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2020-01-28 - AGENDA REPORTS - FY 2018-19 COMPREHENSIVE ANNUAL FIN RPT AND OTHER (2)
Agenda Item: 4 DATE: January 28, 2020 SUBJECT: FISCAL YEAR 2018-19 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, 2019. BACKGROUND The City of Santa Clarita's (City) independent audit firm, Eide Bailly, LLP, has completed the City's annual audit for fiscal year ending June 30, 2019. Eide Bailly, 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 a healthy General Fund balance. Based on the audit performed, Eide Bailly, 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, 2019. 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 Eide Bailly, LLP, to provide specific information related to the audit scope and performance. Page 1 In addition, the following reports were prepared for the fiscal year ending June 30, 2019, by Eide Bailly, 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 06-30-19 (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) Comprehensive Annual Financial Report 06-30-19 (available in the City Clerk's Reading File) Single Audit Report 06-30-19 (available in the City Clerk's Reading File) Transit Enterprise Fund 06-30-19 (available in the City Clerk's Reading File) Open Space Preservation District 06-30-19 (available in the City Clerk's Reading File) Air Quality Improvement Fund 06-30-19 (available in the City Clerk's Reading File) Page 2 EideBailly, CIPAs & BUSINESS ADVISORS Independent Accountant's 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, 2019. 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 2018-2019 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 2018-19 appropriations limit. Findings: No exceptions were found as a result of this procedure. 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 agreed 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. What inspires you, "Inspires us., eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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 20, 2019 A. Appropriations Limit FY 2017-2018 B. Calculation Factors: 1 Population Increase % 2 Inflation Increase % 3 Total Adjustment % C. Annual Adjustment Increase D. Other Adjustments: 1 Loss Responsbility (- ) 2 Transfer to Private (- ) 3 Transfer for Fees (- ) 4 Assumed Responsbility ( + ) E. Total Adjustments F. Appropriations Limit FY 2018-2019 City of Santa Clarita, California Attachment A — Appropriations Limit Calculations June 30, 2019 Amount Source $ 385,247,625 Prior year appropriations limit adopted by the City 1.00580 State Department of Finance 1.03670 State Department of Finance 1.04271 (13.1 x B.2) 16,455,028 [(B.3-1)xA)] 16,455,028 (C+D) $ 401,702,653 (A+E) 3 EideBailly, CIPAs & B US111NIESS ADVISORS December 20, 2019 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 City of Santa Clarita, California (City) as of and for the year ended June 30, 2019, and have issued our report thereon dated December 20, 2019. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our letter dated June 28, 2019, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. We have provided our comments regarding internal control during our audit in our Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated December 20, 2019. We have also provided our comments regarding compliance with the types of compliance requirements referred to above and internal controls over compliance during our audit in our Independent Auditor's Report on Compliance with Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance dated December 20, 2019. What Inspires you, "Inspires us., eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence. Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by City is included in Note 1 to the financial statements. As described in Note 1, the City adopted Governmental Accounting Standards Board (GASB) Statements No. 83, Certain Asset Retirement Obligations, No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, and No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period, effective July 1, 2018. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are management's estimates of fair value of investments, and estimates related to pension and OPEB liabilities, and the related deferred inflows and outflows of resources, pension and OPEB expense, and disclosures. Management's estimate of the fair value of investments is based on observable market inputs and information from the City's safekeeping custodian banks. Management's estimate of the pension and OPEB information is based on actuarial valuations. We evaluated the key factors and assumptions used to develop the estimates and determined that they are reasonable in relation to the basic financial statements taken as a whole. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to: Pension and OPEB liabilities in Notes 12 and 13, respectively, are sensitive to the underlying actuarial assumptions used, including, but not limited to, the investment rate of return, discount rate, and for OPEB, healthcare cost trend rate. As disclosed in Notes 12 and 13, a 1% increase or decrease in the discount rate, or the healthcare cost trend rate, has a material effect on the City's net pension and OPEB liabilities. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. The following misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management: • Long term liabilities were understated by $850 thousand related to the 2019 Sheriff Station bonds. • Interest income and administrative expense in the OPEB Trust fund were understated by $92 thousand and was reclassified. • Activity in the OPEB Trust fund were understated by $225 thousand related to the implied subsidy estimates. • The General Fund expenditure classifications were adjusted to properly reflect costs. The reclassification accumulated to approximately $6.5 million. For the Air Quality Improvement Special Revenue Fund standalone financial statements, the following entry was proposed, and corrected by management: • Accrual for services performed during year ended June 30, 2019, but paid for subsequent to year-end of $13 thousand. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management which are included in the management representation letter dated December 20, 2019. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors. Other Information in Documents Containing Audited Financial Statements Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City's audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we will review the information inputted into the data collection form and will consider whether such information, or the manner of its presentation, is materially consistent with the financial statements. Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. This report is intended solely for the information and use of the City Council, and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Rancho Cucamonga, California 4 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 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, 2019 TABLE OF CONTENTS INTRODUCTORY SECTION Letterof Transmittal......................................................................................................................... i GFOA Certificate of Achievement for Excellence in Financial Reporting .................................... ix Officials of the City of Santa Clarita............................................................................................... x OrganizationalChart .......................................................................................................................xi Map of the City of Santa Clarita....................................................................................................xii FINANCIAL SECTION IndependentAuditor's Report .......................................................................................................... I Management's Discussion and Analysis.......................................................................................... 5 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Position ................. Statement of Activities ..................... Fund Financial Statements: 15 18 Governmental Funds Financial Statements: BalanceSheet........................................................................................................20 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.........................................................................23 Statement of Revenues, Expenditures and Changes in FundBalances.....................................................................................................24 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities........................................................................................26 Proprietary Funds Financial Statements: Statement of Net Position.....................................................................................27 Statement of Revenues, Expenses and Changes in Net Position .......................... 28 Statement of Cash Flows......................................................................................29 Fiduciary Funds Financial Statements: Statement of Fiduciary Net Position 30 Statement of Changes in Fiduciary Net Position .................................................. 31 Notes to the Financial Statements.....................................................................................33 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual: GeneralFund....................................................................................................................85 Bridge and Thoroughfare Special Revenue Fund............................................................ 86 Developer Fees Special Revenue Fund............................................................................ 87 Public Library Special Revenue Fund............................................................................. 88 Landscape Maintenance District 91 Special Revenue Fund ............................................ 89 Schedule of Changes in the Net OPEB Liability and Related Ratios............................................90 Schedule of Contributions - OPEB................................................................................................ 91 Schedule of Money Weighted Rate of Return - OPEB.................................................................. 92 Schedule of Changes in the City's Net Pension Liability and Related Ratios ............................... 93 Schedule of City Contributions - Pensions.................................................................................... 94 Notes to Required Supplementary Information............................................................................. 97 Supplementary Information Non -major Governmental Funds: Description of Non -major Governmental Funds..................................................................... 99 CombiningBalance Sheet......................................................................................................102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..............111 Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual: Bikeway Special Revenue Fund............................................................................................120 Gas Tax Special Revenue Fund.............................................................................................121 Proposition A Special Revenue Fund....................................................................................122 Special Assessment Special Revenue Fund...........................................................................123 Street Lighting District Special Revenue Fund.....................................................................124 Measure M Local Return Special Revenue Fund..................................................................125 SB 1 Road Repair and Activity Special Revenue Fund..........................................................126 State Park Special Revenue Fund..........................................................................................127 Transportation Development Act 8 Special Revenue Fund...................................................128 Traffic Safety Special Revenue Fund....................................................................................129 Community Development Block Grant Special Revenue Fund............................................130 Air Quality Management District Special Revenue Fund.....................................................131 Stormwater Special Revenue Fund........................................................................................132 Surface Transportation Program Special Revenue Fund.......................................................133 BJA Law Enforcement Special Revenue Fund......................................................................134 Supplemental Law Grant Special Revenue Fund..................................................................135 HOME Special Revenue Fund...............................................................................................136 Library Facilities Fees Special Revenue Fund......................................................................137 Public Education and Government Special Revenue Fund...................................................138 Proposition C Special Revenue Fund....................................................................................139 Federal Grants Special Revenue Fund...................................................................................140 Measure R Special Revenue Fund.........................................................................................141 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS FINANCIAL SECTION (CONTINUED) Tourism Marketing District Special Revenue Fund..............................................................142 Open Space Preservation District Special Revenue Fund.....................................................143 Miscellaneous Grants Special Revenue Fund........................................................................144 Park Dedication Special Revenue Fund................................................................................145 Housing Successor Agency Special Revenue Fund..............................................................146 Tourism Marketing Bureau Special Revenue Fund...............................................................147 Areawide Special Revenue Fund...........................................................................................148 Vista Canyon Wastewater Standby District Special Revenue Fund......................................149 General Capital Projects Fund...............................................................................................150 Public Financing Authority Capital Projects Fund................................................................151 Civic Arts Projects Capital Projects Fund.............................................................................152 Public Financing Authority Debt Service Fund.....................................................................153 Internal Service Funds Description of Internal Service Funds...................................................................................155 Combining Statement of Net Position...................................................................................156 Combining Statement of Revenues, Expenses and Changes in Net Position ........................157 Combining Statement of Cash Flows....................................................................................158 Agency Funds Description of Agency Funds................................................................................................159 Combining Statement of Assets and Liabilities.....................................................................160 Combining Statement of Changes in Assets and Liabilities..................................................162 STATISTICAL SECTION Tableof Contents..............................................................................................................165 NetPosition by Component..................................................................................................166 Changesin Net Position.........................................................................................................168 Fund Balances of Governmental Funds................................................................................172 Changes in Fund Balances of Governmental Funds..............................................................174 Assessed Values and Actual Values of Taxable Property.....................................................176 Assessed Values and Actual Values of Taxable Property —Redevelopment Agency ..........178 Assessed Values —Taxable Property.....................................................................................180 Assessed Values —Use Category Summary..........................................................................182 Direct and Overlapping Property Tax Rates..........................................................................183 Principal Property Taxpayers...............................................................................................185 Property Tax Levies, Tax Collections and Delinquencies....................................................186 Top Property Owners Based on Net Values —Successor Agency.........................................187 Project Area Assessment Appeals Summary and Tax Collection History —Successor Agency......................................................................188 Charge Detail Report for CFD 2002-1 (Valencia Town Center) —Successor Agency .........189 Ratio of Outstanding Debt by Type......................................................................................191 Ratio of General Bonded Debt Outstanding..........................................................................193 CITY OF SANTA CLARITA, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS STATISTICAL SECTION (CONTINUED) Direct and Overlapping Tax and Assessment Debt..............................................................194 Legal Debt Margin Information............................................................................................195 Pledged Revenue Coverage...................................................................................................197 Demographic and Economic Statistics.................................................................................198 PrincipalEmployers..............................................................................................................199 Full -Time and Part -Time City Employees by Function.......................................................200 Operating Indicators by Function.........................................................................................201 Capital Asset Statistics by Function.....................................................................................202 City of SANTA CLARITA 23920 Valencia Boulevard • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 • FAX: (661) 259-8125 www.sant,a-claiita.com December 20, 2019 Honorable Mayor, Mayor Pro Tem, and City Councilmembers: The Comprehensive Annual Financial Report (CAFR) of the City of Santa Clarita for fiscal year ended June 30, 2019, is hereby submitted in accordance with Chapter 2.12 of the City of Santa Clarita Municipal Code. This report provides the City Council and the public with an understanding of the financial condition of the City. This report consists of management's representations concerning the finances of the City of Santa Clarita. As such, management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive framework of internal controls that are designed to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City of Santa Clarita. State Law requires the City to prepare an annual financial report. This report fulfills that obligation. Eide Bailly, LLP, an independent firm of certified public accountants, has issued an unmodified ("clean") opinion on the financial statements of the City of Santa Clarita for the year ended June 30, 2019. The independent auditor's report is located at the front of the financial section of this report. The CAFR has been prepared in conformity with Generally Accepted Accounting Principles (GAAP) and the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). These reporting requirements specify that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A, which immediately follows the independent auditor's report, complements this letter of transmittal and should be read in conjunction with it. Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed by our independent audit firm. The Single Audit was designed to meet the special needs of the federal grantor agencies. The standards governing the Single Audit engagements require that the independent auditor report on the fair presentation of the financial Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 2 statements and the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Report. CITY PROFILE The City of Santa Clarita was incorporated on December 15, 1987, as a General Law City, and operates under a City Council/City Manager form of government. It is located between the Santa Susana and San Gabriel mountain ranges, approximately 35 miles northwest from the City of Los Angeles. It is comprised of the communities of Canyon Country, Newhall, Saugus and Valencia, encompassing approximately 66 square miles. With a population of 218,103 the City is the third -largest in Los Angeles County and 18'h largest in the State of California. Santa Clarita offers an expansive parks and recreation network, with 34 beautiful park facilities, nearly 12,000 acres of City -owned open space, and 140 miles of trails and paseos designed for commuting and recreational use, including walking, hiking, biking, and skating. The City's unique blend of upscale sophistication with small-town charm and old -west heritage allows it to accommodate growth while continuing to provide an excellent quality of life for residents. The City of Santa Clarita's five City Councilmembers are elected at large to four-year overlapping terms, with elections held bi-annually. The position of Mayor is annually selected by the Councilmembers. The City Council is responsible for, among other things, passing ordinances, adopting the budget, setting policy, and appointing committees. The City Council appoints the City Manager, who is responsible for implementing the policies of the Council, overseeing the day-to-day operations of City government, and for appointing and managing the various Directors. The City Council also appoints the City Attorney. The City provides, either directly or under contract, a full range of municipal services including public safety, construction, maintenance of streets and other infrastructure, public libraries, public works, parks, recreation, community development, and cultural events. The City also provides services through the Santa Clarita Public Financing Authority (PFA), which is a blended component unit of the City of Santa Clarita. The financial activities of this entity are included in this report, as its operations are under the control of the City. The City operates on a fiscal year basis, which begins July 1 and ends June 30. The City's Municipal Code requires the City Manager to prepare a budget and present it to the City Council each year. The budget process begins by January of each year and is carried out under the direction of the City Manager in cooperation with the various City departments. The proposed operating and capital budget is submitted by the City Manager to City Council for adoption by June 30, to take effect at the beginning of the fiscal year on July 1. Budgetary control for the City is maintained through its accounting systems. Once adopted, the budget may be amended throughout the year as necessary. Budgetary control is established at the category level within each fund. The budgetary control for the Capital Improvement Program is at the program level. ii Honorable Mayor, Mayor Pro Tem and City Councilmembers Page 3 LOCAL ECONOMY The City of Santa Clarita is one of Southern California's most desirable places to live and do business. City officials pride themselves on the organization's ability to balance the needs of locally based companies with those of the community, resulting in an unmatched quality of life. We continue to see positive changes in the economy, such as an increase in sales tax revenues and a recovering housing market. The City has a 100 percent track record for adopting a balanced, on -time budget, with ample reserves and contingency funds. Fiscal Year 2018-19 was successful and stable for the City due to prudent financial planning. This year saw significant progress on a number of projects in the City that have been a long time coming. Nearly 30 years in the making, The Center at Needham Ranch development began construction on four industrial buildings, the first of which is anticipated to be completed by the end of 2019. In addition, after 10 years of planning, Vista Canyon has wrapped up construction on its first office building, with construction getting underway on the first residential units within the development. Valencia Town Center (VTC) Square mixed -use development is nearing completion, and construction continues on new high-class office buildings on Tourney Road. When completed, VTC Square will bring the first automated parking facility to the City. These developments will provide much -needed jobs and additional housing options to residents in the City. This year also saw the creation of a new planning tool that will allow for additional job creation in the City called the Jobs Creation Overlay Zone (JCOZ). The JCOZ will allow office and industrial buildings in certain areas of the city to build taller buildings that fit the current needs of the commercial market to attract high -end jobs to the City. Targeted employment sectors in Santa Clarita include aerospace/defense, advanced manufacturing, medical/biomedical, digital media/entertainment and information technology. Two major developments in the City, Vista Canyon, and Needham Ranch broke ground earlier this year and expect to have the first phases of construction complete early 2020, which will bring new jobs to our community. A number of new businesses have also opened in our community this year, including Bagger Sports, ImmotionVR, Club Pilates, Knead 2 Stretch, Sleep Number, TyCam Marketplace, Stretch Lab, Noche Azul, Voodoo Vinyl, Mane Cave, Pressed Juicery, Wicked Chicken, Pilates Pros, Lovisa Jewelry, HoneyMee and Crafted Collective. Opening soon are Salon Republic, L'occitane en Provence, Slater's 50150, Santouka Ramen, and Galpin Porsche. Currently under construction in Old Town Newhall is a new boutique hotel, the Lexen Hotel; Newhall Crossings, which includes 47 residential units and 20,000+ square feet of restaurant and retail space; and a new seven -screen Laemmle Theatre, adding 500 seats for moviegoers. Retail vacancy rates have slightly decreased, currently at 3.4 percent compared to 3.5 percent in the 2" d Quarter of 2018. Industrial vacancy rates are at 1.8 percent, a significant decrease from 4.2 percent in the 2"d Quarter of 2018. Office space in the City is currently at a 7.2 percent vacancy rate compared to 11.8 percent in the 2"d Quarter of 2018. III Honorable Mayor, Mayor Pro Tem and City Councilmembers Page 4 The City's Film Office enjoyed another strong year. Santa Clarita is home to more than 25 sound stages, 10 movie ranches, and a multitude of film -related businesses. Popular television shows like "NCIS," "Santa Clarita Diet," "Mayan's MC," "Bless This Mess," "Holey Moley," "Good Trouble," "Futureman," "Goliath," and "S.W.A.T." are based in Santa Clarita and regularly film on location within the City. The features "Once Upon a Time in Hollywood," "Deadwood: The Movie," and "Call of the Wild" also filmed in Santa Clarita last year. Tourism continues to be one of the City of Santa Clarita's largest economic generators, contributing over $3.3 million to the general fund from Transient Occupancy Tax (TOT) in the Fiscal Year 2018-19. The Tourism Marketing District (TMD), a collaborative assessment program and partnership between the City and local hotels, collected over $610,000 in support of increased marketing and promotion of Santa Clarita as a tourism destination. TMD dollars are a vital component of the area's continued attraction of events and visitors, which translates to dollars spent in the community and at local businesses. The following events are just a few that came to the City as part of increased event attraction efforts: California Youth Chess Championships, Memorial Day Hockey Challenge, Valencia Trail Race, California Beer Festival, Boots and Brews, Santa Clarita Oktoberfest, USA Swimming 2018 Speedo Championship, and the Bonspiel Curling Tournament. The City also attracted the return of high profile, world -class events, the Los Angeles Spartan Race, and the Amgen Tour of California. Santa Clarita recognizes the important role education plays in the success of the community. The City is home to three premier educational institutions, including California Institute of the Arts (CalArts), College of the Canyons, and The Masters University. These colleges offer world -class instruction and programming to prepare students to become the next generation of business professionals and leaders. LONG -TERM FINANCIAL PLANNING Santa Clarita is one of California's model cities, boasting the essential elements needed for well- balanced living and total well-being. Santa Clarita remains one of the safest cities in California among cities with populations exceeding 150,000. Santa Clarita is home to a well-educated population, with nearly 70 percent of adults age 25 and older having attained some college or higher, as compared to Los Angeles County, which averages 57 percent. The City of Santa Clarita has experienced steady growth since its inception in 1987, and City officials work directly with the private and public sectors to attract new businesses to the Santa Clarita Valley. The City of Santa Clarita is focused on retaining existing companies and encouraging their growth within the City while working to attract new businesses, thereby creating new jobs for residents. Santa Clarita has set an aggressive goal of creating two jobs for every household, whereby providing an increased opportunity for residents to work close to home. The City provides necessary funding for essential services for City Council and community - identified priorities while taking steps to ensure the City remains in good financial health. Twice per year, the City prepares extended forecasts for the General Fund to determine the future impact of current actions. These forecasts indicate a stable General Fund over the next few years, lv Honorable Mayor, Mayor Pro Tem and City Councilmembers Page 5 primarily due to projected marginal increases in sales and property taxes. Because the City of Santa Clarita has practiced smart growth in prosperous financial times, the City is well prepared for times when revenue projections do not include growth. The City maintains a General Fund balance sufficient to provide for various identified contingencies, as well as an established operating reserve. In addition, the General Fund contributes annually to the City's facilities fund, which provides for major maintenance and replacement of infrastructure and capital improvements. The City's Capital Improvement Program (CIP) is a component of the annual budget process that addresses the City's short- and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard, as well as providing new facilities to support current growth and complement new development. In October 2019, the California State Auditor published a Fiscal Health Analysis of over 470 cities in the State. The report assessed each city's level of fiscal risk using various financial metrics in their Comprehensive Annual Financial Reports, including cash position/liquidity, debt burden, financial reserves, revenue trends, pension and other post employee benefit (OPEB) obligations, among others. The City of Santa Clarita received a low risk designation and ranked in the top five percent in fiscal confidence of the over 470 cities assessed. The City received perfect scores in the categories of liquidity, general fund reserves, and in both pension and OPEB obligations. MAJOR MILESTONES IN FISCAL YEAR 2018-19 ❖ The City of Santa Clarita had another fantastic year of location filming in the 2018-2019 Fiscal Year with the Film Office recording 526 film permits and 1,380 film days, which generated an estimated $33.4 million in economic impact to the local community. These statistics represent an increase in the estimated economic impact when compared to the previous fiscal year. ❖ Improving, maintaining, and adding to the City's infrastructure continues to be a high priority and focus for the City. During Fiscal Year 2018-19, the City completed the Newhall Ranch Road Bridge Widening project, which includes a new extension of the San Francisquito Creek Trail, improving safety for trail users by providing a safe new route for those wanting to cross Newhall Ranch Road. The bridge also adds two additional traffic lanes (for a total of four lanes in each direction), a raised median, protected pedestrian walkway, and a new bike path. The City also added a new pedestrian bridge on Sierra Highway at Golden Valley Road to allow for safe crossing for students at the nearby high school. ❖ Two major projects within the Santa Clarita 2020 Plan are taking shape. The new Canyon Country Community Center project site is currently under construction, with improvements being made to the Mint Canyon Channel, storm drains, and the installation of a water infiltration system. Now the site is prepped for construction of the actual Community Center building. The project is on track to be completed in early 2021. The new Santa Clarita Valley Sheriffs Station is currently under construction. Once complete Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 6 in early 2021, the new Sheriff's Station will be more than 44 thousand square feet, with a transmission tower, vehicle maintenance facility, and a helipad. ❖ Santa Clarita saw the lowest crime rate in City history in 2018, thanks to the proactive work of the Sheriff s Deputies. In addition, the Traffic Safety Team was able to drive down collisions. Since the team was formed in 2016, and following the launch of the award -winning Heads Up pedestrian, driver, and cyclist safety campaign, the collision rate has dropped 32.2 percent, and the injury rate is down 36.6 percent. ❖ Santa Clarita continues to be proactive in addressing teen drug use. To raise awareness, the City continues to reach out to parents and families and provide assistance to those in need. The City's Drug -Free Youth In Santa Clarita Valley (DFY in SCV) program has grown each year, with the implementation of drug prevention education in fourth, fifth and sixth grades. ❖ The Santa Clarita Public Library continues to provide residents with what they need for their next adventure. In the last year, the three branches saw nearly 3,000 participants in the popular Summer Reading Program, who collectively read 14,000 books. The library issued 14,074 new library cards and had 336,704 materials in circulation. ❖ Special events hosted by the City attracted visitors from across the country and around the world. Santa Clarita hosted the annual Marathon in November and worked with community partners to host the Thursdays@Newhall event series, which includes JAM Sessions, SENSES, Note by Note, 10 by 10, and trivia nights. The City also hosted its annual summer Concerts in the Park and the much -anticipated Cowboy Festival, which drew more than 10,000 visitors. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Clarita for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018. This was the 301h consecutive year the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy GAAP and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the requirements of the GFOA Certificate of Achievement Program, and we are submitting it to GFOA to determine its eligibility for another certificate. The City of Santa Clarita has received an Investment Policy Certificate of Excellence Award from the Association of Public Treasurers of the United States and Canada for its Fiscal Year 2019-20 Investment Policy. This year marks the 25th consecutive year that the City has received the nationally recognized Certificate of Excellence Award from the Association of Public Treasurers of the United States and Canada for its success in developing a comprehensive written vi Honorable Mayor, Mayor Pro Tem and City Councilmembers Page 7 investment policy. In order to receive certification, investment policies must be carefully reviewed by the association's Investment Policy Certification Committee. For a policy to receive certification, it must be approved by all reviewers on 18 areas spelled out in the Model Investment Policy. This policy includes elements the Association of Public Treasurers of the United States and Canada deems essential to a written investment policy such as policy, scope, the delegation of authority, ethics and conflicts of interest. In addition, the City was awarded the 241h Annual Achievement of Excellence in Procurement (AEP) from the National Procurement Institute. This prestigious honor was awarded in recognition of the City's commitment to purchasing innovation and leadership. This is the seventh time the City has received this award in acknowledgment of Santa Clarita's purchasing policies and practices. The AEP Award is earned by public and non-profit organizations that obtain a high application score based on standardized criteria. The City of Santa Clarita's procurement ethics standards, eProcurement practices, and internal procurement automation received high honors and recognition among judges. The City of Santa Clarita received the District Transparency Certificate of Excellence by the Special District Leadership Foundation. This certificate is awarded to agencies that are successful in maintaining transparency in their operations. There are several requirements that must be met to showcase the transparency of specific City policies, budget hearings, financial audits, ethics training and community outreach. This is the second year the City of Santa Clarita has received this prestigious honor. The City of Santa Clarita continued to receive accolades over the last year. SafeWise recognized Santa Clarita as one of the Top 50 Safest Cities to Raise a Child. In addition, SafeHome ranked Santa Clarita as one of the Top 50 Safest Cities in America and one of the Top 10 Safest Cities in California. Wallethub recognized Santa Clarita as one of the happiest and healthiest cities in the nation. This last year marked the 29th consecutive year that Santa Clarita was designated as a Tree City USA by the National Arbor Day Foundation. The City of Santa Clarita was recognized by the American Public Works Association (APWA) with five prestigious Public Works awards in 2018. The City received the "Outstanding Public Works Project of the Year" award for the Old Town Newhall Parking Structure and the "Best Environmental Project" award for the completion of the Heritage Trail from Gateway Ranch to Wildwood Canyon, from the APWA High Desert Branch. The City also earned a trio of awards from the APWA Southern California Chapter for Enhancing Pedestrian Safety and Traffic Flow Through the Use of Electronic Blank -Out Signs ("Creative and Innovative"), the Newhall Ranch Road Bridge Widening ("Transportation"), and the Heritage Trail from Gateway Ranch to Wildwood Canyon ("Recreational and Athletic Facilities"). Santa Clarita was also recognized by the California Internship & Work Experience Association (CIWEA) as a 2019 Employer of the Year, an award bestowed upon employers that model exemplary internship and work experience programs. The City offers paid internship opportunities for undergraduate and graduate students, as well as unpaid Career Technical Education (CTE) internships, to earn college credit for those enrolled in a postsecondary institution or vocational/technical school. vn Honorable Mayor, Mayor Pro Tem and City Councilmembers Page 8 Santa Clarita continues its business -friendly reputation with the release of the 2018 Kosmont- Rose Institute Cost of Doing Business Survey. The annual survey again ranked Santa Clarita among the best cities for doing business in Southern California and recognized Santa Clarita as a Low -Cost city due to its low property tax rates, no utility tax and several other business benefits in comparison to neighboring cities, such as Burbank, Glendale, Pasadena and Los Angeles. This report is a joint effort by many people from many different areas of responsibility. The preparation of this report could not have been accomplished without the hard work and team effort of the staff of the Finance Division, in particular, Finance Manager, Brittany Houston; Finance Administrator, Mary Ann Ruprecht; Sr. Financial Analysts, Lisett Bautista, and Jan Downey; Financial Analysts, Purevsuren Wrinkle, and Cody Iglesias. I want to express my appreciation to all members of the Division who assisted and contributed to its preparation. I would also like to thank the Mayor; Mayor Pro Tem; Councilmembers; City Manager, Ken Striplin; Assistant City Manager, Frank Oviedo; Deputy City Manager, Darren Hernandez; Director of Public Works, Robert Newman; Director of Recreation and Community Services, Janine Prado; and Director of Community Development, Tom Cole, for their continuing efforts in administering the financial operations of the City in a conservative and responsible manner. Sincerely, Carmen Magana Director of Administrative Services/City Treasurer CM:LB.jb Vlll Government Finance Officers Association dII* I Certiiicate of Achievement for Excellence in Financial Presented to Cal ifor nia For its Comprehensive Annual Financial Report for the Fiscal Year Ended Executive Director/CEO Ix OFF,ICIAL,S OFTHE CITY OFSANTA CLA ITA As of June 30, 2019 City Council Marsha McLean MAYOR Cameron Smyth MAYOR PRO TEM Bob Kellar COUNCILMEMBER Bill Miranda COUNCILMEMBER Laurene Weste COUNCILMEMBER City Officials Ken Striplin CITY MANAGER Frank Oviedo ASSISTANT CITY MANAGER Darren Hernandez 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 Janine Prado DIRECTOR OF RECREATION AND COMMUNITY SERVICES x ORGANIZATION CHART As of June 30, 2019 Santa Clarita Residents City Council City Manager Administrative Neighborhood Community Recreationand Services Services Development Community Services Finance Environmental Services Community Preservation Arts and Events Clerk and Contract Services Parks Economic Development Recreation and Community Services Technologv Services Special Districts Planning Open Space Transit Public Library City Manager's Public Office Works Communications Building and Safetv Human Resources Capital Improvement Program Intergovernmental Relations Engineering Services Sheriffs Department General Services Fire Protection Traffic & Transportation Planning x1 EideBailly, CIPAs & BUSINESS ADVIS0111S Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City of Santa Clarita, California, (City) as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. What Inspires you, "Inspires us. eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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, 2019, 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 5 through 14), schedules of revenues, expenditures and changes in fund balance — budget and actual for the General fund and each major special revenue fund and related notes (pages 85 through 89 and 97 through 98), schedule of changes in the net OPEB liability and related ratios (page 90), schedule of contributions — OPEB (page 91), schedule of money weighted rate of return (page 92), schedule of changes in the City's net pension liability and related ratios (page 93), and schedule of city contributions - pensions (pages 94 through 95) 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. 2 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2019 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Rancho Cucamonga, California December 20, 2019 This page left blank intentionally. MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2019 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, 2019. 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 $1.25 billion. Of this amount, $123.3 million represents unrestricted net position that may be used to meet the City's ongoing obligations to citizens and creditors. The deferred outflows of resources increased by $1.35 million and deferred inflows of resources increased by $6.47 million. Both increases were related to Other Post -Employment Benefits (OPEB) (Table 1). • The City's total net position increased by $74.8 million. Net position of the business -type activities increased by $5.9 million, and the net position of the governmental activities increased by $68.9 million (Table 2). • The net capital assets of the City's governmental activities increased by $47.8 million, or 5.1 % over last fiscal year. The increase was in part due to purchases and contributions and annexations of land totaling $38.5 million, and the increase of construction in progress of $11.4 million. See Note 6 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 $299 million. This represents an increase of $43 million as compared to the prior year. • Within governmental funds, the General Fund reported a fund balance of $192 million. 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). 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, recreation, neighborhood services, community services, and community development (planning). 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. 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 39 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 34 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. 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 money weighted rate of return, schedule of changes in the City's net pension and OPEB liabilities and related ratios, and a schedule of the City's pension and OPEB 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 $74.8 million, increasing from $1.17 billion to $1.25 billion. THE CITY AS A WHOLE (CONTINUED) ASSETS: Current and Other Assets Capital assets, net Noncurrent Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES: LABILFFIES: Noncurrent Liabilities Other Liabilties TOTAL LABILFFIES DEFERRED INFLOWS OF RESOURCES: NET POST ON: Net investment in capital assets Restricted Unrestricted TOTAL NET POSTON TABLE 1 CITY OF SANTA CLARITA'S NET POSITION Governmental Activities Business -type Activities Total 2019 2018 2019 2018 2019 2018 $ 324,670,701 $ 295,634,881 $ 5,954,064 $ 3,510,135 $ 330,624,765 $ 299,145,016 986,877,787 939,065,412 83,906,440 79,199,471 1,070,784,227 1,018,264,883 55,241,561 35,691,681 - - 55,241,561 35,691,681 1,366,790,049 1,270,391,974 89,860,504 82,709,606 1,456,650,553 1,353,101,580 22,634,517 21,318,027 747,557 714,266 23,382,074 22,032,293 164,668,927 148,103,367 1,673,254 1,904,484 166,342,181 150,007,851 52,409,655 46,479,473 4,486,866 3,092,645 56,896,521 49,572,118 217,078,582 194,582,840 6,160,120 4,997,129 223,238,702 199,579,969 9,942,699 3,628,833 272,385 115,590 10,215,084 3,744,423 920,036,752 895,056,642 83,906,440 79,199,471 1,003,943,192 974,256,113 119,375,331 113,286,626 - - 119,375,331 113,286,626 122,991,202 85,155,060 269,116 (888,318) 123,260,318 84,266,742 1,162,403,285 1,093,498,328 84,175,556 78,311,153 1,246,578,841 1,171,809,481 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, 2019, assets exceeded liabilities by $1.25 billion. The largest component of the City's net position, 80.5%, is represented by its $1 billion 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, 9.6%, represents resources subject to external restrictions on how they may be used. The remaining 9.9% of unrestricted net position, $123.3 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 $68.9 million over the prior year. The unrestricted net position of the business -type activities increased by $1.2 million. THE CITY AS A WHOLE (CONTINUED) Governmental Activities Revenues from governmental activities increased by $42.9 million. The cost of all governmental activities this year was $171.5 million, an increase of 15.60% over the past year. As shown in the Statement of Activities, the governmental activities expenses were ultimately financed in part by the taxpayers, as $62.5 million in revenues were generated by service revenues received from the performance of these activities; another $13.6 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions; and another $59.6 million in revenues was generated from capital grants and contributions. Overall, the City's governmental program and general revenues amounted to $245 million, which funded the expenses and resulted in a $68.9 million increase in net position. TABLE 2 CITY OF SANTA CLARITA'S CHANGES IN NET POSITION Program Revenues: Charges for services Operating grants and contributions Capital grants and contributions General Revenues: Taxes: Property taxes Other taxes Other Total Revenues General government Public safety Recreation and corn unity services Public works Corn unity development Neighborhood Services Unallocated infrastructure depreciation Interest and fiscal charges Transit Total Expenses Governmental Activities Business -type Activities 2019 2018 2019 2018 Total 2019 2018 $ 62,541,935 $ 64,527,732 $ 7,662,186 $ 6,987,488 $ 70,204,121 $ 71,515,220 13,574,920 9,259,079 15,292,991 10,226,946 28,867,911 19,486,025 59,565,349 31,807,581 10,434,282 3,102,269 69,999,631 34,909,850 43,761,925 42,284,749 43,761,925 42,284,749 51,644,139 50,747,716 51,644,139 50,747,716 13,733,983 3,264,028 104,576 18,996 13,838,559 3,283,024 244,822,251 201,890,885 33,494,035 20,335,699 278,316,286 222,226,584 62,309,457 53,928,438 - - 62,309,457 53,928,438 27,757,002 27,232,724 - - 27,757,002 27,232,724 17,585,165 23,472,469 - - 17,585,165 23,472,469 20,772,164 14,771,925 - - 20,772,164 14,771,925 7,214,786 6,957,438 - - 7,214,786 6,957,438 12,622,824 1,082,836 - - 12,622,824 1,082,836 20,630,522 19,259,333 - - 20,630,522 19,259,333 2,589,767 1,638,960 - - 2,589,767 1,638,960 32,065,240 28,309,870 32,065,240 28,309,870 171,481,687 148,344,123 32,065,240 28,309,870 203,546,927 176,653,993 Increase/Decrease in Net Postion Before Transfers 73,340,564 53,546,762 1,428,795 (7,974,171) 74,769,359 45,572,591 Transfers (4,435,608) (5,924,278) 4,435,608 5,924,278 Changes in Net Position 68,904,956 47,622,484 5,864,403 (2,049,893) 74,769,359 45,572,591 Net Position— Beginning of Year 1,093,498,328 1,059,360,160 78,311,153 78,386,470 1,171,809,481 1,137,746,630 Restatements - (13,484,316) - 1,974,576 (11,509,740) Net Position— Beginning of Year, as restated 1,093,498,328 1,045,875,844 78,311,153 80,361,046 1,171,809,481 1,126,236,890 Net Position — End of Year $ 1,162,403,285 $ 1,093,498,328 $ 84,175,556 $ 78,311,153 $ 1,246,578,840 $ 1,171,809,481 Business -Type Activities Business -type activities increased the City's net position by $5.9 million for the current year. Business -type activities revenues increased by $13.2 million during the year for a total of $33.5 million in revenues, excluding the $4.4 million of transfers in from other governmental activities. The increased revenue was largely due to a increase in capital grants and contributions of $7.3 million. Related transit activity expenses increased by $3.8 million. 10 THE CITY'S FUNDS The governmental funds reported a combined fund balance at the end of the current fiscal year of $299 million, an increase of $43 million over the prior year. Approximately $108 million is restricted and already committed for specific restricted purposes. The total governmental fund balance includes the general fund balance of $192 million. The General Fund is the chief operating fund of the City of Santa Clarita. The unassigned fund balance of $58 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 11 to the financial statements. Other major fund balance changes are noted below: • The Bridge and Thoroughfare Fund has realized an increase of $60,900 in its fund balance from prior year. • The Developer Fee Fund has realized an increase of $1.13 million due to a decrease in developer contributions. • The Public Library Fund has realized an increase of $1.5 million in its fund balance from the prior year. • The Landscape Maintenance District's fund balance decreased by $11.4 million from the prior year. In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $8 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 increased over the prior year by $5.9 million. The unrestricted portion of the business -type activities net position increased by $1.2 million from the prior year. The Internal Service Funds net position increased by $948,173 or 10.1%. The ending fund balance for Internal Service Funds is $10.3 million, of which $8.8 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2018-2019 original (adopted) general fund budgeted expenditures and transfers of $99.4 million to the final budgeted expenditures of $157 million results in a net increase of $57.6 million. Included in this net increase is $3,183,704 committed purchase orders and contracts from the prior June 30 balance, as well as $2,201,277 of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2018-2019. 11 THE CITY'S FUNDS (CONTINUED) Original Budget Continued Encumbrances Beg. Balance + Supplemental Final Budget + Appropriations + = Changes = $99,393,207 + $2,201,277+ $3,183,704 = $104,778,188+ $ 51,890,256= $156,668,444 Comparing the beginning budget of $105 million with the final budget of $157 million indicates the General Fund had supplemental budgetary appropriations of $52 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 $346,365. Included in the increase is $292,893 in property tax. At year-end, the City's actual general fund revenues were $34 million more than the final budgetary estimates. Actual general fund expenditures were less than the final budgetary estimates by $9.4 million of which $25 million is attributed to the issuance of the 2019 Series Sheriff Station Bonds. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $1.07 billion (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, 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) Land Construction in progress Infrastructure, net Depreciable site improvements, net Depreciable building and improvements, net Depreciable equipment, net TOTALS Governmental Activities 2019 2018 Business Type Activities 2019 2018 $ 211,382,447 $172,876,636 $ 15,087,880 $ 15,087,880 64,017,408 52,656,787 3,806,655 2,807,217 628,045,453 628,220,572 - - 29,997,321 30,507,908 8,541,243 9,109,464 48,947,930 50,399,568 27,791,373 28,674,720 4,487,228 4,403,942 28,679,289 23,520,190 986,877,787 $939,065,413 83,906,440 79,199,471 Major capital asset events during the year included: • Acquisitions, contributions and annexations of land totaling $38.5 million • Infrastructure additions totaling $20.5 million. Total 2019 2018 $ 226,470,327 $187,964,516 $ 67,824,063 $55,464,004 $ 628,045,453 $628,220,572 $ 38,538,564 $39,617,372 76,739,303 $79,074,288 33,166,517 $27,924,132 1,070,784,227 $1,018,264,884 Additional information on the City of Santa Clarita's capital assets can be located in Note 6 to the financial statements. 12 CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration At year-end, the City's total debt amounted to $75.6 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 Activities Business -type Activities 2019 2018 2019 2018 Revenue and Taxable Revenue Bonds 15,107,666 15,848,271 Lease Revenue Bonds 51,075,746 24,532,560 Contract and Leases 2,538 32,200 Private Placement Lease 2,177,480 3,595,740 Compensated Absences 3,599,393 3,303,789 Claims Payable 3,654,276 2,775,229 TOTAL 75,617,099 50,087,789 Total 2019 2018 15,107,666 15,848,271 51,075,746 24,532,560 2,538 32,200 - - 2,177,480 3,595,740 94,611 75,638 3,694,004 3,379,427 - - 3,654,276 2,775,229 94,611 75,638 75,711,710 50,163,427 The City's governmental activities had $75.6 million in debt at year-end. Governmental activities long-term debt increased overall by $25.5 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, 2019, 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, 2019 was $1,249,105,265. 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 7 to the financial statements. 13 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 32% or $37 million as projected in the 2019-2020 budget. Property tax revenues account for 33% of the General Fund budget or $38 million in 2019-2020. 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 $113.6 million, resulting in a balanced budget, an operating surplus of $385,906, and a 20% operating reserve of $17.6 million. The City's 2019-2020 operating and capital budget for all funds is $225.9 million, net of transfers. 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 2019-2020 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 2019-2020 budget can be obtained by visiting the web at _h_ttp://www.santa-clarita.com/city- hal I/departments/city-manager-s-office/city-budget. This financial report is designed to provide a general overview of the City's finances for all those with interest in the government's finances. Questions concerning any of the information provided in this report, or request for additional information should be addressed to the City Clerk, City of Santa Clarita, 23920 Valencia Blvd., Santa Clarita, California 91355. 14 GOVERNMENT -WIDE FINANCIAL STATEMENTS This page left blank intentionally. CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION JUNE 30, 2019 Assets: Current assets: Cash and investments Receivables: Accounts, net Interest Taxes Prepaid costs Due from other governments Total Current Assets Noncurrent assets: Restricted assets: Cash and investments Cash and investments with fiscal agents Loans receivable Notes to RDA Successor Agency Capital assets: Nondepreciable assets Depreciable assets, net Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred outflows related to OPEB Deferred outflows related to pensions Unamortized loss on refunding, Total Deferred Outflows of Resources Liabilities: Current liabilities: Accounts payable and accrued liabilities Interest payable Deposits payable Due to other governments Unearned revenues Compensated absences Claims and judgments Bonds, loans and capital leases Total Current Liabilities Noncurrent liabilities: Compensated absences Claims and judgments Bonds, loans and capital leases Developer credits Net OPEB liability Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred inflows related to OPEB Deferred inflows related to pensions Total Deferred Inflows of Resources Governmental Business -type Activities Activities Total $ 304,006,480 $ 1,724,245 $ 305,730,725 672,481 31,376 703,857 1,518,827 8,152 1,526,979 10,780,845 - 10,780,845 1,164,084 24,602 1,188,686 6,527,984 4,165,689 10,693,673 324,670,701 5,954,064 330,624,765 9,571,274 9,571,274 26, 802,109 26, 802,109 2,403,765 2,403,765 16,464,413 16,464,413 275,399,855 18,894,535 294,294,390 711,477,932 65,011,905 776,489,837 1,042,119,348 83,906,440 1,126,025,788 1,366,790,049 89,860,504 1,456,650,553 1,803,027 44,337 1,847,364 19,309,095 703,220 20,012,315 1,522,395 - 1,522,395 22,634,517 747,557 23,382,074 22,016,546 4,450,221 26,466,767 194,646 - 194,646 14,540,241 14,540,241 7,734,479 7,734,479 1,064,906 - 1,064,906 2,013,038 36,645 2,049,683 2,265,651 - 2,265,651 2,580,148 - 2,580,148 52,409,655 4,486,866 56,896,521 1,586,355 57,966 1,644,321 1,388,625 - 1,388,625 65,783,282 65,783,282 49,626,106 - 49,626,106 5,963,442 146,648 6,110,090 40,321,117 1,468,640 41,789,757 164,668,927 1,673,254 166,342,181 217,078,582 6,160,120 223,238,702 7,585,562 186,530 7,772,092 2,357,137 85,855 2,442,992 9,942,699 272,385 10,215,084 See accompanying notes to financial statements. 15 This page left blank intentionally. 16 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION (CONTINUED) JUNE 30, 2019 Net Position: Net investment in capital assets Restricted: Landscape maintenance Lighting district Transportation Open Space preservation Public safety Public library Air quality improvement Stormwater Public education and government Tourism marketing Low and moderate -income housing Capital improvements Unrestricted Total Net Position Governmental Business -type Activities Activities Total 920,036,752 $ 83,906,440 $ 1,003,943,192 31,619,962 31,619,962 11,665,640 11,665,640 26, 548, 823 26, 548, 823 4,082, 888 4,082, 888 4,527,376 4,527,376 2,491,465 2,491,465 765,316 765,316 4,128,613 4,128,613 617,111 617,111 1,145,706 1,145,706 5,482,581 5,482, 581 26,299,850 - 26,299,850 122,991,202 269,116 123,260,318 $ 1,162,403,285 $ 84,175,556 $ 1,246,578,841 17 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2019 FUNCTION/PROGRAMS Expenses Charges for Services Program Revenues Operating Contributions and Grants Capital Contributions and Grants Governmental activities: General government $ 62,309,457 $ 8,547,181 $ 837,565 $ - Public safety 27,757,002 1,937,603 524,976 3,342,465 Recreation and community service 17,585,165 6,344,242 7,623 92,179 Public works 20,772,164 14,669,328 11,379,072 56,130,705 Community development 7,214,786 1,704,920 825,684 - Neighborhood services 12,622,824 29,338,661 - - Unallocated infrastructure depreciation 20,630,522 - - Interest and fiscal changes 2,589,767 - - - Total governmental activities 171,481,686 62,541,935 13,574,920 59,565,349 Business -type activities: Transit enterprise 32,065,240 7,662,186 15,292,991 10,434,282 Total primary government $ 203,546,926 $ 70,204,121 $ 28,867,911 $ 69,999,631 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 (loss) 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. 18 Net (Expense) Revenues and Changes in Net Position Governmental Business -type Activities Activities Total $ (52,924,711) $ - $ (52,924,711) (21,951,958) - (21,951,958) (11,141,121) - (11,141,121) 61,406,941 - 61,406,941 (4,684,182) - (4,684,182) 16,715,837 - 16,715,837 (20,630,522) - (20,630,522) (2,589,767) - (2,589,767) (35,799,482) - (35,799,482) - 1,324,219 1,324,219 (35,799,482) 1,324,219 (34,475,263) 43,761,925 - 43,761,925 38,546,183 - 38,546,183 8,369,481 - 8,369,481 3,352,776 - 3,352,776 1,227,947 - 1,227,947 147,752 - 147,752 12,528,843 32,613 12,561,456 1,206,740 - 1,206,740 (1,600) 71,963 70,363 109,140,047 104,576 109,244,623 (4,435,608) 4,435,608 - 68,904,957 5,864,403 74,769,360 1,093,498,328 78,311,153 1,171,809,481 $ 1,162,403,285 $ 84,175,556 $ 1,246,578,841 W CITY OF SANTA CLARITA, CALIFORNIA BALANCESHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net Interest Taxes Loans Notes to RDA Successor Agency Prepaid costs Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments Cash and investments with fiscal agents Total assets Liabilities, deferred inflows of resources, and fund balances (deficit): Liabilities: Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources: Unavailable revenues Total deferred inflows of resources Fund balances (deficit): Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflows of of resources and fund balances (deficit) Revenue Funds Bridge and Developer General Fund Thoroughfare Fees $ 173,685,562 $ 12,526,361 $ 8,696,058 533,922 - - 990,697 49,795 34,589 9,995,980 - - 9,553,358 - 6,911,055 391,457 - - 100,000 - - 4,366,894 - - 11,779,557 - 126,580 25,000,000 - - $ 236,397,427 $ 12,576,156 $ 15,768,282 10,630,416 105,255 1,505,401 13,490,241 - 1,050,000 7,700,000 - - 1,064,906 - - - 645 - - 7,312,274 - 32,885,563 7,418,174 2,555,401 11,549,625 - 7,037,635 11,549,625 - 7,037,635 12,050,141 - - - 51157,982 6,122,469 - - 13,460 120,981,128 - 39,317 58,930,970 - - 191,962,239 5,157,982 6,175,246 $ 236,397,427 $ 12,576,156 $ 15,768,282 See accompanying notes to financial statements. 20 Special Revenue Funds Landscape Non -major Total Public Maintenance Governmental Governmental Library District #1 Funds Funds $ 2,011,898 $ 24,248,652 $ 70,168,858 $ 291,337,389 32 12,402 126,125 672,481 7,957 96,727 288,774 1,468,539 176,282 134,652 473,931 10,780,845 - - 2,403,765 2,403,765 - - - 16,464,413 15,835 597,464 159,328 1,164,084 - - 6,427,984 6,527,984 - - - 4,366,894 - - - 11,906,137 9,571,274 9,571,274 - - 1,802,109 26,802,109 $ 2,212,004 $ 25,089,897 $ 91,422,148 $ 383,465,914 346,969 1,375,858 $ 7,920,479 $ 21,884,378 - - - 14,540,241 - - 34,479 7,734,479 - - - 1,064,906 - - 4,366,249 4,366,894 4,593,863 - - 11,906,137 4,940,832 1,375,858 12,321,207 61,497,035 4,464,909 23,052,169 4,464,909 23,052,169 15,835 597,464 159,328 12,822,768 - 23,116,575 73,997,673 108,394,699 - - - 13,460 - - 1,000,864 122,021,309 (2,744,663) - (521,833) 55,664,474 (2,728,828) 23,714,039 74,636,032 298,916,710 $ 2,212,004 $ 25,089,897 $ 91,422,148 $ 383,465,914 21 This page left blank intentionally. 22 CITY OF SANTA CLARITA, CALIFORNIA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2019 Fund balances of governmental funds 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 Depreciable assets, net of accumulated depreciation Revenues reported as deferred inflows in the governmental funds do not provide current financial resources but are recognized in the Statement of Activities Amounts reported for net pension and OPEB liability are not due in the current period and therefore are not reported in the governmental funds. Related components that will affect the net pension and OPEB 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 Deferred outflows of resources related to pensions Deferred inflows of resources related to pensions Net OPEB liability Deferred outflows of resources related to OPEB Deferred inflows of resources related to OPEB 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: Revenue/taxable revenue bonds Private placement lease payable Capital leases Deferred outflow of resources related to loss on refunding Compensated absences Bridge and Thoroughfare developer payables 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. 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. Net Position of Governmental Activities See accompanying notes to financial statements. $ 275,399,855 709,935,344 (40,167,635) 19,235,605 (2,348,165) (5,945,111) 1,797,485 (7,562,246) (66,183,412) (2,177,480) (2,538) 1,522,395 (3,586,840) (49,626,106) $ 298,916,710 985,335,199 23,052,169 (34,990,067) (120,053,981) (194,646) 10,337,901 $ 1,162,403,285 23 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Special Revenue Funds Bridge and Developer General Thoroughfare Fees Revenues: Taxes $ 87,434,427 $ $ Special assessments - Licenses and permits 9,951,586 Intergovernmental 203,119 Charges for services 8,178,848 Investment income (loss) 6,580,274 915,437 286,760 Fines and forfeitures 1,219,536 - - Developer fees - 143,746 3,895,556 Otherrevenue 230,675 368,724 - Total revenues 113,798,465 1,427,907 4,182,316 Expenditures: Current: General government 19,913,852 1,323 75,000 Public safety 26,444,456 - 1,402,113 Recreation and community service 14,997,717 - - Public works 20,976,185 671,955 246,205 Community development 6,750,603 - - Neighborhood services - - - Capital outlay 175,092 110,801 1,235,036 Debt service: Principal retirement - - - Interest and fiscal charges 582,938 Cost of issuance - - - Total expenditures 89,257,905 1,367,017 2,958,354 Excess (deficiency) of revenues over(under)expenditures 24,540,560 60,890 1,223,962 Other financing sources (uses): Bonds issued Premium on bonds issued - Transfers in 30,939,545 Transfers out (11,699,743) (90,436) Total other financing sources (uses) 19,239,802 - (90,436) Net change in fund balances 43,780,362 60,890 1,133,526 Fund balances (deficit), beginning of year 148,181,877 5,097,092 5,041,720 Fund balances (deficit), end of year $ 191,962,239 $ 5,157,982 $ 6,175,246 See accompanying notes to financial statements. 24 Special Revenue Funds Landscape Non -major Total Public Maintenance Governmental Governmental Library District#1 Funds Funds $ 7,299,096 $ 239,722 $ 432,819 $ 95,406,064 - 12,953,385 20,123,888 33,077,273 - - 9,951,586 - 35,883,073 36,086,192 88,059 - 773,090 9,039,997 151,681 1,252,931 2,858,261 12,045,344 - - 631,654 1,851,190 - 2,418,880 6,458,182 274,186 - 804,224 1,677,809 7,813,022 14,446,038 63,925,889 205,593,637 5,977,893 12,050,315 21,620,068 59,638,451 - - 496,009 28,342,578 269,718 183,380 15,450,815 286,723 29,162,298 51,343,366 - 593,461 7,344,064 - 5 52, 83 0 12,271,075 12,823,905 108,390 232,714 3,191,637 5,053,670 - 2,833,260 2,833,260 194,925 1,224,556 2,002,419 - - 517,734 517,734 6,281,208 13,392,300 72,093,478 185,350,262 1,531,814 1,053,738 (8,167,589) 20,243,375 25,850,000 25,850,000 - 1,463,083 1,463,083 10,000 25,125,635 56,075,180 (12,446,811) (36,297,965) (60,534,955) - (12,436,811) 16,140,753 22,853,308 1,531,814 (11,383,073) 7,973,164 43,096,683 (4,260,642) 35,097,112 66,662,868 255,820,027 $ (2,728,828) $ 23,714,039 $ 74,636,032 $ 298,916,710 25 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, 2019 Net changes in fund balances - total governmental funds S 43,096,683 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 only reflected as revenues on government -wide statement of activities. Capital outlay and public works expenditures $ 34,924,292 Capital contributions 37,045,246 Depreciation expense (24,335,008) 47,634,530 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. (1,947,691) 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. The following includes the amounts of repayment of long-term liabilities: Changes in compensated absences (291,893) Bond proceeds (25,850,000) Premium on bonds issued (1,463,083) Lease revenue bonds 1,415,000 Private placement lease payable 1,418,260 Capital leases 29,662 Loss on refundings (185,645) Amortization of premiums of long-term liabilities 95,502 (24,832,197) 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 (9,133) Changes in net OPEB liability and related deferred inflows and outflows of resources (282,214) Changes in net pension liabilities and related deferred inflows and outflows of resources 4,296,806 4,005,459 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. 948,173 Change in net position of governmental activities $ 68,904,957 See accompanying notes to financial statements. 26 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business -type Governmental Activities Activities Transit Internal Enterprise Service Funds Assets: Current assets: Cash and investments S 1,724,245 S 12,669,091 Receivables: Accounts 31,376 - Interest 8,152 50,288 Prepaid costs 24,602 - Due from other governments 4,165,689 - Total current assets 5,954,064 12,719,379 Noncurrent assets: Capital assets: Land and construction in progress 18,894,535 Site improvements, net of accumulated depreciation 8,541,243 Building and improvements, net of accumulated depreciation 27,791,372 - Equipment net of accumulated depreciation 28,679,290 1,542,588 Total noncurrent assets 83,906,440 1,542,588 Total assets 89,860,504 14,261,967 Deferred outflows of resources: Deferred outflows related to OPEB 44,337 5,542 Deferred outflows related to pensions 703,220 73,490 Total Deferred Outflows of Resources 747,557 79,032 Liabilities: Current liabilities: Accounts payable and accrued liabilities 4,450,221 132,168 Compensated absences 36,645 12,553 Claims and judgements - 2,265,651 Total current liabilities 4,486,866 2,410,372 Noncurrent liabilities: Compensated absences payable 57,966 - Claims and judgments - 1,388,625 Net OPEB liability 146,648 18,331 Net pension liability 1,469,640 153,492 Total noncurrent liabilities 1,673,254 1,560,438 Total liabilities 6,160,120 3,970,810 Deferred inflows of resources: Deferred inflows related to OPEB 186,530 23,316 Deferred inflows related to pensions 85,855 8,972 Total Deferred Inflows of Resources 272,385 32,288 Net Position: Net investment in capital assets 83,906,440 1,542,588 Unrestricted 269,116 8,795,313 Total net position S 84,175,556 S 10,337,901 See accompanying notes to financial statements. 27 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Business -type Governmental Activities Activities Transit Internal Enterprise Service Funds Operating revenues: Charges for services $ 7,591,380 $ 3,649,158 Other revenues 70,806 - Total operating revenues 7,662,186 3,649,158 Operating expenses: Administration and personnel services 2,638,884 226,705 Transportation services 20,863,183 - Services and supplies 3,208,299 2,685,290 Depreciation expense 5,354,874 295,058 Total operating expenses 32,065,240 3,207,053 Operating income (loss) (24,403,054) 442,105 Nonoperating revenues (expenses): Intergovernmental revenue 15,292,991 - Investment income (loss) 32,613 483,501 Gain (loss) on disposal of capital assets 71,963 (1,600) Total nonoperating revenues (expenses) 15,397,567 481,901 Income (loss) before transfers and capital contributions (9,005,487) 924,006 Transfers and capital contributions: Transfers in 4,589,298 24,167 Transfers out (153,690) - Capital contributions 10,434,282 - Total transfers and capital contributions 14,869,890 24,167 Change in net position 5,864,403 948,173 Net position Net position, beginning of year 78,311,153 9,389,728 Net position, end of year $ 84,175,556 $ 10,337,901 See accompanying notes to financial statements. 28 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Cash flows from operating activities: Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Cash received from other services Net cash provided by (used in) operating activities Cash flows from noncapital financing activities: Cash transfers out Cash transfers in Intergovernmental revenues Net cash (used in) provided by noncapital financing activities Cash flows from capital and related financing activities: Capital contributions Acquisition and construction of capital assets Proceeds from disposal of capital assets Net cash provided (used) for capital and related financing activities Cash flows from investing activities: Interest received Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provide by (used in) operating activities: Depreciation (Increase)/Decrease in accounts receivable (Increase)/Decrease in prepaid expense Change in deferred amounts related to OPEB Change in net OPEB liability Change in deferred amounts related to pensions Change in net pension liability Increase/(Decrease) in accounts payable Increase in claims and judgments Increase in compensated absences Total adjustments Net cash provided by (used in) operating activities See accompanying notes to financial statements. Business -type Governmental Activities Activities Transit Internal Enterprise Service Funds $ 7,576,825 $ 3,649,158 (22,952,483) (1,728,137) (2,769,966) (238,533) 70,806 - (18,074,818) 1,682,488 (153,690) - 4,589,298 24,167 14,893,155 - 19,328,763 24,167 10,434,282 - (10,061,843) (472,903) 71,963 - 444,402 (472,903) 25,898 482,109 1,724,245 1,715,861 - 10,953,230 $ 1,724,245 $ 12,669,091 $ (24,403,054) $ 442,105 5,354,874 295,058 (14,555) - (10,016) 8,658 107,729 13,466 (100,768) (12,596) 15,775 1,649 (172,792) (18,058) 1,417,577 69,448 - 879,047 18,974 3,711 6,328,236 1,240,383 $ (18,074,818) $ 1,682,488 WE CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Interest Taxes Due from other governments Restricted assets: Cash and investments Cash and investments held with PARS Cash and investments with fiscal agents Capital assets: Land Building and improvements, net of accumulated depreciation Total assets Deferred Outflows of Resources: Unamortized loss on refunding Liabilities: Accounts payable Interest payable Due to external parties Bonds, due within one year Bonds and notes, due in more than one year Total liabilities Net position (deficit): Net position restricted for OPEB Trust deficit Total Net Position (Deficit) Private -purpose Other Post Trust Fund Agency Employment Benefits Redevelopment Funds (OPEB) Trust Fund Successor Agency 1,284,298 $ $ 4,563 5,090 1,122 691 - - 7,734,479 18,008 - 41,338,537 - 1,768,567 - 2,379,362 9,937,976 - 71,490 $ 13,068,112 4,314 13,063,798 $ 13,068,112 41,338, 537 10,137, 534 - 2,299,293 324 331,795 853,660 49,571,300 - 50,757,079 $ 41,338,537 $ - - (38,320,252) $ 41,338,537 $ (38,320,252) See accompanying notes to financial statements. 30 CITY OF SANTA CLARITA, CALIFORNIA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Additions: Property taxes Employer contributions Investment income Miscellaneous Total Additions Deductions: Benefit payments to plan members Administrative expenses Contractual services Interest expense Total Deductions Change in Net Position Net Position (dcficit): Net position/(deficit), beginning of year Net position/(deficit), end of year Private -purpose Other Post Trust Fund Employment Bcnclits Redevelopment (OPEB) Trust Fund Successor Agency $ - $ 2,148,533 923,250 - 2,618,633 3,679 - 2,300 3,541,883 2,154,512 1,093,711 - 73,935 - - 3,580 - 1,771,429 1,167,646 1,775,009 2,374,237 379,503 38,964,300 (38,699,755) $ 41,338,537 $ (38,320,252) See accompanying notes to financial statements. 31 This page left blank intentionally. 32 NOTES TO BASIC FINANCIAL STATEMENTS This page left blank intentionally. CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — 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 units 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 — Santa Clarita Public Financing Authority 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. 33 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 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. 34 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — 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 City has elected the Public Library Special Revenue Fund as a major fund for public interest purposes. The Landscape Maintenance District # 1 Special Revenue Fund is used to account for property tax receipts and disbursements related to the landscape maintenance district. The City has elected the Landscape Maintenance District 41 Special Revenue Fund as a major fund for public interest purposes. Pronrietary 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. 35 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — 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 and a Statement of Changes in Fiduciary Net Position. The fiduciary funds represent an other postemployment benefits (OPEB) trust fund, 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. OPEB trust funds and private -purpose trust funds are reported using the "economic resources " measurement focus and the accrual basis of accounting. The OPEB Trust Fund is used to account for transactions for retiree health care. The City has administrative involvement of the Plan, and has reported the trust and Plan in it's financial statements. 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. 36 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting and Measurement Focus (Continued) Fund Types Reported by the City 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. 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, the Local Agency Investment Fund, and the California Asset Management Program. In accordance with GASB Statement No. 40, Deposit and Investment Risk Disclosures (an amendment of GASB Statement No. 3), certain disclosure requirements, if applicable, are provided for deposit and investment risk in the following areas: Interest Rate Risk Credit Risk - Overall - Custodial Credit Risk - Concentration of Credit Risk Foreign Currency Risk 37 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Cash and Cash Equivalents and Investments (Continued) 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. Cash and Investments with PARS related to the City's OPEB Trust are disclosed in Note 13. E. Interfund Transactions Activity between funds that are representative of lendingiborrowing 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." F. Property Taxes/Special Assessments 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. Special assessments are reported in the City's Special Assessment Special Revenue Fund. G. 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. H. 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. 38 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L 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: SiteImprovements................................................................................................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. J. 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. W CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. 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. K. 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 General Fund when it has matured (i.e. when due and payable). L. 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. M. Pensions The net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, information about the fiduciary net position of the California Public Employees' Retirement System (CaIPERS), and additions to/deductions from Ca1PERS' fiduciary net position have been determined on the same basis as they are reported by Ca1PERS. 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 12, 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, 2020. 40 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Other Post -Employment Benefits For purposes of measuring the net OPEB liability, deferred outflows or resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's Plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value (see Note 13). Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2018 Measurement Date June 30, 2019 Measurement Period July 1, 2018 to June 30, 2019 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. 41 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Net Position and Fund Balances (Continued) 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 City Treasurer 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. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. The City Council has approved an operating reserve to be used for one-time unanticipated expenditure requirements and local disaster. At June 30, 2019, the balance totaled $17,640,000, which is included in the unassigned fund balance in the General Fund. P. Spending Policy Government -Wide Financial Statements and Pronrietary 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 42 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. S. Pronouncements Adopted in the Current Year GASB Statement No. 83 — In November 2016, the GASB issued Statement No. 83, Certain Asset Retirement Obligations. This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs), which 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 assets should recognize a liability, and include certain disclosures within the financial statements, based on the guidance in this Statement. This Statement is effective for reporting periods beginning after June 15, 2018, or the 2018-19 fiscal year. The City implemented this Statement effective July 1, 2018. GASB Statement No. 88 — In March 2018, the GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The objective of this Statement is to improve consistency in the information that is disclosed in the notes to government financial statements related to debt, including direct borrowings and direct placements, and to provide financial statement users with additional essential information about debt. This Statement is effective for reporting periods beginning after June 15, 2018, or the 2018-19 fiscal year. The City implemented this Statement effective July 1, 2018. GASB Statement No. 89 — In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period. The objectives of this Statement are (a) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (b) to simplify accounting for certain interest costs. This Statement is effective for reporting periods beginning after December 15, 2019, or the 2020-21 fiscal year. The City implemented this Statement effective July 1, 2018. 43 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) T. Pronouncements Issued But Not Yet Adopted The GASB has issued pronouncements that have an effective date subsequent to June 30, 2019, 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. 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. 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. GASB Statement No. 90 — In September 2018, the GASB issues Statement No. 90, Majority Equity Interests, an amendment of GASB Statements No. 14 and No. 61. The objectives of this Statement are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The Statement is 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. 91— In May 2019, the GASB issues Statement No. 91, Conduit Debt Obligations. The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The Statement is effective for reporting periods beginning after December 15, 2020, or the 2021-22 fiscal year. The City has not determined the effect of this Statement. 44 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASH AND INVESTMENTS A. Cash and Investments Cash and investments at June 30, 2019, are classified in the accompanying financial statements as follows: Governmental Activities Fiduciary Funds Total Cash and investments 305,730,725 $ 1,288,861 $ 307,019,586 Restricted assets: Cash and investments 9,571,274 18,008 9,589,282 Cash and investments with fiscal agents 26,802,109 4,147,929 30,950,038 Totals $ 342,104,108 $ 5,454,798 $ 347,558,906 Cash and investments consisted of the following at June 30, 2019: Cash on hand and deposits Cash on hand $ 4,911 Deposits with financial institutions 11,500,827 Certificates of deposit 249,998 Total Cash on Hand and Deposits 11,755,736 Investments U.S. Treasury Securities 64,910,397 U.S. Government -Sponsored Enterprise Securities 29,618,019 Negotiable Certificate of Deposits 32,654,264 Supranational 15,776,289 Medium -Term Notes 47,646,604 Money Market Funds 520,491 Asset Backed 16,304,686 State of California Local Agency Investment Fund (LAIF) 35,890,374 L.A. County Pooled Investment Fund (LACPIF) 1,592,281 California Asset Management Program (CAMP) 50,350,445 Total Investments 295,263,850 Restricted investments: Money Market Funds 9,589,282 Restricted investments with fiscal agent: Money Market Funds 30,950,038 Total cash and investments $ 347,558,906 45 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASHAND INVESTMENTS (CONTINUED) A. Cash and Investments (Continued) The carrying amounts of the City's deposits were $11,755,736 at June 30, 2019. Bank balances before reconciling items were $17,131,704 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. Cash and Investments with PARS related to the City's OPEB Trust are disclosed in Note 13. 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. Authorized Investment Type Maximum Maturity Maximum Percentage or Amount of Portfolio* Maximum Investment in One Issuer** Local Agency Bonds 5 years No Limit No Limit U.S. Treasury Obligations 5 years No Limit No Limit State of California Obligations 5 years No Limit No Limit California Local Agency Obligations 5 years No Limit 50% U.S. Governmental -Sponsored Enterprise Securities 5 years No Limit None Supranationals/Unsubordinated Obligations 5 years 30% 10% Banker's Acceptances 180 days 40% 30% Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% 30% Repurchase Agreements 1 year No Limit No Limit Medium -Tenn Notes 5 years 30% 30% Money Market Funds 5 years 20% 10% Mortgage Pass -Through Securities 5 years 20% 50% Asset Backed 5 years 20% 20% Los Angeles County Pooled Investment Fund (LACPIF) Not Applicable No Limit No Limit State of California Local Agency Investment Fund (LAIF) Not Applicable $65,000,000 No Limit * Excluding amounts held by bond trustees that are not subject to California Government Code Restrictions. ** Banker's acceptances may have no more than 30 percent in any one commercial bank, commercial paper may not represent more than 10 percent of the City's surplus funds for any single issuer, and money market mutual funds may have no more than 10 percent invested in any one mutual fund. 46 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASHAND INVESTMENTS (CONTINUED) C. Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Maximum Percentage of Maximum Maximum Amount of Investment in Authorized Investment Type Maturity Portfolio One Issuer U.S. Treasury Obligations N/A 50% None U.S. Government -Sponsored Enterprise Securities 5 years None None Money Market Funds 5 years None None State of California Local Agency Investment Fund (LAIF) 5 years 30% None 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, 2019, the City had the following investment maturities: Investment Type Investments: U.S. Treasury Securities U.S. Government -Sponsored Enterprise Securities Supranational Negotiable Certificates of Deposit Medium -Term Notes Money Market Funds Asset Backed Local Agency Investment Fund (LAIF) Los Angeles County Pooled Investments Fund (LACPIF) California Asset Management Program (CAMP) Total Investments Restricted investments: Money Market Funds Restricted investments with fiscal agent: Money Market Funds Total Investments Subject to Interest Rate Risk Investment Maturities (In Years) Fair Value Less Than 1 1 to 2 2 to 3 3 to 4 4 to 5 $ 64,910,397 $ 288,721 $ 352,338 $ 12,352,609 $ 27,165,831 $ 24,750,898 29,618,019 - 14,945,591 5,866,342 8,806,086 15,776,289 - 9,010,679 6,765,610 - - 32,654,264 13,929,398 18,724,866 - - - 47,646,604 2,790,160 11,950,835 17,370,621 9,484,439 6,050,549 520,491 520,491 - - - 16,304,686 2,988 6,028,817 7,694,559 2,578,322 35,890,374 35,890,374 - - - 1,592,281 1,592,281 50,350,445 50,350,445 295,263,850 105,364,858 40,038,718 57,463,248 50,211,171 42,185,855 9,589,282 9,589,282 30,950,038 30,950,038 - - - - $ 335,803,170 $ 145,904,178 $ 40,038,718 $ 57,463,248 $ 50,211,171 $ 42,185,855 47 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASHAND 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: Investment Type Minimum Rating Fair Value AAA AA+ AA/A-I A Unrated Investments: U.S. Treasury Securities None $ 64,910,397 $ 64,910,397 $ - $ - $ - $ - U.S. Government -Sponsored Enterprise Securities None 29,618,019 5,628,973 21,924,275 - 2,064,771 - Supranational AA 15,776,289 15,776,289 - - - - Negotiable Certificates of Deposit None 32,654,264 - - 10,310,027 - 22,344,237 Medium -Term Notes* A 47,646,604 1,462,448 6,490,023 25,242,676 14,417,057 34,400 Money Market Funds None 520,491 520,491 - - - - Asset Backed AA 16,304,686 16,304,686 - - - - Local Agency Investment Fund (LAIF) None 35,890,374 - - - - 35,890,374 Los Angeles County Pooled Investments Fund (LACPIF) None 1,592,281 - - - - 1,592,281 California Asset Management Program (CAMP) None 50,350,445 - - - - 50,350,445 Total Investments 295,263,850 104,603,284 28,414,298 35,552,703 16,481,828 110,211,737 Restricted investments: Money Market Funds None 9,589,282 - - - - 9,589,282 Restricted investments with fiscal agent: Money Market Funds None 30,950,038 - - - - 30,950,038 Total Investments Subject to Interest Rate Risk $ 335,803,170 $ 104,603,284 $ 28,414,298 $ 35,552,703 $ 16,481,828 $ 150,751,057 * Included in the medium -term notes is an investment in Lehman Brothers, which is not rated as of June 30, 2019. 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, 2019, this investment is recorded at $34,400. 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. 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, 2019, none of the City's deposits or investments were exposed to custodial credit risk. 48 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASHAND INVESTMENTS (CONTINUED) 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, 2019: Investment Type Investments: U.S. Treasury Securities U.S. Government -Sponsored Enterprise Securities Supranational Negotiable Certificates of Deposits Medium -Term Notes Money Market Funds Asset Backed Total Leveled Investments Uncategorized Investments: Local Agency Investment Fund (LAIF) Los Angeles County Pooled Investments Fund (LACPIF) California Asset Management Program (CAMP) Restricted investments: Money Market Funds Restricted investments with fiscal agent: Money Market Funds Total Investment Portfolio Fair Value Level 2 $ 64,910,397 $ 64,910,397 29,618,019 29,618,019 15,776,289 15,776,289 32,654,264 32,654,264 47,646,604 47,646,604 520,491 520,491 16,304,686 16,304,686 207,430,750 $ 207,430,750 35,890,374 1,592,281 50,350,445 9,589,282 30,950,038 $ 335,803,170 Deposits and withdrawals related to the investments in LAIF, LACPIF, CAMP, and money market funds are made on the basis of $1 and not fair value. Accordingly, under the fair value hierarchy these investments are uncategorized. CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 2 — CASHAND INVESTMENTS (CONTINUED) L Investment in State Investment Pool The City is a participant in the Local Agency Investment Fund (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, 2019 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, 2019, the City had $35,890,374 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 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, 2019, the City had $1,592,281 invested in the LACPIF. K. Investment in California Asset Management Program The City is a voluntary participant in a Joint Powers Authority (JPA), the California Asset Management Program (CAMP), which is a permitted investment under California Government Code 53601(p). CAMP is directed by a Board of Trustees, which is made up of experienced local government finance directors and treasurers. As of June 30, 2019, the City had $50,350,445 invested in the CAMP. 50 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 3 —ACCOUNTS RECEIVABLE Accounts receivable as of June 30, 2019, including allowances for uncollectible accounts, is as follows: Gross receivables Less: allowance for uncollectibles Accounts Receivables, Net Gross receivables Less: allowance for uncollectibles Accounts Receivables, Net NOTE 4 — LOANS RECEIVABLE General Fund $ 926,159 (392,237) $ 533,922 Non -Major Governmental Funds Landscape Public Maintenance Library District # 1 $ 32 $ 33,949 - (21,547) $ 32 $ 12,402 Transit Total $ 142,345 $ 31,376 $ 1,133,861 (16,220) - (430,004) $ 126,125 $ 31,376 $ 703,857 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 $2,403,765 at June 30, 2019, 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 5 — 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 2015-2016 and subsequent, the loan amounts will increase by the 3 percent interest only. As of June 30, 2019, the loan amounts reported in the General Fund and Developer Fees Special Revenue Fund was $9,553,358 and $6,911,055, respectively. The unpaid accrued interest of these notes is $2,947,529 and $1,591,168 respectively. 51 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 6 — 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, 2019: Governmental activities: Non -depreciable assets: Land Construction in progress Total Non -Depreciable Assets Depreciable assets: Site improvements Building and improvements Equipment Infrastructure Total Depreciable Assets Less accumulated depreciation: Site improvements Building and improvements Equipment Infrastructure Total Accumulated Depreciation Total Depreciable Assets, Net Total Capital Assets, Net Governmental Activities Balance Balance June 30, 2018 Additions Deletions Transfers June 30, 2019 $ 172,876,636 $ 38,505,811 $ $ - $ 211,382,447 52,656,787 23,703,915 (12,343,294) 64,017,408 225,533,423 62,209,726 (12,343,294) 275,399,855 48,799,090 1,173,971 49,973,061 72,637,100 - 72,637,100 14,188,000 976,287 (550,531) - 14,613,756 988,520,030 8,112,110 12,343,294 1,008,975,434 1,124,144,220 10,262,368 (550,531) 12,343,294 1,146,199,351 18,291,182 1,684,558 19,975,740 22,237, 532 1,451,638 23,689,170 9,784,058 863,348 (520,878) 10,126,528 360,299,459 20,630,522 380,929,981 410,612,231 24,630,066 (520,878) 434,721,419 713,531,989 (14,367,698) (29,653) 12,343,294 711,477,932 $ 939,065,412 $ 47,842,028 $ (29,653) $ - $ 986,877,787 Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2019, as follows: Governmental Activities: General government $ 733,027 Public safety 17,538 Recreation and community service 2,463,136 Neighborhood services 71,805 Public works 391,981 Community development 26,999 Internal service funds depreciation 295,058 Allocated Depreciation 3,999,544 Unallocated infrastructure depreciation 20,630,522 Total Depreciation Expense $ 24,630,066 52 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 6 — 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, 2019: Business -type activities: Non -depreciable assets: Land Construction in progress Total Non -Depreciable Assets Business -Type Activities Balance June 30, 2018 Additions Balance Deletions June 30, 2019 $ 15,087,880 $ - $ - $ 15,087,880 2,807,217 999,438 - 3,806,655 17,895,097 999,438 - 18,894,535 Depreciable assets: Site improvements 12,941,276 - - 12,941,276 Building and improvements 41,483,799 - - 41,483,799 Equipment 55,060,617 9,068,128 (2,314,864) 61,813,881 Total Depreciable Assets 109,485,692 9,068,128 (2,314,864) 116,238,956 Less accumulated depreciation: Site improvements Building and improvements Equipment Total Accumulated Depreciation Total Depreciable Assets, Net Total Capital Assets, Net 3,831,812 568,221 - 4,400,033 12,809,079 883,347 - 13,692,426 31,540,427 3,903,306 (2,309,141) 33,134,592 48,181,318 5,354,874 (2,309,141) 51,227,051 61,304,374 3,713,254 (5,723) 65,011,905 $ 79,199,471 $ 4,712,692 $ (5,723) $ 83,906,440 Depreciation expense for business -type activities for the fiscal year ended June 30, 2019 was charged as follows: Business -type Activities: Transit enterprise fund $ 5,354,874 53 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 — LONG-TERM DEBT A. Governmental Activities The City has outstanding general obligation bonds and notes from direct borrowings and direct placements related to governmental activities totaling $66,216,562 and $2,180,018, respectively. The City has pledged assessment revenues to pay for the debt service for the general obligation bonds related to government -type activities. All outstanding general obligation bonds contain an event of default that changes the timing of repayment of outstanding amounts to become immediately due if the City is unable to make payment. The following is a summary of long-term debt transactions of the City for the year ended June 30, 2019: General Obligations Lease Revenue Bonds: Series 2016A (Golden Valley Road) Series 2016B (OSPD) Series 2019 (Sheriff Station) Plus deferred amount for issuance premium Total Lease Revenue Bonds Revenue and Taxable Revenue Bonds: Series 2018A (Streetlights Acquisition and Retrofit Program) Series 2018B (Streetlights Acquisition and Retrofit Program) Plus deferred amount for issuance premium Total Revenue and Taxable Revenue Bonds Total General Obligations Balance June 30, 2018 Additions Deletions Balance June 30, 2019 Classification Due Within Due More One Year Than One Year $ 9,570,000 $ $ (385,000) $ 9,185,000 $ 400,000 $ 8,785,000 13,450,000 (305,000) 13,145,000 340,000 12,805,000 - 25,850,000 - 25,850,000 25,850,000 1,512,560 1,463,083 (79,897) 2,895,746 79,896 2,815,850 24,532,560 27,313,083 (769,897) 51,075,746 819,896 50,255,850 11,295,000 - 11,295,000 - 11,295,000 4,005,000 (725,000) 3,280,000 295,000 2,985,000 548,271 (15,605) 532,666 15,605 517,061 15,848,271 (740,605) 15,107,666 310,605 14,797,061 40,380,831 27,313,083 (1,510,502) 66,183,412 1,130,501 65,052,911 Notes from direct borrowings and direct placements Private Placement Lease: Refunding, Series 2015 3,595,740 (1,418,260) 2,177,480 1,447,109 730,371 Capital Leases 32,200 (29,662) 2,538 2,538 Total Notes from direct borrowings and direct placements 3,627,940 (1,447,922) 2,180,018 1,449,647 730,371 Subtotal Bonds, Loans and Capital Leases 44,008,771 27,313,083 (2,958,424) 68,363,430 2,580,148 65,783,282 Compensated absences 3,303,789 2,308,642 (2,013,038) 3,599,393 2,013,038 1,586,355 Claims and judgments 2,775,229 2,766,977 (1,887,930) 3,654,276 2,265,651 1,388,625 Total $ 50,087,789 $ 32,388,702 $ (6,859,392) $ 75,617,099 $ 6,858,837 $ 68,758,262 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, 2019, was $9,185,000 for Series 2016A and $13,145,000 for Series 2016B. The Open Space Preservation District (OSPD) special assessment revenues within the OSPD Fund have been pledged as an available source of repayment for the bonds. 54 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 - LONG-TERM DEBT (CONTINUED) A. Governmental Activities (Continued) The annual debt service requirements on the remaining bonds are as follows: Series 2016A: Governmental Activities Bonds Year Ending June 30, Principal Interest Total 2020 $ 400,000 $ 295,700 $ 695,700 2021 420,000 279,300 699,300 2022 435,000 262,200 697,200 2023 450,000 244,500 694,500 2024 470,000 226,100 696,100 2025-2029 2,635,000 848,850 3,483,850 2030-2034 3,020,000 463,275 3,483,275 2035-2036 1,355,000 40,875 1,395,875 $ 9,185,000 $ 2,660,800 $ 11,845,800 Series 201613: Governmental Activities Bonds Year Ending June 30, Principal Interest Total 2020 $ 340,000 $ 405,706 $ 745,706 2021 375,000 391,406 766,406 2022 410,000 375,706 785,706 2023 445,000 358,606 803,606 2024 485,000 340,006 825,006 2025-2029 3,045,000 1,390,381 4,435,381 2030-2034 3,985,000 961,178 4,946,178 2035-2038 4,060,000 256,225 4,316,225 $ 13,145,000 $ 4,479,214 $ 17,624,214 55 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 — LONG-TERM DEBT (CONTINUED) B. Governmental Activities (Continued) Lease Revenue Bonds — Series 2019 In June 2019, the Authority issued Lease Revenue Bonds, Series 2019 (Sheriff Station Project) in the amount of $25,850,000. The City will lease certain real property in conjunction with the Sheriff Station project, and receive rental payments, which are pledged for repayment of the bonds. Interest on the Lease Revenue Bonds, Series 2019, is paid as part of a variable rate between 4 percent and 5 percent payable on June 1 and December 1 of each year commencing on December 1, 2019. Principal payments are due annually in various amounts commencing December 1, 2022, through June 1, 2049. The unpaid balance as of June 30, 2019, was $25,850,000. The bonds maturing on or after June 1, 2028 are subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after June 1, 2027 at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest, without premium. Further, the bonds are subject to redemption prior to their respective maturity dates, as a whole or in part on a pro rata basis if the City takes the leased property or any portion by power of eminent domain, or from insurance proceeds due to destruction of the leased property, at a redemption price equal to the sum of the principal of the bonds to be redeemed plus accrued by unpaid interest, without premium. The term bonds maturing on June 1, 2037 are subject to mandatory redemption by sinking account payments of $940,00 and $970,000 on June 1, 2036 and June 1, 2037, respectively. The annual debt service requirements on the remaining bonds are as follows: Governmental Activities Year Ending June 30, Principal 2020 $ - 2021 2022 2023 2024 2025-2029 2030-2034 2035-2039 2040-2044 2045-2049 505,000 530,000 555,000 3,225,000 4,030,000 4,845,000 5,630,000 Bonds Interest $ 857,789 924,563 924,563 899,313 872,813 3,918,565 3,109,065 2,295,459 1,513,460 Total $ 857,789 924,563 1,429,563 1,429,313 1,427,813 7,143,565 7,139,065 7,140,459 7,143,460 6,530,000 614,779 7,144,779 $ 25,850,000 $15,930,369 $41,780,369 56 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 — LONG-TERM DEBT (CONTINUED) B. Governmental Activities (Continued) Revenue and Taxable Revenue Bonds — Series 2018A and 2018B (Streetlights Acquisition and Retrofit Pro ram In June 2018, the Authority issued 2018 Revenue Bonds Series A and 2018 Taxable Revenue Bonds Series B, in the amount of $11,295,000 and $4,005,000, respectively. Interest on the 2018 Revenue Bonds Series A, is paid as part of a variable rate between 3 percent and 5 percent payable on September 1 and March 1 of each year commencing on September 1, 2018. Principal payments are due annually in various amounts commencing September 1, 2018 through September 1, 2048, for the Series A bonds. The unpaid balance as of June 30, 2019, was $11,295,000. Interest on the 2018 Taxable Revenue Bonds Series B, is paid as part of a variable rate between 2.150 percent and 3.750 percent payable on September 1 and March 1 of each year commencing on September 1, 2018. Principal payments are due annually in various amounts commencing September 1, 2018 through September 1, 2028, for the Series B bonds. The unpaid balance as of June 30, 2019, was $3,280,000. The bonds are payable from and secured by a pledge of and first lien on amounts on deposit in the Streetlighting fund, including assessment revenues and Ad -valorem revenues. Ad valorem revenues and assessment revenues within the Lighting District Funds have been pledged as available sources of repayment for the bonds. Governmental Activities Year Ending June 30, Principal 2020 $ 295,000 2021 305,000 2022 310,000 2023 320,000 2024 330,000 2025-2029 1,820,000 2030-2034 2,215,000 2035-2039 2,630,000 2040-2044 3,205,000 2045-2048 3,145,000 $ 14,575,000 Bonds Interest Total $ 567,201 $ 862,201 558,906 863,906 550,063 860,063 540,613 860,613 530,656 860,656 2,538,491 4,358,491 2,073,438 4,288,438 1,663,291 4,293,291 1,045,125 4,250,125 257,900 3,402,900 $ 10,325,684 $ 24,900,684 57 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 — 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, 2019, was $2,177,480. The annual debt service requirements on these certificates are as follows: Governmental Activities Notes from direct borrowings and direct placements Year Ending June 30, Principal Interest Total 2020 $ 1,447,109 $ 37,110 $ 1,484,219 2021 730,371 7,450 737,821 $ 2,177,480 $ 44,560 $ 2,222,040 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 Less: accumulated depreciation Total Future capital lease payment requirements are as follows: Year Ending June 30, 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments $ 13,433 (13,156) $ 277 Total $ 279 279 (2) $ 277 58 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 7 — LONG-TERM DEBT (CONTINUED) A. Governmental Activities (Continued) On August 1, 2014, the City Council approved a lease -purchase agreement with Canon Financial Services, Inc. to install a Canon Image Runner C5045 for the Canyon Country and Valencia Library branches in the amount of $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 Less: accumulated depreciation Total Future capital lease payment requirements are as follows: Year Ending June 30, 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments Compensated Absences $ 121,956 (119,695) $ 2,261 Total $ 2,270 2,270 (9) $ 2,261 The City's liability for accrued and unpaid compensated absences in the governmental activities totaled $3,599,393 at June 30, 2019. The majority of compensated absences are liquidated through the General Fund. Claims and Judgments The City's liability for outstanding claims and judgments is $3,654,276 at June 30, 2019 (see Note 16). B. Business -Type Activities Compensated Absences The City's liability for accrued and unpaid compensated absences in the business -type activities at June 30, 2019, is as follows: Balance Balance Due Within Due More June 30, 2018 Additions Deletions June 30, 2019 One Year Than One Year Compensated absences $ 75,637 $ 55,619 $ (36,645) $ 94,611 $ 36,645 $ 57,966 W CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 8 — 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, 2019, deposits payable were as follows: General Fund Deposits from developers $ 2,870,388 Sheriffs Station deposits payable 9,818,783 Other deposits payable 801,070 Total General Fund $ 13,490,241 Developer Fees Deposits from developers 1,050,000 Total Deposits Payable $ 14,540,241 On May 31, 2016, the City entered into a memorandum of understanding with the County of Los Angeles (County) for the new Santa Clarita Valley Sheriff's Station. The County agreed to deposit $15,000,000 into the City's trust account earmarked for the design, engineering, and construction of the new Station. As of June 30, 2019, the City has used $5,181,217 from amounts on deposit. NOTE 9 —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, 2019, the City accrued a liability of $49,626,106 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, 2019: Balance Balance June 30, 2018 Additions Deletions June 30, 2019 Bridge and Thoroughfare Credits: Bouquet District $ 21,955,779 $ - $ - $ 21,955,779 Eastside District 11,927,888 - - 11,927,888 Via Princessa District 171,264 - - 171,264 Valencia District 15,571,175 - - 15,571,175 Total Bridge and Thoroughfare Credits $ 49,626,106 $ - $ - $ 49,626,106 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 10 — INTERFUND TRANSACTIONS A. Due To/Due From At June 30, 2019, the City had the following short-term interfund receivables and payables: Due From Other Funds General Due to Other Funds: Bridge and Thoroughfare $ 645 Non -Major Governmental Funds 4,366,249 Total $ 4,366,894 B. Advances At June 30, 2019, the City had the following interfund advances: Advances From Other Funds: Bridge and Thoroughfare Public Library Total Bridge and Thoroughfare Advances To Other Funds Developer General Fees Total $ 7,185,694 $ 126,580 $ 7,312,274 4,593,863 - 4,593,863 $ 11,779,557 $ 126,580 $ 11,906,137 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, 2019, the amount of the advance outstanding is $578,206. 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, 2019, the amount of the advance outstanding is $1,013,723. 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, 2019, the amount of the advance outstanding is $424,871. 61 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 10 — INTERFUND TRANSACTIONS (CONTINUED) B. Advances (Continued) 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, 2019, the amount of the advance outstanding is $586,464. 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, 2019, the amount of the advance outstanding is $2,578,297 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, 2019, the amount of the advance outstanding is $126,580. In May 28, 2019, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $2,000,000 for the onsite construction of the new Santa Clarita Valley Sheriff Station, which includes the main station building, detention facility, helipad, dry utilities, radio antenna tower, perimeter walls, landscaping, furnishings, fixtures, and equipment. 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, 2019, the amount of the advance outstanding is $2,004,133. Public Library The General Fund advanced the Public Library Special Revenue Fund $8,398,938, which consists of the following individual advances: 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. As of June 30, 2019, the principal amount of the advance was paid off in full. 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, 2019, the principal amount of the advance of $4,593,863 is outstanding. 62 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 10 — INTERFUND TRANSACTIONS (CONTINUED) C. Transfers At June 30, 2019, the City had the following transfers Transfers Out Landscape Non -Major Transit General Developer Maintenance Governmental Enterprise Fund Fees District #1 Funds Fund Total Transfers in: General Fund $ $ 90,436 $ 1,990,025 $ 28,709,084 $ 150,000 $ 30,939,545 Landscape Maintenance District #1 10,000 - - - - 10,000 Non -Major Governmental Funds 11,665,576 10,456,786 2,999,583 3,690 25J25,635 Transit Enterprise - - 4,589,298 - 4,589,298 Internal Service Funds 24,167 - - - 24,167 Total $ 11,699,743 $ 90,436 $ 12,446,811 $ 36,297,965 $ 153,690 $ 60,688,645 The General Fund made transfers to Landscape Maintenance District 41 and non -major governmental funds for operating and capital improvement projects for $10,000 and $9,484,718 respectively, and current year debt service payments for $2,180,858, totaling $11,675,576. Transfers from the General Fund to the Self -Insurance Internal Service Fund of $24,167 were for risk management operations. The Landscape Maintenance District 41 Special Revenue Funds and non -major governmental funds, made transfers to the General Fund for current Ca1PERS pension obligations plus additional contribution to pay down the City's Unfunded Accrued Liability, totaling $4,959,838. The Landscape Maintenance District 41 Special Revenue Fund made transfers to the General Fund and the non - major governmental fund for operating costs, and fund balance transfer for $10,496,786. The Developer Fees Special Revenue Fund made transfers to the General Fund for administrative costs for $90,436. The non -major governmental funds made transfers to the General Fund and non -major governmental funds for operating costs of $1,248,618. The non -major governmental funds made transfers to the non -major governmental funds in the amount of $717,381 for streetlight operations and maintenance. Transfers from the non -major governmental funds to non -major governmental funds of $1,447,213 represents debt service payments for the 2016 Lease Revenue Refunding Bonds, $285,643 for the 2018 Lease Revenue Bonds Series A and 2018 Taxable Lease Revenue Bonds Series B, and transfers from the non -major governmental to General Fund of $25,000,000 represents bond proceeds for the 2019 Lease Revenue Bonds. Transfers from the non -major governmental funds to the Transit Enterprise Fund totaling $4,589,297 were to transfer Proposition A and Proposition C non -operating 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. 63 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 11— FUND BALANCES AND NET POSITION A. Fund Balance Classification The details of fund balance of the governmental funds as of June 30, 2019, are presented below: Nonspendable: Prepaid items Advances to other funds Total Nonspendable Restricted: Landscape maintenance Lighting District Capital improvements Transportation Open space preservation Public safety Public library Air quality improvement Stormwater Public education and government Tourism marketing Low- and moderate -income housing Total Restricted Comm tted: Capital improvements Assigned: Capital projects Claims and settlements Public facilities replacement Total Assigned Unassigned Total Fund Balances Major Governmental Funds Landscape General Bridge and Developer Public Maintenance Fund Thoroughfare Fee Library District #1 Non -Major Govemmental Funds Total $ 391,457 $ - $ - $ 15,835 $ 597,464 $ 159,328 $ 1,164,084 11,658,684 * - - - - - 11,658,684 12,050,141 - - 15,835 597,464 159,328 12,822,768 - - - - 23,116,575 8,503,387 31,619,962 - - - - - 11,665,640 11,665,640 - 5,157,982 1,612,891 - - 12,491,342 19,262,215 - - - - - 25,111,650 25,111,650 - - - - - 4,082,888 4,082,888 - - 4,112,095 - - 313,222 4,425,317 - - - - - 2,491,465 2,491,465 - - 105,422 - - 659,894 765,316 - - - - - 4,128,613 4,128,613 - - - - - 617,111 617,111 - - - - - 1,145,706 1,145,706 - - 292,061 - - 2,786,755 3,078,816 5,157,982 6,122,469 23,116,575 73,997,673 108,394,699 13,460 13,460 15,500,000 - 39,317 - - 1,000,854 16,540,171 5,156,328 - - - - 10 5,156,338 100,324,800 - - - - - 100,324,800 120,981,128 39,317 1,000,864 122,021,309 58,930,970 (2,744,663) (521,833) 55,664,474 $ 191,962,239 7 5,157,982 $ 6,175,246 $ (2,728,828) 7 23,714,039 $ 74,636,032 $ 298,916,710 * Accrued interest on General Fund advances to other funds of $120,873, do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. NOTE 12 — AGENT MULTIPLE -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. Ca1PERS is an agent - multiple employer defined benefit pension plan administered by the California Public Employees' Retirement System. Ca1PERS 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. Ca1PERS 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. 64 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) B. Benefits Provided Ca1PERS 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 Ca1PERS employers, and with certain other Retirement Systems with which Ca1PERS 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, 2019 are summarized as follows: Formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of annual salary Required employee contribution rates* Required employer contribution rates Required Unfunded Accrued Liability (UAL) contribution Applies to: Miscellaneous Tier 1 Tier 2 Tier 3 2.7% at 55 2% at 60 2% at 62 5 years of service 5 years of service 5 years of service monthly for life monthly for life monthly for life 50-55 50-60 52-62 2.7% 2.0% 2.0% 8% 7% 5.75% 8.560% $2,921,910 Tier 1 Tier 2 Tier 3 Employees hired before April 9, 2011** Employees hired between April 9, 2011, 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). ** Employees hired January 1, 2013, or later ** * For unrepresented Tier 1 participants, the City pays 1 % of the required employee contribution. For the SEIU Tier 1 participants, the City pays 1 % 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. 65 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) C. Employees Covered by Benefit Terms At June 30, 2017, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 190 Employees entitled to but not yet receiving benefits 407 Active employees 405 1,002 The information was obtained from the Ca1PERS Annual Valuation Report as of June 30, 2017 and is the most recent information available. D. Contributions Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through Ca1PERS' 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, 2019, including amounts paid by the City related to employees' required contribution rates. The employer contributions during the year ended June 30, 2019 were $12,499,992. E. Actuarial Assumptions The total pension liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Salary increases Investment rate of return June 30, 2017 June 30, 2018 Entry -Age Normal Cost Method 7.15 percent 2.75 percent Varies by Entry Age and Service 7.50 percent Mortality rates were based on the 2014 Ca1PERS actuarial experience study for the period 1997 to 2011. Pre - retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) E. Actuarial Assumptions (Continued) 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 7.50 percent rate of return on pension plan investments, Ca1PERS took into account both short- and long-term market return expectations, as well as the expected pension fund cash flows. 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 adjusted to account for assumed administrative expenses. The target allocation and best estimates of arithmetic real rates of return for each major asset class are the same for each Plan. These geometric rates of return are net of administrative expenses and are summarized in the following table: Assumed Asset Real Return Real Return Asset Class(i) Allocation Years 1-10(') Years 11+(') Global Equity 50.0% 4.80% 5.98% Fixed Income 28.0% 1.00% 2.62% Inflation Assets 0.0% 0.77% 1.81% Private Equity 8.0% 6.30% 7.23% Real Estate 13.0% 3.75% 4.93% Liquidity 1.0% 0.00% -0.92% 100% (i) In the Basic Financial Statements, Fixed Income is included in Global Debt Securities; Liquidity is included in Short -Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. An expected inflation of 2.00% used for this period (2) An expected inflation of 2.00% used for this period (3) An expected inflation of 2.92% used for this period F. Discount Rate The discount rate used to measure the total pension liability was 7.15 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 statutorily required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the plan, Ca1PERS 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 7.15 percent discount rate is adequate, and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.15 percent was 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 Ca1PERS website. M CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) G. Changes in the Net Pension Liability Balances at June 30, 2017 Changes recognized for the measurement period: Service cost Interest Changes of assumptions Differences between expected and actual experience Plan to Plan Resource Movements Contributions from the employer Contributions from the employees Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other Miscellaneous (Expense) Net changes Balances at June 30, 2018 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Liability (a) - (b) $ 182,588,700 $ 135,882,204 $ 46,706,496 4,920,377 - 4,920,377 13,037,446 - 13,037,446 (1,615,911) - (1,615,911) 1,709,604 - 1,709,604 (355) 355 - 9,664,637 (9,664,637) - 2,203,916 (2,203,916) - 11,713,900 (11,713,900) (5,601,353) (5,601,353) - - (211,742) 211,742 - (402,101) 402,101 12,450,163 17,366,902 (4,916,739) $ 195,038,863 $ 153,249,106 $ 41,789,757 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, 2019, the total net pension liability was allocated as follows: Net pension liability Governmental Activities $ 40,321,117 Transit Enterprise Fund $ 1,468,640 Total Net Pension Liability $ 41,789,757 68 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) H. Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of the City, calculated using the discount rate of 7.15 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 (6.15 percent) or 1-percentage point higher (8.15 percent) than the current rate: 1 % Decrease Current Discount 1 % Increase (6.15%) Rate (7.15%) (8.15%) Net pension liability $ 72,181,368 $ 41,789,757 $ 16,998,518 L Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued Ca1PERS financial report. J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2019, the City recognized pension expense of $8,032,209. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources. Deferred Outflows Deferred Inflows of Resources of Resources Net difference between projected and actual earnings on pension plan investments $ 184,381 $ - Changes in assumptions 5,969,630 1,574,542 Differences between expected and actual experience 1,358,312 868,450 City contributions subsequent to the measurement date 12,499,992 Total $ 20,012,315 $ 2,442,992 At June 30, 2019, the total deferred outflow of resources, and deferred inflow of resources, and pension expense related to the net pension liability was allocated as follows: Deferred outflows of resources Deferred inflows of resources Pension expense Governmental Transit Activities Enterprise Fund $ 19,309,095 $ 703,220 2,357,137 85,855 7,749,929 282,280 Total $ 20,012,315 2,442,992 8,032,209 .: CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 12 — AGENT MULTIPLE -EMPLOYER PLAN (CONTINUED) J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Amounts reported as deferred outflows 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 $12,499,992, which will be recognized as a reduction of the net pension liability during the fiscal year ending June 30, 2020. 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, 2018 measurement date, the expected average remaining service lifetime is 4.3 years. Deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal Year Ending 2019 2020 2021 2022 Deferred Outflows/(Inflows) of Resources $ 3,693,311 2,805,695 (1,070,894) (358,781) $ 51069,331 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS A. Plan Description The City has elected through resolution to provide healthcare benefits as single employer plan to retirees, spouses, and eligible dependents of the City. This plan provides post -employment medical insurance benefits through the Ca1PERS Health Plan (the Plan). The City has administrative involvement with the Plan, and has included the trust, as well as Plan required disclosures within the City's CAFR. A separate financial report is not issued. B. 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. The Plan Trustee is U.S. Bank, and Public Agencies Retirement Services (PARS) is the Trust Administrator. However, as described above, the City has administrative involvement in the Plan. 70 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) B. 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 percent of the Cash Subsidy. 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 2018-19 was $386,000. The City made additional payments of $313,250, for a total $698,250 in trust contributions. 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 $225,000 related to the fiscal year 2018-19 implied subsidy payments which has been included in the contributions amount above. C. 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 up to $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 unrepresented 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 Service 0 to 5 years 5 to 9 years 10 to 14 years 15 years and greater Vested Percentage 0% 50% 75% 100% Employees hired after January 1, 2008, receive the PERS minimum and are not subject to a vesting schedule. As of the June 30, 2019 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan: Participants Inactives currently receiving benefits Inactives entitled to but not yet receiving benefits Active employees Total Total 122 24 429 575 71 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) D. Contributions The Plan and its contribution requirements are based on the actuarially determined contribution. For the fiscal year ended June 30, 2019, the City's cash contributions were $698,250 in payments to the trust and the estimated implied subsidy was $225,000 resulting in total payments of $923,250. E. Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2019 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2018, based on the following assumptions: Actuarial Assumptions: Actuarial Valuation Date June 30, 2018 Contribution Policy City contributes full cash benefit actuarially determined contributions. Implied Subsidy benefit on pay-as-you-go basis. Discount Rate 5.17% at June 30, 2019 5.60% at June 30, 2018 Expected City contributions projected to be insufficient to pay all benefits from trust. Municipal Bond Index Bond Buyer 20-bond Index 3.50% June 30, 2019 3.87% June 30, 2018 Long Term Return on Assets 6.50% General Inflation 2.75% per annum Mortality, Retirement, Disability, Termination Ca1PERS 1997-2015 Experience Study Mortality Improvement Fully generational Scale MP-2018 Salary Increases Aggregate -3% per annum Merit - Ca1PERS 1997-2015 Experience Study Medical Trend Non -Medicare - 7.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 Medicare - 6.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 PEMHCA Minimum Increases 4.25% per annum Healthcare participation at Hired < l/l/08: 100% Hired >_ 1 / 1 /08: 60% Cap Increases No increase on $1,016.58 cap Medical trend for EE+1 cap 72 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) F. Cash and Investments Held in Trust The City elected a discretionary investment approach with a moderate investment objective. 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. The parameters for fixed income and equity securities based on asset allocation are as follows: Maximum Minimum Percentage of Percentage of Total Plan Total Plan Authorized Investment Type Assets Assets Fixed Income Long-term fixed income 20% 0% Intermediate -term fixed income 50% 15% Short-term fixed income 15% 0% High -yield portion of the Plan 8% 0% Equity Domestic large cap equity 50% 20% Domestic mid -capitalization equity 15% 0% Domestic small capitalization equity 20% 0% International equity 20% 0% Real estate 10% 0% Cash and investments related to the Plan consist of the following: Assets Fair Value Cash and Equivalents $ 669,161 U.S. Government Issues 7,433,511 Corporate Issues 6,748,507 Foreign Issues 738,030 Municipal Issues 331,725 Domestic Common Stocks 4,114,312 Foreign Stocks 148,125 Mutual Funds -Equity 20,713,387 Mutual Funds -Fixed Income 323,803 Total Assets 41,220,561 Accrued Income 117,976 Total $ 41,338,537 73 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) F. Cash and Investments Held in Trust (Continued) The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Target Allocation Expected Real Asset Class PARS -Balance Rate of Return Global Equity 58% 4.82% Fixed Income 35% 1.47% REITS 2% 3.76% Cash 5% 0.06% For the year ended June 30, 2019, the annual money weighted rate of return on investments was 6.94 percent. The money weighted rate of return expresses investment performances adjusted for the changing amounts actually invested. G. Concentrations of Credit Risk Investments in any one issuer that represent 5 percent or more of the Plan's total cash and investments are as follows: Issuer Investment Type Amount Vanguard Growth and Income Mutual Funds -Equity $ 3,660,574 Federal National Mortgage Association U.S. Government Issues $ 2,768,248 Dodge and Cox Stock Fund Mutual Funds -Equity $ 3,665,258 H. Discount Rate Investments 8.88% 6.72% 8.89% The discount rate used to measure the total OPEB liability was 5.17 percent for the 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 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, the plan's fiduciary net position and expected City contributions were projected to be insufficient to make all projected future benefit payments of current active and inactive employees. Therefore, a blended rate was applied beginning in year 35 using the Bond Buyer 20-bond index rate as of June 30, 2019. Before year 35, the long- term expected rate of return was used to determine the total OPEB liability. As a result of the crossover, a blended rate of 5.17 percent was used. 74 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) L Changes in the Net OPEB Liability The changes in the net OPEB liability for the Plan are as follows: Total Net OPEB Fiduciary OPEB Liability Net Position Liability/(Asset) (a) (b) (c) = (a) - (b) Balance at June 30, 2018 $ 49,273,073 $ 38,964,300 $ 10,308,773 Changes for the year Service cost 1,701,975 1,701,975 Interest 2,823,979 2,823,979 Actual vs. expected experience (7,334,973) - (7,334,973) Assumption changes 2,078,284 - 2,078,284 Contributions - employer* - 923,250 (923,250) Net investment income - 2,618,633 (2,618,633) Benefit payments (1,093,711) (1,093,711) - Administrative expenses - (73,935) 73,935 Net Changes (1,824,446) 2,374,237 (4,198,683) Balance at June 30, 2019 $ 47,448,627 $ 41,338,537 $ 6,110,090 *Contributions to trust of $698,250 plus $225,000 implied subsidy benefit payments by the City. J. Changes of Assumptions For the June 30, 2019 measurement date, the discount rate was changed from 5.60% to 5.17%. Changes since June 30, 2018 Measurement Date: • Discount rate was updated based on newer capital market assumptions • Demographic assumptions were updated to Ca1PERS 1997-2015 Experience Study • Mortality improvement scale was updated to Scale MP-2018 • Medical claims costs were developed by Axene Health Partners based on demographic data for the Ca1PERS health plans provided by Ca1PERS and Axene's proprietary AHP Cost Model • New medical trend increase rates • Updated medical plan at retirement 75 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) K. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2019: 1 % Decrease Current Rate 1 % Increase (4.17%) (5.17%) (6.17%) Net OPEB Liability (Asset) $ 14,236,395 $ 6,110,090 $ (401,137) L. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2019: Healthcare Trend Rate 1 % Decrease Current Rate 1 % Increase Net OPEB Liability (Asset) $ (1,559,557) $ 6,110,090 $ 15,944,614 M. OPEB Plan Fiduciary Net Position PARS issues a publicly available report that may be obtained from the Public Agency Retirement Services, 4350 Von Karman Ave, Newport Beach, California 92660. N. OPEB Expense, Deferred Inflows of Resources, and Deferred Outflows of Resources Related to OPEB For the fiscal year ended June 30, 2019, the City recognized OPEB expense of $1,213,296. As of fiscal year ended June 30, 2019, the City reported deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on plan investments Total Deferred Deferred Outflows Inflows of Resources of Resources $ - $ 6,519,976 1,847,364 803,000 - 449,116 $ 1,847,364 $ 7,772,092 76 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 13 — POST -EMPLOYMENT HEALTH BENEFITS (CONTINUED) N. OPEB Expense and Deferred Inflows of Resources Related to OPEB (Continued) Amounts reported as deferred inflows and outflows of resources are amortized in OPEB expense. The amortization period differs depending on the source of the gain or loss. The amortization period is a 15-year fixed period and all other amounts are amortized over the average expected remaining service lives of all members that are provided with benefits. As of June 30, 2019 measurement date, the expected average remaining service lifetime is 9 years. Deferred inflows and outflows of resources related to OPEB will be recognized in OPEB expense as follows: Deferred Fiscal Year Outflows/(Inflows) Ended June 30: of Resources 2020 $ (861,856) 2021 (861,856) 2022 (860,856) 2023 (736,857) 2024 (718,077) Thereafter (1,885,227) $ (5,924,729) NOTE 14 — INDIVIDUAL FUND DISCLOSURES —DEFICIT FUND BALANCE Funds that have a deficit fund balance at June 30, 2019, are as follows: Deficit Fund Fund Balance Maj or Funds: Public Library Special Revenue Fund $ (2,728,828) Non -Major Governmental Funds: Surface Transportation Program Special Revenue Fund (37,537) Federal Grants Special Revenue Fund (484,296) 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. NOTE 15 — 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, 2019, there were 1,589 participants in the plans. The City's contributions totaled $204,099, and employees' contributions totaled $2,150,228. 77 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 16 — 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 $1,887,930 for the property/liability program and the workers' compensation program (based on estimated wages). At June 30, 2019, $430,000 was accrued by the City for general liability claims, and $3,224,276 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. As of July 1, 2019, the City's deductible increased from $5,000 to $50,000. Changes in the reported claims liability since June 30, 2017, resulted in the following: Claims liability as of June 30, 2017 Claims and changes in estimates during the year ended June 30, 2018 Claims and payments during the year ended June 30, 2018 Claims liability as of June 30, 2018 Claims and changes in estimates during the year ended June 30, 2019 Claims and payments during the year ended June 30, 2019 Claims liability as of June 30, 2019 NOTE 17 — NON -COMMITMENT DEBT A. 1915 Act Limited Obligation Improvements Bonds — Golden Valley $ 3,190,756 1,210,037 (1,625,564) 2,775,229 2,766,977 (1,887,930) $ 3,654,276 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, 2019 was $225,000. 78 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 17 — NON -COMMITMENT DEBT (CONTINUED) 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, 2019 was $375,000. 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, 2019 was $13,990,000. NOTE 18 — SANTA CLARITA WATERSHED RECREATION AND CONSER VANCYA UTHORITY 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. 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, 2019, 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. NOTE 19 — SANTA CLARITA PUBLIC TELEVISION A UTHORITY 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). 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, 2019, the City contributed $254,975. 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. Wei CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 20 — COMMITMENTS AND CONTINGENCIES A. Construction Commitments The City has active construction projects as of June 30, 2019. At year-end, the City's commitments with contractors for infrastructure projects are as follows: Project Pavement Bridges Medians Trails Traffic Signals B. Encumbrances Expenditures Contract to Date as of Remaining Amount June 30, 2019 Commitments $ 889,459 $ 645,683 4,243,531 4,009,372 1,866,413 1,172,678 202,502 151,912 2,217,583 877,863 $ 243,776 234,159 693,735 50,590 1,339,720 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, 2019, as follows: Amount General Fund $ 298,788 Other governmental funds 11,626,860 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, 2019. 80 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 21— 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, 2019, classified in the accompanying financial statements as follows: RDA Successor Agency Cash and investments pooled with City $ 4,563 Restricted: Cash and investments 18,008 Cash and investments with fiscal agent 2,379,362 Total $ 2,401,933 B. 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, 2019, $7,734,479 of these unallowable transfers remains due from the City to the Successor Agency. C. Long -Term Debt Classification Balance Balance Due Within Due More June 30, 2018 Additions Deletions June 30, 2019 One Year Than One Year RDA Successor Agency: Loans from the City of Santa Clarita $ 16,192,059 $ 357,772 $ (85,418) $ 16,464,413 $ - $ 16,464,413 Tax Allocation Bonds: Refunding Series2017 33,980,000 - (800,000) 33,180,000 820,000 32,360,000 Less deferred amounts for unamortized discounts 814,208 (33,661) 780,547 33,660 746,887 Total Tax Allocation Bonds 34,794,208 - (833,661) 33,960,547 853,660 33,106,887 Total $ 50,986,267 $ 357,772 $ (919,079) $ 50,424,960 $ 853,660 $ 49,571,300 81 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 21 — SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED) C. 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 $2,947,529 and $1,591,168, respectively, and unpaid principal of $9,553,358 and $6,911,055, 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. In February 2017, the Successor Agency issued Tax Allocation Refunding Bonds, Series 2017, in the amount of $34,800,000 to refund the Tax Allocation Bonds Series 2008 and Tax Allocation Bonds Housing Set -Aside. The difference between the reacquisition price and carrying value of the refunded debt was reported as a deferred outflow of resources and is amortized over the life of the refunded debt, as a component of interest expense, and totaled $2,299,293 as of June 30, 2019. 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, 2019, was $33,180,000. Tax revenues deposited to the Redevelopment Property Tax Trust Fund maintained by the County of Los Angeles, less (i) amounts payable by the State to the Successor Agency and (ii) unsubordinated Statutory Pass - Through Amounts, have been pledged as an available source of repayment for the bonds. If an Event of Default under the Indenture has occurred and is continuing, the Trustee may, with the prior written consent of the Assured Guaranty Municipal Corp (the "Insurer"), or if requested in writing by the Owners of the majority in aggregate principal amount of the Bonds then Outstanding, the Trustee shall, by written notice to the Successor Agency, declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. 82 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 21 — SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED) C. Long -Term Debt (Continued) The Insurer insured the Bonds maturing on October 1 of the years 2022 through 2037, inclusive, and 2042 (the "Insured Bonds"). The maturity of Insured Bonds shall not be accelerated without the consent of the Insurer and in the event the maturity of the Insured Bonds is accelerated, the Insurer may elect, in its sole discretion, to pay accelerated principal and interest accrued, on such principal to the date of acceleration (to the extent unpaid by the Successor Agency) and the Trustee shall be required to accept such amounts. If there are claims upon the Insurance Policy and payments are made by the Insurer, the Successor Agency agrees to pay to the Insurer (i) a sum equal to the total of all amounts paid by the Insurer under the Insurance Policy (the "Insurer Advances"); and (n) interest on such Insurer Advances from the date paid by the Insurer until payment thereof in full, payable to the Insurer at the Late Payment Rate per annum (collectively, the "Insurer Reimbursement Amounts"). Additionally, the Successor Agency shall repay any draws under the Reserve Policy and pay all related reasonable expenses incurred by Insurer and shall pay interest thereon from the date of payment by Insurer at the Late Payment Rate. "Late Payment Rate" means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in The City of New York, as its prime or base lending rate (any change in such rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest rate of interest on the Insured Bonds (or Bonds for the Reserve Policy) and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The annual debt service requirements on the bonds are as follows: Year Ending June 30, Principal 2020 $ 820,000 2021 2022 2023 2024 2025-2029 2030-2034 2035-2039 2040-2043 Total D. Deficit Net Position 850,000 895,000 935,000 985,000 5,690,000 6,910,000 8,265,000 7,830,000 Interest $ 1,342,094 1,309,294 1,266,794 1,222,044 1,175,294 5,110,869 3,903,694 2,539,144 798,400 Total $ 2,162,094 2,159,294 2,161,794 2,157,044 2,160,294 10,800,869 10,813,694 10, 804,144 8,628,400 $ 33,180,000 $ 18,667,627 $ 51,847,627 As of June 30, 2019, the RDA Successor Agency Private -Purpose Trust Fund had a deficit net position of $38,320,252. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County and potential asset sales. 83 This page left blank intentionally. 84 REQUIRED SUPPLEMENTARY INFORMATION This page left blank intentionally 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, 2019 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Investment income Fines and forfeitures Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Personnel Operating Capital outlay Total Expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 85,174,234 $ 85,216,627 $ 87,434,427 $ 2,217,800 7,962,781 7,965,291 9,951,586 1,986,295 190,054 261,651 203,119 (58,532) 7,503,690 7,583,216 8,178,848 595,632 2,215,065 2,215,065 6,580,274 4,365,209 1,108,230 1,273,230 1,219,536 (53,694) 6,771,152 6,970,780 230,675 (6,740,105) 110,925,206 111,485,860 113,798,465 2,312,605 42,534,800 46,813,137 42,139,926 4,673,211 43,469,322 46,686,934 39,612,655 7,074,279 90,150 327,150 81,580 245,570 - - 167,009 (167,009) 833,402 49,697,284 7,291,871 42,405,413 - 704,487 (35,136) 739,623 86,927,674 144,228,992 89,257,905 54,971,087 23,997,532 (32,743,132) 24,540,560 57,283,692 Transfers in 1,831,031 5,857,274 30,939,545 25,082,271 Transfers out (12,465,533) (12,439,452) (11,699,743) 739,709 Total Other Financing Sources (Uses) (10,634,502) (6,582,178) 19,239,802 25,821,980 Net Change in Fund Balances $ 13,363,030 $ (39,325,310) 43,780,362 $ 83,105,672 Fund Balance at Beginning of Year Fund Balance at End of Year 148,181,877 $ 191,962,239 M 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Investment income $ 347,453 $ 347,453 $ 915,437 $ 567,984 Developer fees 1,700,000 - 143,746 143,746 Other revenue 368,724 368,724 368,724 - Total Revenues 2,416,177 716,177 1,427,907 711,730 Expenditures: Operating: Personnel Operating Capital Improvement Projects: Personnel Operating Total Expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Net Change in Fund Balances Fund Balance at Beginning of Year Fund Balance at End of Year 86,704 99,112 42,679 56,433 529,372 531,132 671,231 (140,099) - - 23,121 (23,121) 1,381,881 4,919,444 629,986 4,289,458 1,997,957 5,549,688 1,367,017 4,182,671 418,220 (4,833,511) 60,890 4,894,401 (1,760) - $ 416,460 $ (4,833,511) 60,890 $ 4,894,401 5,097,092 $ 5,157,982 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, 2019 Revenues: Investment income (loss) Developer fees Total Revenues Expenditures: Operating: Operating Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 42,500 $ 42,500 $ 286,760 $ 244,260 - 3,124,979 3,895,556 770,577 42,500 3,167,479 4,182,316 1,014,837 - 1,477,113 1,477,113 - - - 36,918 (36,918) 255,000 4,612,628 1,444,323 3,168,305 255,000 6,089,741 2,958,354 3,131,387 (212,500) (2,922,262) 1,223,962 4,146,224 (64,000) (90,436) (90,436) - $ (276,500) $ (3,012,698) 1,133,526 $ 4,146,224 5,041,720 $ 6,175,246 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, 2019 Revenues: Taxes Charges for services Investment income (loss) Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 7,179,126 $ 7,179,126 $ 7,299,096 $ 119,970 88,060 88,060 88,059 (1) - - 151,681 151,681 300,625 306,375 274,186 (32,189) 7,567,811 7,573,561 7,813,022 239,461 3,609,002 3,616,290 3,304,289 312,001 2,545,362 2,846,219 2,849,613 (3,394) 123,083 126,999 126,999 - - - 307 (307) 6,277,447 6,589,508 6,281,208 308,300 1,290,364 984,053 1,531,814 547,761 (56,252) - - - $ 1,234,112 $ 984,053 1,531,814 $ 547,761 (4,260,642) $ (2,728,828) 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, 2019 Revenues: Taxes Special assessments Investment income (loss) Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 231,093 $ 231,093 $ 239,722 $ 8,629 13,078,511 13,078,511 12,953,385 (125,126) 293,577 293,577 1,252,931 959,354 13,603,181 13,603,181 14,446,038 842,857 1,252,137 1,255,316 1,273,163 (17,847) 11,307,065 12,707,144 11,022,534 1,684,610 48,727 48,727 44,922 3,805 - - 55,884 (55,884) 1,544,237 2,791,773 995,797 1,795,976 14,152,166 16,802,960 13,392,300 3,410,660 (548,985) (3,199,779) 1,053,738 4,253,517 Transfer in 10,000 10,000 10,000 - Transfer out (6,159,675) (12,446,810) (12,446,811) (1) Total Other Financing Sources (Uses) (6,149,675) (12,436,810) (12,436,811) (1) Net Change in Fund Balance $ (6,698,660) S (15,636,589) (11,383,073) S 4,253,516 Fund Balance at Beginning of Year Fund Balance at End of Year 35,097,112 $ 23,714,039 M CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED JUNE 30, 2019 The Schedule of Changes in the Net OPEB Liability and Related Ratios is as follows: 2019 2018 Changes in Total OPEB Liability Service Cost $ 1,701,975 $ 1,711,000 Interest 2,823,979 2,633,073 Actual vs. expected experience (7,334,973) - Assumption changes 2,078,284 (1,071,000) Benefit payments (1,093,711) (1,054,000) Net Changes (1,824,446) 2,219,073 Total OPEB Liability (beginning of year) 49,273,073 47,054,000 Total OPEB Liability (end of year) $ 47,448,627 $ 49,273,073 Plan Fiduciary Net Position Contribution - employer $ 923,250 $ 1,227,000 Net investment income 2,618,633 2,963,587 Benefit payments (1,093,711) (1,054,041) Administrative expense (73,935) (146,319) Net Changes 2,374,237 2,990,227 Plan Fiduciary Net Position (beginning of year) 38,964,300 35,974,073 Plan Fiduciary Net Position (end of year) $ 41,338,537 $ 38,964,300 Net OPEB Liability - ending (a)-(b) $ 6,110,090 $ 10,308,773 Plan fiduciary net position as a percentage of the total OPEB liability 87.12% 79.08% Covered employee payroll* $ 33,895,751 $ 30,634,000 Net OPEB liability as a percentage of covered -employee payroll 18.03% 33.65% Notes to Schedule: Future years' information will be displayed up to 10 years as information becomes available. *For the 12 month period ending on June 30 (Measurement Date). •E CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CONTRIBUTIONS - OPEB LAST TEN YEARS* FOR THE YEAR ENDED JUNE 30, 2019 The Schedule of OPEB Contributions is as follows: Fiscal Year Ended June 30 2019 2018 Actuarially Determined Contribution (ADC) $ 1,127,000 S 1,755,000 Contributions in relation to the actuarially determined contribution** 923,250 1,227,000 Contribution deficiency/(excess) S 203,750 S 528,000 Covered -employee payroll*** S 33,895,751 S 30,634,000 Contribution as a percentage of covered -employee payroll 2.72% 4.01% Notes to Schedule: * Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2019 were from the June 30, 2019 actuarial valuation. **Actual contribution, including implied subsidy ***For the 12 months period ending on June 30 (fiscal year end) Methods and Assumptions for 2018/19 Actuarially Determined Contributions Valuation Date Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Discount Rate General Inflation Medical Trend Mortality Mortality Improvement June 30, 2018 Entry Age Normal, Level Percentage of Payroll Level percent of pay 15-year fixed period for 6/30/19 Investment gains and losses spread over 5-year rolling period 6.50% 2.75% Non -Medicare -Actual premiums for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Medicare -Actual premiums for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Ca1PERS 1997-2015 experience study Mortality projected post -retirement mortality projected with Scale MP-2018 Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. 91 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF MONEY WEIGHTED RATE OF RETURN LAST TEN YEARS* FOR THE YEAR ENDED JUNE 30, 2019 The Schedule of Money Weighted Rate of Return for the OPEB plan is as follows: Annual money -weighted rate of return - net of investment expense 2019 2018 2017 6.94% 8.26% 12.81 % Notes to Schedule *Fiscal year 2017 was the first year of GASB 74 implementation, therefore, only three years are shown. 92 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, 2019 The Schedules of Changes in the City's Net Pension Liability and Related Ratios are as follows: Measurement Date Total Pension Liability Service cost Interest Difference between Expected and Actual Experience Changes of Assumptions Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) Plan Fiduciary Net Postion Contributions - Employer Contributions - Employee Net Investment Income Administrative expenses Benefit Payments, Including Refunds of Employee Contributions Other Miscellaneous Income/(Expense) Plan to Plan Resource Movement Net Change in Fiduciary Net Position Plan Fiduciary Net Postilion - Beginning Plan Fiduciary Net Postion - Ending (b) Net pension liability - ending (a) - (b) Plan Fiduciary Net Position as a Percentage ofthe Total Pension Liability Covered Payroll Plan Net Pension Liability as a Percentage of Covered Payroll Notes: June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 $ 4,920,377 $ 4,921,221 $ 4,409,399 $ 4,418,053 $ 4,462,544 13,037,446 12,166,752 11,315,207 10,443,680 9,588,693 1,709,604 (1,505,660) (305,665) 416,626 - (1,615,911) 11,654,992 - (3,009,808) (5,601,353) (4,406,046) (3,347,335) (2,971,092) (2,561,655) 12,450,163 22,831,259 12,071,606 9,297,459 11,489,582 182, 58 8,700 159,757,441 147, 685, 835 138,3 88,376 126, 898,794 $ 195,038,863 $ 182,588,700 $ 159,757,441 $ 147,685,835 $ 138,388,376 9,664,637 $ 4,484,866 $ 3,959,503 $ 3,740,145 $ 3,562,246 2,203,916 2,224,721 2,252,522 2,164,107 2,339,435 11,713,900 13,510,656 622,282 2,506,239 16,243,165 (211,742) (177,534) (71,202) (131,529) - (5,601,353) (4,406,046) (3,347,335) (2,971,092) (2,561,655) (402,101) - (355) - - 9,685 - 17,366,902 15,636,663 3,415,770 5,317,555 19,583,191 135,882,204 120,245,541 116,829,771 111,512,216 91,929,025 $ 153,249,106 $ 135,882,204 $ 120,245,541 $ 116,829,771 $ 111,512,216 $ 41,789,757 $ 46,706,496 $ 39,511,900 $ 30,856,064 $ 26,876,160 78.57% 74.42% 75.27% 79.11% 80.58% $ 29,655,553 $ 29,966,168 $ 27,934,377 $ 27,234,699 $ 26,879,556 140.92% 155.86% 141.45% 113.30% 99.99% Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes that occurred after June 30, 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 7.65% to 7.15% during the measurement period ending June 30, 2017. The discount rate was revised from 7.5% to 7.65% during the measurement period ending June 30, 2015. * Fiscal Year 2014-15 was the first year of implementation; therefore, only five years are shown until a full 10-year trend is compiled. 93 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CITY CONTRIBUTIONS - PENSIONS LAST TEN YEARS* AS OF THE FISCAL YEAR ENDED JUNE 30, 2019 The Schedule of City Contributions during the fiscal year is as follows: June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 Actuarially determined contribution S 5,637,826 $ 4,662,191 $ 4,484,140 $ 3,958,892 Contributions in relation to the actuarially determined contribution (12,499,992) (9,662,191) (4,484,140) (3,958,892) Contribution deficiency (excess) S (6,862,166) $ (5,000,000) $ $ Covered Payroll S 33,054,867 S 29,655,553 S 29,966,168 S 27,934,377 Contributions as a Percentage of Covered Payroll 37.82% 32.58% 14.96% 14.17% Valuation Date: The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2018-19 were from June 30, 2017 public agency valuations. Actuarial Cost method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Asset Valuation Method Market Value of Assets Inflation 2.75% Salary increases Varies by Entry Age and Service Payroll growth 3.00% Investment Rate of Return 7.50% Net of Pension Plan Investment and Administrative Expenses; includes Inflation Retirement Age The probabilities of Retirement are based on the 2014 Ca1PERS Experience Study for the period from 1997 to 2011. Mortality The probabilities of mortality are based on the 2014 Ca1PERS Experience Study for the period from 1997 to 2011. Pre -retirement and post retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries. CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF CITY CONTRIBUTIONS - PENSIONS (CONTINUED) LAST TEN YEARS* AS OF THE FISCAL YEAR ENDED JUNE 30, 2019 S,74U,13M �s 3,D02,240 �s S,SIV, S20 �s -1,224,028 2,y10,8D2 �s 2,VIV'nu (3,740,138) (3,562,246) (3,319,326) (3,224,628) (2,916,852) (2,919,550) $ 27,234,699 $ 26,879,556 $ 25,256,659 $ 24,807,314 $ 24,940,516 $ 25,336,721 13.73% 13.25% 13.14% 13.00% 11.70% 11.52% M This page left blank intentionally 0 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2019 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. The proposed budget is presented to the City Council for review. The City Council holds public hearings, and a final budget must be 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 budgetary control for the Capital Improvement Program is at the program level. 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. The City does not require additional appropriations through the budget process for bond funds, grant funds, trust and agency funds, and capital funds. Legislative action by the City Council to issue bond funds, accept grants, and/or authorize capital projects is considered as authority to expend funds for those purposes. 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. 97 CITY OF SANTA CLARITA, CALIFORNIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2019 For the year ended June 30, 2019, expenditures exceeded appropriations in the following categories (legal level of budgetary control) of the respective funds: Fund Major Governmental Funds: Bridge and Thoroughfare Special Revenue Fund Operating - Operating Public Library Special Revenue Fund Operating - Operating Capital Improvement Projects - Operating Landscape Maintenance District #1 Special Revenue Fund Operating - Personnel Transfer out Non -Major Governmental Funds: Special Assessment Special Revenue Fund Operating - Capital Outlay State Park Special Revenue Fund Operating - Personnel Operating - Operating Traffic Safety Special Revenue Fund Transfer out Tourism Marketing District Special Revenue Fund Operating - Personnel Public Financing Authority Debt Service Fund Operating - Operating Excess Expenditures Over Appropriations Expenditures Appropriations 531,132 2,846,219 671,231 2,849,613 307 $ 1,255,316 $ 1,273,163 (12,446,810) (12,446,811) (140, 099) (3,394) (307) $ (17,847) (1) 5,300 5,391 (91) 36,326 97,258 (60,932) 85,250 86,122 (872) (550,000) (632,272) (82,272) 30,640 45,156 (14,516) 4,019,836 4,057,816 (37,980) CITY OF SANTA CLARITA, CALIFORNIA NON -MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2019 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%) 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. Street Lighting District - To account for property tax and levy of assessment receipts and disbursements related to the streetlights maintenance program. Measure MLocal Return - To account for the half -cent sales tax revenue that Los Angeles County voters approved in November 2016 to meet the transportation needs of Los Angeles County. SBI Road Repair and Activity - To account for monies received and expended from the State SB 1 Road and Repair Rehabilitation to fund various maintenance, rehabilitations, and safety needs on streets and roads. State Park — To account for grant monies received from the State of California Department of Parks and Recreation for construction or improvements of parkland within the City. TDA (Transportation Development Act 8) — 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. Bureau of Justice Assistance (BJA) Law Enforcement — To account for receipts and disbursements for the BJA law enforcement grant restricted for police department programs. CITY OF SANTA CLARITA, CALIFORNIA NON -MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2019 Special Revenue Funds (Continued) 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. Public Education and Government (PEG) — 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). OSPD (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. 100 CITY OF SANTA CLARITA, CALIFORNIA NON -MAJOR GOVERNMENTAL FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2019 Special Revenue Funds (Continued) Areawide - To account for receipts and disbursements for the City's Areawide Beautification Zone operations which is supported through special benefit assessments levied on individual parcels authorized by the Landscape and Lighting Act of 1972. Funds are restricted for specific use on costs associated with the maintenance of landscape, hardscape and ornamental improvements, park facilities, tree pruning, as well as utility costs such as water and electricity. As provided for by the Landscape and Lighting Act, LMD funds may also be used for the construction and/or installation of capital improvements. Vista Canyon (VC) Wastewater Standby District — To account for the wastewater standby assessment and sewer rate revenues. Funds are restricted to pay for the annual maintenance and operational costs of the self-contained Recycled Water Factory. No budget was adopted for this fund in the current year. 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. Civic Arts Projects To account for Civic Art Allocations which represent an amount equal to 1 percent of the eligible cost of design services and construction of City Capital Improvement Projects. If use of all, or a portion, of a project's funding is prohibited by the funding source for the purposes of the Civic Art Program, the Civic Art Allocation will reflect only that portion of the funding that is eligible for application to the City of Santa Clarita Civic Art Program. 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. 101 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Special Bikeway Gas Tax Proposition A Assessment Assets: Cash and investments $ 280,096 $ 172,684 $ 4,605,202 $ 2,225,228 Receivables: Accounts, net - 25,382 - - Interest 1,116 - 18,353 8,772 Taxes - - 3,915 Loans - Prepaid costs - Due from other governments 10,898 Restricted assets: Cash and investments - Cash and investments with fiscal agents - - - - Total Assets $ 292,110 $ 198,066 $ 4,623,555 $ 2,237,915 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 260,430 198,066 4,744 19,994 Due to other governments - - - - Due to other funds - - - - Total Liabilities 260,430 198,066 4,744 19,994 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources Fund balances (deficit): Nonspendable - - - Restricted 31,680 4,618,811 2,217,921 Assigned - - - Unassigned - - Total Fund Balances (Deficit) 31,680 - 4,618,811 2,217,921 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 292,110 $ 198,066 $ 4,623,555 $ 2,237,915 (Continued) 102 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Street SBl Road Lighting Measure M Repair and District Local Return Activity State Park Assets: Cash and investments $ 3,874,543 $ 5,451,931 $ 3,410,238 $ - Receivables: Accounts, net 24,043 - - - Interest 33,275 21,698 13,581 - Taxes 98,014 - - - Loans - - - - Prepaid costs - - - - Due from other governments - - 708,858 302,700 Restricted assets: Cash and investments 9,364,888 - - - Cash and investments with fiscal agents - - - - Total Assets $ 13,394,763 $ 5,473,629 $ 4,132,677 $ 302,700 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 1,729,123 1,329 97 939 Due to other governments - - - - Due to other funds - - - 181,240 Total Liabilities 1,729,123 1,329 97 182,179 Deferred Inflows of Resources: Unavailable revenues - - - 120,521 Total Deferred Inflows of Resources - - - 120,521 Fund balances (deficit): Nonspendable - - - - Restricted 11,665,640 5,472,300 4,132,580 - Assigned - - - - Unassigned - - - - Total Fund Balances (Deficit) 11,665,640 5,472,300 4,132,580 - Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 13,394,763 $ 5,473,629 $ 4,132,677 $ 302,700 (Continued) 103 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net Interest Taxes Loans Prepaid costs Due from other governments Restricted assets: Cash and investments Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund balances (deficit): Nonspendable Restricted Assigned Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds TDA Traffic Safety CDBG AQMD $ 1,340,670 S - S 135,223 $ 740,806 - 50,920 - 7,419 - 2,944 - 51,762 - - - 99,375 72,831 $ 1,348,089 $ 102,682 $ 234,598 $ 816,581 310,878 75,747 156,686 - 102,682 - - 310,878 102,682 75,747 156,686 99,375 99,375 1,037,211 59,476 659,895 1,037,211 - 59,476 659,895 $ 1,348,089 $ 102,682 $ 234,598 $ 816,581 (Continued) 104 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Surface Transportation BJA Law Supplemental Stormwater Program Enforcement Law Grant Assets: Cash and investments $ 4,387,039 $ $ $ 265,785 Receivables: Accounts, net 289 - Interest 17,412 1,058 Taxes 42,860 - Loans - Prepaid costs Due from other governments 1,066,253 14,087 Restricted assets: Cash and investments - - Cash and investments with fiscal agents - - - - Total Assets $ 4,447,600 $ 1,066,253 $ 14,087 $ 266,843 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 318,987 114,491 71,724 Due to other governments - - - - Due to other funds - 924,901 14,087 - Total Liabilities 318,987 1,039,392 14,087 71,724 Deferred Inflows of Resources: Unavailable revenues 64,398 Total Deferred Inflows of Resources 64,398 Fund balances (deficit): Nonspendable - - Restricted 4,128,613 195,119 Assigned - - Unassigned - (37,537) - Total Fund Balances (Deficit) 4,128,613 (37,537) - 195,119 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,447,600 $ 1,066,253 $ 14,087 $ 266,843 (Continued) 105 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net Interest Taxes Loans Prepaid costs Due from other governments Restricted assets: Cash and investments Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund balances (deficit): Nonspendable Restricted Assigned Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds Public Library Education and HOME Facilities Fees Government Proposition C $ 238,176 $ 2,481,595 $ 510,149 $ 3,562,727 947 9,870 2,029 14,166 - - 115,147 - 2,304,390 - - - - - - 1,981,146 $ 2,543,513 $ 2,491,465 $ 627,325 $ 5,558,039 - - 10,214 770,737 - - - 1,313,046 - - 10,214 2,083,783 2,304,390 - - 1,372,775 2,304,390 - - 1,372,775 239,123 2,491,465 617,111 2,101,481 239,123 2,491,465 617,111 2,101,481 $ 2,543,513 $ 2,491,465 $ 627,325 $ 5,558,039 (Continued) 106 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Tourism Marketing Federal Grants Measure R District OSPD Assets: Cash and investments $ $ 8,880,954 $ 1,067,191 $ 3,932,133 Receivables: Accounts, net - - - Interest 35,325 4,242 15,686 Taxes - 56,448 27,293 Loans - - Prepaid costs Due from other governments 2,093,536 Restricted assets: Cash and investments - Cash and investments with fiscal agents - - - - Total Assets $ 2,093,536 $ 8,916,279 $ 1,127,881 $ 3,975,112 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 346,148 1,198,692 52,623 105,457 Due to other governments - - - - Due to other funds 1,830,293 - - - Total Liabilities 2,176,441 1,198,692 52,623 105,457 Deferred Inflows of Resources: Unavailable revenues 401,391 Total Deferred Inflows of Resources 401,391 Fund balances (deficit): Nonspendable - - - Restricted 7,717,587 1,075,258 3,869,655 Assigned - - - Unassigned (484,296) - - - Total Fund Balances (Deficit) (484,296) 7,717,587 1,075,258 3,869,655 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2,093,536 $ 8,916,279 $ 1,127,881 $ 3,975,112 (Continued) 107 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Housing Tourism Miscellaneous Park Successor Marketing Grants Dedication Agency Bureau Assets: Cash and investments $ 59,517 $ 11,199,136 $ 510,765 $ 70,169 Receivables: Accounts, net 32 - - - Interest - 44,515 279 Taxes - - Loans Prepaid costs - Due from other governments 177,675 - Restricted assets: Cash and investments - 206,386 Cash and investments with fiscal agents - - - - Total Assets $ 237,224 $ 11,243,651 $ 717,151 $ 70,448 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 17,062 756,998 - Due to other governments - - 34,479 Due to other funds - - - Total Liabilities 17,062 756,998 34,479 Deferred Inflows of Resources: Unavailable revenues 102,059 Total Deferred Inflows of Resources 102,059 Fund balances (deficit): Nonspendable - - - - Restricted 118,103 10,486,653 682,672 70,448 Assigned - - - - Unassigned - - - - Total Fund Balances (Deficit) 118,103 10,486,653 682,672 70,448 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 237,224 $ 11,243,651 $ 717,151 $ 70,448 (Continued) CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Capital Projects Funds VC General Public Wastewater Capital Financing Areawide Standby District Projects Authority Assets: Cash and investments $ 9,074,160 $ 656,447 $ 636,734 $ 10 Receivables: Accounts, net 25,459 - - - Interest 36,087 - Taxes 78,236 256 Loans - - Prepaid costs 159,328 Due from other governments - Restricted assets: Cash and investments Cash and investments with fiscal agents - - - Total Assets $ 9,373,270 $ 656,703 $ 636,734 $ 10 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities 1,367,258 32,055 Due to other governments - - Due to other funds - - Total Liabilities 1,367,258 32,055 Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund balances (deficit) Nonspendable 159,328 - Restricted 7,846,684 656,703 - - Assigned - - 604,679 10 Unassigned - - - - Total Fund Balances (Deficit) 8,006,012 656,703 604,679 10 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 9,373,270 $ 656,703 $ 636,734 $ 10 109 CITY OF SANTA CLARITA, CALIFORNIA COMBINING BALANCE SHEET (CONTINUED) NON -MAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net Interest Taxes Loans Prepaid costs Due from other governments Restricted assets: Cash and investments Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities: Accounts payable and accrued liabilities Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund balances (deficit): Nonspendable Restricted Assigned Unassigned Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances Capital Projects Debt Service Funds Fund Public Total Non -major Civic Financing Governmental Arts Projects Authority Funds $ 396,175 $ 3,375 $ 70,168,858 - - 126,125 288,774 473,931 2,403,765 159,328 6,427,984 - 9,571,274 - 1,802,109 1,802,109 $ 396,175 $ 1,805,484 $ 91,422,148 7,920,479 34,479 4,366,249 12,321,207 4,464,909 4,464,909 159,328 - 1,805,484 73,997,673 396,175 - 1,000,864 - - (521,833) 396,175 1,805,484 74,636,032 $ 396,175 $ 1,805,484 $ 91,422,148 110 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, 2019 Special Revenue Funds Special Bikeway Gas Tax Proposition A Assessment Revenues: Taxes $ $ $ $ Special assessments 788,488 Intergovernmental 4,129,847 4,343,464 - Charges for services - - - Investment income (loss) 5,676 13,059 83,585 73,070 Fines and forfeitures - - - - Developer fees - Other revenue - 276,025 - - Total Revenues 5,676 4,418,931 4,427,049 861,558 Expenditures: Current: General government - 30,145 1,507 726 Public safety - - - Recreation and community services - - - Public works 18,649 4,574,302 63,191 Community development - - - Neighborhood services 2,476 - - 95,144 Capital outlay - 204,114 70,408 - Debt service: Principal retirement - - Interest and fiscal charges Cost of issuance - - - - Total Expenditures 21,125 4,808,561 71,915 159,061 Excess (Deficiency) of Revenues Over (Under) Expenditures (15,449) (389,630) 4,355,134 702,497 Other Financing Sources (Uses): Bonds issued Premium on bonds issued Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year 559,346 20,420 (588,862) (9,682) (29,516) - 10,738 (15,449) (419,146) 4,355,134 713,235 47,129 419,146 263,677 1,504,686 $ 31,680 $ - $ 4,618,811 $ 2,217,921 (Continued) 111 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, 2019 Revenues: Taxes Special assessments Intergovernmental Charges for services Investment income (loss) Fines and forfeitures Developer fees Otherrevenue Total Revenues Expenditures: Current: General government Public safety Recreation and community services Public works Community development Neighborhood services Capital outlay Debt service: Principal retirement Interest and fiscal charges Cost of issuance Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Bonds issued Premium on bonds issued Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year Special Revenue Funds Street SB 1 Road Lighting Measure M Repair and District Local Return Activity State Park 5,942,875 - - - 3,048,284 3,971,852 92,179 1,000 - - - 657,977 154,416 77,225 38 6,601,852 3,202,700 4,049,077 92,217 15,216,482 1,748 - - - 183,380 1,245,490 16,311 852,963 - 16,461,972 18,059 852,963 183,380 (9,860,120) 3,184,641 3,196,114 (91,163) 717,382 90,000 (1,054,146) - (336,764) - - 90,000 (10,196,884) 3,184,641 3,196,114 (1,163) 21,862,524 2,287,659 936,466 1,163 $ 11,665,640 $ 5,472,300 $ 4,132,580 $ - (Continued) 112 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, 2019 Revenues: Taxes Special assessments Intergovernmental Charges for services Investment income (loss) Fines and forfeitures Developer fees Other revenue Total Revenues Expenditures: Current: General government Public safety Recreation and community services Public works Community development Neighborhood services Capital outlay Debt service: Principal retirement Interest and fiscal charges Cost of issuance Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Bonds issued Premium on bonds issued Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year Special Revenue Funds TDA Traffic Safety CDBG AQMD 2,293,869 651,441 280,929 155,462 618 1,496 31,176 - 631,654 - - 2,449,331 632,272 652,937 312,105 5,499,974 - 109,563 - 593,461 - 348,254 5,499,974 - 593,461 457,817 (3,050,643) 632,272 59,476 (145,712) (1,197,818) (632,272) (1,197,818) (632,272) - (4,248,461) 59,476 (145,712) 5,285,672 - 805,607 $ 11037,211 $ $ 59,476 $ 659,895 (Continued) 113 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, 2019 Special Revenue Funds Surface Transportation BJA Law Supplemental Stormwater Program Enforcement Law Grant Revenues: Taxes $ $ $ $ Special assessments 3,431,253 - - Intergovernmental - 1,001,855 32,785 492,191 Charges for services - - - - Investment income (loss) 206,967 8,164 Fines and forfeitures - - Developer fees - Other revenue 379,315 - - - Total Revenues 4,017,535 1,001,855 32,785 500,355 Expenditures: Current: General government 27,209 - - - Public safety - 32,785 422,407 Recreation and community services - - - - Public works 4,107,452 1,066,253 Community development - - Neighborhood services Capital outlay Debt service: Principal retirement Interest and fiscal charges Cost of issuance - - - - Total Expenditures 4,134,661 1,066,253 32,785 422,407 Excess (Deficiency) of Revenues Over (Under) Expenditures (117,126) (64,398) - 77,948 Other Financing Sources (Uses): Bonds issued - Premium on bonds issued - Transfers in 3,690 Transfers out (1,417,311) Total Other Financing Sources (Uses) (1,413,621) - Net Change in Fund Balances (1,530,747) (64,398) 77,948 Fund Balances (Deficit), Beginning of Year 5,659,360 26,861 117,171 Fund Balances (Deficit), End of Year $ 4,128,613 $ (37,537) $ $ 195,119 (Continued) 114 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, 2019 Special Revenue Funds Public Library Education and HOME Facilities Fees Government Proposition C Revenues: Taxes $ $ $ 432,819 $ Special assessments - Intergovernmental 174,243 5,072,042 Charges for services - - - - Investment income (loss) 7,117 83,761 19,628 148,327 Fines and forfeitures - - - - Developer fees 783,475 Other revenue - - - Total Revenues 181,360 867,236 452,447 5,220,369 Expenditures: Current: General government - - 398,874 - Public safety - Recreation and community services - Public works 1,268,417 Community development - Neighborhood services - Capital outlay 478,684 Debt service: Principal retirement - Interest and fiscal charges Cost of issuance - Total Expenditures - - 398,874 1,747,101 Excess (Deficiency) of Revenues Over (Under) Expenditures 181,360 867,236 53,573 3,473,268 Other Financing Sources (Uses): Bonds issued Premium on bonds issued Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year (3,850,825) - - - (3,850,825) 181,360 867,236 53,573 (377,557) 57,763 1,624,229 563,538 2,479,038 $ 239,123 $ 2,491,465 $ 617,111 $ 2J01,481 (Continued) 115 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, 2019 Special Revenue Funds Tourism Federal Marketing Grants Measure R District OSPD Revenues: Taxes $ $ $ $ Special assessments 2,698,670 Intergovernmental 7,487,900 2,702,863 - - Charges for services - - 614,303 128,942 Investment income (loss) 320,648 45,402 144,847 Fines and forfeitures - - - Developer fees - Other revenue - - - 2,500 Total Revenues 7,487,900 3,023,511 659,705 2,974,959 Expenditures: Current: General government - 1,767 751,762 519,981 Public safety - - - Recreation and community services - - Public works 5,432,692 1,683,618 Community development - - Neighborhood services - - Capital outlay 13,615 1,537,923 Debt service: Principal retirement - - Interest and fiscal charges Cost of issuance - - - Total Expenditures 5,446,307 1,685,385 751,762 2,057,904 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,041,593 1,338,126 (92,057) 917,055 Other Financing Sources (Uses): Bonds issued - - - Premium on bonds issued Transfers in Transfers out (723,606) Total Other Financing Sources (Uses) - - (723,606) Net Change in Fund Balances 2,041,593 1,338,126 (92,057) 193,449 Fund Balances (Deficit), Beginning of Year (2,525,889) 6,379,461 1,167,315 3,676,206 Fund Balances (Deficit), End of Year $ (484,296) $ 7,717,587 $ 1,075,258 $ 3,869,655 (Continued) 116 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, 2019 Special Revenue Funds Housing Tourism Miscellaneous Park Successor Marketing Grants Dedication Agency Bureau Revenues: Taxes $ $ $ $ Special assessments Intergovernmental 107,329 Charges for services - - - 28,845 Investment income (loss) 468,593 15,019 2,339 Fines and forfeitures - - - Developer fees - 1,635,405 - Other revenue 125,015 - 17,084 - Total Revenues 232,344 2,103,998 32,103 31,184 Expenditures: Current: General government - 9,169 Public safety 40,817 - Recreation and community services - - Public works 205,521 2,194,417 Community development - - Neighborhood services 25,995 Capital outlay 538,639 Debt service: Principal retirement - Interest and fiscal charges Cost of issuance - - - Total Expenditures 246,338 2,759,051 - 9,169 Excess (Deficiency) of Revenues Over (Under) Expenditures (13,994) (655,053) 32,103 22,015 Other Financing Sources (Uses): Bonds issued Premium on bonds issued Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year (90,000) (90,000) - - (13,994) (745,053) 32,103 22,015 132,097 11,231,706 650,569 48,433 $ 118,103 $ 10,486,653 $ 682,672 $ 70,448 (Continued) 117 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, 2019 Speical Revenue Funds Capital Projects Funds VC General Public Wastewater Capital Financing Areawide Standby District Projects Authority Revenues: Taxes $ $ $ $ Special assessments 6,605,899 656,703 Intergovernmental - - Charges for services - Investment income (loss) 137,419 Fines and forfeitures - Developer fees - Other revenue 4,285 Total Revenues 6,747,603 656,703 Expenditures: Current: General government 4,660,698 Public safety - Recreation and community services - Public works 807,269 Community development - - Neighborhood services 12,147,460 Capital outlay - Debt service: Principal retirement Interest and fiscal charges Cost of issuance - - Total Expenditures 16,808,158 - 807,269 Excess (Deficiency) of Revenues Over (Under) Expenditures (10,060,555) 656,703 (807,269) Other Financing Sources (Uses): Bonds issued - Premium on bonds issued - - Transfers in 19,076,404 332,289 723,606 Transfers out (1,009,837) - (723,606) Total Other Financing Sources (Uses) 18,066,567 - 332,289 Net Change in Fund Balances 8,006,012 656,703 (474,980) - Fund Balances (Deficit), Beginning of Year - - 1,079,659 10 Fund Balances (Deficit), End of Year S 8,006,012 $ 656,703 $ 604,679 $ 10 118 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, 2019 Capital Projects Debt Service Fund Fund Public Total Non -major Civics Financing Governmental Arts Projects Authority Funds Revenues: Taxes $ $ $ 432,819 Special assessments 20,123,888 Intergovernmental 35,883,073 Charges for services 773,090 Investment income (loss) (3,768) 2,858,261 Fines and forfeitures 631,654 Developer fees 2,418,880 Other revenue 804,224 Total Revenues (3,768) 63,925,889 Expenditures: Current: General government 21,620,068 Public safety 496,009 Recreation and community services - 183,380 Public works 16,216 29,162,298 Community development - 593,461 Neighborhood services 12,271,075 Capital outlay - 3,191,637 Debt service: Principal retirement 2,833,260 2,833,260 Interest and fiscal charges 1,224,556 1,224,556 Cost of issuance - 517,734 517,734 Total Expenditures 16,216 4,575,550 72,093,478 Excess (Deficiency) of Revenues Over (Under) Expenditures (16,216) (4,579,318) (8,167,589) Other Financing Sources (Uses): Bonds issued 25,850,000 25,850,000 Premium on bonds issued - 1,463,083 1,463,083 Transfers in 412,391 3,190,107 25,125,635 Transfers out - (25,000,000) (36,297,965) Total Other Financing Sources (Uses) 412,391 5,503,190 16,140,753 Net Change in Fund Balances 396,175 923,872 7,973,164 Fund Balances (Deficit), Beginning of Year - 881,612 66,662,868 Fund Balances (Deficit), End of Year $ 396,175 $ 1,805,484 $ 74,636,032 119 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 161,524 $ 296,858 $ - $ (296,858) - - 5,676 5,676 161,524 296,858 5,676 (291,182) - - 9,362 (9,362) 161,524 296,858 11,763 285,095 161,524 296,858 21,125 275,733 $ - $ - (15,449) $ (15,449) 47,129 $ 31,680 120 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, 2019 Revenues: Intergovernmental Investment income (loss) Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 5,186,407 $ 4,414,190 $ 4,129,847 $ (284,343) 3,400 3,400 13,059 9,659 245,953 245,953 276,025 30,072 5,435,760 4,663,543 4,418,931 (244,612) 2,373,060 2,340,528 2,331,602 8,926 2,188,769 2,228,147 2,201,172 26,975 330,000 515,762 204,114 311,648 - - 3,464 (3,464) 144,288 236,694 68,209 168,485 5,036,117 5,321,131 4,808,561 512,570 399,643 (657,588) (389,630) 267,958 Transfer in 100,000 931,415 559,346 (372,069) Transfer out (356,619) (588,862) (588,862) - Total Other Financing Sources (Uses) (256,619) 342,553 (29,516) (372,069) Net Change in Fund Balance $ 143,024 $ (315,035) (419,146) $ (104,111) Fund Balance at Beginning of Year Fund Balance at End of Year 419,146 121 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 4,234,565 $ 4,234,565 $ 4,343,464 $ 108,899 - - 83,585 83,585 4,234,565 4,234,565 4,427,049 192,484 - - 11,110 (11,110) 113,870 259,264 60,805 198,459 113,870 259,264 71,915 187,349 4,120,695 3,975,301 4,355,134 379,833 (4,120,695) - - - $ - $ 3,975,301 4,355,134 $ 379,833 263,677 $ 4,618,811 122 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, 2019 Revenues: Special assessments Investment income (loss) Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 470,664 $ 823,688 $ 788,488 $ (35,200) 13,749 13,749 73,070 59,321 484,413 837,437 861,558 24,121 53,754 57,630 46,428 11,202 222,924 243,553 106,132 137,421 - 5,300 5,391 (91) - 1,110 1,110 - 276,678 307,593 159,061 148,532 207,735 529,844 702,497 172,653 Transfer in 20,420 20,420 20,420 Transfer out (5,595) (9,682) (9,682) _ Total Other Financing Sources (Uses) 14,825 10,738 10,738 _ Net Change in Fund Balance $ 222,560 $ 540,582 713,235 $ Fund Balance at Beginning of Year Fund Balance at End of Year 1,504,686 $ 2,217,921 172,653 123 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STREET LIGHTING DISTRICT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Special assessments Charges for services Investment income (loss) Total Revenues Expenditures: Operating: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 5,813,843 $ 5,813,843 $ 5,942,875 $ 129,032 5,000 3,500 1,000 (2,500) 51,000 51,000 657,977 606,977 5,869,843 5,868,343 6,601,852 733,509 226,818 217,599 184,767 32,832 4,654,694 9,033,303 16,277,205 (7,243,902) 4,881,512 9,250,902 16,461,972 (7,211,070) 988,331 (3,382,559) (9,860,120) (6,477,561) Transfer in 763,376 1,399,527 717,382 (682,145) Transfer out (1,090,775) (2,316,949) (1,054,146) 1,262,803 Total Other Financing Sources (Uses) (327,399) (917,422) (336,764) 580,658 Net Change in Fund Balance $ 660,932 $ (4,299,981) (10,196,884) $ (5,896,903) Fund Balance at Beginning of Year Fund Balance at End of Year 21,862,524 $ 11,665,640 124 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL MEASURE M LOCAL RETURN SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 2,985,591 $ 2,985,591 $ 3,048,284 $ 62,693 4,250 4,250 154,416 150,166 2,989,841 2,989,841 3,202,700 212,859 - - 13,770 (13,770) 657,624 657,624 4,289 653,335 657,624 657,624 18,059 639,565 $ 2,332,217 $ 2,332,217 3,184,641 852,424 2,287,659 $ 5,472,300 125 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL SB1 ROAD REPAIR AND ACTIVITY SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Capital Improvement Projects: Operating Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 3,592,719 $ 3,434,455 $ 3,971,852 $ 537,397 - - 77,225 77,225 3,592,719 3,434,455 4,049,077 614,622 3,592,719 4,503,437 852,963 3,650,474 $ - $ (1,068,982) 3,196,114 $ 4,265,096 936,466 $ 4,132,580 126 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Operating: Personnel Operating Capital Improvement Projects: Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer in Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 317,000 $ 372,074 $ 92,179 $ (279,895) - - 38 38 317,000 372,074 92,217 (279,857) 37,987 36,326 97,258 (60,932) 26,900 85,250 86,122 (872) 250,000 250,000 - 250,000 314,887 371,576 183,380 188,196 2,113 498 (91,163) (91,661) - 90,000 $ 2,113 $ 90,498 90,000 - (1,163) $ (91,661) 1,163 127 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL TRANSPORTATION DEVELOPMENT ACT 8 SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Operating: Operating Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 4,614,056 $ 2,834,185 $ 2,293,869 $ (540,316) 25,500 25,500 155,462 129,962 4,639,556 2,859,685 2,449,331 (410,354) - - 143,025 (143,025) 815,866 6,868,452 5,356,949 1,511,503 815,866 6,868,452 5,499,974 1,368,478 3,823,690 (4,008,767) (3,050,643) 958,124 (3,851,798) (1,591,319) (1,197,818) 393,501 $ (28,108) $ (5,600,086) (4,248,461) $ 1,351,625 5,285,672 $ 1,037,211 128 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, 2019 Revenues: Investment income (loss) Fines and forfeitures Total Revenues Other financing sources (uses): Transfer out Net Change in Ind Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ 618 $ 618 400,000 550,000 631,654 81,654 400,000 550,000 632,272 82,272 (400,000) (550,000) (632,272) (82,272) 129 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Operating: Personnel Operating Capital Improvement Projects: Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 1,599,039 $ 2,284,222 $ 651,441 $ (1,632,781) - - 1,496 1,496 1,599,039 2,284,222 652,937 (1,631,285) 215,806 195,805 74,741 121,064 483,485 533,365 516,494 16,871 899,748 1,555,052 2,226 1,552,826 1,599,039 2,284,222 593,461 1,690,761 $ - $ - 59,476 $ 59,476 $ 59,476 130 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Operating: Operating Capital Improvement Projects: Personnel Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 280,500 $ 280,500 $ 280,929 $ 429 5,100 5,100 31,176 26,076 285,600 285,600 312,105 26,505 25,120 25,120 13,465 11,655 - - 12,149 (12,149) 314,503 898,252 432,203 466,049 339,623 923,372 457,817 465,555 $ (54,023) $ (637,772) (145,712) $ 492,060 805,607 $ 659,895 131 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, 2019 Revenues: Special assessments Investment income (loss) Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 3,417,761 $ 3,417,761 $ 3,431,253 $ 13,492 51,000 51,000 206,967 155,967 - 297,738 379,315 81,577 3,468,761 3,766,499 4,017,535 251,036 1,324,603 1,320,968 1,229,215 91,753 1,652,888 2,860,034 2,161,099 698,935 254,000 264,500 33,133 231,367 - - 5,684 (5,684) 1,335,000 4,106,872 705,530 3,401,342 4,566,491 8,552,374 4,134,661 4,417,713 (1,097,730) (4,785,875) (117,126) 4,668,749 Transfer in 3,690 3,690 3,690 Transfer out (159,178) (1,417,311) (1,417,311) _ Total Other Financing Sources (Uses) (155,488) (1,413,621) (1,413,621) _ Net Change in Fund Balance $ (1,253,218) $ (6,199,496) (1,530,747) $ Fund Balance at Beginning of Year Fund Balance at End of Year 5,659,360 $ 4,128,613 4,668,749 132 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Intergovernmental $ 627,500 $ 1,267,562 $ 1,001,855 $ (265,707) Expenditures: Capital Improvement Projects: Operating - 1,267,562 1,066,253 201,309 Net Change in Fund Balance $ 627,500 $ - (64,398) $ (64,398) Fund Balance at Beginning of Year 26,861 Fund Balance at End of Year $ (37,537) 133 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, 2019 Revenues: Intergovernmental Expenditures: Operating: Operating Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ 48,519 $ 32,785 $ (15,734) - 48,519 32,785 15,734 134 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Intergovernmental $ - $ 329,178 $ 492,191 $ 163,013 Investment income (loss) - - 8,164 8,164 Total Revenues - 329,178 500,355 171,177 Expenditures: Operating: Operating 422,408 422,407 1 Net Change in Fund Balance $ $ (93,230) 77,948 $ 171,178 Fund Balance at Beginning of Year 117,171 Fund Balance at End of Year $ 195,119 135 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, 2019 Revenues: Intergovernmental Investment income (loss) Total Revenues Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ - $ 174,244 $ 174,243 $ (1) - - 7,117 7,117 174,244 181,360 7,116 $ $ 174,244 181,360 $ 7,116 57,763 $ 239,123 136 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, 2019 Revenues: Investment income (loss) Developer fees Total Revenues Expenditures: Operating: Operating Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ 83,761 $ 83,761 287,400 694,376 783,475 89,099 287,400 694,376 867,236 172,860 - 34,080 - 34,080 $ 287,400 $ 660,296 867,236 $ 206,940 1,624,229 $ 2,491,465 137 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, 2019 Revenues: Taxes Investment income (loss) Total Revenues Expenditures: Operating: Operating Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 450,000 $ 430,000 $ 432,819 $ 2,819 8,500 8,500 19,628 11,128 458,500 438,500 452,447 13,947 441,000 441,000 $ 17,500 $ (2,500) 398,874 42,126 53,573 56,073 563,538 $ 617,111 138 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Intergovernmental $ 6,258,106 $ 9,594,283 $ 5,072,042 $ (4,522,241) Investment income (loss) - - 148,327 148,327 Total Revenues 6,258,106 9,594,283 5,220,369 (4,373,914) Expenditures: Capital Improvement Projects: Personnel - - 3,760 (3,760) Operating 3,379,020 5,973,829 1,743,341 4,230,488 Total Expenditures 3,379,020 5,973,829 1,747,101 4,226,728 Other financing sources (uses): Transfer out (4,733,597) (3,850,825) (3,850,825) Net Change in Fund Balance $ (1,854,511) $ (230,371) (377,557) $ (147,186) Fund Balance at Beginning of Year 2,479,038 Fund Balance at End of Year $ 2,101,481 139 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, 2019 Revenues: Intergovernmental Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final $ 1,933,637 $ 9,588,888 $ Variance with Final Budget Actual Positive/(Negative) 7,487,900 $ (2,100,988) - - 147,260 (147,260) 1,933,637 8,119,295 5,299,047 2,820,248 1,933,637 8,119,295 5,446,307 2,672,988 $ - $ 1,469,593 2,041,593 $ 572,000 (2,525,889) $ (484,296) 140 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Intergovernmental $ 2,634,401 $ 2,634,401 $ 2,702,863 $ 68,462 Investment income (loss) 29,729 29,729 320,648 290,919 Total Revenues 2,664,130 2,664,130 3,023,511 359,381 Expenditures: Capital Improvement Projects: Personnel - - 14,111 (14,111) Operating 7,834,657 8,978,005 1,671,274 7,306,731 Total Expenditures 7,834,657 8,978,005 1,685,385 7,292,620 Net Change in Fund Balance $ (5,170,527) $ (6,313,875) 1,338,126 7,652,001 Fund Balance at Beginning of Year 6,379,461 Fund Balance at End of Year $ 7,717,587 141 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Charges for services $ 685,000 $ 582,250 $ 614,303 $ 32,053 Investment income (loss) 17,000 17,000 45,402 28,402 Total Revenues 702,000 599,250 659,705 60,455 Expenditures: Operating: Personnel 30,722 30,640 45,156 (14,516) Operating 493,905 773,905 706,606 67,299 Total Expenditures 524,627 804,545 751,762 52,783 Net Change in Fund Balance $ 177,373 $ (205,295) (92,057) $ 113,238 Fund Balance at Beginning of Year 1,167,315 Fund Balance at End of Year $ 1,075,258 142 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, 2019 Revenues: Special assessments Charges for services Investment income (loss) Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 2,688,000 $ 2,688,000 $ 2,698,670 $ 10,670 121,442 121,442 128,942 7,500 12,750 12,750 144,847 132,097 - 1,613 2,500 887 2,822,192 2,823,805 2,974,959 151,154 222,800 193,880 133,871 60,009 370,135 417,244 325,556 91,688 - 1,824,672 1,537,923 286,749 68,200 118,200 60,554 57,646 661,135 2,553,996 2,057,904 496,092 2,161,057 269,809 917,055 647,246 (727,715) (723,606) (723,606) _ $ 1,433,342 $ (453,797) 193,449 $ 3,676,206 $ 3,869,655 647,246 143 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, 2019 Revenues: Intergovernmental Other revenue Total Revenues Expenditures: Operating: Operating Capital Improvement Projects: Operating Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 55,000 $ 55,000 $ 107,329 $ 52,329 90,000 484,204 125,015 (359,189) 145,000 539,204 232,344 (306,860) 161,500 161,500 95,812 65,688 - 546,605 150,526 396,079 161,500 708,105 246,338 461,767 $ (16,500) $ (168,901) (13,994) $ 154,907 132,097 $ 118,103 144 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Investment income (loss) $ 85,000 $ 85,000 $ 468,593 $ 383,593 Developer fees 1,600,000 1,600,000 1,635,405 35,405 Total Revenues 1,685,000 1,685,000 2,103,998 418,998 Expenditures: Capital Improvement Projects: Personnel - - 25,995 (25,995) Operating 601,560 7,468,341 2,733,056 4,735,285 Total Expenditures 601,560 7,468,341 2,759,051 4,709,290 Excess (Deficiency) of Revenues Over (Linder) Expenditures 1,083,440 (5,783,341) (655,053) 5,128,288 Other financing sources (uses): Transfer out - (90,000) (90,000) - Net Change in Ind Balance $ 1,083,440 $ (5,873,341) (745,053) $ 5,128,288 Fund Balance at Beginning of Year 11,231,706 Fund Balance at End of Year $ 10,486,653 145 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, 2019 Revenues: Investment income (loss) Other revenue Total Revenues Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ 15,019 $ 15,019 24,400 24,400 17,084 (7,316) 24,400 24,400 32,103 7,703 $ 24,400 $ 24,400 32,103 7,703 650,569 $ 682,672 146 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, 2019 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Charges for services $ 7,500 $ 7,500 $ 28,845 $ 21,345 Investment income (loss) - - 2,339 2,339 Other revenue - - - - Total Revenues 7,500 7,500 31,184 23,684 Expenditures: Operating: Operating 9,862 9,862 9,169 693 Net Change in Fund Balance $ (2,362) $ (2,362) 22,015 $ 24,377 Fund Balance at Beginning of Year 48,433 Fund Balance at End of Year $ 70,448 147 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL AREAWIDE SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Special assessments Investment income (loss) Other revenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 746,846 $ 6,724,841 $ 6,605,899 $ (118,942) 46,423 46,423 137,419 90,996 - - 4,285 4,285 793,269 6,771,264 6,747,603 (23,661) 5,258,653 5,041,558 4,563,407 478,151 9,378,140 10,160,052 9,407,704 752,348 - 14,000 13,576 424 - - 120,480 (120,480) 2,413,280 5,376,723 2,702,991 2,673,732 17,050,073 20,592,333 16,808,158 3,784,175 (16,256,804) (13,821,069) (10,060,555) 3,760,514 Transfer in 15,293,011 19,771,990 19,076,404 (695,586) Transfer out (565,039) (1,009,837) (1,009,837) - Total Other Financing Sources (Uses) 14,727,972 18,762,153 18,066,567 (695,586) Net Change in Fund Balance $ (1,528,832) $ 4,941,084 8,006,012 3,064,928 Fund Balance at Beginning of Year Fund Balance at End of Year $ 8,006,012 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL VISTA CANYON WASTEWATER STANDBY DISTRICT SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2019 Revenues: Special assessments Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ 656,703 $ 656,703 $ - $ - 656,703 656,703 $ 656,703 149 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, 2019 Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Other financing sources (uses): Transfer in Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ 1,929 $ (1,929) 150,000 1,451,879 805,340 646,539 150,000 1,451,879 807,269 644,610 86,811 376,411 332,289 (44,122) $ (63,189) $ (1,075,468) (474,980) $ 600,488 1,079,659 $ 604,679 150 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, 2019 Other financing sources (uses): Transfer in Transfer out Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 723,606 $ 723,606 $ 723,606 $ - (723,606) (723,606) (723,606) - 10 $ 10 151 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL CIVIC ARTS PROJECTS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2019 Expenditures: Capital Improvement Projects: Operating Other financing sources (uses): Transfer in Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ 412,391 $ 16,216 $ 396,175 - 412,391 412,391 - $ - $ - 396,175 396,175 $ 396,175 152 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, 2019 Revenues: Investment income (loss) Expenditures: Operating: Operating Cost of Issuance Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other financing sources (uses): Bonds issued Premium on bonds issued Transfer in Transfer out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ - $ (3,768) $ (3,768) $ 4,019,836 $ 4,019,836 $ 4,057,816 $ (37,980) - - 517,734 (517,734) 4,019,836 4,019,836 4,575,550 (555,714) (4,019,836) (4,019,836) (4,579,318) (559,482) - - 25,850,000 25,850,000 - - 1,463,083 1,463,083 3,172,873 3,770,765 3,190,107 (580,658) - - (25,000,000) (25,000,000) 3,172,873 3,770,765 5,503,190 1,732,425 $ (846,963) $ (249,071) 923,872 $ 1,172,943 881,612 $ 1,805,484 153 This page left blank intentionally 154 CITY OF SANTA CLARITA, CALIFORNIA INTERNAL SERVICE FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2019 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. 155 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2019 Self Computer Vehicle Insurance Replacement Replacement Totals Assets: Current assets: Cash and investments $ 5,599,117 $ 2,921,030 $ 4,148,944 $ 12,669,091 Receivables: Interest 22,180 11,613 16,495 50,288 Total Current Assets 5,621,297 2,932,643 4,165,439 12,719,379 Noncurrent assets: Capital assets: Equipment, net of accumulated depreciation - 130,777 1,411,811 1,542,588 Total Assets 5,621,297 3,063,420 5,577,250 14,261,967 Deferred Outflows of Resources: Deferred outflows related to OPEB 5,542 - - 5,542 Deferred outflows related to pensions 73,490 73,490 Total Deferred Outflows of Resources 79,032 79,032 Liabilities: Current liabilities: Accounts payable and accrued liabilities 89,247 36,605 6,316 132,168 Compensated absences 12,553 - - 12,553 Claims and judgments 2,265,651 - 2,265,651 Total Current Liabilities 2,367,451 36,605 6,316 2,410,372 Noncurrent liabilities: Net OPEB liability 18,331 - - 18,331 Net pension liability 153,482 153,482 Claims and judgments 1,388,625 1,388,625 Total Non -current Liabilities 1,560,438 - 1,560,438 Total Liabilities 3,927,889 36,605 6,316 3,970,810 Deferred Inflows of Resources: Deferred inflows related to OPEB 23,316 - - 23,316 Deferred inflows related to pensions 8,972 8,972 Total Deferred Inflows of Resources 32,288 - 32,288 Net position: Net investment in capital assets - 130,777 1,411,811 1,542,588 Unrestricted 1,740,152 2,896,038 4,159,123 8,795,313 Total Net Position $ 1,740,152 $ 3,026,815 $ 5,570,934 $ 10,337,901 156 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Operating Revenues: Charges for services Total Operating Revenues Operating Expenses: Administration and personnel services Services and supplies Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues: Investment income (loss) Gain (loss) on disposal of capital assets Total Net Nonoperating Revenues Income before transfers Transfers Transfers in Change in net position Net Position Net Position at Beginning of the Year Net Position at End of the Year Self Computer Vehicle Insurance Replacement Replacement Totals $ 2,412,772 $ 804,311 S 432,075 $ 3,649,158 2,412,772 804,311 432,075 3,649,158 226,705 - - 226,705 2,046,622 631,438 7,230 2,685,290 - 55,122 239,936 295,058 2,273,327 686,560 247,166 3,207,053 139,445 117,751 184,909 442,105 201,242 115,308 166,951 483,501 - (1,600) - (1,600) 201,242 113,708 166,951 481,901 340,687 231,459 351,860 924,006 24,167 - - 24,167 364,854 231,459 351,860 948,173 1,375,298 2,795,356 5,219,074 9,389,728 S 1,740,152 S 3,026,815 S 5,570,934 S 10,337,901 157 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Self Computer Vehicle Insurance Replacement Replacement Totals Cash flows from operating activities: Cash received from customers and users $ 2,412,772 $ 804,311 $ 432,075 $ 3,649,158 Cash paid to suppliers for goods and services (1,120,576) (606,647) (914) (1,728,137) Cash paid to employees for services (238,533) - - (238,533) Net Cash Provided by Operating Activities 1,053,663 197,664 431,161 1,682,488 Cash flows from non -capital financing activities: Cash transfers in 24,167 - - 24,167 Net Cash Provided (Used in) Non -capital Financing Activities 24,167 24,167 Cash flows from capital and related financing activities: Acquisition and construction of capital assets - (68,848) (404,055) (472,903) Net Cash (Used in) Capital and Related Financing Activities - (68,848) (404,055) (472,903) Cash flows from investing activities: Interest received 201,252 113,526 167,331 482,109 Net Cash Provided by Investing Activities 201,252 113,526 167,331 482,109 Net Increase (Decrease) in Cash and Cash Equivalents 1,279,082 242,342 194,437 1,715,861 Cash and Cash Equivalents, Beginning of Fiscal Year 4,320,035 2,678,688 3,954,507 10,953,230 Cash and Cash Equivalents, End of Fiscal Year $ 5,599,117 $ 2,921,030 $ 4,148,944 12,669,091 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 139,445 $ 117,751 $ 184,909 $ 442,105 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation - 55,122 239,936 295,058 Change in deferred amounts related to pensions 1,649 - - 1,649 Change in deferred amounts related to OPEB 13,466 13,466 Change in net OPEB liability (12,596) (12,596) Change in net pension liability (18,058) - (18,058) Decrease in prepaid expense - 8,658 - 8,658 Decrease in accounts payable 46,999 16,133 6,316 69,448 Increase in claims and judgments 879,047 - - 879,047 Increase in compensated absences 3,711 - - 3,711 Total Adjustments 914,218 79,913 246,252 1,240,383 Net Cash Provided by Operating Activities $ 1,053,663 $ 197,664 $ 431,161 $ 1,682,488 158 CITY OF SANTA CLARITA, CALIFORNIA AGENCY FUNDS AS OF AND FOR THE YEAR ENDED JUNE 30, 2019 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. 159 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS AS OF JUNE 30, 2019 Assets: Cash and investments Receivables: Interest Taxes Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total Assets Liabilities: Accounts payable Due to external parties Total Liabilities Assessment District No. 92-2 Assessment District No. 99-1 Community Facilities District No. 2002-1 $ 196,620 $ 117,774 $ 966,722 782 468 3,840 207 484 - 56,351 61,389 1,650,827 $ 253,960 $ 180,115 $ 2,621,389 $ - $ - $ 4,114 253,960 180,115 2,617,275 $ 253,960 $ 180,115 $ 2,621,389 160 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS AS OF JUNE 30, 2019 Santa Clarita Watershed and Santa Clarita Recreation Public Conservancy Television Authority Authority $ 3,136 $ 9,937,976 71,490 _ $ 10,012,602 $ $ 200 $ 10,012,402 _ $ 10,012,602 $ Totals 46 $ 1,284,298 - 5,090 - 691 - 1,768,567 - 9,937,976 - 71,490 46 $ 13,068,112 - $ 4,314 46 13,063,798 46 $ 13,068,112 161 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Balance Balance July 01, 2018 Additions Deletions June 30, 2019 Assessment District No. 92-2 Assets Cash and investments $ 171,601 $ 25,019 $ - $ 196,620 Receivables: Interest 732 50 - 782 Taxes 391 - 184 207 Restricted assets: Cash and investments with fiscal agents 56,262 89 - 56,351 Total Assets $ 228,986 $ 25,158 $ 184 $ 253,960 Liabilities Due to external parties $ 228,986 $ 25,158 $ 184 $ 253,960 Total Liabilities $ 228,986 $ 25,158 $ 184 $ 253,960 Assessment District No. 99-1 Assets Cash and investments $ 114,643 $ 3,131 $ - $ 117,774 Receivables: Interest 489 - 21 468 Taxes 925 724 1,165 484 Restricted assets: Cash and investments with fiscal agents 60,288 1,101 - 61,389 Total Assets $ 176,345 $ 4,956 $ 1,186 $ 180,115 Liabilities Due to external parties $ 176,345 $ 4,956 $ 1,186 $ 180,115 Total Liabilities $ 176,345 $ 4,956 $ 1,186 $ 180,115 (Continued) 162 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Community Facilities District No. 2002-1 Assets Cash and investments Receivables: Interest Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities Accounts payable Due to external parties Total Liabilities Balance Balance July 1, 2018 Additions Deletions June 30, 2019 $ 898,397 $ 68,325 $ - $ 966,722 3,836 4 - 3,840 1,647,558 3,269 - 1,650,827 $ 2,549,791 $ 71,598 $ - $ 2,621,389 $ - $ 4,114 $ - $ 4,114 2,549,791 67,484 - 2,617,275 $ 2,549,791 $ 71,598 $ - $ 2,621,389 Santa Clarita Watershed Recreation and Conservancy Authority Assets Cash and investments $ 3,935 $ 2 $ 801 $ 3,136 Capital assets: Land 9,937,976 - - 9,937,976 Building, net of accumulated depreciation 75,252 - 3,762 71,490 Total Assets $ 10,017,163 $ 2 $ 4,563 $ 10,012,602 Liabilities Accounts payable Due to external parties Total Liabilities $ 500 $ 300 $ 200 10,016,663 - 4,261 10,012,402 $ 10,017,163 $ - $ 4,561 $ 10,012,602 (Continued) 163 CITY OF SANTA CLARITA, CALIFORNIA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (CONTINUED) AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2019 Santa Clarita Public Television Authority Assets Cash and investments Total Assets Liabilities Due to external parties Total Liabilities Total Agency Funds Assets Cash and investments Receivables: Interest Taxes Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total Assets Liabilities Accounts payable Due to external parties Total Liabilities Balance Balance July 1, 2018 Additions Deletions June 30, 2019 $ 68 $ 265,033 $ 265,055 $ 46 $ 68 $ 265,033 $ 265,055 $ 46 $ 68 $ 265,033 $ 265,055 $ 46 $ 68 $ 265,033 $ 265,055 $ 46 $ 1,188,644 $ 361,510 $ 265,856 $ 1,284,298 5,057 54 21 5,090 1,316 724 1,349 691 1,764,108 4,459 - 1,768,567 9,937,976 - - 9,937,976 75,252 - 3,762 71,490 $ 12,972,353 $ 366,747 $ 270,988 $ 13,068,112 $ 500 $ 12,971,853 4,114 $ 362,631 300 270,686 $ 4,314 13,063,798 $ 12,972,353 $ 366,745 $ 270,986 $ 13,068,112 164 STATISTICAL SECTION This page left blank intentionally 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. 166-175 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. 176-190 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. 191-197 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. 198-199 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. 200-202 165 City of Santa Clarita Net Position by Component Last Ten Fiscal Years Ended June 30, 2019 (accrual basis of accounting) FISCAL YEAR 18 -19 17 -18 16 -17 15 -16 14 -15 Governmental Activities Net investment in capital assets $ 920,036,752 $ 895,056,642 $ 867,144,998 $ 810,324,041 $ 818,817,043 Restricted for: Capital projects - - - - - Specific projects and programs 119,375,331 113,286,625 87,272,723 70,773,322 73,541,304 Total restricted 119,375,331 113,286,625 87,272,723 70,773,322 73,541,304 Unrestricted 122,991,202 85,155,060 105,514,664 115,356,272 79,211,600 Total governmental activities net position $ 1,162,403,285 $ 1,093,498,327 $ 1,059,932,385 $ 996,453,635 $ 971,569,947 Business -Type Activities Net investment in capital assets $ 83,906,440 $ 79,199,471 $ 79,589,102 $ 76,687,260 $ 78,495,871 Unrestricted 269,116 (888,318) (1,202,362) 3,101,763 2,766,972 Total business -type activities net position $ 84,175,556 $ 78,311,153 $ 78,386,740 $ 79,789,023 $ 81,262,843 Primary Government Net investment in capital assets $ 1,003,943,192 $ 974,256,113 $ 946,734,100 $ 887,011,301 $ 897,312,914 Restricted 119,375,331 113,286,625 87,272,723 70,773,322 73,541,304 Unrestricted 123,260,318 84,266,742 104,312,302 118,458,035 81,978,572 Total primary government net position $ 1,246,578,841 $ 1,171,809,480 $ 1,138,319,125 $ 1,076,242,658 $ 1,052,832,790 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. * GASB 54-implemention date June 30, 2011. Source: City of Santa Clarita, Administrative Services Department - Finance Division 166 FISCAL YEAR 13-14 12-13 11-12 10-11 09-10 $ 799,926,613 $ 738,271,282 $ 743,281,558 $ 717,613,095 $ 657,644,168 - 14,292,447 3,275,312 3,452,815 4,769,573 71,643,713 54,229,493 46,915,965 30,201,655 85,895,468 71,643,713 68,521,940 50,191,277 33,654,470 90,665,041 52,551,033 65,706,424 79,141,211 67,397,688 63,218,255 $ 924,121,359 $ 872,499,646 $ 872,614,046 $ 818,665,253 $ 811,527,464 $ 83,296,545 $ 76,561,407 $ 73,778,640 $ 75,416,868 $ 67,911,725 2,250,491 3,835,316 3,099,419 503,446 (176,196) $ 85,547,036 $ 80,396,723 $ 76,878,059 $ 75,920,314 $ 67,735,529 $ 883,223,158 $ 814,832,689 $ 817,060,198 $ 793,029,963 $ 725,555,893 71,643,713 68,521,940 50,191,277 33,654,470 90,665,041 54,801,524 69,541,740 82,240,630 67,901,134 63,042,059 $ 1,009,668,395 $ 952,896,369 $ 949,492,105 $ 894,585,567 $ 879,262,993 167 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2019 (accrual basis of accounting) FISCAL YEAR 18 -19 17 -18 16 -17 15 -16 14 -15 Expenses Governmental Activities General government $ 62,309,457 $ 53,928,438 $ 44,390,099 $ 39,155,006 $ 46,224,813 Public safety 27,757,002 27,232,724 25,231,712 23,778,931 22,235,368 Public works 20,772,164 14,771,925 23,563,825 38,223,035 36,103,144 Recreation and community service 17,585,165 23,472,469 16,224,154 15,594,958 22,619,337 Community development 7,214,786 6,957,438 7,057,301 10,505,906 5,720,237 Neighborhood Services 12,622,824 1,082,836 1,815,637 - - Unallocated infrastructure depreciation 20,630,522 19,259,333 18,833,113 18,342,933 18,072,657 Interest on long-term debt 2,589,767 1,638,960 1,378,888 2,194,181 1,827,094 Total governmental activities expenses 171,481,687 148,344,123 138,494,729 147,794,950 152,802,650 Business -Type Activities Transit 32,065,240 28,309,870 29,858,499 28,127,407 28,062,668 Total business -type activities expenses 32,065,240 28,309,870 29,858,499 28,127,407 28,062,668 Total primary government expenses $ 203,546,927 $ 176,653,993 $ 168,353,228 $ 175,922,357 $ 180,865,318 Program Revenues Governmental Activities Charges for services: General government $ 8,547,181 $ 10,007,154 $ 6,740,507 $ 22,914,059 $ 26,783,616 Public safety 1,937,603 1,429,900 1,231,974 1,162,551 1,605,059 Public works 14,669,328 15,792,197 11,549,806 16,407,616 13,056,586 Recreation and community service 6,344,242 8,306,076 6,191,011 8,142,336 4,525,662 Community development 1,704,920 1,901,897 1,906,079 1,843,296 1,774,482 Neighborhood Services 29,338,661 27,090,508 25,044,704 - - Operating grants and contributions 13,574,920 9,259,079 5,977,971 7,687,397 12,561,608 Capital grants and contributions 59,565,349 31,807,581 55,220,052 23,629,474 30,107,231 Total governmental activities program revenues 135,682,204 105,594,392 113,862,104 81,786,729 90,414,244 Business -Type Activities Charges for services: Transit 7,662,186 6,987,488 7,231,136 7,546,433 6,779,579 Operating grants and contributions 15,292,991 10,226,946 8,459,236 9,153,499 8,228,348 Capital grants and contributions 10,434,282 3,102,269 9,138,643 3,504,305 1,423,440 Total business -type activities program revenues 33,389,459 20,316,703 24,829,015 20,204,237 16,431,367 Total primary government revenues $ 169,071,663 $ 125,911,095 $ 138,691,119 $ 101,990,966 $ 106,845,611 Note: (1 ) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 168 FISCAL YEAR 13-14 12-13 11-12 10-11 09-10 $ 41,807,284 $ 35,921,943 $ 33,664,470 $ 47,048,462 $ 32,116,335 22,187,434 19,940,098 27,391,075 21,280,904 17,912,704 26,183,862 28,651,261 30,623,718 25,799,166 26,758,527 22,550,301 21,809,820 19,282,538 11,281,552 27,835,763 6,193,101 7,214,293 5,896,640 11,547,650 13,831,341 17, 561, 539 15,163, 864 16, 844, 238 16, 392, 901 15, 545, 626 1,872,832 1,992,574 3,391,058 4,650,566 5,476,918 138, 356, 353 130, 693, 853 137, 093, 737 138, 001, 201 139, 477, 214 26,819,161 25,653,753 24,930,635 24,127,043 23,348,708 26,819,161 25,653,753 24,930,635 24,127,043 23,348,708 $ 165,175,514 $ 156,347,606 $ 162,024,372 $ 162,128,244 $ 162,825,922 $ 31,970,148 $ 24,323,027 $ 13,719,117 $ 398,181 $ 396,651 1,847,403 2,284,334 2,079,109 2,305,608 2,194,038 12,463,046 9,943,014 7,209,724 4,929,602 3,162,052 4,390,686 4,371,888 4,156,386 4,220,977 3,956,933 1,961,243 1,611,184 5,152,484 12,059,509 15,937,913 19,421,199 9,061,950 16,032,433 14,090,686 16,224,269 22,530,841 33,585,797 28,616,388 31,325,725 15,249,634 94,584,566 85,181,194 76,965,641 69,330,288 57,121,490 7,587,497 6,863,086 6,616,778 6,573,879 3,181,614 8,984,127 8,579,209 7,385,264 6,913,534 10,260,579 10,804,747 8,513,238 5,041,992 13,043,418 - 27,376,371 23,955,533 19,044,034 26,530,831 13,442,193 $ 121,960,937 $ 109,136,727 $ 96,009,675 $ 95,861,119 $ 70,563,683 (Continued) 169 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2019 (accrual basis of accounting) Net Revenues (expenses): Governmental activities Business -type activities Total net revenues (expenses) General Revenue and Other Changes in Net Position Governmental activities Taxes: Sales taxes Property taxes Franchise taxes Real property transfer taxes Transient occupancy taxes Unrestricted revenue in lieu of motor vehicle taxes Unrestricted revenue in lieu of sales taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Miscellaneous revenue Gain on sale of capital asset Transfers Reversal of Allowance for Notes to RDA Successor Ag Capital Contributions Total governmental activities Business -type activities Unrestricted investment earnings Gain on sale of capital asset Miscellaneous revenue Transfers Total business -type activities Total primary government Extraordinary Item Gain from dissolution of former redevelopment agency of the City of Santa Clarita Change in Net Position Governmental activities Business -type activities Total primary government FISCAL YEAR 18-19 17-18 16-17 15-16 14-15 (35,799,482) (42,749,731) (24,060,399) (66,008,221) $ (62,388,406) 1,324,219 (7,993,167) (5,029,484) (7,923,170) (11,631,301) (34,475,263) (50,742,898) (29,089,883) (73,931,391) $ (74,019,707) $ 38,546,183 $ 37,252,523 $ 36,147,727 $ 37,807,385 $ 34,355,412 43,761,925 42,284,749 39,924,749 40,072,597 38,556,890 8,369,481 8,523,791 8,208,347 8,392,789 8,512,818 1,227,947 1,320,018 1,275,363 1,383,473 1,169,780 3,352,776 3,489,281 3,639,264 3,813,437 3,124,904 147,752 162,103 144,665 129,053 85,703 12,528,843 591,177 1,052,254 4,142,959 2,240,594 1,206,740 2,661,916 737,513 1,080,771 678,937 (1,600) 10,935 11,711 459,709 27,410 (4,435,608) (5,924,278) (3,602,443) (6,390,264) (7,329,516) 12, 633, 832 15, 780, 230 104,704,439 90,372,215 87,539,150 90,891,909 109,836,994 32,613 (1,242) (28,735) 59,086 17,592 71,963 20,238 53,223 - - 4,435,608 5,924,278 3,602,443 6,390,264 7,329,516 4,540,184 5,943,274 3,626,931 6,449,350 7,347,108 $ 109,244,623 $ 96,315,489 $ 91,166,081 $ 97,341,259 $117,184,102 $ 68,904,957 $ 47,622,484 $ 63,478,751 $ 24,883,688 $ 47,448,588 5,864,403 (2,049,893) (1,402,553) (1,473,820) (4,284,193) $ 74,769,360 $ 45,572,591 $ 62,076,198 $ 23,409,868 $ 43,164,395 Note: (1( The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 170 FISCAL YEAR 13-14 12-13 11-12 10-11 09-10 $ (43,771,787) $ (68,670,913) $ (60,128,096) $ (68,670,913) $ (82,355,724) 557,210 2,403,788 (5,886,601) 2,403,788 (9,906,515) $ (43,214,577) $ (66,267,125) $ (66,014,697) $ (66,267,125) $ (92,262,239) $ 33, 480, 522 $ 32, 057, 358 $ 28, 828,139 $ 27, 701, 757 $ 24, 511, 238 35, 652, 080 32, 341, 369 34, 818, 426 24, 996, 219 25,126, 278 7,796,070 7,141,953 6,920,244 6,697,241 6,407,923 947,470 706,180 590,474 3,082,456 4,564,687 2,781,527 2,556,774 2,380,547 2,106,521 2,050,857 86,531 91,062 - - - - - - 3,316,058 3,221,498 - 87,883 812,475 896,708 2,090,322 (82,870) 1,509,201 3,756,112 4,871,133 781,986 310,676 5,372,890 9,148,163 4,161,677 18,174 - - - - (5,692,032) (5,187,224) (6,844,199) (5,808,300) (7,477,547) 77, 942, 650 69, 935, 278 73, 663, 605 75, 808, 702 68, 334, 452 4,791 5,692,032 29,660 5,187,224 147 6,844,199 (27,303) 5,808,300 82,554 7,477,547 5,696,823 5,216,884 6,844,346 5,780,997 7,560,101 $ 83,639,473 $ 75,152,162 $ 80,507,951 $ 81,589,699 $ 75,894,553 $ $ $ 40,413,284 $ - $ $ 34,170,863 $ 1,264,365 $ 53,948,793 $ 7,137,789 $ (14,021,272) 6,254,033 7,620,672 957,745 8,184,785 (2,346,414) $ 40,424,896 $ 8,885,037 $ 54,906,538 $ 15,322,574 $ (16,367,686) 171 City of Santa Clarita Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2019 (modified accrual basis of accounting) General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total general fund All Other Governmental Funds Reserved Unreserved: Special revenue funds Debt service fund Capital projects fund Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds FISCAL YEAR 18-19 17-18 16-17 15-16 14-15 12,050,141 12, 390,885 15,742,945 11,108,252 11,024,338 120,981,128 88,674,761 79,367,084 79,367,084 55,336,807 58,930,970 47,116,235 53,905,237 50,669,580 50,141,486 $191,962,239 $ 148,181,881 $149,015,266 $ 141,144,916 $116,502,631 772,627 5,882 976,841 1,134,103 1,455, 067 108,394,699 113,286,625 86,664,536 86,240,243 85,763,293 13,460 15,008 14,000 14,000 14,000 1,040,181 1,117,165 2,151,360 1,881,728 1,843,822 (3,266,496) (6,786,531) (5,897,790) (6,975,198) (8,633,303) $106,954,471 $107,638,149 $ 83,908,947 $ 82,294,876 $ 80,442,879 FUND BALANCES Fiscal Year Ended June 30, 2019 N ote: (1( Beginning in FY 2011, the fund balance classification changed in accordance with GASB 54 Source: City of Santa Clarita, Administrative Services Department - Finance Division 172 FISCAL YEAR (1) 13-14 12-13 11-12 10-11 09-10 $ - $ - $ - $ - $ 19,546,015 - - - - 58,211,508 11,519,143 11,910,059 18,902,350 23,845,861 - - - 66,257 12, 356, 339 - 51, 718, 096 47,106, 536 309,078 572,781 - 45,654,640 35,320,706 50,664,338 46,915,238 - $108,891,879 $ 94,337,301 $ 69,942,023 $ 83,690,219 $ 77,757,523 $ - $ - $ - $ - $ 51,195,454 - - - - 2,109,198 - - - - (24,048,962) - - - - 33,725,531 606,996 670,612 28,885,983 28,813,152 - 84,268,720 68,957,999 46,915,965 57,205,072 - 612,829 716,826 - - - 3,412,127 4,466,367 3,275,312 3,637,410 - (9,300,647) (10,665,597) (56,718,519) (72,692,440) - $ 79,600,025 $ 64,146,207 $ 22,358,741 $ 16,963,194 $ 62,981,221 120 100 80 V! 060 2 40 20 0 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 Fiscal Year 173 City of Santa Clarita Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2019 (modified accrual basis of accounting) Revenues: Taxes Licenses and permits Developer fees Investment income Intergovernmental Fines and forfeitures Service charges Other revenues Total Revenues Expenditures: Current: General government Public safety Public works Recreation and community service Community development Neighborhood services Capital outlay Debt service: Principal Interest, professional services and fiscal charges Redemption of district credits Total Expenditures Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Revenue bonds issued/issuance premium Proceeds of long-term debt Escrow payment, costs of bonds issuance and others Proceeds from capital lease Transfers in Transfers out Issuance of district credits Total Other Financing Sources (Uses) Extraordinary Item: Dissolution of Santa Clarita Redevelopment Agency FISCAL YEAR 18-19 17-18 16-17 15-16 14-15 $ 95,406,064 $ 93,032,465 $ 89,340,115 $ 91,598,734 $ 85,789,556 9,951,586 7,688,342 7,408,357 7,283,898 5,567,280 6,458,182 9,888,734 4,211,890 6,272,799 10,764,554 12,045,344 595,650 1,030,146 3,937,618 2,026,507 36,086,192 36,491,705 23,922,361 31,380,753 31,953,692 1,851,190 1,372,687 1,117,620 973,753 1,261,752 42,117,270 41,793,226 36,639,646 36,828,067 37,738,754 1,677,809 1,744,075 690,974 1,789,724 511,117 205,593,637 192,606,884 164,361,109 180,065,346 175,613,212 59,638,451 50,728,642 41,138,676 35,969,981 43,196,168 28,342,578 27,217,567 25,214,091 23,777,171 22,188,641 51,343,366 57,213,646 43,459,620 21,327,662 36,082,625 15,450,815 21,589,318 20,446,596 37,937,050 21,007,651 7,344,064 6,988,331 6,583,484 10,673,993 5,883,441 12,823,905 1,162,647 1,667,058 5,053,670 12,083,887 9,759,258 10,562,953 23,224,180 2,833,260 2,138,803 2,167,429 2,852,140 1,992,479 2,520,153 1,647,842 1,237,357 4,539,815 1,850,703 - - - - 5,105, 402 185,350,262 180,770,683 151,673,569 147,640,765 160,531,290 20,243,375 11,836,201 12,687,540 32,424,581 15,081,922 25,850,000 15,848,271 32,997,352 1,463,083 (35,099) (32,907,353) 56,075,180 25,690,566 8,046,713 11,940,563 7,850,640 (60,534,955) (30,444,125) (11,249,832) (17,960,861) (14,478,956) 22,853,308 11,059,613 (3,203,119) (5,930,299) (6,628,316) Net change in fund balances 43,096,683 22,895,814 9,484,421 26,494,282 8,453,606 Fund balances - Beginning of Year 255,820,027 232,924,213 223,439,792 196,945,510 188,491,904 Fund balances - End of Year $ 298,916,710 $ 255,820,027 $ 232,924,213 $ 223,439,792 $196,945,510 Debt service as percentage of noncapital expenditures 2.98% 2.14% 2.40% 5.72% 2.80% Note: (1( Beginning in FY 2011, the fund balance classification changed in accordance with GASB 54 Source: City of Santa Clarita, Administrative Services Department - Finance Division 174 FISCAL YEAR D1D 13-14 12-13 11-12 10-11 09-10 $ 80, 285, 660 $ 73, 972, 006 $ 73, 625, 713 $ 72, 474, 882 $ 80, 714, 829 5,366,972 4,246,957 4,097,709 3,675,424 4,093,250 2,600,997 15,828,388 7,181,986 282,776 3,053,363 1,911,491 1,702,006 2,739,794 3,798,498 5,485,925 34, 355, 734 27, 452, 216 28, 375,142 19, 780, 700 33, 881,145 1,661,157 2,114,166 1,674,085 1,891,500 1,936,318 42,156, 582 36, 311, 324 28,145, 012 23, 608, 272 10, 812, 521 5,943,608 332,146 6,425,792 7,685,141 7,234,923 174, 282, 201 161, 959, 209 152, 265, 233 133,197,193 147, 212, 274 36,294,205 35,433,288 50,816,449 42,213,597 27,951,510 22,137, 338 19, 894, 859 25, 412, 420 21, 230, 594 17, 862,129 24,385,865 27,968,407 20,753,607 34,210,327 20,594,575 20,498,108 19,824,550 19,523,584 21,853,319 20,048,430 6,185, 263 7,252,424 5,923,872 11, 575, 365 10, 849, 942 36, 580, 589 23, 837, 533 27, 403, 439 21, 311, 885 46,183, 268 1,837,174 1,750,538 2,338,787 2,246,218 2,611,372 1,885,546 2,039,144 3,743,134 4,796,695 5,411,152 - 14,368,419 - - - 149, 804, 088 152, 369,162 155, 915, 292 159, 438, 000 151, 512, 378 24,478,113 9,590,047 (3,650,059) (26,240,807) (4,300,104) 252,068 9,757,447 9,069,495 16,538,674 50,869,852 18,953,115 (15,524,498) (14,256,719) (29,810,448) (64,714,376) (28,930,662) 11,297,334 12,270,335 - 5,530,283 7,083,111 (13,019,706) (13,844,524) (9,977,547) - - 8,317,116 30,008,396 16,673,158 (8,352,649) (40,085,331) (14,277,651) 158, 483, 508 141, 810, 350 100, 653, 413 140, 738, 744 155, 016, 395 $ 188, 491, 904 $ 158, 483, 508 $ 92, 300, 764 $ 100, 653, 413 $ 140, 738, 744 3.26% 2.95% 4.40% 5.96% 6.84% 175 City of Santa Clarita Assessed Values 411� and Actual Values of Taxable Property Last Ten Fiscal Years STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED Fiscal IMPROVE- PERSONAL IMPROVE- PERSONAL OTHER Year LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 2009-10 1,750,395 2,264,780 4,015,175 9,416,163,697 11,115,441,327 105,296,475 (323,630,904) 20,313,270,595 2010-11 1,750,395 2,264,780 4,015,175 9,160,567,699 11,280,024,994 112,335,544 (330,372,395) 20,222,555,842 2011-12 1,431,971 2,264,780 3,696,751 9,097,382,703 11,485,773,659 107,089,927 (372,583,638) 20,317,662,651 2012-13 1,431,971 2,264,780 3,696,751 8,882,930,332 11,516,988,299 111,202,431 (400,045,608) 20,111,075,454 2013-14 1,431,971 2,264,780 3,696,751 9,989,545,816 13,726,755,146 107,166,367 (412,668,046) 23,410,799,283 2014-15 1,431,971 2,264,780 3,696,751 10,820,572,961 14,749,259,449 103,844,310 (453,562,893) 25,220,113,827 2015-16 1,431,971 2,264,780 3,696,751 11,358,919,366 15,476,133,167 109,544,613 (471,097,603) 26,473,499,543 2016-17 1,431,971 2,264,780 3,696,751 11,931,551,116 16,179,111,473 123,045,242 (348,794,590) 27,884,913,241 2017-18 2,368,193 2,208,225 4,576,418 12,988,746,949 17,460,522,327 136,887,194 (682,936,469) 29,903,220,001 2018-19 2,368,193 2,208,225 4,576,418 13,850,827,148 18,431,289,844 163,768,504 (817,961,355) 31,627,924,141 ASSESSED VALUATION by CATEGORIES (Total Secured and Unsecured) Fiscal Year Ended June 30, 2019 PERSONAL PROPERTY, 2.25% 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 2017-18 176 LOCALLY ASSESSED TOTALS HOME - UNSECURED BEFORE TAXABLE % TOTAL OWNER IMPROVE- PERSONAL OTHER OTHER ASSESSED INCR. DIRECT PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL EXEMPTIONS VALUE (DECR.) RATE (2) TAX RELIEF 359,543,253 600,420,921 (15,127,698) 944,836,476 21,600,880,848 21,262,122,246 -1.08% 0.07432% 224,731,598 346,874,191 553,829,644 (13,331,377) 887,372,458 21,457,647,247 21,113,942,935 -0.70% 0.07392% 223,277,279 314,286,482 548,430,090 (15,137,342) 847,579,230 21,556,659,612 21,168,938,632 0.26% 0.07291% 220,496,294 349,415,601 534,947,944 (13,693,787) 870,669,758 21,399,181,358 20,985,441,963 -0.87% 0.07183% 216,163,460 329,350,845 541,533,568 (15,907,716) 854,976,697 24,698,048,493 24,269,472,731 15.65% 0.09170% 236,577,388 339,544,656 561,740,289 (13,152,888) 888,132,057 26,578,658,416 26,111,942,635 7.59% 0.09163% 232,799,644 299,024,341 569,926,540 (15,283,837) 853,667,044 27,817,244,778 27,330,863,338 4.67% 0.09169% 230,402,082 265,891,622 547,111,240 (15,791,822) 797,211,040 29,050,407,444 28,685,821,032 4.96% 0.09259% 226,031,427 280,824,664 549,107,476 (10,383,140) 819,549,000 31,420,665,028 30,727,345,419 7.12% 0.09111% 228,373,713 274,390,510 584,621,318 (10,543,790) 848,468,038 33,309,473,742 32,480,968,597 5.71% 0.09126% 225,813,184 35,000 30,000 25,000 cl 20,000 O mIr_ 15,000 10,000 5,000 TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 Fiscal Year 177 City of Santa Clarita Redevelopment Agency Assessed Values �2� and Actual Values of Taxable Property Last Ten Fiscal Years STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED FISCAL IMPROVE -PERSONAL IMPROVE- PERSONAL OTHER YEAR LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 2009-10 343,043,150 214,695,279 1,775,246 (3,779,814) 555,733,861 2010-11 319,869,014 213,093,295 1,850,279 (3,196,475) 531,616,113 2011-12 322,803,745 214,686,716 1,933,165 (7,016,751) 532,406,875 2012-13 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2013-14 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2014-15 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2015-16 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2016-17 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2017-18 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2018-19 N/A N/A N/A N/A N/A N/A N/A N/A N/A (1( The Redevelopment Agency of the City was established on November 28, 1989, pursuant to the State of California and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief 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 178 LOCALLY ASSESSED TOTALS HOME - UNSECURED TOTALS TAXABLE OWNER IMPROVE- PERSONAL OTHER BEFORE ASSESSED VALUE PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL BASE YEAR BASE YEAR VALUE GROWTH TAX RELIEF 34,102,838 46,361,945 (84,500) 80,380,283 636,114,144 (266,351,517) 369,762,627 (15,821,204) 1,921,661 21,240,432 62,307,206 (84,500) 83,463,138 615,079,251 (266,351,517) 348,727,734 (21,034,893) 1,871,456 34,353,633 46,665,422 (102,000) 80,917,055 613,323,930 (266,351,517) 346,972,413 (1,755,321) 1,865,922 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 179 City of Santa Clarita Assessed Values —Taxable Property Last Ten Fiscal Years FISCAL YEAR CATEGORY 18-19 17-18 16-17 15-16 14-15 Residential Commercial Industrial Irrigated Dryfarm Recreational Institutional Government Miscellaneous Vacant land SBE Nonunitary Possessorylnt. Unsecured Unknown TOTALS: 30000 25000 N O 20000 s= 15000 10000 5000 0 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 $ 25,140,365,171 $ 23,734,569,687 $ 21,784,467,001 $ 20,809,579,112 $ 19,755,522,402 3,557,018,366 3,399,444,104 3,248,599,972 3,059,958,633 2,952,772,231 1,861,078,681 1,790,582,919 1,706,030,432 1,799,119, 742 1,642, 718, 866 3,707,035 2,993,570 2,960,760 2,936,120 2,834,466 113,347,606 106,578,193 99,802,827 104,324,505 101,870,300 230,449,000 193,500,837 213,333,035 162,056,819 142,862,940 371,122 363,846 356,714 220,358 216,042 339,297 315,717 309,530 348,240 341,421 593,951,571 554,513,132 449,270,431 419,750,992 507,997,067 4,576,418 4,576,418 3,696,751 3,696,751 3,696,751 127,296,292 120,357,965 117,718,179 115,205,002 112,978,072 848,468,038 819,549,000 797,363,610 853,667,044 888,132,057 - 31 20 20 20 $32,480,968,597 $30,727,345,419 $28,423,909,262 $27,330,863,338 $26,111,942,635 ASSESSED VALUE - TAXABLE PROPERTY Last Ten Fiscal Years Fiscal Year ®Residential ■Commercial Dlndustrial ®Vacant land ElAll others 180 FISCAL YEAR 13-14 12-13 11-12 10-11 09-10 $ 18,138,258,224 $ 14,971,655,728 $ 15,212,586,674 $ 15,239,936,469 $ 15,094,074,637 2,847,760,176 2,794,405,083 2,748,247,727 2,820,296,027 2,729,669,423 1,561,091,316 1,413,623,056 1,455,126,754 1,463,696,151 1,451,053,867 2,827,311 2,796,388 3,016,072 3,004,749 3,630,743 100,138,918 104,981,278 106,506,146 121,791,852 121,511,353 136,824,169 132,119,758 125,982,002 127,363,481 125,868,861 215,066 210,850 206,717 205,173 206,850 1,017,342 864,299 847,359 841,034 843,038 509,125,263 565,117,297 533,608,937 308,820,538 636,182,476 3,696,751 3,696,751 3,696,751 4,015,175 3,573,175 113,541,478 125,301,717 131,534,263 136,599,828 150,671,347 854,976,697 870,669,758 847,579,230 887,372,458 944,836,476 20 - - - - $24,269,472,731 $20,985,441,963 $21,168,938,632 $21,113,942,935 $21,262,122,246 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. 181 City of Santa Clarita Assessed Values —Use Category Summary Fiscal Year 2018-19 CATEGORY PARCELS ASSESSED VALUE PERCENT EXEMPTIONS NET TAXABLE VALUE PERCENT Residential 58,494 $ 25,230,860,207 75.6% $ 90,495,036 $ 25,140,365,171 77.40% Commercial 916 3,619,580,100 10.8% $ 62,561,734 3,557,018,366 10.95% Industrial 733 2,080,753,485 6.2% $ 219,674,804 1,861,078,681 5.73% Irrigated 6 3,707,035 0.0% $ - 3,707,035 0.01% Recreational 35 116,378,793 0.3% $ 3,031,187 113,347,606 0.35% Institutional 101 662,503,072 2.0% $ 432,054,072 230,449,000 0.71% Government 6 1,248,153 0.0% $ 877,031 371,122 0.00% Miscellaneous 8 339,297 0.0% $ - 339,297 0.00% Vacant land 3,730 602,052,978 1.8% $ 8,101,407 593,951,571 1.83% SBE Nonunitary (15) 4,576,418 0.0% $ - 4,576,418 0.01% Possessory I nt. (2,215) 128,462,376 0.4% $ 1,166,084 127,296,292 0.39% Unsecured (4,480) 859,011,828 2.6% $ 10,543,790 848,468,038 2.61% Exempt 1,215 59,640,412 0.2% $ 59,640,412 - 0.00% Unknown 3 - 0.0% $ - - 0.00% TOTALS: 58,537 $ 33, 369,114,154 100.00% $ 888,145, 557 $ 32,480, 968, 597 100.00% ASSESSED VALUE by USE CATEGORY NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2018-19 Fiscal Year 2018-19 Residential, 75.61 % Source: HdL Coren & Cone, Los Angeles County Assessor 2017-18 Combined Tax Rolls. 182 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) Last Ten Fiscal Years CASTAIC LOS LAKE COUNTY COUNTY Fiscal ANGELES WATER SCHOOL SANITATION FLOOD Year GENERAL COUNTY AGENCY DISTRICTS DISTRICTS CONTROL TOTAL 2009-10 1.000000 - 0.060750 0.089815 - - 1.150565 2010-11 1.000000 - 0.070600 0.086830 - - 1.157430 2011-12 1.000000 - 0.070600 0.091457 - - 1.162057 2012-13 1.000000 - 0.070600 0.112835 - - 1.183435 2013-14 1.000000 - 0.070600 0.120330 - - 1.190930 2014-15 1.000000 - 0.070600 0.118570 - - 1.189170 2015-16 1.000000 - 0.070600 0.116070 - - 1.186670 2016-17 1.000000 - 0.070600 0.119436 - - 1.190036 2017-18 1.000000 - 0.070600 0.135348 - - 1.205948 2018-19 1.000000 - 0.070600 0.496140 - - 1.566740 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2018-19 0.600000 CASTAIC LAKE WATER AGENCY 0.500000 0.400000 0.300000 0.200000 0.100000 CASTAIC LAKE SCHOOL SANITATION WATER AGENCY DISTRICTS DISTRICTS 0.000000 LA COUNTY Source: HdL Coren & Cone, Los Angeles County Assessor 2017-18 Tax Rate Table 183 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) One Year Detail of Rates Producing Revenue for City and Associated Redevelopment Agencies City General Fund Direct Rates RDA Incremental Rate Total Direct Rate City Share Prop. 13 of 1 % Total City plus applicable Roll Year per Prop. 13 Debt Rates Rates voter -approved debt 2018-19 0.086630 0.000000 0.086630 0.00000% 9.12600% Agency 2018-19 City of Santa Clarita Tax District 1 (249.01) 0.05920 Castaic Lake Water Agency (302.01) 0.06550 Children's Institutional Tuition Fund (400.21) 0.00327 Consolidated Fire Protection District of LA Co. (007.30) 0.18090 County School Service Fund Saugus Union (581.06) 0.00905 County School Service Hart William S. Hart (757.06) 0.00039 County School Services (400.15) 0.00165 Development Center Handicapped Saugus Union (581.07) 0.00104 Educational Augmentation Fund Impound (400.01) 0.13200 Educational Revenue Augmentation Fund (ERAF) (400.00) 0.05430 Greater LA Co. Vector Control (061.80) 0.00031 Santa Clarita Library (249.56) 0.02740 LA County Fire - Ffw (007.31) 0.00550 LA County Flood Control Improvement District (030.10) 0.00217 LA County Flood Control Maintenance (030.70) 0.01210 LA County General (001.05) 0.18580 LA County Accum Cap Outlay (001.20) 0.00013 Saugus Union School District (581.01) 0.06280 Santa Clarita Community College (814.04) 0.04320 Santa Clarita Valley Sanitation Dist. LA Co. 0.00989 William S. Hart Elementary School Fund (757.07) 0.04940 William S. Hart Union High (757.02) 0.09400 Total Prop. 13 Rate: 1.00000 Castaic Lake Water Agency (302.01) 0.070600 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) 0.019185 Newhall Elementary School District Debt Services 1999 Ser. A (581.52) 0.019185 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.54) 0.008196 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55) 0.008196 Santa Clarita Community College Debt Services 2005 Refunding Bonds (81 0.008196 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52) 0.008196 Santa Clarita Community College Debt Services 2006 Ser. 2012 0.008196 William S. Hart Un.Hsd Debt Services (757.51) 0.011292 William S. Hart Un.Hsd Debt Services 2008 Ser. B 0.011292 William S. Hart Un.Hsd Debt Services 2008 Ser. C 0.011292 William S. Hart Unified Debt Services 2001 Ser. B (757.52) 0.011292 William S. Hart Unified Debt Services 2008 Ser. A (757.53) 0.011292 Total Tax Rate 0.206410 Source: HdL Coren & Cone, Los Angeles County Assessor 2018/19 Tax Rate Table Notes: General fund tax rates are representative and based upon the direct and overlapping rates for the largest General Fund tax rates area (TRA) by net taxable value. Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information. The percentages presented in the columns above do not sum across rows. In 1978 California voters passed Proposition 13, which set the property tax at a 1.00% fixed amount. This 1.00% is shared by all the taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter -approved bonds. 184 City of Santa Clarita Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years Ago FISCAL YEAR 2018-19 PERCENT of Number TOTAL TOTAL CITY of ASSESSED ASSESSED OWNER/TAXPAYER Parcels VALUE VALUE OWNER/TAXPAYER Valencia Town Center Venture LP Park Sierra Properties PFI Valencia LLC WESCO IV LLC Saugus Colony Limited IVT River Oaks Valencia LLC EQR Valecnia LLC EQR The Oaks LLC Valencia Biomedical Park LLC ARC SLSTCCA001 LLC Total All Others Total Assessed Valuation 17 $ 388,485,421 1.20 % Valencia Town Center Venture 15 142,644,008 0.44 VTC Business Center 9 135,252,000 0.42 EQR Valencia LLC 2 125,905,273 0.39 Casden Santa Clarita LLC 19 120,790,737 0.37 C-Native Exchange I LLC Time Warn 7 115,000,000 0.35 Walmart Real Estate Business Trust 218 107,181,874 0.33 RREEF America REIT II Corp 28 104,916,896 0.32 Prado Town Center West LLC 5 104,569,853 0.32 Gateway Village LLC 4 101,401,543 0.31 PK I Granary Square LP 324 1,446,147,605 4.45 % 31,034,820,992 95.55 $ 32,480,968,597 100.00 % NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone, LA County Assessor 2017/18 Combined Tax Rolls FISCAL YEAR 2009-10 PERCENT of Number TOTAL TOTAL CITY of ASSESSED ASSESSED Parcels VALUE VALUE 33 $ 305,092,765 1.43 % 9 152,997,448 0.72 218 94,981,666 0.45 25 81,182,347 0.38 1 79,450,107 0.37 5 76,315,398 0.36 2 75,547,858 0.36 264 72,547,938 0.34 1 62,100,000 0.29 3 60,740,698 0.29 561 1,060,956,225 4.99 % 20,200,724,021 95.01 $ 21,261,680,246 100.00 % 185 City of Santa Clarita Property Tax Levies, Tax Collections and Delinquencies Last Ten Fiscal Years COLLECTIONS TOTAL PERCENT FISCAL TAXES PERCENT IN SUBSEQUENT COLLECTIONS COLLECTIONS YEAR LEVIED COLLECTIONS COLLECTIONS YEARS TO DATE TO DATE 2009-10 14,202,626 13,711,940 96.5% - 13,711,940 2010-11 14,172,030 13,829,640 97.6% 50,605 13,880,246 2011-12 14,299,999 13,999,770 97.9% 49,862 14,049,633 2012-13 18,634,850 18,297,746 98.2% - 18,297,746 2013-14 21,446, 963 21,128, 332 98.5% - 21,128, 332 2014-15 23,131,317 22,795,838 98.5% - 22,795,838 2015-16 24,304,887 23,957,604 98.6% - 23,957,604 2016-17 25,483, 385 25,178, 564 98.8% - 25,178, 564 2017-18 27,299,254 26,957,834 98.7% - 26,957,834 2018-19 28,692,974 28,469,759 99.2% - 28,469,759 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 TAX COLLECTIONS & DELINQUENCY - LAST TEN FISCAL YEARS 96.55% 97.94% 98.25% 98.19% 0.00% 98.57% 98.80% 98.75% 99.22% 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 FISCALYEAR ■LEVIES ©COLLECTIONS uii DELINQUENT AMOUNT NOTES: Article XIII-A of the Constitution of the State of California, adopted by the electorate in June 1978, precludes the City from a local property tax levy. 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 186 City of Santa Clarita Successor Agency Top Property Owners Based on Net Values Fiscal Year 2018-19 Secured Unsecured Combined Parcels Value % of Parcels Values % of Value % of Owner Net AV Net AV Net AV 1 Time Warner Cable - $ - 0.00% 3 $43,577,840 55.13% $ 43,577,840 9.96% 2 Newhall Development Partners LLC 21 19,913,620 3.20% - 0.00% 19,913,620 4.55% (Pending Appeals On Parcels) 3 Saugus Station LLC 7 19,031,917 3.05% 1 126,500 0.16% 19,158,417 4.38% 4 Peter and Barbara Coeler et al 4 12,624,738 2.03% 1 6,548 0.01 % 12,631,286 2.89% 5 JDH Mulberry LLC 1 11,026,200 1.77% - 0.00% 11,026,200 2.52% 6 Lyons Properties Limited 1 10,691,171 1.72% 0.00% 10,691,171 2.44% (Pending Appeals On Parcels) 7 Telfair Corporation 2 9,199,203 1.48% 0.00% 9,199,203 2.10% (Pending Appeals On Parcels) 8 25805 San Fernando LLC 1 8,536,854 1.37% 0.00% 8,536,854 1.95% 9 RFT Sprouts LLC et al 3 8,171,576 1.31% 0.00% 8,171,576 1.87% 10 Xenon Investment Corporation 3 7,926,479 1.27% 0.00% 7,926,479 1.81% Top Ten Total 43 $ 107,121,758 17.19% 5 $43,710,888 55.30% $ 150,832,646 34.47% Agency Total 623,213,906 79,048,711 702,262,617 Incremental Net AV Total $ 376,492,381 28.45% $61,117,059 71.52% $ 437,609,440 34.47% Source: HdL Coren & Cone 187 City of Santa Clarita Successor Agency Project Area Assessment Appeals Summary and Tax Collection History Fiscal Years 2009-10 Through 2018-19 Project Area Assessment Appeals Summary—FY 2018-19 Estimated No. of No. of No. & Value of Estimated No. Reduction on Total No. of Resolved Successful Average Appeals of Appeals Pending Appeals Appeals Appeals Appeals Reduction Pending Allowed Allowed 302 210 177 63% 37 / $81,572,330 31 $ 43,506,825 Tax Collection History For Fiscal Years 2009-10 Throuah 2017-18 Current Year Current Year Prior Year Collection Total Collection Year Tax Levy Collection Collection Total Percentage Percentage 2009-10 $4,068,572 $3,885,719 $ 42,260 $ 3,927,979 96% 97% 2010-11 3,618,835 2,744,263 (204,741) 2,539,523 76% 70% 2011-12... 3,762,457 2,934,904 218,094 3,152,998 78% 84% 2012-13 (2) 3,485,808 2,786,791 275,290 3,062,081 80% 88% 2013-14 (2) 3,526,463 2,828,495 815,124 3,643,619 80% 103% 2014-15 (2) 3,836,835 3,185,967 158,652 3,344,619 83% 87% 2015-16 (2) 3,579,829 3,430,748 518,292 3,704,259 96% 103% 2016-17 (2) 4,063,020 3,819,731 797,178 3,983,145 94% 98% 2017-18 (2) 4,188,893 3,944,498 860,267 4,046,235 94% 97% 2018-19 (2) 4,405,493 4,363,813 2,142,067 5,328,034 99% 121% Source: Los Angeles County Auditor/Controller, Disbursement/Tax Division "CRA Remittance Advice" from Fiscal Years 1997-98 through 2010-11, and for Fiscal Year 2011-12, November 2011 through January 2012. (1( Sources: Ledgers and 2011-12 Revenue & Collection from Year -End Adjsuted Gross TI Collection by CRA reports from Los Angeles County Auditor -Controller. O Sources: Ledgers and special reports from Los Angeles County Auditor -Controller commencing February 2012 pursuant to AB X 1 26. 188 City of Santa Clarita Charge Detail Report for CFD 2002-1 (Valencia Town Center) Fiscal Year 2018-19 LAND STRUCTURE TOTAL ASSESSOR'S ASSESSED ASSESSED ASSESSED TAXABLE PARCEL NUMBER PROPERTY OWNER VALUES ($) VALUES ($) VALUES ($) ACREAGE 2861-058-071 Valencia Town Center Venture LP $ 1,286,316 $ 196,006 $ 1,482,322 0.84 2861-058-072 Valencia Town Center Venture LP 3,565,465 18,536,122 22,101,587 4.81 2861-058-073 Valencia Town Center Venture LP 28,176,658 3,472,151 31,648,809 15.68 2861-058-076 Valencia Town Center Venture LP 897,586 89,145 986,731 1.18 2861-058-077 Valencia Town Center Venture LP 4,846,579 414,551 5,261,130 6.70 2861-058-081 Valencia Town Center Venture LP 16,390,093 173,308,104 189,698,197 14.34 2861-058-084 Valencia Town Center Venture LP 3,381,185 9,800,551 13,181,736 2.05 2861-058-085 Valencia Town Center Venture LP 441,019 220,507 661,526 0.33 Totals: $ 58,984,901 $206,037,137 $265,022,038 45.94 189 MAX TAX RATE APPLIED CLASS ($) MAX TAX RATE ($) CHARGE ($) 1 $ 37,069 $ 31,290 $ 27,415 $ 23,141 1 37,069 178,303 27,415 131,864 1 37,069 581,321 27,415 429,916 1 37,069 43,890 27,415 32,459 1 37,069 248,365 27,415 183,678 37,069.33 & 1 &2 249,693.25 531,643 27,418 393,176 1 37,069 75,992 27,415 56,200 1 37,069 12,159 27,415 8,992 $ 1,259,426 190 City of Santa Clarita Ratio of Outstanding Debt by Type Last Ten Fiscal Years GOVERNMENTAL ACTIVITIES FISCAL CERTIFICATES PRIVATE TAX ALLOCATION CAPITAL YEAR OF PARTICIPATION (1) (3) LOANS BONDS (2) PLACEMENT LEASE (5) BONDS (4) LEASES TOTAL 2009-10 13,760,000 15,525,000 2,017,793 13,075,000 29,460,000 8,730,000 1,624 82,569,417 2010-11 12,700,000 15,525,000 1,413,786 12,805,000 29,040,000 8,605,000 - 80,088,786 2011-12 11,610,000 15,490,000 1,040,000 12,525,000 - - 242,417 40,907,417 2012-13 10,480,549 15,379,349 810,000 12,316,280 201,880 39,188,058 2013-14 9,323,138 15,291,374 580,000 12,002,622 154,705 37,351,839 2014-15 8,128,138 15,175,988 300,000 11,673,964 217,615 35,495,705 2015-16 - - 200,000 26,012,352 6,328,411 138,877 32,679,640 2016-17 100,000 25,262,456 4,984,543 60,444 30,407,443 2017-18 - 40,380,831 3,595,740 33,980,000 32,200 77,988,771 2018-19 65,333,412 2,177,480 33,960,547 2,538 101,473,977 NOTES: (1) In 1991 the Santa Clarita Public Financing Authority issued $22,940,000 aggregate principal amount of Local Agency (Redevelopment) Revenue Bonds Series 1991. Simultaneously with the receipt of the Bond proceeds, the Authority acquired $22,940,000 Certificates of Participation issued by the Santa Clarita Redevelopment Agency, of which the proceeds were transferred to the City to finance and/or refinance the design, acquisition, improvement or construction of land, the City Hall Building and certain road improvements, and to refinance certain debt. The Agency leased back the facilities to the City for lease payments to be made by the City to the Authority equal to the principal and interest due on the revenue bonds. At this point in time, the Agency is not active. -The 1991 Series certificates were later refunded in fiscal year 1997-98 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) On January 16, 2007, the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue 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. - On June 1, 2018, the Santa Clarita Public Financing Authority issued $15,300,000 in Lease Revenue Bonds for the acquisition and retrofit of streetlights located within the City from Southern California Edison. - On June 27, 2019, the Santa Clarita Public Financing Authority issued $25,850,000 in Lease Revenue bond proceeds for the construction of a new Sheriff Station facility. (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) On June 1, 2008, the Santa Clarita Redevelopment Agency issued $29,860,000 in Non -Housing Tax Allocation Bonds and $8,850,000 in Low/Mod Housing Tax Allocations Bonds to fund certain redevelopment projects within the 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) 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. Sources: City of Santa Clarita, Administrative Services Department - Finance Division 191 PERCENTAGE BUSINESS -TYPE ACTIVITIES OF OUTSTANDING TOTAL TAXABLE DEBT DEBT TO LEASE PRIMARY ASSESSED PER PERSONAL PAYABLE TOTAL GOVERNMENT VALUE CAPITA INCOME 248,304 248,304 82,817,721 0.39% 466 5% - - 80,088,786 0.38% 454 N/A 40,907,417 0.19% 231 N/A 39,188,058 0.19% 191 N/A 37,351,839 0.15% 179 N/A 35,495,705 0.14% 166 N/A 32,679,640 0.12% 149 N/A 30,407,443 0.11 % 141 N/A 77,988,771 0.25% 360 N/A 101,473,977 0.31% 465 N/A OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years 500 450 400 350 300 250 200 150 100 50 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Fiscal Year 192 City of Santa Clarita Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years PERCENTAGE OUTSTANDING GENERAL BONDED DEBT OF TAXABLE DEBT FISCAL REVENUE CERTIFICATES OF ASSESSED PER YEAR POPULATION (1) BONDS PARTICIPATION TOTAL VALUE CAPITA 2008-09 177,150 13,330,000 30,315,000 43,645,000 0.19% 246 2009-10 177,641 13,075,000 29,285,000 42,360,000 0.20% 238 2010-11 176,971 12, 805, 000 28,225, 000 41, 030, 000 0.19% 233 2011-12 177,445 12, 525, 000 27,100, 000 39, 625, 000 0.19% 223 2012-13 204,951 12,316,280 25,859,898 38,176,178 0.18% 186 2013-14 209,130 12,002,622 24,614,512 36,617,134 0.15% 175 2014-15 213,231 11,673,964 23,304,126 34,978,090 0.13% 164 2015-16 219,611 26,012,352 - 26,012,352 0.10% 118 2016-17 216,350 25,262,456 - 25,262,456 0.09% 117 2017-18 216,589 40, 380, 831 - 40, 380, 831 0.13% 186 2018-19 218,103 65,333,412 - 65,333,412 0.20% 300 350 300 250 200 150 100 50 0 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Fiscal Year Source: (1) State of California, Finance Department 193 City of Santa Clarita Direct and Overlapping Tax and Assessment Debt June 30, 2019 2018-19 Assessed Valuation: $32,625,928,276 (Net of Redevelopment Agency Incremental Value of $415,555,111; 2018-19 Population: 218,103 Percent City's Share Total Debt Applicable of Debt 06/30/2019 To City "' 06/30/2019 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Santa Clarita Community College District $ 249,773,326 73.79% $ 184,317,728 William S. Hart Union High School District 341,954,641 73.79% $ 252,311,232 William S. Hart Union High School District Community Facilities District No. 90-1 265,000 100% $ 265,000 William S. Hart Union High School District Community Facilities District No. 2015-1 24,930,000 100% $ 24,930,000 Los Angeles Community College and Unified School DistrictE 14,036,840,000 0.00001 % $ 1,404 Castaic Union School District 21,305,446 28.873% $ 6,151,521 Newhall School District 6,925,000 60.70% $ 4,203,683 Newhall School District School Facilities Improvement District No. 2011-1 58,810,000 61.54% $ 36,191,674 Saugus Union School District 19,011,729 88.02% $ 16,734,884 Saugus Union School District School Facilities Improvement District No. 2014-1 37,895,000 88.23% $ 33,432,864 Saugus Union School District Community Facilities District No. 2006-1, Improvement Area N 19,135,000 99.17% $ 18,976,371 Saugus Union School District Community Facilities District No. 2006-1, Improvement Area N 20,840,000 100.00% $ 20,840,000 Saugus Union School District Community Facilities District No. 2006-1, Improvement Area N 20,810,000 100% $ 20,810,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N 7,360,000 100% $ 7,360,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N 7,795,000 100% $ 7,795,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area N 15,430,000 100% $ 15,430,000 Saugus -Hart School District Community Facilities District No. 2000-1 9,490,000 100% $ 9,490,000 Saugus-Castaic School District Facilities Financing Authority Community Facilities District N 16,465,000 100.00% $ 16,465,000 Sulphur Springs Union School District 48,363,939 92.81 % $ 44,885,605 Sulphur Springs Union School District Community Facilities District No. 2002-1 24,455,000 100% $ 24,455,000 Sulphur Springs Union School District Community Facilities District No. 2006-1 19,300,000 100% $ 19,300,000 City of Santa Clarita Open Space and Parkland Assessment District 13,145,000 100% $ 13,145,000 City of Santa Clarita Landscaping and Lighting Streetlighting Zones A and B 14,575,000 99.85% $ 14,552,700 City of Santa Clarita Community Facilities District No. 2002-1 13,990,000 100% $ 13,990,000 City of Santa Clarita 1915 Act Bonds 600,000 100% $ 600,000 Los Angeles County Regional Park and Open Space Assessment District 13,620,000 2.15% $ 292,694 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 806.927.359 Los Angeles County General Fund Obligations 2,153,701,630 2.15% $ 46,283,048 Los Angeles County Superintendent of Schools Certificates of Participation 5,827,868 2.15% $ 125,241 Los Angeles County Sanitation District No. 32 Authority 8,558,545 75.38% $ 6,451,003 Santa Clarita Community College District Certificates of Participation 8,835,000 73.79% $ 6,519,700 William S. Hart Union High School District Certificates of Participation 44,715,333 73.79% $ 21,348,282 Castaic Union School District Certificates of Participation 3,425,000 28.873% $ 988,900 Saugus Union School District Certificates of Participation 10,625,000 88.024% $ 9,352,550 Sulphur Springs Union School District Certificates of Participation 25,375,000 92.81 % $ 23,550,030 Los Angeles Unified School District Certificates of Participation 180,545,000 0.00001 % $ 18 City of Santa Clarita Obligations 37,215,018 100.00% $ 37,215,018 (2( TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 151,833,791 Total Net Direct and Overlapping General Fund Debt $ 151,833,791 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 33,180,000 100.000% 33,180,000 Total Direct Debt $ 50,360,018 Gross Total Overlapping Debt 941,581,132 Net Total Overlapping Debt $ 941,581,132 GROSS COMBINED TOTAL DEBT $ 991,941,150 () NET COMBINED TOTAL DEBT $ 991,941,150 (1( Percentage of overlapping debt applicable to the city is estimated using taxable assed property value. Applicable percentages were estimated b 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 va (2( City of Santa Clarita Obligations includes $2,177,480 for the Private Placement Lease, $2,538 for the Canon Copier Lease, $9,185,000 for the 2016A series Golden Valley Road bond, and $25,850,000 for the 2019 Series Sheriff Station Bond, O Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2017-18 Assessed Valuation: Direct Debt($13,450,000)...........................................................................0.04% Total Overlapping Tax and Assessment Debt...................................................2.47% Total Direct Debt($26,647,940)...................................................................0.15% Combined Total Debt...................................................................................3.08% Ratios to Redevelopment Successor Agency Incremental Valuation ($437.609.440) Total Overlapping Tax Increment Debt..............................................................7.58% Source: MuniServices, LLC 194 City of Santa Clarita Legal Debt Margin Information Last Ten Fiscal Years FISCAL YEAR 18-19 17-18 16-17 15-16 14-15 13-14 Assessed valuation $ 33,309,473,742 $ 30,727,345,419 $ 28,685,821,032 $ 27,330,863,338 $ 26,111,942,635 $ 24,269,472,731 Conversion percentage 25% 25% 25% 25% 25% 25% Adjusted assessed valuation 8,327,368,436 7,681,836,355 7,171,455,258 6,832,715,835 6,527,985,659 6,067,368,183 Debt limit percentage 15% 15% 15% 15% 15% 15% Debt limit 1,249,105,265 1,152,275,453 1,075,718,289 1,024,907,375 979,197,849 910,105,227 Total net debt applicable to limit: General obligation bonds - - Legal debt margin $ 1,249,105,265 $ 1,152,275,453 $ 1,075,718,289 $ 1,024,907,375 $ 979,197,849 $ 910,105,227 Total debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% 0% 0% Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarita, Administrative Services Department - Finance Division 195 FISCAL YEAR 12-13 11-12 10-11 09-10 $ 20,985,441,963 25% $ 21,168,938,632 25% $ 21,113,942,935 25% $ 21,262,122,246 25% 5,246,360,491 15% 5,292,234,658 15% 5,278,485,734 15% 5,315,530,562 15% 786,954,074 793,835,199 791,772,860 797,329,584 $ 786,954,074 $ 793,835,199 $ 791,772,860 $ 797,329,584 0% 0% 0% 0% LEGAL DEBT MARGIN Last Ten Fiscal Years Fiscal Year 196 City of Santa Clarita Pledged Revenue Coverage Last Ten Fiscal Years TRANSIT LESS NET Fiscal TRANSIT OPERATING AVAILABLE DEBT SERVICE Year REVENUES (1) EXPENSES (2) REVENUES Principal Interest COVERAGE 2009-10 21,179, 438 23, 525, 855 (2,346,417) 236,999 23,149 1.23% 2010-11 32, 507, 582 24, 270, 533 8,237, 048 248,304 11,844 0.80% 2011-12 26,133, 433 25,175, 688 957,745 - - - 2012-13 29,420,486 25,901,822 3,518,664 - - - 2013-14 33,298,907 27,044,874 6,254,034 - - - 2014-15 24, 008,186 28, 292, 380 (4,284,194) - - - 2015-16 26,853,481 28,327,301 (1,473,820) - - - 2016-17 28,652,461 30,231,012 (1,578,551) - - - 2017-18 29,124,857 30,654,674 (1,529,817) - - - 2018-19 38,089,054 32,224,652 5,864,402 - - - NOTE: (1( Includes Other revenues, Transfers in and Capital contributions () Includes Transfers out and Other expenses 197 City of Santa Clarita Demographic and Economic Statistics Last Ten Calendar Years AVERAGE AVERAGE PER CITY OF ANNUAL LOS ANGELES ANNUAL CAPITA TOTAL SANTA CLARITA PERCENTAGE COUNTY PERCENTAGE PERSONAL PERSONAL UNEMPLOYMENT YEAR POPULATION 111 INCREASE POPULATION 111 INCREASE INCOME 12) INCOME 12) RATE 131 2010 177,641 0.54% 9,822,121 0.21% 43,999 565,365,000 7.70% 2011 176,971 0.15% 9,818,605 -0.04% 44,423 575,044,998 7.60% 2012 177,445 0.64% 9,884,632 0.67% 46,337 604,831,837 6.90% 2013 204,951 15.50% 9,958,091 0.74% 48,425 635,891,798 6.60% 2014 209,130 2.04% 10,041,797 0.84% 50,751 673,073,539 4.70% 2015 213,231 1.96% 10,136,559 0.94% 54,526 727,377,241 6.40% 2016 219,611 2.99% 10,241,335 1.03% 57,160 760,828,529 4.70% 2017 216,350 -1.48% 10,241,278 0.00% 60,087 802,394,100 4.40% 2018 216,589 0.11 % 10,283,729 0.41 % N/A N/A 5.10% 2019 218,103 0.70% 10,253,716 -0.29% N/A N/A 4.80% 17.00% 15.00% 13.00% 11.00% 9.00% 7.00% 5.00% 3.00% 1.00% -1.00% POPULATIONINCREASE Last Ten Fiscal Years IMMEUA YEAR Sources: (1( State of California, Finance Department, as of 1/1/2018 (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), Sept. 21, 2018 Note: Reduction in 2017 population numbers due to change in the county controls. The primary factor was a lowering of the estimated school enrollment. 198 City of Santa Clarita Principal Employers Current Fiscal Year and Nine Fiscal Years Ago 2019* 2010 PERCENT PERCENT NUMBER of NUMBER of of TOTAL of TOTAL EMPLOYER EMPLOYEES EMPLOYMENT EMPLOYER EMPLOYEES EMPLOYMENT Six Flags Magic Six Flags Magic Mountain 3,200 10.38% Mountain 3,800 4.70% Princess Cruises 2,177 7.06% Princess Cruises 2,000 2.47% Henry Mayo Newhall Henry Mayo Newhall Memorial Hospital 1,982 6.43% Memorial Hospital 1,200 1.48% Boston Scientific 900 2.92% Speciality Laboratories 850 1.05% The Master's College 765 2.48% The Master's College 780 0.96% Walmart 705 2.29% Cal Arts 700 2.27% Arvato Services 580 0.72% Woodward HRT (formerly HR Textron) 680 2.21% Cal Arts 525 0.65% Quest Diagnostics (formerly Speciality Laboratories) 660 2.14% Aerospace Dynamics 440 0.54% Aerospace Dynamics 581 1.89% Fanfare Media Works 400 0.49% Largest firms ��� 12,350 40.08% Largest firms ��� 10,575 13.07% All others 18,467 59.92% All others 70,341 86.93% Grand total 30,817 100.00% Grand total 80,916 100.00% * As of March 2019 NOTE: (1( Non -governmental employers Source: 2019 Economic Outlook Santa Clarita Valley Economic Dev Corp & College of the Canyons 2010 CAFR 199 City of Santa Clarita Full -Time and Part -Time City Employees by Function Last Ten Fiscal Years FISCAL YEAR Function 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 09-10 General government 186.60 180.60 150.00 91.00 87.60 87.60 89.60 84.35 85.75 89.75 Public safety (1) - - - - - - - - - - Public works 141.50 139.50 128.50 131.50 125.00 122.00 129.00 126.00 127.00 128.00 Community developmen 45.00 44.00 44.00 37.00 41.00 41.00 32.00 30.50 33.00 33.00 Parks and Recreation 68.25 68.25 63.90 112.15 111.15 109.15 108.15 105.90 106.50 110.50 Transit 10.00 10.00 12.00 12.00 11.00 11.00 11.00 13.00 12.00 12.00 Totals 451.35 442.35 398.40 383.65 375.75 370.75 369.75 359.75 364.25 373.25 500.00 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 CITY OF SANTA CLARITA - EMPLOYEES Last Ten Fiscal Years 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 (1) Police and Fire services have been provided by the County Source: City of Santa Clarita, Administrative Services Department - Finance Division 200 City of Santa Clarita Operating Indicators by Function Last Ten Fiscal Years FISCAL YEAR Function 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 09-10 Police: Parking citations issued a"u 24,214 15,505 13,133 9,035 4,765 4,786 5,726 5,521 6,577 5,114 Parking revenue collected $ 364,954 $ 498,749 $ 470,843 $ 379,384 $ 320,682 $ 323,040 $ 341,607 $ 335,663 $ 323,408 $ 238,478 Public works: Street resurfacing (miles) 26.0 38.9 45.0 15.5 80.0 20.9 18.0 24.0 24.0 33.8 Parks and Recreation: Number of recreation classes 2,773 2,903 2,992 2,918 2,189 2,557 2,548 2,106 2,080 2,447 Number of facility rentals (times) 12,787 12,013 19,924 13,390 19,018 14,604 13,000 11,042 10,754 10,239 Transit: Number of customers served axp 2,680,202 2,775,327 2,864,351 3,167,021 3,422,015 3,540,969 3,661,302 3,612,060 3,724,490 3,922,052 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 201 City of Santa Clarita Capital Assets Statistics by Function Last Ten Fiscal Years Function Public works: Streets (miles) Street lights (11) Traffic signals (City Jurisdiction) Traffic signals (Joint Jurisdiction) Parks and recreation: Number of parks Community centers Transit: Stations FISCAL YEAR 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 09-10 540 540 537 516 497 496 496 496 496 496 18,662 18,662 17,843 17,843 17,843 17,843 17,843 15,081 14,963 14,939 187 187 186 180 180 177 177 171 170 166 5 5 5 5 5 5 5 6 1 6 32 32 32 32 32 29 29 24 23 20 2 2 2 2 2 2 1 1 1 1 4 4 4 4 4 4 4 4 4 4 (1( All of the above referred streetlights are/were owned and maintained by Edison Company. The Highway Safety Lights (HSL) are the streetlights attached to traffic signals (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 202 Single Audit Report June 30, 2019 City of Santa Clarita, California EideBailly, CITY OF SANTA CLARITA, CALIFORNIA SINGLE AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS PAGE Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Independent Auditor's 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 Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs 0 7 1. Summary of Auditor's Results 8 II. Financial Statement Findings 9 III. Federal Award Findings and Questioned Costs 11 Schedule of Prior Year Audit Findings and Recommendations 12 EideBailly, CIPAs & BUS111NIESS ADVIS0111S Independent Auditor's Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 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, 2019, 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 20, 2019. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Asignificant 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 and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2019-001 and 2019-002 that we consider to be significant deficiencies. What inspires you, "Inspires us., eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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. City's Response to Findings The City's response to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 20, 2019 EideBailly, CIPAs & BUSINESS ADVUS0111S Independent Auditor's 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, 2019. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued 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. What inspires you, "Inspires us., eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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, 2019. 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. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control 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, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 20, 2019 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. Z_ Rancho Cucamonga, California December 20, 2019 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 Federal Federal grantor / pass -through CFDA grantor / program or cluster title Number Pass -Through/ Amount Identification Federal Provided to Number Expenditures Subrecipients U.S. Department of Housing and Urban Development Direct Assistance: Community Development Block Grant/Entitlement Grants 14.218 B-16-MC-06-0576 $ 1,523 $ Community Development Block Grant/Entitlement Grants 14.218 B-17-MC-06-0576 703 - Community Development Block Grant/Entitlement Grants 14.218 B-18-MC-06-0576 591,234 444,513 Subtotal CDBG Entitlement Grants Cluster 593,460 444,513 Total U.S. Department of Housing and Urban Development 593,460 444,513 U.S. Department of Justice Direct Assistance: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2017-DJ-BX-0715 8,329 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2018-DJ-BX-0475 24,456 Subtotal Edward Byrne Memorial Justice Assistance Grant Program 32,785 Total U.S. Department of Justice 32,785 U.S. Department of Transportation Passed through the State of California, Transportation Department: Highway Planning and Construction 20.205 HSIPL-5450(085) 55,307 Highway Planning and Construction 20.205 HSIPL-5450(091) 192,100 Highway Planning and Construction 20.205 HSIPL-5450(093) 29,119 Highway Planning and Construction 20.205 HSIPL-5450(092) 197,722 Highway Planning and Construction 20.205 BPMPL-5450(086) 2,730 Highway Planning and Construction 20.205 HSIPL-5450(094) 144,832 Highway Planning and Construction 20.205 BPMPL-5450(095) 43,268 Highway Planning and Construction 20.205 BHLS-5405(082) 2,458,559 Highway Planning and Construction 20.205 BHLS-5450 (008) 1,004 Highway Planning and Construction 20.205 APTL-5450(087) 796,617 Highway Planning and Construction 20.205 APTLNI-5450(090) 97,127 Highway Planning and Construction 20.205 FERSTPL-5450(096) 1,427,919 Highway Planning and Construction 20.205 FERSTPL-5450(096) 1,066,253 Subtotal Highway Planning and Construction Cluster 6,512,557 Direct Assistance: Federal Transit Formula Grants 20.507 CA-90-Y276-02 113,655 Federal Transit Formula Grants 20.507 CA-90-Y276-02 24,584 Federal Transit Formula Grants 20.507 CA-90-Y276-02 27,250 Federal Transit Formula Grants 20.507 CA-90-Y276-02 314,400 Federal Transit Formula Grants 20.507 CA-90-Y276-02 1,780,497 Federal Transit Formula Grants 20.507 CA-90-Y276-02 1,615 Federal Transit Formula Grants 20.507 CA-90-Y276-02 10,753 Federal Transit Formula Grants 20.507 CA-90-Y276-02 2,200,000 Federal Transit Formula Grants 20.507 CA-90-Y851-01 286,726 Federal Transit Formula Grants 20.507 CA-2016-044-00 60,471 Federal Transit Formula Grants 20.507 CA-2016-051-00 3,914,325 Federal Transit Formula Grants 20.507 CA-2016-051-00 369,252 Federal Transit Formula Grants 20.507 CA-2016-051-00 548,646 Federal Transit Formula Grants 20.507 CA-2016-051-00 80,212 Federal Transit Formula Grants 20.507 CA-2017-138-00 618,317 Federal Transit Formula Grants 20.507 CA-2017-138-00 31,318 Federal Transit Formula Grants 20.507 CA-2018-089-00 22,109 Subtotal Federal Transit Cluster 10,404,130 Total U.S. Department of Transportation 16,916,687 Total Federal Awards $ 17,542,932 $ 444,513 See accompanying notes to Schedule of Expenditures of Federal Awards M CITY OF SANTA CLARITA, CALIFORNIA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 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, 2019 I. SUMMARY OF AUDITOR'S RESULTS FINANCIAL STATEMENTS Type of auditor's 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? Yes 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 auditor's 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 Number Name of Federal Program or Cluster 20.507 Federal Transit Cluster Dollar threshold used to distinguish between Type A and Type B programs: $ 750,000 Auditee qualified as low -risk auditee? Yes CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 II. FINANCIAL STATEMENT FINDINGS Finding Number 2019-001 FINANCIAL REPORTING AND CLOSING Criteria: Management is responsible for the preparation of the basic financial statements and all accompanying information as well as all representations contained therein and the fair presentation in conformity with U.S. generally accepted accounting principles. This requires management to perform a year-end closing process to accumulate, reconcile, and summarize information for inclusion in the annual financial statements. Condition: During the audit, we identified adjustments, which were corrected by management for the following: • Long term liabilities were understated by $850 thousand related to the 2019 Sheriff Station bonds. • Interest income and administrative expense in the OPEB Trust fund were understated by $92 thousand and was reclassified. • Activity in the OPEB Trust fund was understated by $225 thousand related to the implied subsidy estimates. • The General Fund expenditure classifications were adjusted to properly reflect costs. The reclassification accumulated to approximately $6.5 million. Context: The condition was noted during our audit of the City for the year ended June 30, 2019. Effect. Journal entries were posted, and adjustments made to the financial statements, in order to fairly present the financial statements. Cause: While the City has detailed closing procedures, certain adjustments were not identified and proposed during the audit. Management has posted these adjustments and they are reflected in the financial statements. Recommendation: We recommend that the City review its closing policies and procedures to ensure amounts are properly reconciled for year-end closing, including OPEB Trust Fund entries, overhead reimbursement closing entries, and any other non-standard entries posted during the year. Views of Responsible Officials and Planned Corrective Actions: The City concurs. Refer to separate Corrective Action Plan Report for management's response. CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 Finding Number 2019-002 PERSONNEL ACTION FORMS AND PAY RATE APPROVALS Criteria: The City's policy for approval of changes to personnel records is for such changes to be authorized by a Supervisor, Department Head, and Human Resources for full time employees, and a Supervisor and Human Resources for part time employees, prior to processing any changes. Additionally, a Pay Rate Audit is performed for each pay period, which is completed by Human Resources. Condition: We noted four of the sixty personnel action forms (PAF) selected for internal control testing did not include evidence of proper approval, based on the criteria above. In addition, the City's mitigating controls (bi-weekly Pay Rate Audits) did not detect the missing approvals on the employee action forms. Context: The condition was noted during our procedures over the internal controls related to personnel action forms and pay rate changes. Effect: Exceptions to the City's process were identified. This indicates that there is potential for unauthorized changes to the City's payroll system as PAF may be processed without proper authorization. Cause: The City's controls did not ensure that PAFs were properly approved before processing payroll changes. Recommendation: We recommend that the City evaluate the PAF approval process, including ensuring proper training for those involved, to ensure PAFs are properly authorized. Views of Responsible Officials and Planned Corrective Actions: The City concurs. Refer to separate Corrective Action Plan Report for management's response. 10 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 III. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None noted. 11 CITY OF SANTA CLARITA, CALIFORNIA SCHEDULE OF PRIOR AUDIT FINDINGS AND RECOMMENDATIONS FOR THE YEAR ENDED JUNE 30, 2019 None noted. 12 Financial Report June 30, 2019 The Transit Enterprise Fund of the City of Santa C 1 arita EideBailly, 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, 2019 Table of Contents Page INDEPENDENT AUDITOR'S REPORT.................................................................................................1 FINANCIAL STATEMENTS Statementof Net Position.................................................................................................................4 Statement of Revenues, Expenses and Changes in Fund Net Position.............................................5 Statementof Cash Flows..................................................................................................................6 Notesto Financial Statements..........................................................................................................7 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Transit Fund's Proportionate Share of the Net Pension Liability .........................22 Schedule of the Transit Fund's Pension Contributions..................................................................23 Schedule of the Transit Fund's Proportionate Share of the Net OPEB Liability ...........................24 Schedule of the Transit Fund's OPEB Contributions.....................................................................25 EideBailly, CIPAs & BUSINESS ADVUS0111S Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the Transit Enterprise Fund (Fund), an enterprise fund of the City of Santa Clarita, California (the City), as of and for the year ended June 30, 2019, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Fund's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. What Inspires you, "Inspires us. eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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, 2019, and the changes in its financial position and cash flows 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, 2019, 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, schedule of pension contributions, schedule of proportionate share of the net OPEB liability, and schedule of OPEB 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 20, 2019 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance, as it relates to the Fund of the City. Rancho Cucamonga, California December 20, 2019 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, 2019 ASSETS Current assets Pooled cash and investments $ 1,724,245 Accounts receivable 31,376 Interest receivable 8,152 Prepaids 24,602 Due from other governments 4,165,689 Total current assets 5,954,064 Noncurrent assets Capital assets Nondepreciable assets 18,894,535 Depreciable assets, net 65,011,905 Total noncurrent assets 83,906,440 Total assets 89,860,504 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to OPEB 44,337 Deferred outflows related to pensions 703,220 Total deferred outflows of resources 747,557 LIABILITIES Current liabilities Accounts payable 4,450,221 Compensated absences payable 36,645 Total current liabilities 4,486,866 Noncurrent liabilities Compensated absences payable 57,966 Net OPEB liability 146,648 Net pension liability 1,468,640 Total noncurrent liabilities 1,673,254 Total liabilities 6,160,120 DEFERRED INFLOWS OR RESOURCES Deferred inflows related to OPEB 186,530 Deferred inflows related to pensions 85,855 Total deferred inflows of resources 272,385 NET POSITION Net investment in capital assets 83,906,440 Unrestricted 269,116 Total net position $ 84,175,556 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 REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2019 Operating revenues: Metrolink and EZ pass revenues $ 239,917 Fixed -route passenger fares 2,919,227 Dial -A -Ride passenger fares 125,370 County of Los Angeles operating assistance 2,359,526 Specialized transit services 1,947,340 Miscellaneous revenues 70,806 Total operating revenues 7,662,186 Operating expenses Salaries and benefits 1,030,449 Administrative services 1,608,435 Contract transportation services 20,863,183 FTA funded non -capitalized projects 524,877 Insurance 109,740 Supplies, utilities and other 2,573,682 Depreciation 5,354,874 Total operating expenses 32,065,240 Operating loss (24,403,054) Nonoperating revenues (expenses): Proposition A discretionary 4,771,135 Proposition A specialized transportation 657,930 Proposition C expansion 202,611 Proposition C BSIP 52,591 Proposition C transit mitigation 27,595 Proposition C MOSIP 2,359,690 Proposition C security allocation 204,480 Measure R bus operations 2,395,651 Measure M bus operations 2,418,679 SB 1 State Transportation Assistance 980,918 Low Carbon Transportation 482,551 Transit mitigation fees 739,160 Investment income 32,613 Gain on disposal of capital assets 71,963 Total nonoperating revenues 15,397,567 Loss before contributions and transfers (9,005,487) Capital contributions: Federal Transit Administration capital grants 10,218,408 Proposition C MOSIP 215,874 Total capital contributions 10,434,282 Transfers from the City of Santa Clarita 4,589,298 Transfers to the City of Santa Clarita (153,690) Change in net position 5,864,403 Net Position: Beginning of year 78,311,153 End of year $ 84,175,556 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) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2019 Cash flows from operating activities Cash received from customers and users $ 7,576,825 Cash payments to suppliers of goods and services (22,952,483) Cash payments to employees (2,769,966) Cash received from other sources 70,806 Net cash used in operating activities (18,074,818) Cash Flows from noncapital financing activities Cash transfers out to the City of Santa Clarita (153,690) Cash transfers in from the City of Santa Clarita 4,589,298 Federal and state funding received 14,893,155 Net cash provided by noncapital financing activities 19,328,763 Cash flows from capital and related financing activities Federal and state capital contributions 10,434,282 Acquisition of capital assets (10,061,843) Sale of capital assets 71,963 Net cash provided by capital and related financing activities 444,402 Cash flows from investing activities: Interest received 25,898 Net Cash provided by investing activities 25,898 Net increase in cash and cash equivalents 1,724,245 Pooled cash and cash equivalents Beginning of year - End of year $ 1,724,245 Reconciliation of operating loss to net cash used in operating activities Operating loss $ (24,403,054) Adjustments to reconcile operating loss to net cash used in operating activities Depreciation 5,354,874 OPEB Expense 29,119 Pension Expense 282,280 Changes in operating assets and liabilities: Decrease in accounts receivable (14,555) Decrease in prepaids (10,016) Increase in accounts payable 1,417,577 Increase in compensated absences 18,974 Decrease in due to the City of Santa Clarita (288,562) Payments related to deferred outflows for pension contributions subsequent to the measurement date (439,297) Total adjustments 6,328,236 Net cash used in operating activities $ (18,074,818) See notes to 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, 2019 NOTE I — 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. 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. 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 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 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. 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, 2019 NOTE 1 — NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Prepaids: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. Administrative services: Service costs include contractual, professional, legal, and landscape services. 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 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 Building and improvements 5-50 years Equipment 5-25 years 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 (Ca1PERS) plan and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by Ca1PERS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Post -Employment Benefits (OPEB): For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2018 Measurement Date June 30, 2019 Measurement Period July 1, 2018 to June 30, 2019 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, 2019 NOTE 1 — NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net position: Net position represents the difference between assets and deferred outflows, and liabilities and deferred inflows, and is classified into three categories: Net investment in capital assets: This amount consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets, and excludes unspent debt proceeds. Restricted: Represents the net position that is constrained for use by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Unrestricted net position: This amount represents the residual of amounts not classified in the other two categories and represents the net position available for the City. When an expense is incurred for purposes for which both restricted and unrestricted resources are available, the Transit Fund's policy is to apply restricted resources first. 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, 2019 was $94,611 of which $36,645 was considered due within one year, and $57,966 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: The GASB has issued pronouncements that have an effective date subsequent to June 30, 2019, 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. 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. N 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, 2019 NOTE 1 — NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. GASB Statement No. 90 — In September 2018, the GASB issues Statement No. 90, Majority Equity Interests, an amendment of GASB Statements No. 14 and No. 61. The objectives of this Statement are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The Statement is 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. 91 — In May 2019, the GASB issues Statement No. 91, Conduit Debt Obligations. The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The Statement is effective for reporting periods beginning after December 15, 2020, or the 2021-22 fiscal year. The City has not determined the effect of this Statement. NOTE 2 — DUE FROM OTHER GOVERNMENTS Due from other governments consists of the following at June 30, 2019: Agency Los Angeles County $ 1,857,681 Federal Transit Administration 2,206,038 Other Agencies 101,970 $ 4,165,689 Due from other governments relate to various program support revenues received from other governments in support of transit operations and programs. 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, 2019 NOTE 3 — CAPITAL ASSETS Changes in capital assets of the Fund at June 30, 2019, consisted of the following: Non -depreciable assets: Land Construction Total non -depreciable assets Depreciable assets: Site improvements Building and improvements Equipment Total depreciable assets Less accumulated depreciation Site improvements Building and improvements Equipment Total accumulated depreciation Total depreciable assets, net Total capital assets, net Balance June 30, 2018 $ 15,087,880 2,807,217 17,895,097 12,941,276 41,483,799 55,060,617 109,485,692 (3,831,812) (12,809,079) (31,540,427) (48,181,318) 61,304,374 $ 79,199,471 Additions 999,438 999,438 Deletions Balance June 30, 2019 $ 15,087,880 3,806,655 18,894,535 - - 12,941,276 - - 41,483,799 9,068,128 (2,314,864) 61,813,881 9,068,128 (2,314,864) 116,238,956 (568,221) (883,347) (3,903,306) (5,354,874) 3,713,254 $ 4,712,692 NOTE 4 — TRANSFERS TO/FROM THE CITY OF SANTA CLARITA 2,309,141 2,309,141 (5,723) $ (5,723) (4,400,033) (13,692,426) (33,134,592) (51,227,051) 65,011,905 $ 83,906,440 During the year ended June 30, 2019, the Transit Fund transferred $153,690 to the City of Santa Clarita, $150,000 was to support the senior center transit operations and $3,690 for the proportional share of Metrolink station maintenance. Transfers to the Transit Fund from the City in the amount of $4,589,297 were to transfer TDA Article 8 and Proposition C non -operating revenues in the current year. Transfers from the City were made as follows: TDA (Art 8) Street and Road Proposition C $ 738,472 3,850,825 $ 4,589,297 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, 2019 NOTE 5 — 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 (Ca1PERS), which acts as a common investment and administrative agent for its participating member employers. The employees are participants in the Miscellaneous Plan ofthe 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. Ca1PERS 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 Ca1PERS website. Benefits Provided 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 up to $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 unrepresented 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 Service 0 to 5 years 5 to 9 years 10 to 14 years 15 years and greater Vested Percentage 0% 50% 75% 100% Employees hired after January 1, 2008, receive the PERS minimum and are not subject to a vesting schedule. 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, 2019 NOTE 5 — PENSION PLAN (CONTINUED) The Plan's provisions and benefits in effect at June 30, 2019, are summarized as follows: Formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of annual salary Required employee contribution rates* Required employer contribution rates Required Unfunded Accrued Liability (UAL) contribution Applies to: Tier 1 Miscellaneous Tier 2 Tier 3 2.7%at55 2%at60 2%at62 5 years of service 5 years of service 5 years of service monthly for life monthly for life monthly for life 50-55 50-60 52-62 2.7% 2.0% 2.0% 8% 7% 5.75% 8.560% $2,921,910 Tier 1 Employees hired before April 9, 2011** Tier 2 Employees hired between April 9, 2011, and December 31, 2012, or those hired January 1, 2013, or later, who have been a Classic Ca1PERS member with a public agency or in a Classific reciprocal plan within the last 6 months). ** Tier 3 Employees hired January 1, 2013, or later ** * For unrepresented Tier 1 participants, the City pays 1% of the required employee contribution. For the SEIU Tier 1 participants, the City pays 1% 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. 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 Ca1PERS. 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, 2019 were $439,297. 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, 2019 NOTE 5 — PENSION PLAN (CONTINUED) Pension Liabilities_ Pension EXnenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2019, 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 $1,468,640. 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, 2018, 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, 2017, rolled forward to June 30, 2018, 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, 2017 and 2018 were as follows: Proportion - June 30, 2017 Proportion - June 30, 2018 Change - Increase (Decrease) 3.51435% 3.51435% 0% For the year ended June 30, 2019, the Transit Fund recognized pension expense of $282,280. At June 30, 2019, the Transit Fund reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Difference between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Contributions subsequent to the measurement date Total Deferred Outflows of Resources $ 47,649 209,794 6,480 439,297 $ 703,220 Deferred Inflows of Resources $ (30,520) (55,335) $ (85,855) The amount of $439,297 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, 2020. Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense as follows: Fiscal Year Ending 2020 2021 Deferred Outflows/(Inflows) of Resources $ 129,710 98,602 2022 (37,635) 2023 (12,609) Total $ 178,068 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, 2019 NOTE 5 — PENSION PLAN (CONTINUED) Actuarial Assumptions The total pension liabilities in the June 30, 2017, actuarial valuation for the City 's Miscellaneous Plan was determined using the following actuarial assumptions applied to all periods included in the measurement: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Payroll Growth Projected Salary Increase Mortality (1) Depending on age, service and type of employment (2) Derived using Ca1PERS Membership Data for all Funds Miscellaneous June 30, 2017 June 30, 2018 Entry -Age Normal Cost Method 7.15% 2.75% 3.00% (1) (2) The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017, valuation were based on the results of an actuarial experience study for the period 1997 to 2011. Further details of the Experience Study can be found on the Ca1PERS website. Discount Rate The discount rate used to measure the total pension liability was 7.15 percent for the 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 7.15 percent rate of return on pension plan investments, Ca1PERS 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. 15 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, 2019 NOTE 5 — PENSION PLAN (CONTINUED) 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 Strategic Expected Real Rate Expected Real Rate Asset Class Allocation of Return 1-10 Years (a) of Return I I+ Years (b) Global Equity 50.0% 4.80% 5.98% Fixed Income 28.0% 1.00% 2.62% Inflation Assets 0.0% 0.77% 1.81% Private Equity 8.0% 6.30% 7.23% Real Estate 13.0% 3.75% 4.93% Liquidity 1.0% 0.00% -0.92% 100% (a) An expected inflation rate of 2.0% used for this period (b) An expected inflation rate of 2.9% used for this period Sensitivity of the Transit Fund's Proportionate Share of the Net Pension Liability to Chanizes 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: Transit Fund's proportionate share of the net pension liability 1% Decrease Current Discount 1% Increase (6.15%) Rate (7.15%) (8.15%) $2,536,709 $1,468,640 $597,388 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 Ca1PERS financial reports. NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) Plan Description The City has elected through resolution to provide healthcare benefits as a single employer plan to retirees, spouses, and eligible dependents of the City. This plan provides post -employment medical insurance benefits through the Ca1PERS Health Plan (the Plan). Accordingly, all amounts and disclosures are presented on a cost -sharing perspective where the Transit Fund is a participant in the City's plan. Additional details are provided on the plan within the City's CAFR. 16 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, 2019 NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Benefits Provided After age 65, the City contributes a flat monthly rate of $133 for those employees who retire under the PERS retirement system, subscribe to the PERS Health Insurance System, and have at least five years of Ca1PERS service, in accordance with Government Code. This is a perpetual benefit which is available to all PERS retirees including eligible dependents of deceased retirees. In addition, the City also contributes up to $1,016.58 to the monthly premium for health insurance for various employee groups, depending on hire date, total years of service to the City, and the applicable employee bargaining unit. Fundingolicy The City conducted an actuarial valuation to determine the City's liability to fund OPEB and determined that it served the City's interests to prefund those benefits. In December 2011, the City Council approved Resolution 1I- 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. The Plan Trustee is U.S. Bank, and Public Agencies Retirement Services (PARS) is the Trust Administrator. 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 percent of the Cash Subsidy. 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 2018-19 was $386,000. The amount contributed totaled $698,250, of which $16,758 was allocated to the Transit Fund. 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 Transit Fund received credit of $5,400 related to the fiscal year 2018-19 implied subsidy payments which has been included in the contributions amount above. Contributions The plan and its contributions are established by memorandums of understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2019, the Transit's Funds proportionate share of cash contributions were $16,758 in payments to the Plan and the estimated implied subsidy was $5,400, resulting in total payments of $22,158. 17 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, 2019 NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (CONTINUED) OPEB Liabilities_ OPEB Exbense_ and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2019, the net OPEB liability reported by the Transit for its proportionate share of the net OPEB liability of the Plan, as allocated by the City, was $146,648. The net OPEB liability was measured as of June 30, 2019, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using actuarial update procedures. The Transit Fund's proportion of the net OPEB liability was based on actual contributions paid by the Transit Fund in relation to the total City's contributions to the OPEB plan, as determined by the City. The Transit Fund's proportion of the net OPEB liability for the Plan as of June 30, 2018 and 2019 were as follows: Proportion - June 30, 2018 2.4% Proportion - June 30, 2019 Change - Increase (Decrease) 2.4% 0% For the year ended June 30, 2019, the Transit Fund recognized OPEB expense of $6,961 and reported deferred inflows and outflows of resources related to OPEB from the following sources: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on plan investments Total Deferred Deferred Outflows Inflows of Resources of Resources 156,479 44,337 19,272 - 10,779 $ 44,337 $ 186,530 Amounts reported as deferred inflows and outflows of resources are amortized in OPEB expense. The amortization period differs depending on the source of the gain or loss. The amortization period is a 15-year fixed period and all other amounts are amortized over the average expected remaining service lives of all members that are provided with benefits. As of June 30, 2019 measurement date, the expected average remaining service lifetime is 9 years. Deferred inflows and outflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30, Amortization 2020 $ (20,685) 2021 (20,685) 2022 (20,661) 2023 (17,685) 2024 (17,235) 2025, and thereafter (45,241) Total $ (142,193) 18 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, 2019 NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Actuarial Assumptions The total OPEB liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial Valuation Date June 30, 2018 Contribution Policy City contributes full cash benefit ADC. Implied Subsidy benefit on pay-as-you-go basis. Discount Rate 5.17% at June 30, 2019 5.60% at June 30, 2018 Expected City contributions projected to be insufficient to pay all benefits from trust. Municipal Bond Index Bond Buyer 20-bond Index 3.50% June 30, 2019 3.87% June 30, 2018 Long Term Return on Assets 6.50% General Inflation 2.75% per annum Mortality, Retirement, Disability, Termination Ca1PERS 1997-2015 Experience Study Mortality Improvement Fully generational Scale MP-2018 Salary Increases Aggregate -3% per annum Merit - CalPERS 1997-2015 Experience Study Medical Trend Non -Medicare - 7.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 and later years Medicare - 6.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 and later years PEMHCA Minimum Increases 4.25% per annum Healthcare participation at Hired < I/1/08: 100% Hired > 1/l/08: 60% Cap Increases No increase on $1,016.58 cap Medical trend for EE+I cap Mortality rates were based on the 2011 Ca1PERS actuarial experience study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale BB. The Experience Study report can be obtained on the Ca1PERS website under Forms and Publications. W 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, 2019 NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Discount Rate The discount rate used to measure the total OPEB liability was 5.17 percent for the 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 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, the plan's fiduciary net position and expected City contributions were projected to be insufficient to make all projected future benefit payments of current active and inactive employees. Therefore, a blended rate was applied beginning in year 35 using the Bond Buyer 20-bond index rate as of June 30, 2019. Before year 35, the long-term expected rate of return was used to determine the total OPEB liability. As a result of the crossover, a blended rate of 5.17 percent was used. The long-term expected rate of return on 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 OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and most recent best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Target Allocation Expected Real Asset Class PARS -Balance Rate of Return Global Equity 58% 4.82% Fixed Income 35% 1.47% REITS 2% 3.76% Cash 5% 0.06% 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 OPEB liability if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate: 1 % Decrease Discount Rate 1 % Increase (4.17%) (5.17%) (6.17%) Net OPEB Liability (Asset) $ 341,673 $ 146,648 $ (9,627) 20 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, 2019 NOTE 6 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Sensitivity of the Transit Fund's Proportionate Share of the Net OPEB liability to Changes in the Healthcare Cost Trend Rates The following presents the Transit Fund's proportionate share of the net OPEB liability, as well as what the Transit Fund's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates, for measurement period ended June 30, 2019: Healthcare Trend Rate 1 % Decrease Current Rate 1 % Increase Net OPEB Liability (Asset) $ (37,429) $ 146,648 $ 382,671 OPEB Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the City's CAFR. 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 $736,323 for the year ended June 30, 2019. 21 REQUIRED SUPPLEMENTARY INFORMATION o o, N M 69 69 69 69 0 CO M 69 69 O N O M � O O M N r-i r-i 69 69 69 69 0 O 0 oc O O 0 O 0 r- N N 3 � i M 0 FA FA O U N O a. O o U y O cz U U N cz cz cz O N cz x" cC � O � U O O O M N 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 OPEB LIABILITY FOR THE YEAR ENDED JUNE 30, 2019 Transit Fund's proportion of the net OPEB liability Transit Fund's proportionate share of the net OPEB liability Transit Fund's covered -employee payroll Transit Fund's proportionate share of the net OPEB liability as a percentage of its covered -employee payroll Plan fiduciary net position as a percentage of the total OPEB liability 2019 2018* $ 146,648 $ 247,416 2.40% 2.40% 813,498 735,216 Notes to Schedule: * Fiscal year 2018 was the first year of implementation, therefore only 2 years are shown. 18.03% 33.65% 87.12% 79.08% 24 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 OPEB CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2019 Contractually determined contribution Contributions in relation to the contractually determined contributions Contribution deficiency (excess) Covered -employee payroll Contributions as a percentage of covered payroll Notes to Schedule: * Fiscal year 2018 was the first year of implementation, therefore only 2 years are shown Methods and Assumptions for 2018/19 Actuarially Determined Contributions 813,498 735,216 2.72% 4.01% Valuation Date June 30, 2018 Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Amortization Method Level percent of pay Amortization Period 15-year fixed period for 6/30/19 Asset Valuation Method Investment gains and losses spread over 5-year rolling period Discount Rate 6.50% General Inflation 2.75% Medical Trend Non -Medicare -Actual premiums for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Medicare -Actual premiums for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Mortality Ca1PERS 1997-2015 experience study Mortality Improvement Mortality projected post -retirement mortality projected with Scale MP-18 Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. 25 Financial Report June 30, 2019 City of Santa Clarita, California Open Space Preservation District Special Revenue Fund EideBailly, CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND Financial Report For the Year Ended June 30, 2019 Table of Contents Page INDEPENDENT AUDITOR'S REPORT.................................................................................................I BASIC FINANCIAL STATEMENTS BalanceSheet...................................................................................................................................3 Statement of Revenues, Expenditures and Changes in Fund Balance..............................................4 Notesto Financial Statements..........................................................................................................5 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance — Budgetand Actual...............................................................................................................7 Note to Required Supplementary Information.................................................................................8 EideBailly, CIPAs & BUSINESS ADVISORS Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the 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, 2019, and the related notes to the financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. What Inspires you, "Inspires us. eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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, 2019, 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, 2019, and the changes in its 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 and related note on page 7 and 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 20, 2019 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Rancho Cucamonga, �Calrnia December 20, 2019 2 BASIC FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND BALANCESHEET JUNE 30, 2019 Assets Pooled cash and investments Receivables: Interest Taxes Total assets Liabilities and fund balance Liabilities Accounts payable and accrued liabilities Fund balance Restricted for Open Space Preservation Total liabilities and fund balance See notes to financial statements. $ 3,932,133 15,686 27,293 $ 3,975,112 $ 105,457 3,869,655 $ 3,975,112 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, 2019 Revenues Special assessments Investment income Charges for services Other revenues Total revenues Expenditures Current: Open Space Preservation Capital outlay Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses): Transfers to other funds of the City of Santa Clarita Net change in fund balance Fund balance, beginning of year Fund balance, end of year See notes to financial statements. 4 $ 2,698,670 144,847 128,942 2,500 2,974,959 459,427 1,598,477 2,057,904 917,055 (723,606) 193,449 3,676,206 $ 3,869,655 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: On July 17, 2007, the City of Santa Clarita (the City) established the Santa Clarita Open Space Preservation District (the District) pursuant to the provisions of the Landscape and Lighting Act of 1972, being Part 2 of Division 15 of the California Street and Highway Code. The purpose of the District is to fund a portion of the City's open space, park and parkland program consisting of the acquisition, preservation, improvement, servicing, financing and maintenance of open -space land, parks and parkland, and appurtenant equipment and facilities, including the payment of debt service, of benefit to the property within the District. Facilities include, but are not limited to, open -space land, parks, parklands, the Santa Clarita River Watershed, trail systems and wildlife corridors. These are financed by special assessments levied on parcels within the City boundaries. The boundaries of the District are the same as the boundaries of the City. The City established the Open Space Preservation District Special Revenue Fund (Fund) to account for the activities 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 principles generally accepted in the United States of America (U.S. GAAP). The Fund is presented as a Special Revenue Fund of the City. The Governmental Accounting Standards Board (GASB) is the acknowledged standard -setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States. The financial statements were prepared from only the accounts of the Fund and, therefore, do not present the financial position or results of operations of the City 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 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 the fund balance. The primary revenue sources are special assessments and interest revenue. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are considered available if they are collected within 90 days of the end of the current fiscal period, except for special assessments, which are within 60 days. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 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 a share of pooled cash and investments, which are separately maintained, and interest income was apportioned based on its average month -end cash balances to the total of the pooled cash and investments. CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Special assessments: Special assessment taxes are attached as enforceable liens on real property on July 1, the beginning of the fiscal year, and are due in two installments on November 1 and February 1; however, no penalties or interest are assessed until December 10 and April 10, respectively. These taxes are determined annually based on property values, subject to limits based on Proposition 13, as of January 1 of the levy year, which is prior to the end of the previous fiscal year. The County of Los Angeles bills and collects these taxes for the District and are remitted on a monthly basis. Fund Balance: 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 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 requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. NOTE 2 — CASH AND INVESTMENTS The Fund's pooled cash and investments at June 30, 2019 was $3,932,133. The deposit and investment disclosures required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, as they relate to the pooled cash and investments, are reported in the annual report of the City. The pooled cash and investments are unrated, and average maturity is 30 days orless. 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. NOTE 3 — TRANSFERS TO OTHER FUNDS OF THE CITY OF SANTA CLARITA The Fund made transfers to the City's Public Financing Authority's capital project fund of $723,606 for current year debt service payments for the Lease Revenue Bond Series 2016B. As of June 30, 2019, $13,145,000 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. Additional information regarding the Lease Revenue Bond Series 2016B is presented in the City's Comprehensive Annual Financial Report. M 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, 2019 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Revenues Special assessments $ 2,688,000 $ 2,688,000 $ 2,698,670 $ 10,670 Investment income 12,750 12,750 144,847 132,097 Charges for services 121,442 121,442 128,942 7,500 Other revenue - 1,613 2,500 887 Total revenues 2,822,192 2,823,805 2,974,959 151,154 Expenditures: Operating: Personnel 222,800 193,880 133,871 60,009 Operating 370,135 417,244 325,556 91,688 Capital outlay - 1,824,672 1,537,923 286,749 Capital Improvement Projects: Operating 68,200 118,200 60,554 57,646 Total Expenditures 661,135 2,553,996 2,057,904 496,092 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,161,057 269,809 917,055 647,246 Other financing sources (uses): Transfer out (727,715) (723,606) (723,606) - Net Change in Fund Balance $ 1,433,342 $ (453,797) 193,449 $ 647,246 Fund Balance at Beginning of Year 3,676,206 Fund Balance at End of Year $ 3,869,655 See accompanying note to required supplementary information. 7 CITY OF SANTA CLARITA, CALIFORNIA OPEN SPACE PRESERVATION DISTRICT SPECIAL REVENUE FUND NOTE TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2019 Budgetary Information Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles in the United States of America for all governmental funds, except that encumbrances are shown in the year incurred for budgetary purposes. 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. The proposed budget is presented to the City Council for review. The City Council holds public hearings, and a final budget must be 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 budgetary control for the Capital Improvement Program is at the program level. 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 restricted fund balance. Unexpended appropriations lapse at year-end. Financial Report June 30, 2019 City of Santa Clarita, California Air Quality Improvement Special Revenue Fund EideBailly, CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND Financial Report For the Year Ended June 30, 2019 Table of Contents Page INDEPENDENT AUDITOR'S REPORT....................................................................................................... 1 BASIC FINANCIAL STATEMENTS BalanceSheet......................................................................................................................................... 3 Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 4 Notesto Financial Statements................................................................................................................ 5 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund balance — Budget and Actual and Related Note to RSI........................................................................................ 8 Notes to Required Supplemental Information....................................................................................... 9 EideBailly, CIPAs & BUSINESS ADVISORS Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California Report on the Financial Statements We have audited the accompanying financial statements of the Air Quality Improvement Special Revenue Fund (Fund) of the City of Santa Clarita, California (City) as of and for the year ended June 30, 2019, and the related notes to the financial statements, as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. What Inspires you, "Inspires us. eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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, 2019, 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, 2019, 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 and related note on pages 8 and 9 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2019 on our consideration of the Fund's internal control over financial reporting and on our tests of the City's compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Fund's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund's internal control over financial reporting and compliance, as it relates to the Fund of the City. Rancho Cucamong�Cifornia, December 20, 2019 BASIC FINANCIAL STATEMENTS CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND BALANCESHEET JUNE 30, 2019 Assets Pooled cash and investments Interest receivable Due from South Coast Air Quality Management District Total assets Liabilities and fund balance Liabilities Accounts payable and accrued liabilities Fund Balance Restricted Total liabilities and fund balance See accompanying notes to financial statements. $ 740,806 2,944 72,831 $ 816,581 $ 169,784 646,797 $ 816,581 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, 2019 Revenues Assembly Bill 2766 revenues Investment income Total revenues Expenditures Administrative Air quality improvement program Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year See accompanying notes to financial statements. $ 280,929 31,176 312,105 5,164 465,751 470,915 (158,810) 805,607 $ 646,797 4 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — 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 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 NOTE I — 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, 2019 is $740,806. 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 — DUE FROMSOUTH COAST AIR Q UALITY MANA GEMENT DISTRICT The South Coast Air Quality Management District (SCAQMD) collects revenues from annual vehicle registration fees and allocates a percentage of the revenues collected to the City. As of June 30, 2019, the Fund's due from SCAQMD balance totaled $72,831. Cel CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 NOTE 4 — 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. 7 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, 2019 Revenues Assembly Bill 2766 revenues Investment income (loss) Total revenues Expenditures: Administrative Air quality improvement program Total Expenditures Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Actual Variance with Final Budget Positive Original Final Amounts (Negative) $ 280,500 $ 280,500 $ 280,929 $ 5,100 5,100 31,176 429 26,076 285,600 285,600 312,105 26,505 11,820 11,820 5,164 6,656 327,803 911,552 465,751 445,801 339,623 923,372 470,915 452,457 $ (54,023) $ (637,772) (158,810) $ (425,952) 805,607 $ 646,797 See accompanying note to required supplementary information. 8 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTE TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2019 Budgetary Information Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles in the United States of America for all governmental funds, except that encumbrances are shown in the year incurred for budgetary purposes. 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. The proposed budget is presented to the City Council for review. The City Council holds public hearings, and a final budget must be 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 budgetary control for the Capital Improvement Program is at the program level. 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. The schedule does not present the legal level of budgetary control, which is at the category level. Refer to the City's CAFR for further information. 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 restricted fund balance. Unexpended appropriations lapse at year-end. EideBailly, CIPAs & B US111NIESS ADVISORS Independent Auditor's 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 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, 2019, and the related notes to the financial statements, and have issued our report thereon dated December 20, 2019. 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 Fund's internal control. Accordingly, we do not express an opinion on the effectiveness of the Fund's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. Asignificant 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 and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify certain deficiencies in internal control of the Fund, described in the accompanying schedule of findings and responses as item 2019-001 that we consider to be material weaknesses. What Inspires you, "Inspires us., eidelbaillllymcomu 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE 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. City's Response to Findings The City's response to the findings identified in our audit are described in the accompanying schedule of findings and responses. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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 20, 2019 CITY OF SANTA CLARITA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND SCHEDULE OF FINDING AND RESPONSE JUNE 30, 2019 Finding Number 2019-001 FINANCIAL REPORTING AND CLOSING Criteria: Management is responsible for the preparation of the Fund's basic financial statements and all accompanying information as well as all representations contained therein and the fair presentation in conformity with U.S. generally accepted accounting principles. This requires management to perform a year-end closing process to accumulate, reconcile, and summarize information for inclusion in the Fund financial statements. Condition: During the audit, we identified an adjustment to the Fund, which was corrected by management for the following: • $13 thousand accrual for services performed during year ended June 30, 2019 but paid for subsequent to year-end. Context: The condition was noted during our audit of the Fund for the year ended June 30, 2019. Effect: Journal entries were posted, and adjustments made to the financial statements, in order to fairly present the Fund financial statements. Cause: While the City has detailed closing procedures, the adjustment was identified and proposed during the audit. Management has posted the adjustments and they are reflected in the financial statements. Recommendation: We recommend that the City review its closing policies and procedures to ensure amounts are properly reconciled for year-end closing, including evaluating the thresholds used for accruals on standalone funds. Views of Responsible Officials and Planned Corrective Actions: The City concurs. Updates to the City's year-end closing checklist have been made. The Senior Financial Analyst responsible for oversight of the accrual and audit process will perform a review of all expenditures that occurred 90 days following the end of the fiscal year to ensure invoice payments, regardless of the amount, are accrued for the Air Quality Improvement Fund, and other standalone funds, as applicable.