City’s pooled cash and investments is presented in the City’s Comprehensive Annual Financial Report. 6 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 3 – TRANSFERS TO AND FROM OTHER FUNDS OF THE CITY OF SANTA CLARITA Transfers to other funds of the City of Santa Clarita of $641,173 of transfers to the City’s Public Financing Authority’s capital project fund. These funds are related to the debt service for Lease Revenue Bond Series 2016B. As of June 30, 2017, $13,725,000 was outstanding. Revenues from the Fund are pledged for repayment of the bonds, but the City is not obligated to require additional amounts from the Fund in event the revenues of the fund are insufficient for bond repayment. Transfers from other funds of the City of Santa Clarita of $600 were for rent charged by the City. 7 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2017 Variance with Final Budget OriginalFinalPositive BudgetBudgetActual(Negative) Revenues Special assessments2,393,297$ 2,393,297$ 2,399,530$ 6,233$ Investment income5,000 5 ,000 7,918 2,918 Charges for services86,654 86,654122,442 35,788 Total revenues 2,484,951 2,484,9512,529,890 44,939 Expenditures Operating: Personnel 239,395 239,095208,048 31,047 Operating 317,120 598,556 350,576247,980 Capital outlay 11,941 3,124,8463,072,443 52,403 Capital improvement projects: Operating -81,21213,509 67,703 Total expenditures 568,456 4,043,7093,644,576399,133 Excess (deficiency) of revenues over (under) expenditures 1,916,495(1,558,758)(1,114,686)444,072 Other financing sources (uses) Transfers in from other funds of the City of Santa Clarita-600 600 - Transfers to other funds of the City of Santa Clarita(884,249)(641,112)(641,173) (61) Total Other Financing Sources (Uses) (884,249) (640,512)(640,573) (61) Net change in fund balance $ (2,199,270)1,032,246$ (1,755,259) 444,011$ Fund balance, beginning of year 6,201,155 Fund balance, end of year $ 4,445,896 8 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTE TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2017 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 atfiscal year-end. On or before the last day in January of each year, all operational units submit requests for appropriationsto the city manager for budget preparation purposes. Before April 30, the proposed budget is presented tothe City Council for review. The City Council holds public hearings and a final budget must be preparedand adopted no later than June 30. The appropriated budget is prepared by fund, category and department at the category level. The City reports the following categories: personnel, operating and capital outlay. Additionally, the City separately prepares a capital improvement projects budget. The City’s Department Heads, with approval of the City Manager, may make transfers of appropriations within certain line-items within a program, but may not exceed the total appropriated amounts for each category. The City Manager may approve transfers that do no change the total appropriated amount within the fund. The legal level of budgetary control (i.e., the level at which expenditures maynot legally exceed appropriations) is the category. recorded Under encumbrance accounting, purchase orders, contracts and other commitments for expenditures are to reserve that portion of the applicable appropriation. Encumbrance accounting is employed asan extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures orliabilities, encumbrances outstanding at year-end are reported as restricted fund balance. Unexpendedappropriations lapse at year-end. For the year ended June 30, 2017, expenditures exceeded appropriations in the category level (legal level of budgetary control) as noted below: Excess Expenditures over Description Appropriations Expenditures Appropriations Transfers to other funds of the City of Santa Clarita $ 641,173641,112$ (61)$ Expenditures are in excess of appropriations due to additional transfers out related to increases in other post- employment benefits costs in June 2017. 9