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2021-01-26 - AGENDA REPORTS - FY 2019-20 CAFR (2)
O Agenda Item: 4 P CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL:1 DATE: January 26, 2021 SUBJECT: FISCAL YEAR 2019-20 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, 2020. 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, 2020. 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, 2020. 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 Packet Pg. 26 O In addition, the following reports were prepared for the fiscal year ending June 30, 2020, 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 06-30-20 (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 06-30-20 (available in the City Clerk's Reading File) Single Audit Report 06-30-20 (available in the City Clerk's Reading File) Transit Enterprise Fund 06-30-20 (available in the City Clerk's Reading File) Air Quality Improvement Fund 06-30-20 (available in the City Clerk's Reading File) Open Space Preservation District 06-30-20 (available in the City Clerk's Reading File) Page 2 Packet Pg. 27 „l..d,l a].... lPAs L IRUSIIN1I.SS ADVISORS December 22, 2020 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, 2020, and have issued our reports indicated below thereon dated December 22, 2020: 1. Comprehensive Annual Financial Report (CAFR) 2. Transit Enterprise Fund Standalone Report 3. Air Quality Improvement Fund Standalone Report 4. Open Space Preservation District Report 5. Santa Clarita Watershed Recreation and Conservation Authority Report 6. Santa Clarita Public Television Authority Report (includes June 30, 2020 and 2019) 7. Single Audit Report Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards and our Compliance Audit under the Uniform Guidance As communicated in our letter dated April 28, 2020 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 and to express an opinion on whether the City complied with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City's major federal program. Our audit of the financial statements and major program compliance does not relieve you or management of its 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. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niillyuccirlilr 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE Our responsibility, as prescribed by professional standards as it relates to the audit of the City major federal program compliance, is to express an opinion on the compliance for the City's major federal program based on our audit of the types of compliance requirements referred to above. An audit of major program compliance includes consideration of internal control over compliance with the types of compliance requirements referred to above as a basis for designing audit procedures that are appropriate in the circumstances 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, as a part of our major program compliance audit, we considered internal control over compliance for these purposes and not to provide any assurance on the effectiveness of the City's internal control over compliance. 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 controls 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 22, 2020. 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 22, 2020. 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. The City adopted Governmental Accounting Standards Board (GASB) Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, July 1, 2019. 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, estimates related to pension and OPEB liabilities, and the related deferred inflows and outflows of resources, pension and OPEB expense, and disclosures, and estimates of the City's claims and judgements liabilities 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 and claims and judgements liabilities are based on actuarial valuations. We evaluated the key factors and assumptions used to develop the fair value of investments estimates, and estimate of the pension, OPEB and claims liabilities and determined that it is 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. No uncorrected or corrected misstatements arose during the course of the audit. 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 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 22, 2020. 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 conditions affecting the entity, and operating 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. Group Audits The financial statements include the financial activity of the Santa Clarita Public Financing Authority (Authority), a blended component unit of the City. For the purposes of our audit, we do not consider the Authority to be a significant component of the financial statements. Consistent with the audit of the financial statements as a whole, our audit included obtaining an understanding of the Authority and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements as it relates to the Authority and completion of further audit procedures. 4 This report is intended solely for the information and use of the members 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 COMPREHENSIVE ANNUAL FINANCIAL REPORT Financial Statements June 30, 2020 City of Santa Clarita, California City of Santa Clarita, California Table of Contents June 30, 2020 INTRODUCTORY SECTION Letterof Transmittal................................................................................................................................................... i GFOA Certificate of Achievement for Excellence in Financial Reporting................................................................ viii Officials of the City of Santa Clarita.......................................................................................................................... ix OrganizationalChart.................................................................................................................................................. x Mapof the City of Santa Clarita................................................................................................................................ xi FINANCIAL SECTION IndependentAuditor's Report................................................................................................................................... 1 Management's Discussion and Analysis.................................................................................................................... 5 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position...................................................................................................................................15 Statementof Activities.........................................................................................................................................17 Fund Financial Statements: Government Funds Financial Statements: BalanceSheet.......................................................................................................................................................19 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ............................21 Statement of Revenues, Expenditures and Changes in Fund Balances............................................................... 22 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities............................................................................................................... 24 Proprietary Funds Financial Statements: Statementof Net Position................................................................................................................................... 25 Statement of Revenues, Expenses and Changes in Net Position.........................................................................26 Statementof Cash Flows..................................................................................................................................... 27 Fiduciary Funds Financial Statements: Statement of Fiduciary Net Position....................................................................................................................28 Statement of Changes in Fiduciary Net Position................................................................................................. 29 Notes to Financial Statements.............................................................................................................................31 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual: GeneralFund...................................................................................................................................................92 Bridge and Thoroughfare Special Revenue Fund............................................................................................ 93 Developer Fees Special Revenue Fund............................................................................................................94 City of Santa Clarita, California Table of Contents (Continued) June 30, 2020 Public Library Special Revenue Fund...............................................................................................................95 Landscape Maintenance District #1 Special Revenue Fund............................................................................96 Schedule of Changes in the Net OPEB Liability and Related Ratios....................................................................97 Schedule of Contributions — OPEB...................................................................................................................... 98 Schedule of Money Weighted Rate of Return — OPEB........................................................................................ 99 Schedule of Changes in the City's Net Pension Liability and Related Ratios .................................................... 100 Schedule of City Contributions — Pensions.......................................................................................................101 Notes to Required Supplementary Information...............................................................................................103 Supplementary Information Non -major Governmental Funds: Description of Non -Major Governmental Funds...............................................................................................106 CombiningBalance Sheet..................................................................................................................................110 Combining Statement of Revenues, Expenditures and Changes in Fund Balances...........................................118 Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual: Bikeway Special Revenue Fund.......................................................................................................................... 125 Gas Tax Special Revenue Fund...........................................................................................................................126 Proposition A Special Revenue Fund.................................................................................................................127 Special Assessment Special Revenue Fund........................................................................................................ 128 Street Lighting District Special Revenue Fund...................................................................................................129 Measure M Local Return Special Revenue Fund...............................................................................................130 SB1 Road Repair and Activity Special Revenue Fund.........................................................................................131 State Park Special Revenue Fund.......................................................................................................................132 Transportation Development Act 8 Special Revenue Fund...............................................................................133 Traffic Safety Special Revenue Fund.................................................................................................................. 134 Community Development Block Grant Special Revenue Fund.......................................................................... 135 Air Quality Management District Special Revenue Fund...................................................................................136 Stormwater Special Revenue Fund.................................................................................................................... 137 Surface Transportation Program Special Revenue Fund...................................................................................138 BJA Law Enforcement Special Revenue Fund.................................................................................................... 139 Supplemental Law Grant Special Revenue Fund...............................................................................................140 HOMESpecial Revenue Fund.............................................................................................................................141 Library Facilities Fees Special Revenue Fund.....................................................................................................142 Public Education and Government Special Revenue Fund................................................................................ 143 Proposition C Special Revenue Fund.................................................................................................................. 144 Federal Grants Special Revenue Fund...............................................................................................................145 Measure R Special Revenue Fund...................................................................................................................... 146 Measure R Highway Improvement Special Revenue Fund................................................................................ 147 Measure M ATP Special Revenue Fund.............................................................................................................148 Measure A Safe Parks Special Revenue Fund.................................................................................................... 149 Measure W Safe Clean Water Special Revenue Fund........................................................................................ 150 Tourism Marketing District Special Revenue Fund............................................................................................ 151 Open Space Preservation District Special Revenue Fund.................................................................................. 152 Miscellaneous Grants Special Revenue Fund....................................................................................................153 Park Dedication Special Revenue Fund.............................................................................................................. 154 Housing Successor Agency Special Revenue Fund.............................................................................................155 City of Santa Clarita, California Table of Contents (Continued) June 30, 2020 Tourism Marketing Bureau Special Revenue Fund............................................................................................ 156 Areawide Special Revenue Fund........................................................................................................................ 157 Vista Canyon Wastewater Standby District Special Revenue Fund................................................................... 158 General Capital Projects Fund............................................................................................................................ 159 Public Financing Authority Capital Projects Fund.............................................................................................. 160 Civic Arts Projects Capital Projects Fund...........................................................................................................161 Public Financing Authority Debt Service Fund...................................................................................................162 Internal Services Funds: Description of Internal Service Funds................................................................................................................ 163 Combining Statement of Net Position...............................................................................................................164 Combining Statement of Revenues, Expenses and Changes in Net Position .................................................... 165 Combining Statement of Cash Flows.................................................................................................................166 Agency Funds Descriptionof Agency Funds.........................................................................................................................167 Combining Statement of Assets and Liabilities.............................................................................................. 168 Combining Statement of Changes in Assets and Liabilities...........................................................................170 STATISTICAL SECTION NetPosition by Component...............................................................................................................................176 Changesin Net Position.....................................................................................................................................178 Fund Balances of Governmental Funds.............................................................................................................182 Changes in Fund Balances of Governmental Funds...........................................................................................184 Assessed Values (1) and Actual Values of Taxable Property.............................................................................186 Redevelopment Agency (1) Assessed Values (2) and Actual Values of Taxable Property.................................188 Assessed Values —Taxable Property.................................................................................................................. 190 Assessed Values —Use Category Summary........................................................................................................ 192 Direct and Overlapping Property Tax Rates.......................................................................................................193 Principal Property Taxpayers.............................................................................................................................195 Property Tax Levies, Tax Collections and Delinquencies...................................................................................196 Successor Agency Top Property Owners Based on Net Values.........................................................................197 Successor Agency Project Area Assessment Appeals Summary and Tax Collection History.............................198 Charge Detail Report for CFD 2002-1 (Valencia Town Center).......................................................................... 200 Ratio of Outstanding Debt by Type.................................................................................................................... 202 Ratio of General Bonded Debt Outstanding...................................................................................................... 204 Direct and Overlapping Tax and Assessment Debt............................................................................................ 205 LegalDebt Margin Information..........................................................................................................................206 PledgedRevenue Coverage............................................................................................................................... 208 Demographic and Economic Statistics............................................................................................................... 209 PrincipalEmployers............................................................................................................................................210 Full -Time and Part -Time City Employees by Function.......................................................................................211 Operating Indicators by Function...................................................................................................................... 212 Capital Assets Statistics by Function.................................................................................................................. 213 n/ City of SANTA CLARITA 23920 Valencia Boulevard • Santa Clarita, California 91355-2196 Phone: (661) 259-2489 ® FAX: (661) 259-8125 www.santa-claiita.com December 22, 2020 Honorable Mayor, Mayor Pro Tern and City Councilmembers: The Comprehensive Annual Financial Report (CAFR) of the City of Santa Clarita for fiscal year ended. June 30, 2020, 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 fiends 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, 2020. The independent auditor's report is located at the front of the financial section of this report. The CAFR has been prepared in conformity with Generally Accepted Accounting Principles (GAAP) and the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). These reporting requirements specify that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A, which immediately follows the independent auditor's report, complements this letter of transmittal and should be read in conjunction with it. Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed by our independent audit firm. The Single Audit was designed to meet the special needs of the federal grantor agencies. The standards governing the Single Audit engagements require that the independent auditor report on the fair presentation of the financial statements and the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 2 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 70 square miles. With a population of 225,000, the City is the third - largest in Los Angeles County and the 18"' largest in the State of California. Santa Clarita offers an expansive parks and recreation network, with 35 beautiful park facilities, nearly 11,000 acres of City -owned open space, and 150 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 find. The budgetary control for the Capital Improvement Program is at the program level. 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. While the COVID crisis has impacted our community, like all communities, with residents and businesses being affected, the City of Santa Clarita is working to position itself to have a quicker recovery just as we were able to accomplish during the great recession. Retail sales have decreased Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 3 during the pandemic, and as such, sales tax revenues decreased. However, activity is picking back up, and the housing market remains steady. This year saw significant progress in the Needham Ranch development. The first two tenants were secured with Illumination Dynamics and Amazon signing on for Buildings 1 and 6, respectively. Illumination Dynamics is up and running, and Amazon should be up and running later in the year. In addition, Phase 2 of the Needham Ranch development was purchased in early 2020 and is set to begin grading on an additional l million square feet of industrial space in late 2020, bringing the total business park to 2 million square feet of first in class industrial space. Despite the pandemic, a number of new businesses have opened in our community this year including Paws Stay and Play, Slater's 50150, The Children's Place, AT&T, It's Boba Time's third location, L' Occitane, Bagel Boys' second location, Rocket Fizz, Lettermen's Sports Bar, Earth Baby Boutique, Dunn Edwards, Shell/Circle K Mart, Porsche and Flex-N-Burn. Businesses slated to open later in the year include Painting with a Twist, Pro hnage Sports, Anthropologie and Crab N Spice. Businesses opening soon at Newhall Crossings in Old Town Newhall are Rustic Burger House, The Local Japanese Bakery & Cafe, XRO Fresh Churro Bar, C'est L'Amour Nail, Grit & Gratitude, The Glass House LA, Pops Artisanal Creamery, a new boutique hotel, the Luxen Hotel and a seven -screen Laemrnle Theatre which will add 500 seats for moviegoers. The pandemic has impacted commercial vacancy rates significantly this year. Retail vacancy rates have increased, currently at 4.7 percent, compared to 3.4 percent in the 2nd Quarter of 2019. Industrial vacancy rates are at 4.8 percent, increasing from 1.8 percent in the 2nd Quarter of 2019. Office space in the City is currently at a 9.2 percent vacancy rate compared to 7.9 percent in the 2nd Quarter of 2019. Despite the impacts of COVID-19, the City's Film Office experienced another strong year. In Fiscal Year 19/20, the Film Office issued 468 permits, which led to 1,249 film days and $30,771,500 in estimated economic impact. Santa Clarita is home to more than 30 sound stages, 10 movie ranches and a multitude of film -related businesses. Popular television shows like "NCIS," "Mayan's MC," `Bless This Mess," "Holey Moley," "Good Trouble," "Futureman," "Goliath," "68 Whiskey" and "S.W.A.T." were based in Santa Clarita and regularly filmed on location within the City. Several feature films were filmed in Santa Clarita, including "Yes Day" and "The Outlaw Johnny Black," along with dozens of national commercial spots ranging from McDonald's and Nissan to Walmart and Adidas. Tourism continues to be a significant part of the City of Santa Clarita's economy, contributing over $2.7 million to the general fund from Transient Occupancy Tax (TOT) in the Fiscal Year 2019-20. The Tourism Marketing District (TMD), a collaborative assessment program and partnership between the City and local hotels, collected over $500,000 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. Cancellations due to COVID-19 adversely affected economic generation from tourism, but the following events were held in Santa Clarita in the last fiscal year: Presidents Day Hockey Tournament, Grace Community Church Shepards' Conference, Santa Clarita Oktoberfest, USA Swimming 2019 Speedo Sectionals, USA Ultimate (frisbee) and the Bonspiel Curling Tournament. The City also attracted the return of high profile, world -class events, the Los Angeles Spartan Race. Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 4 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 Master's 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 over 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 even throughout this pandemic, City officials continue to work directly with the private and public sectors to attract new businesses to the Santa Clarita Valley. The City of SantaClarita 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, 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 November 2020, the California State Auditor published a Fiscal Health Analysis of over 450 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 six percent in fiscal confidence of the over 450 cities assessed. The City received perfect scores in the categories of liquidity, general fiend reserves, and in both pension and OPEB obligations. iv Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 5 In October 2020, Standard & Poor's Global Ratings (S&P) affirmed the City's 'AAA' issuer credit rating (ICR). Amid the COVID-19 pandemic and economic uncertainties, the City was able to demonstrate high levels of strength in areas of the City's economy, management, budgetary flexibility, liquidity and institutional framework. This resulted in affirming the City of Santa Clarita's `AAA' issuer credit rating (ICR), with a "stable" outlook. This ICR reflects S&P's forward -looking opinion of the City's overall creditworthiness and the capacity and willingness to meet financial obligations. MAJOR MILESTONES IN FISCAL YEAR 2019-20 The Film Office recorded 468 film permits and 1,249 location film days generating an estimated economic impact of $30.7 million to the local community. ❖ Improving, maintaining and adding to the City's infrastructure and amenities continues to be a high priority and focus for the City. During Fiscal Year 2019-20, the City completed the new inclusive playground at Canyon Country Park. Santa Clarita's first Inclusive Play Area for all ages and abilities features a dual -track zipline, accessible ramps to the play structure and sensory -friendly elements. In addition, the 35"' City park — Plum Canyon Park, was welcomed to the City. A new multi -modal transit hub on the east side of the City broke ground at Vista Canyon and the City also provided grant funding to support the restoration of historic buildings at Heritage Junction. Two major projects within the Santa Clarita 2020 Plan are in the home stretch. The new Canyon Country Community Center project site is currently under construction, with phase I of construction now complete. The actual Community Center building is now taking shape, and offsite improvements are happening concurrently. The project is on track to be completed in mid-2021. The new Santa Clarita Valley Sheriff's Statical is also under construction. Once complete 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 continues to be hailed as a safe community. Over the last five years, the Part One crime rate in Santa Clarita has seen an impressive 29.8 percent decrease. The Traffic Safety Team continues its work to reduce the number of collisions and injuries seen on Santa Clarita roadways through Education, Engineering and Enforcement. The City's collision rate has dropped nearly 18 percent in the first half of 2020 compared to last year, and total collisions are down nearly 19 percent. DUI collisions have dropped 10.3 percent compared to 2019, pedestrian and cyclist collisions are down 26.7 percent and fatalities have been cut in half. Since the City began gathering statistics in 2001, the collision rate is down 57.6 percent and the injury rate has decreased by 37.5 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. This award -winning program reached approximately 27,000 students and parents in the last year through parent workshops, elementary school assemblies, monthly DFY in SCV club meetings, outreach and social events, online activities and more. •:• The Santa Clarita Public Library quickly adapted to a virtual format due to the COVID pandemic. Innovative new services were introduced, including lockers at the Valencia and Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 6 Canyon Country library branches, printing pick up, virtual storytimes, modified passport services and more. The 2019-20 fiscal year also saw the termination of a two -decades -long battle against mega -mining in Soledad Canyon. The City, local organizations and elected officials have fought for years to prevent CEMEX from mining 56 million tons of sand and gravel on the east side of the City. The second and final 10-year contract has now expired, keeping residents and wildlife protected from the catastrophic effects this mine would have had on our environment and quality of life. AWARDS AND ACKNOWLEDGEMENTS 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 30th 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's (APWA) Southern California Chapter once again for its accomplishments, honoring the City with three prestigious Public Works awards in 2019. The City received the organization's B.E.S.T. (Building Excellence, Shaping Tomorrow) awards for Give Me Green, the Copper Hill Park Restroom and Play Area and the Orchard Village Median Rain Garden. Santa Clarita was also recognized by the National Recreation and Parks Association with their Innovation in Social Equality Award for the Jakes Way Neighborhood Program. The National Alliance for Youth Sports also honored the City of Santa Clarita as a `Better Sports for Kids Quality Program Provider." The City of Santa Clarita was also recognized as the Crisis Communicator of the year award from the California Association of Public Information Officials for work during the Tick Fire and Saugus High School shooting. 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, 2019. This was the 31st 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 hnvestmennt Policy Certificate of Excellence Award from the Association of Public Treasurers of the United States and Canada for its Fiscal Year 2020-21 Investment Policy. This year marks the 26th consecutive year that the City has received the nationally recognized Certificate of Excellence Award from the Association of Public Treasurers of vi Honorable Mayor, Mayor Pro Tern and City Councilmembers Page 7 the United States and Canada for its success in developing a comprehensive written 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 25th 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 7th consecutive year, for a total of 10 years, 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 third year the City of Santa Clarita has received this prestigious honor. 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; Payroll Adminstrator, Jan Downey; Sr. Financial Analyst, Myra Kaczmarek; and Financial Analyst, Purevsuren Wrinkle. 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 conservatively and responsibly. Sincerely, Carmen Magana Director of Administrative Services/City Treasurer vii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Santa Clarita California For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO OFFICIALS OF THE CITY OF SANTA CLARITA As of June 30, 2020 City Council Cameron Smyth MAYOR Bill Miranda MAYOR PRO TEM Laurene Weste COUNCILMEMBER Marsha McLean COUNCILMEMBER Bob Kellar 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 ix ORGANIZATION CHART As of Jtme 30, 2020 �Soutta Clarka Residents City Comte City Manager Admnust,at— N. borh-d C.--ity Recreation and Citv'vtana es's 4 Public. i)eIiii'eY Services D-,Ie pment cornrnffi6t� Services ee Wo kS F.—Il E.,i-p —tar Services Cpmmunit� Pr —lit At, and Events Communications BuMne and Safet} Clerk and Contract Services Parks E—oni c Development Recreation and Community Services Human Resources C'aprtal Impmyenlent Pro¢mm Tech-Il Ry Services Special Distacts Plannuie Op- Space ]nter2ov ernmental Relations Enpneenn2 Services Transit Sheriffs Department General Services Public Libra Frre Protection Traffic. & Transportation PLmv n od I �o .I �.! rrrrrrr r rs r r r gym„ �' w�.5"+ err Irrrrrrr 0 I7f° li v r' o % SPND`CANYONRD ao O�VO RDA Q�OA/yyO 10V 1 r a 02 ° I o o�tiy Ir ca) "ll�l,> a u W N 1 i Q>U a I �® ���a z U� zc.'s i Ir Q " I L. 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ClP z L BUSINESS ADVISOIRS 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, 2020, 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. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niilyuccirlilr 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, 2020, 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 92 through 96 and 103 through 104, schedule of changes in the net OPEB liability and related ratios (page 97), schedule of contributions — OPEB (page 98), schedule of money weighted rate of return (page 99), schedule of changes in the City's net pension liability and related ratios (page 100), and schedule of city contributions - pensions (pages 101 through 102) be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor funds financial statements and budgetary comparison schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor funds financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor funds financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2020 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 22, 2020 3 This page left blank intentionally. MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2020 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, 2020. 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 and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $1.29 billion. Of this amount, $79.4 million represents unrestricted net position that may be used to meet the City's ongoing obligations to citizens and creditors. The City's deferred outflows of resources total $33.6 million and deferred inflows of resources total $8.2 million (Table 1). • The City's total deferred outflows of resources increased by $10.2 million. The deferred inflows of resources decreased by $2 million. The changes in deferred outflow and inflows were related to Other Post -Employment Benefits (OPEB) and Pensions (Table 1). • The City's total net position increased by $44.1 million. Net position of the business -type activities decreased by $5.3 million, and the net position of the governmental activities increased by $49.4 million (Table 1 & 2). • The net capital assets of the City's governmental activities increased by $37.5 million, or 3.8% over last fiscal year. The increase was in part due to purchases and contributions of land totaling $21.4 million, and the increase of construction in progress of $15.1 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 $301 million. This represents an increase of $2 million as compared to the prior year. • Within governmental funds, the General Fund reported a fund balance of $190 million. USING THIS ANNUAL REPORT The financial statements presented herein include all of the activities of the City 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 and deferred outflows of resources of the City (including infrastructure) as well as all liabilities and deferred inflows of resources (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. 0 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 43 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 38 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 liability, OPEB 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 $44.1 million, increasing from $1.25 billion to $1.29 billion. N THE CITY AS A WHOLE (CONTINUED) ASSETS: Current and Other Assets Capital assets, net Noncurrent Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES: LIABILTIES: Noncurrent Liabilities Other Liabilties TOTAL LIABILTIES DEFERRED INFLOWS OF RESOURCES: NET POSTION: Net investment in capital assets Restricted Unrestricted TOTAL NET POSTION TABLE 1 CITY OF SANTA CLARITA'S NET POSITION Governmental Activities Business -type Activities Total 2020 2019 2020 2019 2020 2019 $ 326,786,177 $ 324,670,701 $ 920,065 $ 5,954,064 $ 327,706,242 $ 330,624,765 1,024,352,442 986,877,787 84,371,043 83,906,440 1,108,723,485 1,070,784,227 46,136,156 55,241,561 - - 46,136,156 55,241,561 1,397,274,775 1,366,790,049 85,291,108 89,860,504 1,482,565,883 1,456,650,553 32,566,332 22,634,517 1,020,830 747,557 33,587,162 23,382,074 171,899,825 164,668,927 1,847,255 1,673,254 173,747,080 166,342,181 38,113,161 52,409,655 5,403,128 4,486,866 43,516,289 56,896,521 210,012,986 217,078,582 7,250,383 6,160,120 217,263,369 223,238,702 8,021,685 9,942,699 218,562 272,385 8,240,247 10,215,084 984,052,712 920,036,752 80,308,956 83,906,440 1,064,361,668 1,003,943,192 146,874,629 119,375,331 - - 146,874,629 119,375,331 80,879,095 122,991,202 (1,465,963) 269,116 79,413,132 123,260,318 1,211,806,436 1,162,403,285 78,842,993 84,175,556 1,290,649,429 1,246,578,841 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, 2020, assets exceeded liabilities by $1.29 billion. The largest component of the City's net position, 82.5%, is represented by its $1.1 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, 11.4%, represents resources subject to external restrictions on how they may be used. The remaining 6.2% of unrestricted net position, $79.4 million, may be used to meet the City's ongoing obligations to citizens and creditors. Within the restricted section of net position, $23.1 million is related to the Sheriff's Station bond. 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 consistent with prior years. Net position for governmental activities increased by $49.4 million over the prior year. The unrestricted net position of the business -type activities decreased by $5.3 million. THE CITY AS A WHOLE (CONTINUED) Governmental Activities Revenues from governmental activities decreased by $14.8 million. The cost of all governmental activities this year was $180.7 million, an increase of 5.39% over the past year. As shown in the Statement of Activities, the governmental activities expenses were ultimately financed in part by the taxpayers, as $57.7 million in revenues were generated by service revenues received from the performance of these activities; another $22.1 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions; and another $41.5 million in revenues was generated from capital grants and contributions. Overall, the City's governmental program and general revenues amounted to $230 million, which funded the expenses and resulted in a $49.4 million increase in net position. TABLE 2 CITY OF SANTA CLARITA'S CHANGES IN NET POSITION Governmental Activities Business -type Activities Total 2020 2019 2020 2019 2020 2019 Program Revenues: Charges for services $ 57,665,088 $ 62,541,935 $ 6,785,178 $ 7,662,186 $ 64,450,266 $ 70,204,121 Operating grants and contributions 22,066,816 13,574,920 13,405,112 15,292,991 35,471,928 28,867,911 Capital grants and contributions 41,462,296 59,565,349 5,701,142 10,434,282 47,163,438 69,999,631 General Revenues: Taxes: Property taxes 46,420,350 43,761,925 46,420,350 43,761,925 Other taxes 49,577,480 51,644,139 49,577,480 51,644,139 Other 12,785,744 13,733,983 (9,629) 104,576 12,776,115 13,838,559 Total Revenues 229,977,774 244,822,251 25,881,803 33,494,035 255,859,577 278,316,286 General government 54,710,526 62,309,457 - - 54,710,526 62,309,457 Public safety 29,907,832 27,757,002 29,907,832 27,757,002 Recreation and corrmunity services 16,047,345 17,585,165 16,047,345 17,585,165 Public works 33,663,857 20,772,164 33,663,857 20,772,164 Community development 8,942,864 7,214,786 8,942,864 7,214,786 Neighborhood Services 12,862,529 12,622,824 12,862,529 12,622,824 Unallocated infrastructure depreciation 21,043,711 20,630,522 21,043,711 20,630,522 Interest and fiscal charges 3,549,649 2,589,767 - - 3,549,649 2,589,767 Transit - - 31,060,676 32,065,240 31,060,676 32,065,240 Total Expenses 180,728,313 171,481,687 31,060,676 32,065,240 211,788,989 203,546,927 Increase/Decrease in Net Postion Before Transfers 49,249,461 73,340,564 (5,178,873) 1,428,795 44,070,588 74,769,359 Transfers 153,690 (4,435,608) (153,690) 4,435,608 - - Changes in Net Position 49,403,151 68,904,956 (5,332,563) 5,864,403 44,070,588 74,769,359 Net Position — Beginning of Year 1,162,403,285 1,093,498,328 84,175,556 78,311,153 1,246,578,841 1,171,809,481 Restatements - - Net Position — Beginning of Year, as restated 1,162,403,285 1,093,498,328 84,175,556 78,311,153 1,246,578,841 1,171,809,481 Net Position — End of Year $1,211,806,436 $1,162,403,285 $ 78,842,993 $84,175,556 $1,290,649,429 $1,246,578,840 Business -Type Activities Business -type activities decreased the City's net position by $5.3 million for the current year. Business -type activities revenues decreased by $7.6 million during the year for a total of $25.8 million in revenues, excluding transfers in from governmental activities. The decreased revenue was largely due to a decrease in capital grants and contributions of $4.7 million. Related transit activity expenses decreased by $1 million. 10 THE CITY'S FUNDS The governmental funds reported a combined fund balance at the end of the current fiscal year of $301 million, an increase of $2 million over the prior year. Approximately $136 million is restricted and already reserved for specific restricted purposes. The total governmental fund balance includes the general fund balance of $190 million. The General Fund is the chief operating fund of the City. The unassigned fund balance of $60 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 a decrease of $1.5 million in its fund balance from prior year. • The Developer Fee Fund has realized a decrease of $0.3 million due to a decrease in developer contributions. • The Public Library Fund has realized an increase of $1.9 million in its fund balance from the prior year. • The Landscape Maintenance District's fund balance increased by $1.0 million from the prior year. In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $2.8 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 decreased over the prior year by $5.3 million. The unrestricted portion of the business -type activities net position decreased by $1.7 million from the prior year. The Internal Service Funds net position decreased by $6,225 or .06%. The ending fund balance for Internal Service Funds is $10.3 million, of which $8.6 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2019-2020 original (adopted) general fund budgeted expenditures and transfers of $108.8 million to the final budgeted expenditures of $176.3 million results in a net increase of $67.5 million. Included in this net increase is $40,678,053 committed purchase orders and contracts from the prior June 30 balance, as well as $1,915,212 of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2019-2020. 11 THE CITY'S FUNDS (CONTINUED) Original Budget Continued Encumbrances Beg. Balance + Supplemental Final Budget Appropriations + = Changes = $108,764,401 + $1,915,212+ $40,678,053 = $151,357,666+ $ 24,982,256= $176,339,922 Comparing the beginning budget of $152 million with the final budget of $176 million indicates the General Fund had supplemental budgetary appropriations of $25 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 $789,252. Included in the increase is $562,000 in development revenues, $176,923 for SB90 claims reimbursement from the State of California, $100,000 in Transient Occupancy Tax, $101,094 in film permitting and recreation revenue. A decrease of $227,441 was also included to adjust parking citations revenue. At year-end, the City's actual general fund revenues were $2.5 million more than the final budgetary estimates. Actual general fund expenditures were less than the final budgetary estimates by $57 million, which is primarily due to capital projects carried forward to the next fiscal year. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $1.1 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 2020 2019 $ 232,854,321 $211,382,447 79,137,952 64,017,408 631,237,751 628,045,453 28,313,196 29,997,321 Business Type Activities 2020 2019 $ 15,087,880 $ 15,087,880 5,570,040 3,806,655 7,973,022 8,541,243 Total $ 247,942,201 $226,470,327 $ 84,707,992 $67,824,063 $ 631,237,751 $628,045,453 $ 36,286,218 $38,538,564 47,475,118 48,947,930 26,908,026 27,791,373 74,383,144 $76,739,303 5,334,104 4,487,228 28,832,075 28,679,289 34,166,179 $33,166,517 1,024,352,442 $986,877,787 84,371,043 83,906,440 1,108,723,485 $1,070,784,227 Major capital asset events during the year included: • Acquisitions and contributions of land totaling $21.5 million • Construction in progress additions totaling $16.9 million. • Infrastructure additions totaling $3.2 million. 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 $75.4 million in bonds, notes, capital leases, 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 Total 2020 2019 2020 2019 2020 2019 Revenue and Taxable Revenue Bonds 14,796,697 15,107,666 - 14,796,697 15,107,666 Lease Revenue Bonds 50,288,999 51,075,746 50,288,999 51,075,746 Contract and Capital Leases 497,583 2,538 497,583 2,538 Private Placement Lease 730,371 2,177,480 - - 730,371 2,177,480 Compensated Absences 4,144,358 3,599,393 118,877 94,611 4,263,234 3,694,004 Claims Payable 4,901,109 3,654,276 - - 4,901,109 3,654,276 TOTAL 75,359,117 75,617,099 118,877 94,611 75,477,993 75,711,710 The City's governmental activities had $75.4 million in debt at year-end. Governmental activities long-term debt decreased overall by $0.2 million. No new debt related to business -type activities was issued or refinanced during the current fiscal year. The City continues to monitor the potential impacts of the COVID-19 pandemic on revenues and expenditures and budget adjustments will be made as needed between December and the end of the fiscal year. During the fiscal year ended June 30, 2020, 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, 2020 was $1,319,055,691. 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 one of the largest revenue source to operate general governmental functions, accounting for 29% or $32.1 million as projected in the 2020-2021 budget. • Property tax revenues account for 36% of the General Fund budget or $39.5 million in 2020-2021. 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 $109.9 million, resulting in a balanced budget, an operating surplus of $300,856, and a 20% operating reserve of $17.7 million. The City's 2020-2021 operating and capital budget for all funds is $219.7 million, net of transfers. The City continues to monitor the potential impacts of the COVID-19 pandemic on revenues and expenditures and budget adjustments will be made as needed between December and the end of the fiscal year. 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 2020-2021 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 2020-2021 budget can be obtained by visiting the web at httpe//www.santa-clarita.com/city- hall/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 City of Santa Clarita, California Statement of Net Position June 30, 2020 Governmental Business -type Activities Activities Total Assets Current assets Cash and investments $ 300,380,647 $ 100 $ 300,380,747 Receivables: Accounts, net 843,651 1,309 844,960 Interest 1,091,743 - 1,091,743 Taxes 13,761,890 - 13,761,890 Prepaid costs 1,120,457 30,841 1,151,298 Due from other governments 5,666,015 4,809,589 10,475,604 Internal balances 3,921,774 (3,921,774) - Total Current Assets 326,786,177 920,065 327,706,242 Noncurrent assets Restricted assets Cash and investments 2,365,167 2,365,167 Cash and investments with fiscal agents 24,583,170 24,583,170 Loans receivable 2,365,634 2,365,634 Notes to RDA Successor Agency 16,822,185 - 16,822,185 Capital assets Nondepreciable assets 311,992,273 20,657,920 332,650,193 Depreciable assets, net 712,360,169 63,713,123 776,073,292 Total Noncurrent Assets 1,070,488,598 84,371,043 1,154,859,641 Total Assets 1,397,274,775 85,291,108 1,482,565,883 Deferred Outflows of Resources Deferred outflows related to OPEB 9,569,522 235,316 9,804,838 Deferred outflows related to pensions 21,566,060 785,514 22,351,574 Unamortized loss on refundings 1,430,750 - 1,430,750 Total Deferred Outflows of Resources 32,566,332 1,020,830 33,587,162 Liabilities Current liabilities Accounts payable and accrued liabilities 18,168,320 5,364,016 23,532,336 Interest payable 319,065 - 319,065 Deposits payable 4,699,753 4,699,753 Due to other governments 7,871,979 7,871,979 Unearned revenues 157,119 - 157,119 Compensated absences 1,818,313 39,112 1,857,425 Claims and judgments 3,038,688 - 3,038,688 Bonds, loans and capital leases 2,039,924 - 2,039,924 Total Current Liabilities 38,113,161 5,403,128 43,516,289 Noncurrent liabilities Compensated absences 2,326,045 79,765 2,405,810 Claims and judgments 1,862,421 - 1,862,421 Bonds, loans and capital leases 64,273,726 64,273,726 Developer credits 49,626,106 - 49,626,106 Net OPEB liability 16,269,574 400,077 16,669,651 Net pension liability 37,541,953 1,367,413 38,909,366 Total Noncurrent Liabilities 171,899,825 1,847,255 173,747,080 Total Liabilities 210,012,986 7,250,383 217,263,369 Deferred Inflows of Resources Deferred inflows related to OPEB 6,221,004 152,975 6,373,979 Deferred inflows related to pensions 1,800,681 65,587 1,866,268 Total Deferred Inflows of Resources 8.021.685 218.562 8.240.247 See Notes to Financial Statements 15 City of Santa Clarita, California Statement of Net Position (Continued) June 30, 2020 Governmental Business -type Activities Activities Total Net Position Net investment in capital assets $ 984,052,712 $ 80,308,956 $ 1,064,361,668 Restricted Landscape maintenance 32,038,453 - 32,038,453 Lighting district 13,290,227 13,290,227 Transportation 33,324,104 33,324,104 Open space preservation 5,837,395 5,837,395 Public safety 4,241,406 4,241,406 Public library 2,992,222 2,992,222 Air quality improvement 841,827 841,827 Stormwater 3,998,532 3,998,532 Public education and government 438,108 438,108 Tourism marketing 1,070,521 1,070,521 Low and moderate -income housing 5,245,177 5,245,177 Capital improvements 20,492,988 20,492,988 Bond proceeds 23,063,669 23,063,669 Unrestricted 80,879,095 (1,465,963) 79,413,132 Total Net Position $ 1,211,806,436 $ 78,842,993 $ 1,290,649,429 See Notes to Financial Statements 16 City of Santa Clarita, California Statement of Activities June 30, 2020 Program Revenues Operating Capital Charges for Contributions Contributions Function/Programs Expenses Services and Grants and Grants Governmental activities General government $ 54,710,S2S $ 8,215,989 $ 1,048,066 $ - Public safety 29,907,832 1,484,OOS 547,664 1,663,368 Recreation and community services 16,047,345 3,635,790 6,726 3,823 Public works 33,663,857 12,201,244 15,983,OS8 39,79S,10S Community development 8,942,864 1,SS2,869 1,920,820 - Neighborhood services 12,862,529 30,S7S,191 2,560,482 - Unallocated infrastructure depreciation 21,043,711 - - - Interest and fiscal charges 3,549,649 - - - Total governmental activities 180,728,313 57,665,088 22,066,816 41,462,296 Business -type activities Transit enterprise 31,060,676 6,785,178 13,405,112 5,701,142 Total primary government $ 211,788,989 $ 64,4SO,266 $ 35,471,928 $ 47,163,438 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 Notes to Financial Statements 17 Net (Expense) Revenues and Changes in Net Position Governmental Business -type Activities Activities Total $ (45,446,470) $ - $ (45,446,470) (26,212,795) - (26,212,795) (12,401,006) - (12,401,006) 34,315,550 - 34,315,550 (5,469,175) - (5,469,175) 20,273,144 - 20,273,144 (21,043,711) - (21,043,711) (3,549,649) - (3,549,649) (59,534,113) - (59,534,113) - (5,169,244) (5,169,244) (59,534,113) (5,169,244) (64,703,357) 46,420,350 - 46,420,350 36,621,145 - 36,621,145 8,604,265 - 8,604,265 2,726,113 - 2,726,113 1,418,026 - 1,418,026 207,931 - 207,931 12,311,467 (9,629) 12,301,838 472,227 - 472,227 2,050 - 2,050 108,783,574 (9,629) 108,773,945 153,690 (153,690) - 49,403,151 (5,332,563) 44,070,588 1,162,403,285 84,175,556 1,246,578,841 $ 1,211,806,436 $ 78,842,993 $ 1,290,649,429 See Notes to Financial Statements 18 City of Santa Clarita, California Balance Sheet Governmental Funds June 30, 2020 Special Revenue Funds Bridge and Developer General Fund Thoroughfare Fees Assets Cash and investments $ 162,888,188 $ 10,777,844 $ 6,902,760 Receivables Accounts, net 531,858 - - Interest 656,656 34,240 21,949 Taxes 9,776,995 - - Loans - - Notes to RDA Successor Agency 9,751,533 7,070,652 Prepaid costs 545,181 - Due from other governments 172,619 Due from other funds 9,798,811 - Advances to other funds 10,164,307 129,552 Restricted assets: Cash and investments - - Cash and investments with fiscal agents 23,064,395 - - Total assets $ 227,350,543 $ 10,812,084 $ 14,124,913 Liabilities, deferred inflows of resources, and fund balances (deficit) Liabilities Accounts payable and accrued liabilities 13,229,763 2,131 9,908 Deposits payable 3,649,753 - 1,050,000 Due to other governments 7,837,500 - Unearned revenues 157,119 - Due to other funds - 24,309 Advances from other funds - 7,110,416 - Totalliabilities 24,874,135 7,136,856 1,059,908 Deferred inflows of resources Unavailable revenues 12,035,171 7,200,204 Total deferred inflows of resources 12,035,171 7,200,204 Fund balances (deficit) Nonspendable 9,810,973 - - Restricted 23,063,669 3,675,228 5,814,292 Committed - - 9,277 Assigned 97,293,470 41,232 Unassigned 60,273,125 - - Total fund balances (deficit) 190,441,237 3,675,228 5,864,801 Total liabilities, deferred inflows of of resources and fund balances (deficit) $ 227,350,543 $ 10,812,084 $ 14,124,913 See Notes to Financial Statements 19 Special Revenue Funds Landscape Non -major Total Public Maintenance Governmental Governmental Library District #1 Funds Funds $ 2,341,024 $ 25,231,094 $ 78,322,270 $ 286,463,180 32 5,531 306,230 843,651 7,444 80,252 247,025 1,047,566 185,826 133,224 3,665,845 13,761,890 - - 2,365,634 2,365,634 - - - 16,822,185 6,896 448,884 119,496 1,120,457 - - 5,493,396 5,666,015 - 9,798,811 - 10,293,859 2,365,167 2,365,167 - - 1,518,775 24,583,170 $ 2,541,222 $ 25,898,985 $ 94,403,838 $ 375,131,585 187,934 1,172,397 $ 3,194,564 $ 17,796,697 - - - 4,699,753 34,479 7,871,979 - 157,119 - 5,852,728 5,877,037 3,183,443 - - 10,293,859 3,371,377 1,172,397 9,081,771 46,696,444 7,878,767 27,114,142 7,878,767 27,114,142 6,896 448,884 119,496 10,386,249 - 24,277,704 78,863,975 135,694,868 - - 9,277 750,682 98,085,384 (837,051) - (2,290,853) 57,145,221 (830,155) 24,726,588 77,443,300 301,320,999 $ 2,541,222 $ 25,898,985 $ 94,403,838 $ 375,131,585 See Notes to Financial Statements 20 City of Santa Clarita, California Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2020 Fund balances of governmental funds $ 301,320,999 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 $ 311,992,273 Depreciable assets, net of accumulated depreciation 710,S8S,8S0 1,022,578,123 Revenues reported as deferred inflows in the governmental funds do not provide current financial resources but are recognized in the Statement of Activities 27,114,142 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 (37,399,OSO) Deferred outflows of resources related to pensions 21,483,969 Deferred inflows of resources related to pensions (1,793,827) Net OPEB liability (16,219,564) Deferred outflows of resources related to OPEB 9,540,107 Deferred inflows of resources related to OPEB (6,201,882) (30,590,247) 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 (6S,08S,696) Private placement lease payable (730,371) Capital leases (497,583) Deferred outflow of resources related to loss on refunding 1,430,7SO Compensated absences (4,120,188) Bridge and Thoroughfare developer payables (49,626,106) (118, 629,194) 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. (319,065) 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. 10,331,678 Net Position of Governmental Activities $ 1,211,806,436 See Notes to Financial Statements 21 City of Santa Clarita, California Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2020 Special Revenue Funds Bridge and Developer General Thoroughfare Fees Revenues Taxes $ 87,376,087 $ $ Special assessments - Licenses and permits 7,S38,878 Intergovernmental 3,182,624 Charges for services 6,816,474 - Investment income (loss) 6,667,123 924,428 267,413 Fines and forfeitures 79S,648 - - Developer fees 208,638 1,869,991 Other revenue 30S,28S 368,724 - Total revenues 112,682,119 1,SO1,790 2,137,404 Expenditures Current General government 20,9S1,2S0 807 Public safety 27,938,688 - 2,081,7SS Recreation and community service 13,SS3,813 - Public works 3S,630,112 2,218,941 221,OS8 Community development 6,821,630 - Neighborhood services 742,142 - - Capital outlay 1,66S,4SO 126,621 4,360 Debt service Principal retirement - - Interest and fiscal charges 638,17S - Total expenditures 107,303,08E 2,984,S44 2,307,173 Excess (deficiency) of revenues over (under) expenditures S,379,034 (1,482,7S4) (169,769) Other financing sources (uses) Contributions from Property Owners 2,647,000 Transfers in 2,491,902 Transfers out (12,038,938) (140,676) Total other financing sources (uses) (6,900,036) (140,676) Net change in fund balances (1,S21,002) (1,482,7S4) (310,44S) Fund balances (deficit), beginning of year 191,962,239 S,1S7,982 6,17S,246 Fund balances (deficit), end of year $ 190,441,237 $ 3,67S,228 $ S,864,801 See Notes to Financial Statements 22 Special Revenue Funds Landscape Non -major Total Public Maintenance Governmental Governmental Library District #1 Funds Funds $ 7,906,237 $ 2SO,404 $ 46S,102 $ 9S,997,830 - 13,462,237 21,087,074 34,S49,311 - - 7,S38,878 30,S64,266 33,746,890 92,31S S94,434 7,SO3,223 80,831 948,S92 2,889,366 11,777,7S3 - 22,2S6 918,297 1,736,201 - 838,621 2,917,2SO 324,676 - 2,SO9,908 3,SO8,S93 8,404,OS9 14,683,489 S9,867,068 199,27S,929 6,320,9S6 12,090,301 11,S66,286 SO,929,600 - 490,S79 30,S11,022 278,201 14,7S4 13,846,768 419,7S8 34,463,842 72,9S3,711 1,887,710 8,709,340 700,2S8 11,6S8,019 13,100,419 94,8SO 13S,422 2,186,890 4,213,S93 2,482,109 2,482,109 89,S80 - 2,173,SO2 2,901,2S7 6,SOS,386 13,623,940 66,923,691 199,647,819 1,898,673 1,OS9,S49 (7,OS6,623) (371,890) - - 2,647,000 10,000 1S,639,073 18,140,97S (S7,000) (S,77S,182) (18,011,796) - (47,000) 9,863,891 2,776,179 1,898,673 1,012,S49 2,807,268 2,404,289 (2,728,828) 23,714,039 74,636,032 298,916,710 $ (830,1SS) $ 24,726,S88 $ 77,443,300 $ 301,320,999 See Notes to Financial Statements 23 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, 2020 Net changes in fund balances - total governmental funds $ 2,404,289 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. Net effect of various transactions involving capital assets (i.e. sales, retirements) $ 42,099,012 Capital contributions 19,966,080 Depreciation expense (24,822,170) 37,242,922 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. 4,061,977 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 (533,348) Lease revenue bonds 1,002,214 Private placement lease payable 1,447,109 Capital leases (495,045) Interest and fiscal charges (91,644) Amortization of premiums of long-term liabilities 95,502 1,424,788 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 (124,419) Changes in net OPEB liability and related deferred inflows and outflows of resources (1,171,468) Changes in net pension liabilities and related deferred inflows and outflows of resources 5,571,285 4,275,398 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. (6,223) Change in net position of governmental activities $ 49,403,151 See Notes to Financial Statements 24 City of Santa Clarita, California Statement of Net Position Proprietary Funds June 30, 2020 Business -type Governmental Activities Activities Transit Internal Enterprise Service Funds Assets Current assets Cash and investments $ 100 $ 13,917,467 Receivables Accounts 1,309 - Interest - 44,177 Prepaid costs 30,841 - Due from other governments 4,809,589 - Total current assets 4,841,839 13,961,644 Noncurrent assets Capital assets Land and construction in progress 20,657,920 Site improvements, net of accumulated depreciation 7,973,022 Building and improvements, net of accumulated depreciation 26,908,026 - Equipment, net of accumulated depreciation 28,832,075 1,774,319 Total noncurrent assets 84,371,043 1,774,319 Total assets 89,212,882 15,735,963 Deferred outflows of resources Deferred outflows related to OPEB 235,316 29,415 Deferred outflows related to pensions 785,514 82,091 Total Deferred Outflows of Resources 1,020,830 111,S06 Liabilities Current liabilities Accounts payable and accrued liabilities 5,364,016 371,623 Compensated absences 39,112 24,170 Claims and judgements - 3,038,688 Due to other funds 3,921,774 - Total current liabilities 9,324,902 3,434,481 Noncurrent liabilities Compensated absences payable 79,765 - Claims and judgments - 1,862,421 Net OPEB liability 400,077 50,010 Net pension liability 1,367,413 142,903 Total noncurrent liabilities 1,847,2SS 2,OSS,334 Total liabilities 11,172,157 5,489,815 Deferred inflows of resources Deferred inflows related to OPEB 152,975 19,122 Deferred inflows related to pensions 65,587 6,854 Total Deferred Inflows of Resources 218,562 25,976 Net Position Net investment in capital assets 80,308,956 1,774,319 Unrestricted (1,465,963) 8,SS7,359 Total net position $ 78,842,993 $ 10,331,678 See Notes to Financial Statements 25 City of Santa Clarita, California Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended June 30, 2020 Operating revenues Charges for services Other revenues Total operating revenues Operating expenses Administration and personnel services Transportation services Services and supplies Depreciation expense Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Intergovernmental revenue Investment income (loss) Gain (loss) on disposal of capital assets Total nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Transfers and capital contributions Transfers in Transfers out Capital contributions Total transfers and capital contributions Change in net position Net position Net position, beginning of year Net position, end of year Business -type Activities Transit Enterprise $ 6,481,875 303,303 6,785,178 2,427,973 19, 879, 031 3,499,073 5,178, 662 30,984,739 (24,199,561) 13, 405,112 (9,629) (75,937) 13, 319, 546 (10,880,015) (153,690) 5,701,142 5,547,452 (5,332,563) Governmental Activities Internal Service Funds $ 3,486,025 5,000 3,491,025 297,296 3,455,331 304,895 4,057,522 (566,497) 533,713 2,050 535,763 (30,734) 24,511 24,511 (6,223) 84,175,556 10,337,901 $ 78,842,993 $ 10,331,678 See Notes to Financial Statements 26 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 sources Net cash provided by (used in) operating activities Cash flows from noncapital financing activities Cash transfers out Cash transfers in Federal and state funding received Net cash (used in) provided by noncapital financing activities Cash flows from capital and related financing activities Capital contributions Sale of capital assets Acquisition of capital assets Net cash provided (used) for capital and related financing activities Cash flows from investing activities Interest paid 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 City of Santa Clarita, California, California Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2020 Business -type Governmental Activities Activities Transit Internal Enterprise Service Funds $ 6,511,942 $ 3,491,025 (22,470,548) (1,969,046) (2,578,601) (303,362) '4n'4 '4n' _ (18,233,904) 1,218,617 (153,690) - 3,921,774 24,511 12,761,212 - 16,529,296 24,511 5,701,142 - 29,775 (5,748,977) (536,626) (18,060) (S34,S76) (1,477) 539,824 (1,724,145) 1,248,376 1,724,245 $ 100 12,669,091 $ 13,917,467 $ (24,199,561) $ (566,497) 5,178,662 304,895 30,067 - (6,239) - (224,534) (28,067) 253,429 31,679 (102,562) (10,719) (101,227) (10,579) 913,795 239,4SS - 1,246,833 24,266 11,617 S,96S,6S7 $ (18,233,904) 1,785,114 $ 1,218,617 See Notes to Financial Statements 27 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 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) City of Santa Clarita, California Statement of Fiduciary Net Position June 30, 2020 Private -purpose Other Post Trust Fund Agency Employment Benefits Redevelopment Funds (OPEB) Trust Fund Successor Agency $ 1,823,623 $ $ 1,010,375 5,771 3,237 18,688 - 139,732 7,734,479 - 21,287 - 42,169,577 - 17,932,459 - 1,773,823 9,937,976 - 67,728 - - $ 29,925,977 42,169,577 10,543,201 $ - - 2,200,138 135,447 63 - 323,687 29,790,530 - - 883,660 - 49,045,412 $ 29,925,977 - 50,252,822 $ 42,169,577 $ - (37,509,483) $ 42,169,577 $ (37,509,483) See Notes to Financial Statements 28 City of Santa Clarita, California Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2020 Private -purpose Other Post Trust Fund Employment Benefits Redevelopment (OPEB) Trust Fund Successor Agency Additions Property taxes $ - $ 2,547,419 Employer contributions 636,000 - Investment income 1,475,065 8,136 Miscellaneous - - Total Additions 2,111,065 2,555,555 Deductions Benefit payments to plan members 1,202,901 - Administrative expenses 77,124 - Contractual services - 3,935 Interest expense - 1,740,851 Total Deductions 1,280,025 1,744,786 Change in Net Position Net Position (deficit) Net position/(deficit), beginning of year Net position/(deficit), end of year 831,040 810,769 41,338,537 (38,320,252) $ 42,169,577 $ (37,509,483) See Notes to Financial Statements 29 This Page Left Blank Intentionally. City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Note 1- Summary of Significant Accounting Policies A. Financial Reporting Entity These financial statements present the financial results of the City of Santa Clarita, California (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 (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. 31 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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. 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. 32 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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. 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 #1 Special Revenue Fund as a major fund for public interest purposes. 33 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Proprietary Fund Financial Statements Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) and deferred inflows and deferred outflows of resources are included in the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Operating revenues and expenses result from the operating and maintenance of the local public transit services. The operating revenues consist of charges to customers for the service provided. Operating expenses include the costs of providing these services, administrative expenses and depreciation expense. All revenues and expenses not meeting these definitions and which are not capital in nature are reported as non -operating revenues and expenses. The City reports the following major enterprise fund: The Transit Enterprise Fund is used to account for the operation of the City's local public transit bus system. 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). 34 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 The City reports the following agency funds: The following funds are 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: Assessment District No. 92-2 Fund Assessment District No. 99-1 Fund Community Facilities District No. 2002-1 Fund Community Facilities District No. 2016-1 Fund The Santa Clarita Watershed Recreation and Conservancy Authority is used to account for assets and liabilities held by the City as an agent and related to the park and open space lands for the Santa Clarita Watershed Recreation and Conservancy Authority (the Watershed Authority). The Santa Clarita Public Television Authority is used to account for assets and liabilities held by the City as an agent and related to the operations of the Santa Clarita Public Television Authority (the SCPTA). Fund Types Reported by the City Additionally, the City reports the following fund types: The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. The Debt Service Funds are used to account for the accumulation of resources for and payment of, interest and principal on long-term debt. The Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). The Internal Service Funds are used to account for the financing of special activities that provide services within the City. Such activities include self-insurance, computer replacement, and vehicle replacement. 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. 35 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 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 o Overall o Custodial Credit Risk o Concentration of Credit Risk • Foreign Currency Risk The City applies GASB Statement No. 72, Fair Value Measurements and Application for determining fair value measurements, applying fair value to investments, and disclosures related to the fair value hierarchy. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 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 lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds" (i.e. current portion of interfund loans) or "advances from/to other funds" (i.e. noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." W City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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. Property taxes in lieu of motor vehicle fee are the City's own -source revenues and are apportioned according to formula similar to property tax revenues. 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. As of June 30, 2020 allowances for uncollectible accounts totaled $94,999. 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. 37 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 I. Capital Assets Government -Wide Financial Statements, Proprietary Funds, and Fiduciary Funds Capital assets, which include land, site improvements, buildings and improvements, and equipment and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the proprietary funds and fiduciary funds. General infrastructure assets consist of roads, curbs and gutters, sidewalks, medians, street signs, bus shelters, bridges, trails, traffic signals, and storm drains/catch basins. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($25,000 for site improvements and building improvements and $100,000 for infrastructure) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Site Improvements 5-25 years Buildings and Improvements 5-50 years Equipment 5-25 years Infrastructure 20-60 years Governmental Fund Financial Statements The governmental fund financial statements do not present capital assets. Instead, capital assets purchases are reported as capital outlay expenditures or other functional expenditures such as public works. As such, capital assets are shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position. 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. WN City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 (CalPERS), and additions to/deductions from CalPERS' fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. A deferred outflow of resources is a consumption of net position or fund balance by a government that is applicable to a future reporting period. A deferred inflow of resources represents an acquisition of net position or fund balance by the government that is applicable to a future period. Deferred outflows and inflows of resources related to pensions represent amounts that will be recognized as adjustments to pension expense in future years. As noted in Note 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, 2021. M City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020 Measurement Period July 1, 2019 to June 30, 2020 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 position 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. 40 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Restricted — Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed — Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision - making, City Council through Council Resolution, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. Assigned — Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be designated 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, 2020, the balance totaled $17,710,000, which is included in the unassigned fund balance in the General Fund. P. Spending Policy Government -Wide Financial Statements and Proprietary Fund Financial Statements When an expense is incurred for purposes for which both restricted and unrestricted resources are available, the City's policy is to apply restricted resources first. Governmental Fund Financial Statements When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City's policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance: • Restricted • Committed • Assigned • Unassigned 41 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 Government Accounting Standards Board (GASB) Statement No. 95— In May 2020, the GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authority Guidance. The objective of this Statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. The requirements of this Statement are effective immediately as they delayed the effective dates of several GASB Statements. The City implemented this Statement effective July 1, 2019. T. Pronouncements Issued But Not Yet Adopted The GASB has issued pronouncements that have an effective date subsequent to June 30, 2020, 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. This Statement is effective for reporting periods beginning after December 15, 2019. 42 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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; enhancing the comparability of financial statements between governments; and also enhancing the relevance, reliability (representational faithfulness), and consistency of information about the leasing activities of governments. This Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 90 — In September 2018, the GASB issued 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, 2019. GASB Statement No. 91— In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. The objective of this Statement is to provide a single method of reporting conduit debt obligations by issues and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. GASB Statement No. 92 — In January 2020, the GASB issued Statement No. 92, Omnibus 2020. The objectives of this Statement are to enhance comparability in accounting and financial reporting to improve the consistency of authoritative literature by addressing practices issues that have been identified during implementation and application of certain GASB Statements. The Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 93 — In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this Statement is to address the accounting and financial reporting implications that result from the replacement of an IBOR. The Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 94 — In March 2020, the GASB issued Statement No. 94, Public -Private and Public - Public Partnerships and Availability Payment Arrangements. The objective of this Statement is to improve financial reporting by addressing issues related to public -private and public -public partnership arrangements (PPPs). The Statement is effective for reporting periods beginning after June 15, 2022. GASB Statement No. 96 — In May 2020, the GASB issued Statement No. 96, Subscription -based Information Technology Arrangements. The objective of this Statement is to provide guidance on the accounting and financial reporting for subscription -based information technology arrangements (SBITAs) for government end users (governments). The Statement is effective for reporting periods beginning after June 15, 2022. 43 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 GASB Statement No. 97 — In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting For Internal Revenue Code Section 457 Deferred Compensation Plans —An Amendment of GASB Statement No.14 and No.84 and A Supersession of GASB Statement No.32. The objective of this Statement is (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The Statement is effective for reporting periods beginning after June 15, 2021. Note 2 - Cash and Investments A. Cash and Investments Cash and investments at June 30, 2020, are classified in the accompanying financial statements as follows: Governmental Business -Type Activities Activities Fiduciary Funds Total Cash and investments $ 300,380,647 $ 100 $ 2,833,998 $ 303,214,745 Restricted assets Cash and investments 2,365,167 - 21,287 2,386,454 Cash and investments held with PARS - 42,169,577 42,169,577 Cash and investments with fiscal agents 24,583,170 - 19,706,282 44,289,452 Totals $ 327,328,984 $ 100 $ 64,731,144 $ 392,060,228 44 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Cash and investments consisted of the following at June 30, 2020: Cash on hand and deposits Cash on hand $ 4,336 Deposits with financial institutions 34,719,844 Certificates of deposit 249,954 Total Cash on Hand and Deposits 34,974,134 Investments U.S. Treasury Securities 53,837,195 U.S. Government -Sponsored Enterprise Securities 41,880,402 California Local Agency Obligations 2,763,453 Negotiable Certificate of Deposits 28,497,748 Supranational 6,862,024 Medium -Term Notes 36,727,946 Money Market Funds 102,912 Asset Backed 15,242,304 State of California Local Agency Investment Fund (LAIF) 13,772,901 L.A. County Pooled Investment Fund (LACPIF) 1,622,998 California Asset Management Program (CAMP) 66,930,728 Total Investments 268,240,611 Restricted investments Money Market Funds 2,386,454 Investment with PARS 42,169,577 Total Restricted Investments 44,556,031 Restricted investments with fiscal agent Money Market Funds 44,289,452 Total Investments 357,086,094 Total cash and investments $ 392,060,228 The carrying amounts of the City's deposits were $34,719,884 at June 30, 2020. Bank balances before reconciling items were $36,589,683 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. 45 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 B. Investments Authorized by the California Government Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Maximum Percentage or Maximum Authorized Maximum Amount of Investment in Investment Tvoe Maturity Portfolio* One Issuer** Local Agency Bonds 5 years No Limit No Limit U.S. Treasury Obligations 5 years No Limit No Limit State of California Obligations 5 years No Limit No Limit California Local Agency Obligations 5 years No Limit 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 -Term Notes 5 years 30% 30% Money Market Funds 5 years 20% 10% Mortgage Pass -Through Securities 5 years 20% 5% Asset Backed 5 years 20% 5% California Asset Management Program (CAMP) Not Applicable No Limit No Limit Los Angeles County Pooled Investment Fund (LACPIF) Not Applicable No Limit No Limit State of California Local Agency Investment Fund (LAIF) Not Applicable $75,000,000 No Limit * Excluding amounts held by bond trustees that are not subject to California Government Code restriction. ** 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. 12 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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. 47 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 At June 30, 2020, the City had the following investment maturities: Investment Maturities (In Years) Investment Tyne Fair Value Less Than 1 1 to 2 2 to 3 3 to 4 4 to 5 Investment U.S. Treasury Securities $ 53,837,195 $ $ $ 11,191,124 $ 22,300,770 $ 20,345,301 U.S. Government -Sponsored Enterprise Securities 41,880,402 3,884,130 11,338,028 9,171,568 17,486,676 California Local Agency Obligations 2,763,453 - - 2,113,040 650,413 Supranational 6,862,024 6,862,024 - - - Negotiable Certificates of Deposit 28,497,748 18,823,332 1,821,221 7,853,195 - - Medium -Term Notes 36,727,946 22,400 13,522,871 13,486,687 6,342,286 3,353,702 Money Market Funds 102,912 102,912 - - - Asset Backed 15,242,304 - 2,336,311 7,693,776 4,010,798 1,201,419 Local Agency Investment Fund (LAIF) 13,772,901 13,772,901 - - - - Los Angeles County Pooled Investments Fund (LACPIF) 1,622,998 1,622,998 - - - - California Asset Management Program (CAMP) 66,930,728 66,930,728 Total Investments 268,240,611 101,275,271 28,426,557 51,562,810 43,938,462 43,037,511 Restricted investments Money Market Funds 2,386,454 2,386,454 Investment with PARS 42,169,577 42,169,577 Total Restricted Investments 44,556,031 44,556,031 Restricted investments with fiscal agent Money Market Funds 44,289,452 44,289,452 - - - - Total Investments Subject to Interest Rate Risk $ 357,086,094 $ 190,120,754 $ 28,426,557 $ 51,562,810 $ 43,938,462 $ 43,037,511 M *a City of Santa Clarita, California Notes to Financial Statements June 30, 2020 E. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating, as reported by Standard & Poor's, as of year-end for each investment type: Minimum Investment Tyne Ratine Fair Value AAA AA+ AA/A-1 A Unrated Investments U.S. Treasury Securities None $ 53,837,195 $ - $ - $ - $ - $ 53,837,195 U.S. Government -Sponsored Enterprise Securities None 41,880,402 - - - - 41,880,402 California Local Agency Obligations None 2,763,453 650,413 2,113,040 - - - Supranational AA 6,862,024 6,862,024 - - - - Negotiable Certificates of Deposit None 28,497,748 - - 3,509,828 15,179,996 9,807,924 Medium -Term Notes* A 36,727,946 - 13,208,141 4,173,864 19,323,541 22,400 Money Market Funds None 102,912 102,912 - - - - Asset Backed AA 15,242,304 13,308,411 1,933,893 - - - Local Agency Investment Fund (LAIF) None 13,772,901 - - - - 13,772,901 Los Angeles County Pooled Investments Fund (LACPIF) None 1,622,998 - - - - 1,622,998 California Asset Management Program (CAMP) None 66,930,728 - - - - 66,930,728 Total Investments 268,240,611 20,923,760 17,255,074 7,683,692 34,503,537 187,874,548 Restricted investments Money Market Funds Investment with PARS Total Restricted Investments Restricted investments with fiscal agent Money Market Funds Total Investments Subject to Interest Rate Risk None 2,386,454 42,169, 577 44,556,031 2,386,454 42,169, 577 44,556,031 None 44,289,452 - - - - 44,289,452 $ 357,086,094 $ 20,923,760 $ 17,255,074 $ 7,683,692 $ 34,503,537 $ 276,720,031 * Included in the medium -term notes is an investment in Lehman Brothers, which is not rated as of June 30, 2020. 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, 2020, this investment is recorded at $22,400. 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. 49 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, none of the City's deposits or investments were exposed to custodial credit risk. H. Fair Value Classifications Fair value measurements are categorized based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments categorized as Level 2 are valued using market approach using quoted market prices and matrix pricing. 01 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Investments' fair value measurements are as follows as of June 30, 2020: Investment Type Fair Value Level 2 Investments U.S. Treasury Securities $ 53,837,195 $ 53,837,195 U.S. Government -Sponsored Enterprise Securities 41,880,402 41,880,402 California Local Agency Obligations 2,763,453 2,763,453 Supranational 6,862,024 6,862,024 Negotiable Certificates of Deposits 28,497,748 28,497,748 Medium -Term Notes 36,727,946 36,727,946 Money Market Funds 102,912 102,912 Asset Backed 15,242,304 15,242,304 Investments with PARS 42,169,577 44,289,452 Total Leveled Investments 228,083,561 230,203,436 Uncategorized Investments Local Agency Investment Fund (LAIF) 13,772,901 Los Angeles County Pooled Investments Fund (LACPIF) 1,622,998 California Asset Management Program (CAMP) 66,930,728 Restricted investments: Money Market Funds 2,386,454 Restricted investments with fiscal agent: Money Market Funds 44,289,452 Total Investment Portfolio $ 357,086,094 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. I. 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 $75,000,000 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, 2020 included a portion of the pool funds invested in structured notes and asset -backed securities: 51 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, the City had $13,772,901 invested in LAIF, which had invested 3.37 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. LAIF is not registered with the Securities and Exchange Commission and is not rated. 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, 2020, the City had $1,622,998 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, 2020, the City had $66,930,728 invested in the CAMP. 52 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Note 3 - Accounts Receivable Accounts receivable as of June 30, 2020, 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 $ 623,458 (91,600) $ 531,858 Non -Major Governmental Funds $ 309,629 (3,399) Landscape Public Maintenance Library District #1 $ 32 $ 5,531 $ 32 $ 5,531 Transit Total $ 1,309 $ 939,959 - (94,999) $ 306,230 $ 1,309 $ 844,960 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 $2,365,634 at June 30, 2020, 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, 2020, the loan amounts reported in the General Fund and Developer Fees Special Revenue Fund was $9,751,533 and $7,070,652, respectively. The unpaid accrued interest of these notes is $3,145,703 and $1,750,766 respectively. 53 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020: 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, 2019 Additions Deletions Transfers June 30, 2020 $ 211,382,447 $ 21,471,874 $ - $ - $ 232,854,321 64,017,408 39,366,555 (10,000) (24,236,011) 79,137,952 275,399,855 60,838,429 (10,000) (24,236,011) 311,992,273 49,973,061 49,973,061 72,637,100 - 72,637,100 14,613,756 1,891,617 (1,280,462) - 15,224,911 1,008,975,434 - 24,236,011 1,033,211,445 1,146,199,351 1,891,617 (1,280,462) 24,236,011 1,171,046,517 19,975,740 1,684,125 21,659,865 23,689,170 1,472,812 25,161,982 10,126,528 926,421 (1,162,142) 9,890,807 380,929,981 21,043,713 401,973,694 434,721,419 25,127,071 (1,162,142) 458,686,348 711,477,932 (23,235,454) (118,320) 24,236,011 712,360,169 $ 986,877,787 $ 37,602,975 $ (128,320) $ - $ 1,024,352,442 Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2020, as follows: Governmental Activities: General government $ 759,533 Public safety 17,539 Recreation and community service 2,482,283 Neighborhood services 79,767 Public works 410,710 Community development 28,630 Internal service funds depreciation 304,896 Allocated Depreciation 4,083,358 Unallocated infrastructure depreciation 21,043,713 Total Depreciation Expense $ 25,127,071 54 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020: Business -Type Activities Balance Balance June 30, 2019 Additions Deletions Transfers June 30, 2020 Business -type activities Non -depreciable assets Land $ 15,087,880 $ - $ $ $ 15,087,880 Construction in progress 3,806,655 1,763,385 5,570,040 Total Non -Depreciable Assets 18,894,535 1,763,385 20,657,920 Depreciable assets Site improvements 12,941,276 - 12,941,276 Building and improvements 41,483,799 - 41,483,799 Equipment 61,813,881 3,985,591 (2,129,408) 63,670,064 Total Depreciable Assets 116,238,956 3,985,591 (2,129,408) 118,095,139 Less accumulated depreciation Site improvements 4,400,033 568,221 4,968,254 Building and improvements 13,692,426 883,347 14,575,773 Equipment 33,134,592 3,727,094 (2,023,697) 34,837,989 Total Accumulated Depreciation 51,227,051 5,178,662 (2,023,697) 54,382,016 Total Depreciable Assets, Net 65,011,905 (1,193,071) (105,711) 63,713,123 Total Capital Assets, Net $ 83,906,440 $ 570,314 $ (105,711) $ $ 84,371,043 Depreciation expense for business -type activities for the fiscal year ended June 30, 2020 was charged as follows: Business -type Activities: Transit enterprise fund $ 5,178,662 55 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 $65,085,696 and $1,227,954, 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, 2020: Balance June 30, 2019 Additions General Obligations Lease Revenue Bonds Series 2016A (Golden Valley Road) $ 9,185,000 $ Series 2016B (OSPD) 13,145,000 Series 2019 (Sheriff Station) 25,850,000 Plus deferred amount for issuance premium, net of discount 2,895,746 Total Lease Revenue Bonds 51,075,746 Revenue and Taxable Revenue Bonds Series 2018A (Streetlights Acquisition and Retrofit Program) 11,295,000 Series 2018B (Streetlights Acquisition and Retrofit Program) 3,280,000 Plus deferred amount for issuance premium, net of discount 532,666 Total Revenue and Taxable Revenue Bonds 15,107,666 Classification Balance Due Within Due More Deletions June 30, 2020 One Year Than One Year $ (400,000) $ 8,785,000 $ 420,000 $ 8,365,000 (340,000) 12,805,000 375,000 12,430,000 - 25,850,000 - 25,850,000 (46,747) 2,848,999 79,896 2,769,103 (786,747) 50,288,999 874,896 49,414,103 - 11,295,000 - 11,295,000 - (295,000) 2,985,000 305,000 2,680,000 - (15,969) 516,697 15,969 500,728 (310,969) 14,796,697 320,969 14,475,728 Total General Obligations 66,183,412 - (1,097,716) 65,085,696 1,195,865 63,889,831 Notes from direct borrowings and direct placements Private Placement Lease: Refunding, Series 2015 2,177,480 - (1,447,109) 730,371 730,371 Capital Leases 2,538 586,228 (91,183) 497,583 113,688 383,895 Total Notes from direct borrowings and direct placements 2,180,018 586,228 (1,538,292) 1,227,954 844,059 383,895 Subtotal Bonds, Loans and Capital Leases 68,363,430 586,228 (2,636,008) 66,313,650 2,039,924 64,273,726 Compensated absences 3,599,393 2,363,278 (1,818,313) 4,144,358 1,818,313 2,326,045 Claims and judgments 3,654,276 2,399,468 (1,152,635) 4,901,109 3,038,688 1,862,421 Total $ 75,617,099 $ 5,348,974 $ (5,606,956) $ 75,359,117 $ 6,896,925 $ 68,462,192 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, 2020, was $8,785,000 for Series 2016A and $12,805,000 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. M City of Santa Clarita, California Notes to Financial Statements June 30, 2020 The annual debt service requirements on the remaining bonds are as follows: Series 2016A: Year Ending June 30, 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036 Series 201613: Governmental Activities Bonds Principal Interest Total $ 420,000 $ 279,300 $ 699,300 435,000 262,200 697,200 450,000 244,500 694,500 470,000 226,100 696,100 490,000 206,900 696,900 2,715,000 769,650 3,484,650 3,120,000 366,175 3,486,175 685,000 10,275 695,275 $ 8,785,000 $ 2,365,100 $ 11,150,100 Governmental Activities Bonds Year Ending June 30, Principal Interest 2021 $ 375,000 $ 391,406 2022 410,000 375,706 2023 445,000 358,606 2024 485,000 340,006 2025 525,000 319,806 2026-2030 3,245,000 1,298,731 2031-2035 4,195,000 845,472 2036-2038 3,125,000 143,775 Total $ 766,406 785,706 803,606 825,006 844,806 4,543,731 5,040,472 3,268,775 $ 12,805,000 $ 4,073,509 $ 16,878,509 57 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, 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 $940,000 and $970,000 on June 1, 2036 and June 1, 2037, respectively. The annual debt service requirements on the remaining bonds are as follows: Year Ending June 30, 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2049 Principal 505,000 530,000 555,000 585,000 3,385,000 4,190, 000 5,000,000 5,800,000 5,300,000 $ 25,850,000 Governmental Activities Bonds Interest $ 924,563 924,563 899,313 872,813 845,063 3,757,313 2,947,863 2,141, 063 1,344,563 415,469 $ 15,072,586 Total $ 924,563 1,429,563 1,429,313 1,427,813 1,430,063 7,142,313 7,137, 863 7,141, 063 7,144,563 5,715,469 $ 40,922,586 Revenue and Taxable Revenue Bonds — Series 2018A and 2018B (Streetlights Acquisition and Retrofit Program) 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. M City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, 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, 2020, was $2,985,000. 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 Bonds Year Ending June 30, Principal Interest 2021 $ 305,000 $ 558,906 2022 310,000 550,063 2023 320,000 540,613 2024 330,000 530,656 2025 340,000 519,975 2026-2030 1,885,000 2,406,459 2031-2035 2,300,000 1,990,788 2036-2040 2,720,000 1,567,222 2041-2045 3,365,000 884,575 2046-2048 2,405,000 146,900 Total $ 863,906 860,063 860,613 860,656 859,975 4,291,459 4,290,788 4,287,222 4,249,575 2,551,900 $ 14,280,000 $ 9,696,156 $ 23,976,156 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, was $730,371. 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 2021 Capital Leases 730,371 7,450 737,821 On June 11, 2019, the City Council approved a lease -purchase agreement with Kyocera Document Solutions West, LLC for Citywide printers and copiers in the amount of $497,730. The lease agreement has 60 monthly payments of $8,944 with an interest rate of 3 percent. The final payment is due July 1, 2024. The lease was assigned by Kyocera Document Solutions West, LLC. The assets acquired through the capital lease are as follows: Equipment Less: accumulated depreciation Total $ 530,970 (97,345) $ 433,625 At City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Future capital lease payment requirements are as follows: Year Ending June 30, Total 2021 $ 107,323 2022 107,323 2023 107,323 2024 107,323 2025 8,944 Net minimum lease payments 438,236 Less: amount representing interest (26,262) Present value of net minimum lease payments $ 411,974 On April 28, 2020, the City Council approved a lease -purchase agreement with Kyocera Document Solutions West, LLC to install library printers and copiers in the amount of $88,497. The lease agreement has 60 monthly payments of $1,509 with an interest rate of 0.90 percent. The final payment is due April 5, 2025. The lease was assigned by Kyocera Document Solutions West, LLC. The assets acquired through the capital lease are as follows: Equipment $ 111,831 Less: accumulated depreciation (3,728) Total $ 108,103 Future capital lease payment requirements are as follows: Year Ending June 30, Total 2021 $ 18,107 2022 18,107 2023 18,107 2024 18,107 2025 15,089 Net minimum lease payments 87,517 Less: amount representing interest (1,908) Present value of net minimum lease payments $ 85,609 61 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Compensated Absences The City's liability for accrued and unpaid compensated absences in the governmental activities totaled $4,144,358 at June 30, 2020. The majority of compensated absences are liquidated through the General Fund. Claims and Judgments The City's liability for outstanding claims and judgments is $4,144,358 at June 30, 2020 (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, 2020, is as follows: Balance Balance Due Within Due More June 30, 2019 Additions Deletions June 30, 2020 One Year Than One Year Compensated absences $ 94,611 $ 63,378 $ (39,112) $ 118,877 $ 39,112 $ 79,765 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, 2020, deposits payable were as follows: General Fund: Deposits from developers Sheriff's Station deposits payable Other deposits payable Total General Fund Developer Fees Deposits from developers Total Deposits Payable $ 2,620,427 257,153 772,173 $ 3,649,753 1,050,000 $ 4,699,753 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, the City has used $14,742,847 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, 2020, 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, 2020: Balance Balance June 30, 2019 Additions Deletions June 30, 2020 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 63 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Note 10 - Interfund Transactions A. Due To/Due From At June 30, 2020, the City had the following short-term interfund receivables and payables: Due From Other Funds General Due to Other Funds: Bridge and Thoroughfare $ 24,309 Non -Major Governmental Funds 5,852,728 Transit Enterprise Fund 3,921,774 Total $ 9,798,811 B. Advances At June 30, 2020, the City had the following interfund advances: Advances To Other Funds Developer General Fees Total Advances From Other Funds: Bridge and Thoroughfare $ 6,980,864 $ 129,552 $ 7,110,416 Public Library 3,183,443 - 3,183,443 Total $ 10,164,307 $ 129,552 $ 10,293,859 Bridge and Thoroughfare In March 2006, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $430,000 for acquisition of land. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2020, the amount of the advance outstanding is $591,789. 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, 2020, the amount of the advance outstanding is $1,037,538. 64 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020, the amount of the advance outstanding is $434,851. 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, 2020, the amount of the advance outstanding is $600,240. 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, 2020, the amount of the advance outstanding is $2,265,234. 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, 2020, the amount of the advance outstanding is $129,552. 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, 2020, the amount of the advance outstanding is $2,051,212. 65 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Public Library The General Fund advanced the Public Library Special Revenue Fund $8,398,938, which consists of the following individual advances: 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, 2020, the principal amount of the advance of $3,183,443 is outstanding. C. Transfers At June 30, 2020, 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 $ - $ 140,676 $ 40,000 $ 2,161,226 $ 150,000 $ 2,491,902 Landscape Maintenance District #1 10,000 - - - - 10,000 Non -Major Governmental Funds 12,004,427 17,000 3,613,956 3,690 15,639,073 Transit Enterprise - - - - - Internal Service Funds 24,511 24,511 Total $ 12,038,938 $ 140,676 $ 57,000 $ 5,775,182 $ 153,690 $ 18,165,486 The General Fund made transfers to Landscape Maintenance District #1 and non -major governmental funds for operating and capital improvement projects for $10,000 and $9,824,508 respectively, and current year debt service payments for $2,179,919, totaling $12,014,427. Transfers from the General Fund to the Self - Insurance Internal Service Fund of $24,511 were for risk management operations. The Developer Fees Special Revenue Fund made transfers to the General Fund for administrative costs for $140, 676. The Landscape Maintenance District #1 Special Revenue Fund made transfers to the General Fund and the non -major governmental fund for operating costs for $57,000. The Non -major governmental funds, made transfers to the General Fund for current CalPERS pension obligations plus additional contribution to pay down the City's Unfunded Accrued Liability, totaling $1, 554, 850. The non -major governmental funds made transfers to the General Fund and non -major governmental funds for operating costs of $1,141,047. M. City of Santa Clarita, California Notes to Financial Statements June 30, 2020 The non -major governmental funds made transfers to the non -major governmental funds in the amount of $141,214 for streetlight operations and maintenance. Transfers from the non -major governmental funds to non -major governmental funds of $1,491,412 represents debt service payments for the 2016 Lease Revenue Refunding Bonds and $1,446,659 for the 2018 Lease Revenue Bonds Series A and 2018 Taxable Lease Revenue Bonds Series B. 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. Note 11 - Fund Balances and Net Position A. Fund Balance Classification The details of fund balance of the governmental funds as of June 30, 2020, 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 Bond Proceeds Total Restricted Committed: Capital improvements Major Governmental Funds Landscape Non -Major General Bridge and Developer Public Maintenance Governmental Fund Thoroughfare Fee Library District #1 Funds Total $ 545,181 $ - $ - $ 6,896 $ 448,884 $ 119,496 $ 1,120,457 9,265,792 * - - - - - 9,265,792 9,810,973 - - 6,896 448,884 119,496 10,386,249 - 3,675,228 1,653,797 - - 3,743,195 110,558 - 306,742 23,063,669 - - 23,063,669 3,675,228 5,814,292 9,277 24,277,704 7,760,749 32,038,453 - 13,290,227 13,290,227 - 7,963,759 13,292,784 - 31,972,250 31,972,250 - 5,837,395 5,837,395 - 358,142 4,101,337 - 2,992,222 2,992,222 - 609,269 719,827 - 3,998,532 3,998,532 - 438,108 438,108 - 1,070,521 1,070,521 - 2,572,801 2,879,543 - - 23,063,669 24,277,704 78,863,975 135,694,868 9,277 Assigned: Capital projects 15,500,000 - 41,232 - - 750,671 16,291,903 Claims and settlements - - - - - 11 11 Public facilities 81,793,470 - - - - - 81,793,470 Total Assigned 97,293,470 - 41,232 - - 750,682 98,085,384 Unassigned 60,273,125 - - (837,051) - (2,290,853) 57,145,221 Total Fund Balances $ 190,441,237 $ 3,675,228 $ 5,864,801 $ (830,155) $ 24,726,588 $ 77,443,300 $ 301,320,999 * Accrued interest on General Fund advances to other funds of $898,515, do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. 67 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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. CalPERS is an agent - multiple employer defined benefit pension plan administered by the California Public Employees' Retirement System. CalPERS acts as a common investment and administrative agent for its participating member employers and are included within Public Employees' Retirement Fund A (PERF A). Benefits provisions under the Plan are established by State statute and may be amended by City resolution. CalPERS issues a publicly available financial report, which includes a full description of the pension plan regarding benefit provisions, and assumptions and membership information that can be obtained at htt�s://www.calpers.ca.ov. B. Benefits Provided CalPERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits (total service across all CalPERS employers, and with certain other Retirement Systems with which CalPERS has reciprocity agreements). All members are eligible for non -duty disability benefits after 5 years of service. The death benefit is one of the following: Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees' Retirement Law. 4 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 The Plan's provisions and benefits in effect as of June 30, 2020 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% 6.25% 9.211% $3,466,495 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 * * Those hired as part-time seasonal (PTS) who later convert to regular full-time will qualify for Tier 1, 2 or 3 depending on their conversion date. C. Employees Covered by Benefit Terms At June 30, 2018, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 215 Employees entitled to but not yet receiving benefits 437 Active employees 433 1,085 The information was obtained from the CalPERS Annual Valuation Report as of June 30, 2018 and is the most recent information available. City of Santa Clarita, California Notes to Financial Statements June 30, 2020 D. Contributions Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Refer to Section B for required contribution rates during the year ended June 30, 2020, including amounts paid by the City related to employees' required contribution rates. The employer contributions during the year ended June 30, 2020 were $15,976,871. E. Actuarial Assumptions The total pension liability in the June 30, 2018 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, 2018 June 30, 2019 Entry -Age Normal Cost Method 7.15 percent 2.75 percent Varies by Entry Age and Service 7.375 percent Mortality rates were based on the 2014 CalPERS 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 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 7.325 percent rate of return on pension plan investments, CalPERS took into account both short- and long-term market return expectations, as well as the expected pension fund cash flows. 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. 70 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 These geometric rates of return are net of administrative expenses and are summarized in the following table: Asset Class (1) Assumed Asset Allocation Real Return Real Return Years 1-10(2) Years 11+(3) 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 (1) In the System's CAFR, fixed income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Gloal Equity Securityes and Global Debt Securities (2) An expected inflation rate of 2.00% used for this period (3) An expected inflation rate 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, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15 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 CalPERS website. 71 G. Changes in the Net Pension Liability Balances at June 30, 2018 Changes recognized for the measurement period: Service cost Interest Changes of assumptions Differences between expected and actual experience Net Plan to Plan Resource Movement 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, 2019 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Liability (a) - (b) $ 195,038,863 $ 153,249,106 $ 41,789,757 5,104, 511 - 5,104, 511 14,120,352 - 14,120,352 3,019,582 - 3,019,582 - 12,500,090 (12,500,090) - 2,478,266 (2,478,266) - 10,255,487 (10,255,487) (6,246,516) (6,246,516) - - (109,362) 109,362 - 355 (355) 15,997,929 18,878,320 (2,880,391) $ 211,036,792 $ 172,127,426 $ 38,909,366 The plan's Fiduciary Net Position as a percentage of the total pension liability is 81.56% for the measurement period ending June 30, 2019. 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, 2020, the total net pension liability was allocated as follows: Net pension liability Governmental Transit Total Net Activities Enterprise Fund Pension Liability $ 37,541,953 $ 1,367,413 $ 38,909,366 72 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 $ 71,261,497 $ 38,909,366 $ 12,510,851 I. Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial report. J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2020, the City recognized pension expense of $10,180,598. At June 30, 2020, 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 $ - $ 570,197 Changes in assumptions 3,126,949 864,325 Differences between expected and actual experience 3,247,754 431,746 City contributions subsequent to the measurement date 15,976,871 - Total $ 22,351,574 $ 1,866,268 At June 30, 2020, 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 $ 21,566,060 $ 785,514 1,800,681 65,587 9,822,816 357,782 Tota 1 $ 22,351,574 1,866,268 10,180,598 73 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 $15,976,871, which will be recognized as a reduction of the net pension liability during the fiscal year ending June 30, 2021. 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, 2019 measurement date, the expected average remaining service lifetime is 4.4 years. Deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal Year Ending 2020 2021 2022 2023 Note 13 - Post -Employment Health Benefits A. Plan Description Deferred Outflows/(Inflows) of Resources $ 3,691,741 (184,850) 527,263 474,281 $ 4,508,435 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 CalPERS 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. 74 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 and is not determined based on a level of pay. The Cash Subsidy component of the annual required contribution for fiscal year 2019-2020 was $360,000. An additional $926,903 in benefits was paid directly by the Trust to recipients during the year. 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 $276,000 related to the fiscal year 2019-2020 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, 2020 measurement date, 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 124 33 432 589 75 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 D. Contributions The Plan and its contribution requirements are based on the actuarially determined contribution. For the fiscal year ended June 30, 2020, the City's cash contributions were $360,000 in payments to the trust and the estimated implied subsidy was $276,000 resulting in total payments of $636,000. An additional $926,903 in benefits was paid directly by the Trust to recipients during the year. E. Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2020 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 Valuation Date Contribution Policy Discount Rate Municipal Bond Index Long Term Return on Assets General Inflation Mortality, Retirement, Disability, Termination Mortality Improvement Salary Increases Medical Trend PEMHCA Minimum Increases Healthcare participation at Cap Increases June 30, 2018 Pre -fund cash benefit Actuarially Determined Contribution (ADC) with PARS Balance Fund Implied subsidy benefit on pay-as-you-go basis 4.17% at June 30, 2020 5.17% at June 30, 2019 Expected City contributions projected to be insufficient to pay all benefits from trust. Bond Buyer 20-bond Index 2.21% at June 30, 2020 3.50% June 30, 2019 6.50% 2.75% per annum CalPERS 1997-2015 Experience Study Post -retirement mortality projected fully generational Aggregate -3% per annum Merit - CalPERS 1997-2015 Experience Study 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 4.25% per annum Hired < 1/1/08: 100% Hired >_ 1/1/08: 60% No increase on $1,016.58 cap Medical trend for EE+1 cap 911 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 $ 1,543,108 U.S. Government Issues 6,215,847 Corporate Issues 5,658,201 Foreign Issues 380,059 Municipal Issues 348,376 Domestic Common Stocks 4,089,821 Foreign Stocks 84,884 Mutual Funds -Equity 20,364,293 Mutual Funds -Fixed Income 3,404,361 Total Assets 42,088,950 Accrued Income 80,627 Total $ 42,169,577 77 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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: Asset Class Target Allocation PARS -Balance Expected Real 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, 2020, the annual money weighted rate of return on investments was 3.78 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 Vanguard Growth and Income Federal National Mortgage Association Dodge and Cox Stock Fund H. Discount Rate Investment Type Mutual Funds -Equity U.S. Government Issues Mutual Funds -Equity Amount Investments $ 5,159,572 12.26% $ 2,486,189 5.91% $ 2,985,198 7.09% The discount rate used to measure the total OPEB liability was 4.17 percent for the Plan, a decrease from 5.17 percent in the prior year. 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 31 using the Bond Buyer 20-bond index rate of 2.2 percent as of June 30, 2020. Before year 31, 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 4.17 percent was used. WN I. Changes in the Net OPEB Liability The changes in the net OPEB liability for the Plan are as follows: Total OPEB Liability (a) Balance at June 30, 2019 $ 47,448,627 Changes for the year Service cost Interest Actual vs. expected experience Assumption changes Contributions - employer* Net investment income Benefit payments Administrative expenses Net Changes Balance at June 30, 2020 1,610,969 2,505,286 8,477, 248 (1,202,903) 11,390,600 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Fiduciary Net Position (b) $ 41,338,537 636,000 1,475,065 (1,202,903) (77,123) 831,039 Net OPEB Liability/(Asset) (c) _ (a) - (b) $ 6,110,090 1,610,969 2,505,286 8,477, 248 (636,000) (1,475,065) 77,123 10,559,561 $ 58,839,227 $ 42,169,576 $ 16,669,651 *Contributions to trust of $360,000 plus $276,000 implied subsidy benefit payments by the City. The plan's fiduciary net position as a percentage of the total OPEB liability is 71.67%. Per the most recent funding valuation dated June 30, 2018, the City's actuarial obligations are 104.5% funded. J. Changes of Assumptions For the June 30, 2020 measurement date, the discount rate was changed from 5.17% to 4.17%. 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, 2020: Net OPEB Liability 1% Decrease (3.17%) $ 27,351,539 Current Rate (4.17 % ) $ 16,669,651 1% Increase (5.17%) $ 8,188,435 79 City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020: Healthcare Trend Rate 1% Decrease Current Rate 1% Increase Net OPEB Liability $ 6,282,831 $ 16,669,651 $ 30,188,648 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, 2020, the City recognized OPEB expense of $1,839,973. As of fiscal year ended June 30, 2020, 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 Outflows of Resources 9,151, 776 653,062 Deferred Inflows of Resources $ 5,704,979 669,000 $ 9,804,838 $ 6,373,979 -* City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020 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 2021 $ 319,660 2022 320,660 2023 444,659 2024 463,439 2025 224,839 Thereafter 1,657,602 $ 3,430,859 Note 14 - Individual Fund Disclosures — Deficit Fund Balance Funds that have a deficit fund balance at June 30, 2020, are as follows: Deficit Fund Fund Balance Major Funds Public Library Special Revenue Fund $ (830,155) Non -Major Governmental Funds State Park Special Revenue Fund (10,914) Surface Transportation Program Special Revenue Fund (37,538) Federal Grants Special Revenue Fund (297,554) Measure R Highway Improvement Special Revenue Fund (3,168) Measure M ATP Special Revenue Fund (3,000) Measure A Safe Parks Special Revenue Fund (351,869) Measure W Safe Clean Water Special Revenue Fund (1,586,810) 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. L-W City of Santa Clarita, California Notes to Financial Statements June 30, 2020 The deficit in the Measure W Safe Clean Water special revenue fund will be eliminated in the next fiscal year. The deficit was due to fiscal year 2019-20 property taxes received from the County more than 60 days after the fiscal year end. 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, 2020, there were 1,544 participants in the plans. The City's contributions totaled $237,016, and employees' contributions totaled $2,339,549. 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 $50,000 general liability deductible. All general liability claims above $50,000 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 $1,371,234 for the general liability program and the workers' compensation program (based on estimated wages). At June 30, 2020, $912,000 was accrued by the City for general liability claims, and $3,989,109 was accrued for workers' compensation claims and judgments. These accruals represent management's estimates of amounts to be paid for incurred and reported claims, as well as incurred but not reported (IBNR) claims based upon past experience and modified for current trends and information. L-*YJ City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Changes in the reported claims liability since June 30, 2018, resulted in the following: Claims liability as of June 30, 2018 $ 2,775,229 Claims and changes in estimates during the year ended June 30, 2019 2,766,977 Claims and payments during the year ended June 30, 2019 (1,887,930) Claims liability as of June 30, 2019 3,654,276 Claims and changes in estimates during the year ended June 30, 2020 (735,265) Claims and payments during the year ended June 30, 2020 1,982,098 Claims liability as of June 30, 2020 $ 4,901,109 Note 17 - Non -Commitment Debt A. 1915 Act Limited Obligation Improvements Bonds —Golden Valley On July 24, 1996, $879,432 of 1915 Act Limited Obligation Improvement Bonds (1915 Golden Valley Road Bonds) for the Golden Valley Road Improvement Assessment District (the Golden Valley Assessment District) were issued. The 1915 Golden Valley Road Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Golden Valley Assessment District. The principal amount of debt outstanding at June 30, 2020 was $190,000. B. 1915 Act Limited Obligation Improvements Bonds —Vermont/Everett On January 27, 2000, $790,000 of 1915 Act Limited Obligation Improvement Bonds (1915 Vermont Drive/Everett Drive Bonds) for the Vermont Drive/Everett Drive Improvement Assessment District (the Vermont/Everett Assessment District) were issued. The 1915 Vermont Drive/Everett Drive Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Vermont/Everett Assessment District. The principal amount of the debt outstanding at June 30, 2020 was $345,000. 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, 2020 was $13,440,000. L-*Xj City of Santa Clarita, California Notes to Financial Statements June 30, 2020 D. Community Facilities District No. 2016-1 Vista Canyon On February 13, 2020, $17,230,000 of Special Tax bonds were issued for Community Facilities District No. 2016-1 (the Community Facilities District). 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, 2020 was $17,230,000. Note 18 - Santa Clarita Watershed Recreation and Conservancy Authority In June 1992, the City entered into a joint powers agreement with the Santa Monica Mountains Conservancy (the Conservancy) to create the Watershed Authority. The purpose of the Watershed Authority is to acquire, develop, and conserve additional park and open space lands, including water -oriented recreation and conservation projects. The governing board consists of two representatives from the Conservancy and two from the City. The City performs administrative functions for the Watershed Authority. 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, 2020, 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 Authority In July 2009, the City entered into a joint powers agreement with the William S. Hart School District (the District) to create the Santa Clarita Public Television Authority (SCPTA). 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, 2020, the City contributed $294,343. 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. ,d City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Note 20 - Commitments and Contingencies A. Construction Commitments The City has active construction projects as of June 30, 2020. At year-end, the City's commitments with contractors for infrastructure projects are as follows: Expenditures Contract to Date as of Remaining Project Amount June 30, 2020 Commitments Pavement $ 3,557,541 $ 588,652 $ 2,968,889 Bridges 3,164,942 3,017,092 147,850 Medians 299,749 255,568 44,181 Trails 202,502 158,219 44,283 Traffic Signals 4,363,119 1,071,011 3,292,108 B. Encumbrances The City utilizes encumbrance accounting as a means of controlling expenditures. Under this method, funds are encumbered when purchase orders, contracts, and other commitments are signed or approved by authorized City officials. Such outstanding commitments at year-end do not constitute expenditures or liabilities. Encumbrances of balances within the governmental funds are classified as either restricted or assigned and are included in the respective categories. These encumbrances are not separately classified in the financial statements and are summarized at June 30, 2020, as follows: General Fund Other governmental funds Amount $ 40,530,878 32,497,457 L-*V City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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, 2020. During 2020, the world-wide coronavirus pandemic impacted national and global economies. The City is closely monitoring its operations, liquidity and capital resources and is actively working to minimize the current and future impact of this unprecedented situation. As of the date of issuance of these financial statements, the current and future full impact to the City is not known. 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. -* City of Santa Clarita, California Notes to Financial Statements June 30, 2020 A. Cash and Investments The balance of cash and investments at June 30, 2020, classified in the accompanying financial statements as follows: RDA Successor Agency Cash and investments pooled with City $ 1,010,375 Restricted: Cash and investments 21,287 Cash and investments with fiscal agent 1,773,823 Total $ 2,805,485 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, 2020, $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, 2019 Additions Deletions June 30, 2020 One Year Than One Year RDA Successor Agency: Loans from the City of Santa Clarita $ 16,464,413 $ 357,772 $ $ 16,822,185 $ $ 16,822,185 Tax Allocation Bonds: Refunding Series 2017 33,180,000 - (820,000) 32,360,000 850,000 31,510,000 Less deferred amounts for unamortized discounts 780,547 (33,660) 746,887 33,660 713,227 Total Tax Allocation Bonds 33,960,547 (853,660) 33,106,887 883,660 32,223,227 Total $ 50,424,960 $ 357,772 $ (853,660) $ 49,929,072 $ 883,660 $ 49,045,412 L.*b City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 principal of these notes is $9,751,533 and $7,070,652, respectively, which include unpaid accrued interest of $3,145,703 and $1,750,766, 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 $2,200,138 as of June 30, 2020. 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, 2020, was $32,360,000. 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. ::a City of Santa Clarita, California Notes to Financial Statements June 30, 2020 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 (ii) 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 _ 2021 $ 850,000 $ 2022 2023 2024 2025 2026-2030 2031-2035 2036-2040 2041-2043 D. Deficit Net Position 895,000 935,000 985,000 1,030,000 5,935,000 7,170,000 8,575,000 5,985,000 Interest 1,288,044 1,244,419 1,198,669 1,150,669 1,100,294 4,748,578 3,513,331 2,061,381 365,500 Tota 1 $ 2,138,044 2,139,419 2,133,669 2,135,669 2,130,294 10,683,578 10,683,331 10,636,381 6,350,500 $ 32,360,000 $ 16,670,885 $ 49,030,885 As of June 30, 2020, the RDA Successor Agency Private -Purpose Trust Fund had a deficit net position of $37,509,483. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County. City of Santa Clarita, California Notes to Financial Statements June 30, 2020 Note 22 - Subsequent Events A. Acquisition of Vista Canyon Parking Structure On February 27, 2020, $17,230,000 of Special Tax bonds were issued for Community Facilities District No. 2016-1 (Vista Canyon). As a result of the issuance, project proceeds in the amount of $15 million were available to finance the acquisition costs associated with the Vista Canyon parking structure, constructed by the Developer Vista Canyon Ranch LLC. A funding and acquisition agreement provided for the method and terms for the City, acting on behalf of the CFD, to acquire the completed parking structure from the Developer using the bond proceeds. In October 2020, the developer was reimbursed $15 million for its construction of the parking structure and the parking structure became an asset of the City to be reflected in the City's financial statements ending June 30, 2021. B. Lease Revenue Bonds — Series 2020 In October 2020, the Santa Clarita Public Financing Authority issued Lease Revenue Bonds Series 2020A and Taxable Lease Revenue Bonds Series 2020A-T (Recreational Facility), in the amount of $10,645,000 and $3,625,000 respectively. Interest on the bonds is paid as part of a fixed rate between 0.45% and 4.00% payable on December 1 and June 1 of each year commencing on December 1, 2020. Principal payments are due annually in various amounts commencing June 1, 2030 through June 1, 2050 for Series 2020A and June 1, 2021 through June 1, 2030 for Series 2020A-T. Net bond proceeds in the amount of $14,200,000 were used to reimburse the City in October 2020 for its acquisition of an approximately 4.4 acre parcel and 93,000 square foot recreational facility located at 27745 Smyth Drive within the City. C. Federal Transportation Administration CARES Act Funding On July 20, 2020, the City entered into an agreement with the Department of Transportation to receive approximately $18 million in CARES Act funds for its Transportation programs. As the grant agreement was entered into subsequent to year end, resulting in future revenues for the City, the City will be allowed to apply costs incurred between the period of January 20, 2020 through June 30, 2020 to this grant. The amount to be applied during fiscal year 2019-20 is $5,835,988. t Required Supplementary Information June 30, 2020 City of Santa Clarita, California 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, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Taxes $ 87,565,870 $ 81,372,524 $ 87,376,087 $ 6,003,563 Licenses and permits 7,934,282 6,992,282 7,538,878 546,596 Intergovernmental 75,130 4,473,864 3,182,624 (1,291,240) Charges for services 7,535,177 6,444,791 6,816,474 371,683 Investment income 2,924,976 2,924,976 6,667,123 3,742,147 Fines and forfeitures 1,426,730 850,289 795,648 (54,641) Other revenue 7,015,563 7,100,692 305,285 (6,795,407) Total Revenues 114,477,728 110,159,418 112,682,119 2,522,701 Expenditures: Operating: Personnel 49,571,562 50,566,026 47,093,277 3,472,749 Operating 45,434,785 47,310,664 36,970,951 10,339,713 Capital outlay - 1,266,334 1,259,952 6,382 Capital Improvement Projects: Personnel - - 153,349 (153,349) Operating 1,150,000 63,406,092 21,468,380 41,937,712 Capital outlay - 739,624 357,176 382,448 Total Expenditures 96,156,347 163,288,740 107,303,085 55,985,655 Excess (deficiency) of revenues over (under) expenditures 18,321,381 (53,129,322) 5,379,034 58,508,356 Other financing sources (uses) Contributions from property owners - - 2,647,000 2,647,000 Transfers in 2,425,850 2,502,526 2,491,902 (10,624) Transfers out (12,608,054) (13,051,182) (12,038,938) 1,012,244 Total Other Financing Sources (Uses) (10,182,204) (10,548,656) (6,900,036) 3,648,620 Net Change in Fund Balances $ 8,139,177 $ (63,677,978) (1,521,002) $ 62,156,976 Fund Balance at Beginning of Year Fund Balance at End of Year 191,962,239 $ 190,441,237 See note to the required supplementary information 92 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, 2020 Revenues: Investment income Developer fees Other revenue Total Revenues 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 434,995 $ 434,995 $ 924,428 $ 489,433 - - 208,638 208,638 368,724 368,724 368,724 - 803,719 803,719 1,SO1,790 698,071 105,308 104,864 64,756 40,108 417,082 417,082 675,047 (257,965) - - 40,795 (40,795) 246,612 6,770,778 2,203,946 4,566,832 769,002 7,292,724 2,984,544 4,308,180 34,717 (6,489,OOS) (1,482,754) 5,006,251 $ 34,717 $ (6,489,OOS) (1,482,754) $ 5,006,251 S,1S7,982 $ 3,675,228 See note to the required supplementary information 93 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, 2020 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) $ 84,000 $ 84,000 $ 267,413 $ 183,413 - 1,71S,82S 1,869,991 154,166 84,000 1,799,825 2,137,404 337,579 - - 13,548 (13,548) 185,312 3,801,071 2,293,625 1,S07,446 185,312 3,801,071 2,307,173 1,493,898 (101,312) (2,001,246) (169,769) 1,831,477 (64,000) (140,676) $ (165,312) $ (2,141,922) (140,676) - (310,445) $ 1,831,477 6,175, 246 $ 5,864,801 See note to the required supplementary information 94 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, 2020 Revenues: Taxes Charges for services Investment income (loss) Otherrevenue Total Revenues Expenditures: Operating: Personnel Operating Capital outlay Capital Improvement Projects: Operating Total Expenditures 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) $ 7,780,091 $ 7,780,091 $ 7,906,237 $ 126,146 90,878 90,878 92,315 1,437 - - 80,831 80,831 445,829 335,704 324,676 (11,028) 8,316,798 8,206,673 8,404,059 197,386 4,004,416 3,872,306 3,547,221 325,085 2,833,677 2,983,781 2,863,315 120,466 - 118,766 94,850 23,916 6,838,093 6,974,853 6,505,386 469,467 $ 1,478,705 $ 1,231,820 1,898,673 $ 666,853 (2,728,828) $ (830,155) See note to the required supplementary information 95 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, 2020 Revenues: Taxes Special assessments Investment income (loss) Fines and forfeitures 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) $ 242,253 $ 242,253 $ 250,404 $ 8,151 13,155,347 13,460,475 13,462,237 1,762 384,000 384,000 948,592 564,592 - - 22,256 22,256 13,781,600 14,086,728 14,683,489 596,761 1,422,809 882,956 919,936 (36,980) 12,447,678 13,508,550 11,858,790 1,649,760 - - 76,211 (76,211) 805,710 3,007,351 769,003 2,238,348 14,676,197 17,398,857 13,623,940 3,774,917 (894,597) (3,312,129) 1,059,549 4,371,678 Transferin 10,000 10,000 10,000 Transfer out (57,000) (57,000) (57,000) Total Other Financing Sources (Uses) (47,000) (47,000) (47,000) - Net Change in Fund Balance $ (941,597) $ (3,359,129) 1,012,549 $ 4,371,678 Fund Balance at Beginning of Year Fund Balance at End of Year 23,714,039 $ 24,726,588 See note to the required supplementary information 96 City of Santa Clarita, California Schedule of Changes in the Net OPEB Liability and Related Ratios For the Year Ended June 30, 2020 2020 2019 2018 Changes in Total OPEB Liability Service Cost $ 1,610,969 $ 1,701,975 $ 1,711,000 Interest 2,505,286 2,823,979 2,633,073 Actual vs. expected experience - (7,334,973) - Assumption changes 8,477,248 2,078,284 (1,071,000) Benefit payments (1,202,903) (1,093,711) (1,054,000) Net Changes 11,390,600 (1,824,446) 2,219,073 Total OPEB Liability (beginning of year) 47,448,627 49,273,073 47,054,000 Total OPEB Liability (end of year) $ 58,839,227 $ 47,448,627 $ 49,273,073 Plan Fiduciary Net Position Contribution - employer $ 636,000 $ 923,250 $ 1,227,000 Net investment income 1,475,065 2,618,633 2,963,587 Benefit payments (1,202,903) (1,093,711) (1,054,041) Administrative expense (77,123) (73,935) (146,319) Net Changes 831,039 2,374,237 2,990,227 Plan Fiduciary Net Position (beginning of year) 41,338,537 38,964,300 35,974,073 Plan Fiduciary Net Position (end of year) $ 42,169,576 $ 41,338,537 Net OPEB Liability - ending (a)-(b) $ 16,669,651 $ 6,110,090 Plan fiduciary net position as a percentage of the total OPEB liability 71.67% 87.12% $ 38,964,300 $ 10,308,773 79.08% Covered employee payroll* $ 38,295,087 $ 33,895,751 $ 30,634,000 Net OPEB liability as a percentage of covered -employee payroll 43.53% 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). 97 Fiscal Year Ended June 30 Actuarially Determined Contribution (ADC)* Contributions in relation to the actuarially determined contribution** Contribution deficiency/(excess) Covered -employee payroll*** Contribution as a percentage of covered -employee payroll Notes to Schedule: * Contributions to the plan are made on an Ad Hoc basis. **Actual contribution, including implied subsidy ***For the 12 months period ending on June 30 (fiscal year end) Methods and Assumptions for 2019/20 Actuarially Determined Contributions Valuation Date Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Discount Rate General Inflation Medical Trend Mortality Mortality Improvement City of Santa Clarita, California Schedule of Contributions — OPEB Last Ten Years For the Year Ended June 30, 2020 2020 2019 2018 $ 1,112,000 $ 1,127,000 $ 1,755,000 636,000 923,250 1,227,000 $ 476,000 $ 203,750 $ 528,000 $ 38,295,087 $ 33,895,751 $ 30,634,000 1.66% 2.72% 4.01% June 30, 2018 Entry Age Normal, Level Percentage of Payroll Level percent of pay 14-year fixed period for 2019/20 Investment gains and losses spread over 5-year rolling period 6.50 2.75 Non -Medicare - 7.5% for 2020, decreasing to an ultimte rate of 4.0% in 2076 Medicare - 6.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 CAPERS 1997-2015 experience study Post -retirement mortality projected fully generational 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. O ,a Annual money -weighted rate of return - net of investment expense City of Santa Clarita, California Schedule of Money Weighted Rate of Return — OPEB Last Ten Years As of the Fiscal Year Ended June 30, 2020 Last Ten Years* 2020 2019 2018 3.78% 6.94% Notes to Schedule *Fiscal year 2017 was the first year of GASB 74 implementation, therefore, only four years are shown. 8.26% 2017 12.81% a 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, 2020 Measurement Date June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability Service cost $ 5,104,511 $ 4,920,377 $ 4,921,221 $ 4,409,399 $ 4,418,053 $ 4,462,544 Interest 14,120,352 13,037,446 12,166,752 11,315,207 10,443,680 9,588,693 Difference between Expected and Actual Experience 3,019,582 1,709,604 (1,505,660) (305,665) 416,626 - Changes of Assumptions - (1,615,911) 11,654,992 - (3,009,808) - Benefit Payments, Including Refunds of Employee Contributions (6,246,516) (5,601,353) (4,406,046) (3,347,335) (2,971,092) (2,561,655) Net Change in Total Pension Liability 15,997,929 12,450,163 22,831,259 12,071,606 9,297,459 11,489,582 Total Pension Liability - Beginning 195,038,863 182,588,700 159,757,441 147,685,835 138,388,376 126,898,794 Total Pension Liability - Ending (a) $ 211,036,792 $ 195,038,863 $ 182,588,700 $ 159,757,441 $ 147,685,835 $ 138,388,376 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 Postition - Beginning Plan Fiduciary Net Postion - Ending (b) Net pension liability - ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered Payroll Plan Net Pension Liability as a Percentage of Covered Payroll * only 6 years shown as GASB 68 was implemented effective June 30, 2014. 12,500,090 $ 9,664,637 $ 4,484,866 $ 3,959,503 $ 3,740,145 $ 3,562,246 2,478,266 2,203,916 2,224,721 2,252,522 2,164,107 2,339,435 10,255,487 11,713,900 13,510,656 622,282 2,506,239 16,243,165 (109,362) (211,742) (177,534) (71,202) (131,529) - (6,246,516) (5,601,353) (4,406,046) (3,347,335) (2,971,092) (2,561,655) 355 (402,101) - - - - - (355) - - 9,685 - 18,878,320 17,366,902 15,636,663 3,415,770 5,317,555 19,583,191 153,249,106 135,882,204 120,245,541 116,829,771 111,512,216 91,929,025 $ 172,127,426 $ 153,249,106 $ 135,882,204 $ 120,245,541 $ 116,829,771 $ 111,512,216 $ 38,909,366 $ 41,789,757 $ 46,706,496 $ 39,511,900 $ 30,856,064 $ 26,876,160 81.56% 78.57% 74.42% 75.27% 79.11% 80.58% $ 33,054,867 $ 29,655,553 $ 29,966,168 $ 27,934,377 $ 27,234,699 $ 26,879,556 117.71% 139.46% 155.86% 141.45% 113.30% 99.99% 100 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered Payroll Contributions as a Percentage of Covered Payroll City of Santa Clarita, California Schedule of City Contributions — Pensions Last Ten Years* As of the Fiscal Year Ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 $ 6,323,890 $ 5,637,826 $ 4,662,191 $ 4,484,140 $ 3,958,892 (15,976,871) (12,499,992) (9,662,191) (4,484,140) (3,958,892) $ (9,652,981) $ (6,862,166) $ (5,000,000) $ $ $ 34,882,519 $ 33,054,867 $ 29,655,553 $ 29,966,168 $ 27,934,377 45.80% 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 2019-2020 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 7.375% Net of Pension Plan Investment and Administrative Expenses; includes Inflation Retirement Age The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Mortality The probabilities of mortality are based on the 2014 CalPERS 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. * only 6 years shown as GASB 68 was implemented effective June 30, 2014. 101 City of Santa Clarita, California Schedule of City Contributions — Pensions (Continued) Last Ten Years As of the Fiscal Year Ended June 30, 2020 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 June 30, 2011 $ 3,740,138 $ 3,562,246 $ 3,319,326 $ 3,224,628 $ 2,916,852 (3,740,138) (3,562,246) (3,319,326) (3,224,628) (2,916,852) $ 27,234,699 $ 26,879,556 $ 25,256,659 $ 24,807,314 $ 24,940,516 13.73% 13.25% 13.14% 13.00% 11.70% 102 City of Santa Clarita, California Notes to Required Supplementary Information June 30, 2020 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. 103 City of Santa Clarita, California Note to Required Supplementary Information June 30, 2020 For the year ended June 30, 2020, 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 Landscape Maintenance District #1 Special Revenue Fund Operating - Personnel Non -Major Governmental Funds: Measure W Special Revenue Fund Operating - Personnel Tourism Marketing Bureau Special Revenue Fund Operating - Operating Excess Expenditures Over Appropriations Expenditures Appropriations 417,082 675,047 (257,965) $ 882,956 $ 919,936 $ (36,980) 61,039 66,071 (5,032) 8,908 9,148 (240) 104 Supplementary Information June 30, 2020 City of Santa Clarita, California City of Santa Clarita, California Description of Non -Major Governmental Funds As of and For the Year Ended June 30, 2020 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 M Local 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. SB1 Road Repair and Activity - To account for monies received and expended from the State SB1 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. W. City of Santa Clarita, California Non -Major Governmental Funds (Continued) As of and For the Year Ended June 30, 2020 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. 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. Measure R Highway Improvement Program — To account for the half -cent sales tax measure approved by LA County voters in November 2008 to fund carpool, highways and other highway related improvements. Measure M ATP - To account for the half -cent sales tax measure approved by LA County voters in November 2016 to fund active transportation projects throughout Los Angeles County. Measure A Safe Clean Neighborhood Parks Entitlement (Measure A Safe Parks) - The Clean Safe Neighborhood Parks and Beaches Measure was passed by the voters of Los Angeles in November of 2016. Entitlement funds are distributed to cities on a per capital basis. The measure provides local funding from an annual parcel tax of 1.5 cents per square foot of building floor area for parks and open space. 107 City of Santa Clarita, California Non -Major Governmental Funds (Continued) As of and For the Year Ended June 30, 2020 Measure W Safe Clean Water - To account for the special tax of 2.5 cents per square feet of impermeable area for parcels located in Los Angeles County Flood Control District that Los Angeles County voters approved November 2018 to pay for projects, infrastructure, and programs to capture, treat, and recycle rainwater. 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. 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, LIVID 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. WN City of Santa Clarita, California Non -Major Governmental Funds (Continued) As of and For the Year Ended June 30, 2020 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 and bond proceeds held by the City's trustee. 109 City of Santa Clarita, California Combining Balance Sheet Non -Major Governmental Funds June 30, 2020 Special Revenue Funds Special Bikeway Gas Tax Proposition A Assessment Assets Cash and investments $ 428,612 $ 79,838 $ 8,702,839 $ 3,086,S21 Receivables Accounts, net - 14,078 - - Interest 1,363 - 27,673 8,787 Taxes - - 6,933 Loans - Prepaid costs - Due from other governments 12,811 Restricted assets: Cash and investments - Cash and investments with fiscal agents - - - Total Assets $ 442,786 $ 93,916 $ 8,730,S12 $ 3,102,241 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable and accrued liabilities 418,961 78,068 2,198 11,910 Due to other governments - - - - Due to other funds - - - - Total Liabilities 418,961 78,068 2,198 11,910 Deferred Inflows of Resources Unavailable revenues - - - - Total Deferred Inflows of Resources Fund balances (deficit) Nonspendable - - Restricted 23,82S 1S,848 8,728,314 3,090,331 Assigned - - Unassigned - - Total Fund Balances (Deficit) 23,82S 1S,848 8,728,314 3,090,331 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 442,786 $ 93,916 $ 8,730,S12 $ 3,102,241 (Continued) 110 Special Revenue Funds Street SB1 Road Lighting Measure M Repair and District Local Return Activity State Park TDA Traffic Safety CDBG $ 10,9S1,646 $ 7,603,309 $ 3,907,388 $ $ 1,S79,861 $ $ 240,826 - - 34,689 24,177 12,42S S,60S S73 10218S3 - 60,OS2 101,77S S76,847 131,4S2 123,739 2,1S8,781 $ 13,488,79S $ 7,627,486 $ 4,496,660 $ 131,4S2 $ 1,S8S,466 $ 60,OS2 $ 226,087 1981S68 21,209 4S6 326,S99 - 10,4S8 78,811 60,OS2 38,370 1981S68 21,209 10,914 326,S99 60,OS2 117,181 - 131,4S2 101,77S 131,4S2 101,77S 13,290,227 7,606,277 4,496,660 1,2S8,867 7,131 - - - (10,914) - 13,290,227 7,606,277 4,496,660 (10,914) 1,2S8,867 7,131 $ 13,488,79S $ 7,627,486 $ 4,496,660 $ 131,4S2 $ 1,S8S,466 $ 60,OS2 $ 226,087 (Continued) 111 City of Santa Clarita, California Combining Balance Sheet Non -Major Governmental Funds (Continued) June 30, 2020 Special Revenue Funds Surface Transportation BJA Law AQMD Stormwater Program Enforcement Assets Cash and investments $ 548,874 $ 4,098,434 $ $ Receivables Accounts, net - 24,030 Interest 1,745 13,021 Taxes - 42,774 Loans - Prepaid costs - - Due from other governments 190,259 94,961 17,070 Restricted assets: Cash and investments - - - Cash and investments with fiscal agents - - - - Total Assets $ 740,878 $ 4,178,259 $ 94,961 $ 17,070 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable and accrued liabilities 9,609 179,727 7,104 Due to other governments - - - - Due to other funds - - 91,078 9,966 Total Liabilities 9,609 179,727 91,078 17,070 Deferred Inflows of Resources Unavailable revenues 122,000 - 41,421 - Total Deferred Inflows of Resources 122,000 41,421 Fund balances (deficit) Nonspendable - - - Restricted 609,269 3,998,532 Assigned - - Unassigned - - (37,538) Total Fund Balances (Deficit) 609,269 3,998,532 (37,538) - Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 740,878 $ 4,178,259 $ 94,961 $ 17,070 (Continued) 112 Special Revenue Funds Public Supplemental Library Education and Law Grant HOME Facilities Fees Government Proposition C Federal Grants Measure R $ 341,872 $ 343,014 $ 2,982,737 $ 321,474 $ 6,880,805 $ - $ 4,384,683 1,087 1,091 9,485 1,022 21,880 13,942 - - 115,612 - - 2,263,859 3,295,744 522,732 $ 342,959 $ 2,607,964 $ 2,992,222 $ 438,108 $ 10,198,429 $ 522,732 $ 4,398,625 75,707 - - - 250,331 10,SS6 118,989 3,074,842 611,394 - 75,707 3,325,173 621,950 118,989 2,263,859 1,310,433 198,336 2,263,859 1,310,433 198,336 267,252 344,105 2,992,222 438,108 S,S62,823 4,279,636 - - (297,SS4) - 267,252 344,105 2,992,222 438,108 S,S62,823 (297,SS4) 4,279,636 $ 342,959 $ 2,607,964 $ 2,992,222 $ 438,108 $ 10,198,429 $ 522,732 $ 4,398,625 (Continued) 113 City of Santa Clarita, California Combining Balance Sheet Non -Major Governmental Funds (Continued) June 30, 2020 Special Revenue Funds Measure R Measure W Tourism Highway Measure A Safe Clean Marketing Improvement Measure M ATP Safe Parks Water District Assets Cash and investments $ $ $ $ $ 979,790 Receivables Accounts, net - Interest 3,116 Taxes 3,211,394 21,685 Loans - - Prepaid costs Due from other governments 5,846 30,007 351,859 Restricted assets: Cash and investments - - - Cash and investments with fiscal agents - - - - - Total Assets $ 5,846 $ 30,007 $ 351,859 $ 3,211,394 $ 1,004,591 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable and accrued liabilities 17,119 844 6,569 Due to other governments - - - - - Due to other funds 5,846 12,887 351,869 1,585,966 - Total Liabilities 5,846 30,006 351,869 1,586,810 6,569 Deferred Inflows of Resources Unavailable revenues 3,168 3,001 351,859 3,211,394 - Total Deferred Inflows of Resources 3,168 3,001 351,859 3,211,394 Fund balances (deficit) Nonspendable - - - - - Restricted 998,022 Assigned - Unassigned (3,168) (3,000) (351,869) (1,586,810) - Total Fund Balances (Deficit) (3,168) (3,000) (351,869) (1,586,810) 998,022 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,846 $ 30,007 $ 351,859 $ 3,211,394 $ 1,004,591 (Continued) 114 City of Santa Clarita, California Combining Balance Sheet Non -Major Governmental Funds (Continued) June 30, 2020 Special Revenue Funds Housing Tourism vC Miscellaneous Park Successor Marketing Wastewater OSPD Grants Dedication Agency Bureau Areawide Standby District $ 5,607,474 $ 91,898 $ 5,315,941 $ 525,796 $ 72,543 $ 7,167,123 $ 1,511,059 - - - - - 27,296 - 17,831 16,904 1,705 231 22,790 4,805 25,201 - - - 72,285 7,056 - 119,496 140,069 - 206,386 $ 5,650,506 $ 231,967 $ 5,332,845 $ 733,887 $ 72,774 $ 7,408,990 $ 1,522,920 58,080 1,008 214,448 - 275 1,051,665 - - - 34,479 - - 58,080 1,008 214,448 34,479 275 1,051,665 140,069 140,069 - - - - - 119,496 - 5,592,426 90,890 5,118,397 699,408 72,499 6,237,829 1,522,920 5,592,426 90,890 5,118,397 699,408 72,499 6,357,325 1,522,920 $ 5,650,506 $ 231,967 $ 5,332,845 $ 733,887 $ 72,774 $ 7,408,990 $ 1,522,920 (Continued) 115 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 City of Santa Clarita, California Combining Balance Sheet Non -Major Governmental Funds (Continued) June 30, 2020 Capital Projects Debt Service Capital Projects Funds Funds Fund General Public Public Total Non -major Capital Financing Civic Financing Governmental Projects Authority Arts Projects Authority Funds $ 466,257 $ 10 $ 339,090 $ 3,382 $ 78,322,270 306,230 1,078 247,025 - 3,665,845 2,365,634 119,496 5,493,396 - 2,365,167 - - - 1,518,775 1,518,775 $ 466,257 $ 10 $ 340,168 $ 1,522,157 $ 94,403,838 55,753 - - - 3,194,564 - 34,479 - 5,852,728 55,753 9,081,771 7,878,767 7,878,767 - 119,496 - - - 1,522,157 78,863,975 410,504 10 340,168 - 750,682 - - - - (2,290,853) 410,504 10 340,168 1,522,157 77,443,300 $ 466,257 $ 10 $ 340,168 $ 1,522,157 $ 94,403,838 116 This page intentionally left blank. 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, 2020 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 Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances (Deficit), Beginning of Year Fund Balances (Deficit), End of Year Special Revenue Funds Street Special Lighting Bikeway Gas Tax Proposition A Assessment District - - - 654,258 6,297,047 1,489 4,667,061 4,182,055 - - - - - - 2,500 8,764 - 314,880 108,018 483,162 - 24,311 - - 338,620 - 246,213 - - 1,934,930 10,253 4,937,585 4,496,935 762,276 9,056,259 15,946 3,710 347 3,888,238 18,108 4,447,110 7,034 54,594 1,774,004 - - 148,366 322,771 148,061 376,688 - - 18,108 4,611,117 387,432 203,307 5,985,013 (7,855) 326,468 4,109,503 558,969 3,071,246 282,802 323,208 141,214 (593,422) (9,767) (1,587,873) (310,620) - 313,441 (1,446,659) (7,855) 15,848 4,109,503 872,410 1,624,587 31,680 4,618,811 2,217,921 11,665,640 $ 23,825 $ 15,848 $ 8,728,314 $ 3,090,331 $ 13,290,227 (Continued) 118 Special Revenue Funds SIB 1 Road Measure M Repair and Local Return Activity State Park TDA Traffic Safety CDBG AQMD 2,920,349 3,777,516 3,823 1,878,161 1,829,355 276,639 297,831 154,037 17 52,886 - 5,636 21,639 - - - - 539,376 - - 3,218,180 3,931,553 3,840 1,931,047 539,376 1,834,991 298,278 508,534 - - 14,754 - - 575,669 3,567,473 - 1,511,210 - 191,423 - - - 1,887,336 - 15,379 157,481 1,084,203 3,567,473 14,754 1,526,589 - 1,887,336 348,904 2,133,977 364,080 (10,914) 404,458 539,376 (52,345) (50,626) (182,802) (539,376) - - (182,802) (539,376) 2,133,977 364,080 (10,914) 221,656 (52,345) (50,626) 5,472,300 4,132,580 1,037,211 59,476 659,895 $ 7,606,277 $ 4,496,660 $ (10,914) $ 1,258,867 $ $ 7,131 $ 609,269 (Continued) 119 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, 2020 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 Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Special Revenue Funds Surface Transportation BJA Law Supplemental Stormwater Program Enforcement Law Grant 3,523,524 - - - - 53,540 34,608 513,056 138,441 13,320 315,162 - - - 3,977,127 53,540 34,608 526,376 15,663 - - - 34,608 454,243 4,053,534 53,541 41,701 4,110,898 53,541 34,608 454,243 (133,771) (1) 72,133 Transfers in 3,690 Transfers out - Total Other Financing Sources (Uses) 3,690 - - Net Change in Fund Balances (130,081) (1) 72,133 Fund Balances (Deficit), Beginning of Year 4,128,613 (37,537) 195,119 Fund Balances (Deficit), End of Year $ 3,998,532 $ (37,538) $ $ 267,252 (Continued) 120 Special Revenue Funds Public Library Education and Federal HOME Facilities Fees Government Proposition C Grants Measure R $ $ $ 465,102 $ $ $ 91,465 6,135,252 384,566 2,598,046 13,517 117,905 12,103 247,281 163,984 382,852 104,982 500,757 477,205 6,382,533 384,566 2,762,030 656,123 16,474 1,523,618 124,056 6,183,507 85 1,397,573 73,768 656,208 2,921,191 197,824 6,199,981 104,982 500,757 (179,003) 3,461,342 186,742 (3,437,951) 104,982 500,757 (179,003) 3,461,342 186,742 (3,437,951) 239,123 2,491,465 617,111 2,101,481 (484,296) 7,717,587 $ 344,105 $ 2,992,222 $ 438,108 $ 5,562,823 $ (297,554) $ 4,279,636 (Continued) 121 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, 2020 Special Revenue Funds Measure R Measure W Tourism Highway Measure A Safe Clean Marketing Improvement Measure M ATP Safe Parks Water District Revenues Taxes $ $ $ $ $ Special assessments Intergovernmental 2,656 27,006 Charges for services - 49S,OS7 Investment income (loss) 40,864 Fines and forfeitures - Developer fees - Other revenue - 10,000 Total Revenues 2,656 27,006 S4S,921 Expenditures Current General government 622,783 Public safety - Recreation and community services - Public works 5,824 30,006 1,520,739 - Community development - - 374 Neighborhood services 66,071 - Capital outlay - Debt service Principal retirement Interest and fiscal charges - Total Expenditures 5,824 30,006 1,586,810 623,157 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,168) (3,000) (1,586,810) (77,236) Other Financing Sources (Uses) Transfers in Transfers out (351,869) Total Other Financing Sources (Uses) (351,869) Net Change in Fund Balances (3,168) (3,000) (351,869) (1,586,810) (77,236) Fund Balances (Deficit), Beginning of Year 1,07S,2S8 Fund Balances (Deficit), End of Year $ (3,168) $ (3,000) $ (351,869) $ (1,586,810) $ 998,022 (Continued) 122 Special Revenue Funds Housing Tourism VC Miscellaneous Park Successor Marketing Wastewater OSPD Grants Dedication Agency Bureau Areawide Standby District 2,852,828 - 6,949,820 809,597 - 53,802 - - - 85,627 - - - 8,250 - - 209,013 253,349 16,736 2,949 142,177 56,620 - - - - 15,990 - - - 455,769 - 4,793 1,133,821 - - - 1,810 - 3,152,261 1,187,623 709,118 16,736 11,199 7,109,797 866,217 672,491 - 9,148 5,156,829 - 1,728 - - 11,293 - - - - 1,213,108 6,069,817 915,048 995 11,078,115 6,562 - 683,784 1,214,836 6,077,374 - 9,148 17,149,992 - 2,468,477 (27,213) (5,368,256) 16,736 2,051 (10,040,195) 866,217 - - - 9,410,169 - (745, 706) (1,018, 661) (745,706) - - 8,391,508 - 1,722,771 (27,213) (5,368,256) 16,736 2,051 (1,648,687) 866,217 3,869,655 118,103 10,486,653 682,672 70,448 8,006,012 656,703 $ 5,592,426 $ 90,890 $ 5,118,397 $ 699,408 $ 72,499 $ 6,357,325 $ 1,522,920 (Continued) 123 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, 2020 Capital Projects Debt Service Capital Projects Funds Fund Fund General Public Public Total Non -major Capital Financing Civics Financing Governmental Projects Authority Arts Projects Authority Funds Revenues Taxes $ $ $ $ $ 465,102 Special assessments 21,087,074 Intergovernmental 29,430,445 Charges for services 591,434 Investment income (loss) 14,237 2,889,366 Fines and forfeitures - 918,297 Developer fees 838,621 Other revenue - 3,646,729 Total Revenues 14,237 59,867,068 Expenditures Current General government - 11,566,286 Public safety 490,579 Recreation and community services - 26,047 Public works SS4,17S 70,244 34,463,842 Community development - 1,887,710 Neighborhood services 11,658,019 Capital outlay 2,17S,S97 Debt service Principal retirement 2,482,109 2,482,109 Interest and fiscal charges - 2,173,SO2 2,173,SO2 Total Expenditures SS4,17S 70,244 4,6SS,611 66,923,691 Excess (Deficiency) of Revenues Over (Under) Expenditures (SS4,17S) (56,007) (4,6SS,611) (7,OS6,623) Other Financing Sources (Uses) Transfers in 360,000 745,706 4,372,284 15,639,073 Transfers out - (745,706) - (S,77S,182) Total Other Financing Sources (Uses) 360,000 4,372,284 9,863,891 Net Change in Fund Balances (194,175) - (56,007) (283,327) 2,807,268 Fund Balances (Deficit), Beginning of Year 604,679 10 396,175 1,805,484 74,636,032 Fund Balances (Deficit), End of Year $ 410,SO4 $ 10 $ 340,168 $ 1,522,157 $ 77,443,300 124 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, 2020 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) $ 322,486 $ 415,316 $ 1,489 $ (413,827) - - 8,764 8,764 322,486 415,316 10,253 (405,063) 322,486 448,789 18,108 430,681 $ - $ (33,473) (7,855) $ 31,680 $ 23,825 25,618 125 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, 2020 Revenues: Intergovernmental Investment income (loss) Fines and forfeitures Otherrevenue 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) $ 5,360,662 $ 5,360,662 $ 4,667,061 $ (693,601) 4,000 4,000 - (4,000) - - 24,311 24,311 251,899 251,899 246,213 (5,686) 5,616,561 5,616,561 4,937,S8S (678,976) 2,563,649 2,SO9,336 2,382,853 126,483 2,114,606 2,087,959 2,OS2,793 35,166 - 31S,2S8 148,061 167,197 - - 2,391 (2,391) 444,884 131,701 25,019 106,682 5,123,139 5,044,254 4,611,117 433,137 493,422 572,307 326,468 (245,839) Transfer in 100,000 8SO,000 282,802 (567,198) Transfer out (593,422) (593,422) (593,422) - Total Other Financing Sources (Uses) (493,422) 2S6,S78 (310,620) (567,198) Net Change in Fund Balance $ - $ 828,885 15,848 $ (813,037) Fund Balance at Beginning of Year Fund Balance at End of Year $ 15,848 126 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, 2020 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 Budgeted Amounts Original Final Variance with Final Budget Actual Positive/(Negative) $ 4,471,520 $ 4,364,044 $ 4,182,055 $ (181,989) - - 314,880 314,880 4,471,520 4,364,044 4,496,935 132,891 - - 28,404 (28,404) 182,390 1,586,013 359,028 1,226,985 182,390 1,586,013 387,432 1,198,581 4,289,130 2,778,031 4,109,503 1,331,472 (6,249,541) (3,500,955) - 3500,955 $ (1,960,411) $ (722,924) 4,109,503 $ 4,832,427 4,618,811 $ 8,728,314 127 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, 2020 Revenues: Special assessments 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) $ 609,134 $ 609,134 $ 6S4,2S8 $ 45,124 40,000 40,000 108,018 68,018 649,134 649,134 762,276 113,142 60,307 60,580 43,818 16,762 329,076 329,076 159,489 169,587 389,383 389,656 203,307 186,349 2S9,7S1 259,478 SS8,969 299,491 Transfer in 20,420 352,041 323,208 (28,833) Transfer out (9,767) (9,767) (9,767) - Total Other Financing Sources (Uses) 10,653 342,274 313,441 (28,833) Net Change in Fund Balance $ 270,404 $ 601,752 872,410 $ 270,658 Fund Balance at Beginning of Year Fund Balance at End of Year 2,217,921 $ 3,090,331 128 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, 2020 Revenues: Special assessments Charges for services Investment income (loss) Fines and forfeitures 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) Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 6,240,354 $ 6,240,354 $ 6,297,047 $ 56,693 2,SOO 2,SOO 2,SOO - 231,OSO 231,OSO 483,162 252,112 - 410,000 338,620 (71,380) - 1,934,930 1,934,930 - 6,473,904 8,818,834 9,OS6,2S9 237,425 231,9SS 275,604 284,566 (8,962) 5,160,2SO 7,839,236 5,634,391 2,204,845 - 28,253 28,253 - - 38,000 37,803 197 5,392,205 8,181,093 S,98S,013 2,196,080 1,081,699 637,741 3,071,246 2,433,SOS Transfer in (1,363,778) (1,076,445) 141,214 1,217,659 Transfer out (2,231,878) (2,523,104) (1,587,873) 935,231 Total Other Financing Sources (Uses) (3,S9S,6S6) (3,S99,S49) (1,446,659) 2,152,890 Net Change in Fund Balance $ (2,513,957) $ (2,961,808) 1,624,587 $ 4,586,395 Fund Balance at Beginning of Year Fund Balance at End of Year 11,665,640 $ 13,290,227 129 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, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 3,1S2,6S7 $ 3,076,881 $ 2,920,349 $ (1S6,S32) 73,833 73,833 297,831 223,998 3,226,490 3,150,714 3,218,180 67,466 - - 40,420 (40,420) 5,331,898 5,971,462 1,043,783 4,927,679 5,331,898 5,971,462 1,084,203 4,887,259 $ (2,105,408) $ (2,820,748) 2,133,977 4,954,725 5,472,300 $ 7,606,277 130 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, 2020 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) $ 3,584,902 $ 3,584,902 $ 3,777,516 $ 192,614 10,884 10,884 154,037 143,153 3,S9S,786 3,S9S,786 3,931,SS3 335,767 3,952,386 7,538,004 3,567,473 3,970,531 $ (356,600) $ (3,942,218) 364,080 $ 4,306,298 4,132,580 $ 4,496,660 131 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, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ 12S,7S4 $ 3,823 $ (121,931) - - 17 17 - 12S,7S4 3,840 (121,914) - 9,271 9,271 1,660 5,483 5,483 111,000 361,000 - 361,000 112,660 37S,7S4 14,754 361,000 $ (112,660) $ (250,000) (10,914) $ 239,086 $ (10,914) 132 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, 2020 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) $ 2,957,900 $ 3,458,387 $ 1,878,161 $ (1,580,226) 30,000 30,000 52,886 22,886 2,987,900 3,488,387 1,931,047 (1,557,340) - - 42,659 (42,659) 2,957,900 4,780,786 1,483,930 3,296,856 2,957,900 4,780,786 1,526,589 3,254,197 30,000 (1,292,399) 404,458 1,696,857 - (750,000) (182,802) 567,198 $ 30,000 $ (2,042,399) 221,656 $ 2,264,055 1,037,211 $ 1,258,867 133 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, 2020 Revenues: Fines and forfeitures Total Revenues 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) SS0,000 SS0,000 539,376 (10,624) SS0,000 SS0,000 539,376 (10,624) (SS0,000) (SS0,000) (539,376) 10,624 134 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, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 1,256,382 $ 2,809,208 $ 1,829,355 $ (979,853) - - 5,636 5,636 1,256,382 2,809,208 1,834,991 (974,217) 193,247 171,339 122,675 48,664 646,286 667,396 528,777 138,619 416,848 1,969,674 1,235,884 733,790 1,256,381 2,808,409 1,887,336 921,073 $ 1 $ 799 (52,345) $ (53,144) 59,476 $ 7,131 135 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, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ 402,929 $ 276,639 $ (126,290) 6,000 6,000 21,639 15,639 6,000 408,929 298,278 (110,651) 21,480 21,480 14,542 6,938 - - 347 (347) 14,030 717,353 334,015 383,338 3S,S10 738,833 348,904 389,929 $ (29,510) $ (329,904) (50,626) $ 279,278 659,895 $ 609,269 136 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, 2020 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): 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) $ 3,638,826 $ 3,638,826 $ 3,S23,S24 $ (115,302) 22,000 22,000 138,441 116,441 297,738 297,738 315,162 17,424 3,9S8,S64 3,9S8,S64 3,977,127 18,563 1,372,296 1,317,999 1,293,790 24,209 2,397,648 3,OSO,319 2,315,011 735,308 75,000 307,679 306,707 972 - - 9,048 (9,048) 63,SOO 744,646 186,342 SS8,304 3,908,444 5,420,643 4,110,898 1,309,745 SO,120 (1,462,079) (133,771) 1,328,308 (3,690) (3,690) 3,690 7,380 $ 46,430 $ (1,465,769) (130,081) $ 1,335,688 4,128, 613 $ 3,998,532 137 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, 2020 Revenues: Intergovernmental 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) $ 1,399,798 $ 1,66S,07S $ S3,S40 $ (1,611,S3S) 1,399,798 1,574,677 S3,S41 1,521,136 $ - $ 90,398 (1) $ (90,399) (37,537) $ (37,538) 138 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, 2020 Revenues: Intergovernmental 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ - $ 117,795 $ 34,608 $ (83,187) 39,762 20,401 19,361 78,033 14,207 63,826 117,795 34,608 83,187 139 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, 2020 Revenues: Intergovernmental 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) $ 389,238 $ 389,238 $ S13,OS6 $ 123,818 - - 13,320 13,320 389,238 389,238 526,376 137,138 457,407 457,407 454,243 3,164 $ (68,169) $ (68,169) 72,133 $ 140,302 195,119 $ 267,252 140 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, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Intergovernmental $ - $ - $ 91,46S $ 91,46S Investment income (loss) 3,3S0 3,3S0 13,S17 10,167 Total Revenues 3,3S0 3,3S0 104,982 101,632 Net Change in Fund Balance $ 3,3S0 $ 3,3S0 104,982 $ 101,632 Fund Balance at Beginning of Year 239,123 Fund Balance at End of Year $ 344,10S 141 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, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Investment income (loss) $ - $ - $ 117,905 $ 117,905 Developer fees 240,000 240,000 382,852 142,852 Total Revenues 240,000 240,000 500,757 260,757 Net Change in Fund Balance $ 240,000 $ 240,000 500,757 $ 260,757 Fund Balance at Beginning of Year 2,491,465 Fund Balance at End of Year $ 2,992,222 142 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, 2020 Revenues: Taxes Investment income (loss) Total Revenues Expenditures: Operating: Operating Capital outlay Total Expenditures 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) $ 430,000 $ 430,000 $ 465,102 $ 35,102 7,000 7,000 12,103 5,103 437,000 437,000 477,205 40,205 523,050 656,124 656,122 2 86,650 64,453 86 64,367 609,700 720,577 656,208 64,369 $ (172,700) $ (283,577) (179,003) $ 104,574 617,111 $ 438,108 143 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, 2020 Revenues: Intergovernmental Investment income (loss) Total Revenues Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 6,080,132 $ 12,533,621 $ 6,13S,2S2 $ (6,398,369) 38,833 38,833 247,281 208,448 6,118,965 12,572,454 6,382,533 (6,189,921) - - 1,112 (1,112) 3,275,788 10,184,217 2,920,079 7,264,138 3,275,788 10,184,217 2,921,191 7,263,026 2,843,177 2,388,237 3,461,342 1,073,105 Other financing sources (uses): Transfer out (3,902,SO3) (4,920,309) Total Other Financing Sources (Uses) (3,902,SO3) (4,920,309) Net Change in Fund Balance $ (1,OS9,326) $ (2,532,072) Fund Balance at Beginning of Year Fund Balance at End of Year - 4,920,309 - 4,920,309 3,461,342 $ 5,993,414 2,101,481 $ S,S62,823 144 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, 2020 Revenues: Intergovernmental Expenditures: Capital Improvement Projects: Personnel Operating Total Expenditures Excess (Deficiency) of Revenues Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Budgeted Amounts Original Final $ 1,330,172 $ 2,323,617 $ Variance with Final Budget Actual Positive/(Negative) 384,566 $ (1,939,051) - - 54,027 (54,027) 1,330,172 2,873,274 143,797 2,729,477 1,330,172 2,873,274 197,824 2,675,450 $ - $ (549,657) 186,742 736,399 (484,296) $ (297,554) 145 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, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 2,781,756 $ 2,715,187 $ 2,598,046 $ (117,141) 5,000 5,000 163,984 158,984 2,786,756 2,720,187 2,762,030 41,843 - - 131,608 (131,608) 2,780,774 10,099,824 6,068,373 4,031,451 2,780,774 10,099,824 6,199,981 3,899,843 $ 5,982 $ (7,379,637) (3,437,951) $ 3,941,686 7,717,587 $ 4,279,636 146 City of Santa Clarita, California Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Measure R Highway Improvement Special Revenue Fund For the Year Ended June 30, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ S6S,000 $ S6S,000 $ 2,656 $ (562,344) - - 5,824 (5,824) S6S,000 S6S,000 - S6S,000 S6S,000 S6S,000 5,824 SS9,176 $ - $ - (3,168) $ (3,168) $ (3,168) 147 City of Santa Clarita, California Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Measure M ATP Special Revenue Fund For the Year Ended June 30, 2020 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 624,000 $ 75,000 $ 27,006 $ (47,994) - - 6,404 (6,404) 624,000 624,000 23,602 600,398 624,000 624,000 30,006 593,994 $ - $ (549,000) (3,000) $ 546,000 $ (3,000) 148 City of Santa Clarita, California Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Measure A Safe Parks Special Revenue Fund For the Year Ended June 30, 2020 Revenues: Intergovernmental 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 - $ 351,869 $ Variance with Final Budget Actual Positive/(Negative) - $ (351,869) - (351,869) (351,869) - $ - $ - (351,869) $ (351,869) $ (351,869) 149 City of Santa Clarita, California Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Measure W Safe Clean Water Special Revenue Fund For the Year Ended June 30, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Revenues: Taxes $ 3,000,000 $ 3,000,000 $ - $ (3,000,000) Expenditures: Operating: Personnel - 61,039 66,071 (5,032) Capital Improvement Projects: Operating 1,665,000 1,665,000 1,520,739 144,261 Total Expenditures 1,665,000 1,726,039 1,586,810 139,229 Net Change in Fund Balance $ 1,335,000 $ 1,273,961 (1,586,810) (2,860,771) Fund Balance at Beginning of Year - Fund Balance at End of Year $ (1,586,810) 150 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, 2020 Revenues: Charges for services Investment income (loss) Otherrevenue Total Revenues Expenditures: Operating: Personnel Operating Total Expenditures 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) $ 582,250 $ 612,250 $ 495,057 $ (117,193) 21,765 21,765 40,864 19,099 - - 10,000 10,000 604,015 634,015 545,921 (88,094) 31,258 31,455 30,465 990 582,803 752,803 592,692 160,111 614,061 784,258 623,157 161,101 $ (10,046) $ (150,243) (77,236) $ 73,007 1,075,258 $ 998,022 151 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, 2020 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) $ 2,850,195 $ 2,850,195 $ 2,852,828 $ 2,633 121,442 121,442 85,627 (35,815) 67,848 67,848 209,013 141,165 - - 4,793 4,793 3,039,485 3,039,485 3,152,261 112,776 289,246 288,165 259,493 28,672 401,820 398,305 363,668 34,637 64,500 270,267 10,854 259,413 - 195,862 49,769 146,093 755,566 1,152,599 683,784 468,815 2,283,919 1,886,886 2,468,477 581,591 (745,706) (745,706) (745,706) - $ 1,538,213 $ 1,141,180 1,722,771 581,591 3,869,655 $ 5,592,426 152 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, 2020 Revenues: Intergovernmental Otherrevenue 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 64,000 $ 1,637,345 $ 53,802 $ (1,583,543) - - 1,133,821 1,133,821 64,000 1,637,345 1,187,623 (449,722) 86,163 86,163 34,046 52,117 - 1,472,208 1,180,790 291,418 86,163 1,558,371 1,214,836 343,535 $ (22,163) $ 78,974 (27,213) (106,187) 118,103 $ 90,890 153 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, 2020 Revenues: Investment income (loss) Developer fees 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 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) $ 110,000 $ 110,000 $ 253,349 $ 143,349 1,428,621 455,769 455,769 - 1,538,621 565,769 709,118 143,349 $ - $ - $ 995 $ (995) 402,074 10,486,653 6,076,379 4,410,274 402,074 10,486,653 6,077,374 4,409,279 $ 1,136,547 $ (9,920,884) (5,368,256) $ 4,552,628 10,486,653 $ 5,118,397 154 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, 2020 Budgeted Amounts Original Final Revenues: Investment income (loss) Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Final Budget Actual Positive/(Negative) 16,736 $ 16,736 16,736 $ 16,736 682,672 $ 699,408 155 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, 2020 Revenues: Charges for services 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) $ 7,500 $ 7,500 $ 8,250 $ 750 - - 2,949 2,949 7,500 7,500 11,199 3,699 8,908 8,908 9,148 (240) $ (1,408) $ (1,408) 2,051 3,459 70,448 $ 72,499 156 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, 2020 Revenues: Special assessments Investment income (loss) Fines and forfeitures 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) 6,951,692 6,951,692 6,949,820 (1,872) $ - $ - $ 142,177 $ 142,177 - - 15,990 15,990 - - 1,810 1,810 6,951,692 6,951,692 7,109,797 158,105 5,319,476 5,416,771 5,097,868 318,903 $ 10,383,681 $ 10,968,179 $ 10,401,483 $ 566,696 - 29,561 29,561 - - - 77,851 (77,M) 5,477,611 7,598,885 1,543,229 6,OSS,656 21,180,768 24,013,396 17,149,992 6,863,404 (14,229,076) (17,061,704) (10,040,195) 7,021,509 Transfer in 9,711,892 9,850,010 9,410,169 (439,841) Transfer out (1,018,661) (1,018,661) (1,018,661) - Total Other Financing Sources (Uses) 8,693,231 8,831,349 8,391,508 (439,841) Net Change in Fund Balance $ (5,535,845) $ (8,230,3SS) (1,648,687) $ 6,581,668 Fund Balance at Beginning of Year Fund Balance at End of Year 8,006,012 $ 6,357,325 157 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, 2020 Revenues: Special assessments 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) $ - $ 1,058,742 $ 809,597 $ (249,145) $ - $ - $ 56,620 $ 56,620 - 1,058,742 866,217 (192,525) $ - $ 1500 $ - $ 1, 500 $ - $ 1,057,242 866,217 $ (191,025) 656,703 $ 1,522,920 158 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, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Expenditures: Capital Improvement Projects: Personnel $ - $ - $ 101,973 $ (101,973) Operating 809,916 1,614,924 452,202 1,162,722 Total Expenditures 809,916 1,614,924 554,175 1,060,749 Other financing sources (uses): Transfer in 578,312 903,570 360,000 (543,570) Net Change in Fund Balance $ (231,604) $ (711,354) (194,175) $ 517,179 Fund Balance at Beginning of Year 604,679 Fund Balance at End of Year $ 410,504 159 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, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) Other financing sources (uses): Transfer in $ 745,706 $ 745,706 $ 745,706 $ Transfer out (745,706) (745,706) (745,706) _ Total Other Financing Sources (Uses) - - - Fund Balance at Beginning of Year Fund Balance at End of Year 10 $ 10 160 City of Santa Clarita, California Schedule of Revenues, Expenditures and Changes in Fund Balance — Budget and Actual Civic Arts Projects Capital Projects Fund Revenues: Investment income (loss) Expenditures: Capital Improvement Projects: Operating Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year For the Year Ended June 30, 2020 Variance with Budgeted Amounts Final Budget Original Final Actual Positive/(Negative) - $ - $ 14,237 $ 14,237 $ - $ 396,174 $ 70,244 $ 325,930 $ - $ (396,174) (56,007) $ 340,167 396,175 $ 340,168 161 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, 2020 Expenditures: Operating: 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) $ 3,793,725 $ 3,793,725 $ 4,6SS,611 $ (861,886) 3,793,725 4,372,284 4,372,284 - $ - $ S78,SS9 (283,327) $ (861,886) 1,805,484 $ 1,522,157 162 City of Santa Clarita, California Description of Internal Service Funds As of and for the Year Ended June 30, 2020 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. 163 City of Santa Clarita, California Combining Statement of Net Position Internal Service Funds June 30, 2020 Self Computer Vehicle Insurance Replacement Replacement Totals Assets Current assets Cash and investments $ 6,531,834 $ 2,991,562 $ 4,394,071 $ 13,917,467 Receivables Interest 20,692 9,513 13,972 44,177 Total Current Assets 6,552,526 3,001,075 4,408,043 13,961,644 Noncurrent assets Capital assets Equipment, net of accumulated depreciation - 248,743 1,525,576 1,774,319 Total Assets 6,552,526 3,249,818 5,933,619 15,735,963 Deferred Outflows of Resources Deferred outflows related to OPEB 29,415 - - 29,415 Deferred outflows related to pensions 82,091 82,091 Total Deferred Outflows of Resources 111,506 111,506 Liabilities Current liabilities Accounts payable and accrued liabilities 60,395 240,415 70,813 371,623 Compensated absences 24,170 - - 24,170 Claims and judgments 3,038,688 - - 3,038,688 Total Current Liabilities 3,123,253 240,415 70,813 3,434,481 Noncurrent liabilities Net OPEB liability 50,010 - - 50,010 Net pension liability 142,903 - 142,903 Claims and judgments 1,862,418 3 1,862,421 Total Non -current Liabilities 2,055,331 3 - 2,055,334 Total Liabilities 5,178,584 240,418 70,813 5,489,815 Deferred Inflows of Resources Deferred inflows related to OPEB 19,122 - - 19,122 Deferred inflows related to pensions 6,854 6,854 Total Deferred Inflows of Resources 25,976 - - 25,976 Net position Net investment in capital assets - 248,743 1,525,576 1,774,319 Unrestricted 1,459,472 2,760,657 4,337,230 8,557,359 Total Net Position $ 1,459,472 $ 3,009,400 $ 5,862,806 $ 10,331,678 164 City of Santa Clarita, California Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds For the Year Ended June 30, 2020 Self Computer Vehicle Insurance Replacement Replacement Totals Operating Revenues Charges for services $ 2,261,147 $ 804,311 $ 420,567 $ 3,486,025 Other revenues 5,000 - - 5,000 Total Operating Revenues 2,266,147 804,311 420,567 3,491,025 Operating Expenses Administration and personnel services 279,101 18,195 - 297,296 Services and supplies 2,523,505 877,725 54,101 3,455,331 Depreciation expense - 49,308 255,587 304,895 Total Operating Expenses 2,802,606 945,228 309,688 4,057,522 Operating Income (Loss) (536,459) (140,917) 110,879 (566,497) 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 231,268 123,502 178,943 533,713 - - 2,050 2,050 24,511 - - 24,511 (280,680) (17,415) 291,872 (6,223) $ 1,459,472 $ 3,009,400 $ 5,862,806 $ 10,331,678 165 Cash flows from operating activities Cash received from customers and users Cash paid to/received from suppliers for goods and services Cash paid to employees for services Net Cash Provided by Operating Activities Cash flows from non -capital financing activities Cash transfers in Net Cash Provided (Used in) Non -capital Financing Activities Cash flows from capital and related financing activities Acquisition and construction of capital assets Net Cash (Used in) Capital and Related Financing Activities Cash flows from investing activities Interest received Net Cash Provided by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Fiscal Year Cash and Cash Equivalents, End of Fiscal Year Reconciliation of operating income to net cash provided by operating activities Operating income Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Change in deferred amounts related to pensions Change in deferred amounts related to OPEB Change in net OPEB liability Change in net pension liability Decrease in accounts payable Increase in claims and judgments Increase in compensated absences Total Adjustments Net Cash Provided by Operating Activities City of Santa Clarita, California Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2020 Self Computer Vehicle Insurance Replacement Replacement Totals $ 2,266,147 $ 804,311 $ 420,567 $ 3,491,025 (1,305,527) (673,915) 10,396 (1,969,046) (285,170) (18,192) - (303,362) 675,450 112,204 430,963 1,218,617 24,511 24,511 24,511 24,511 - (167,274) (369,352) (536,626) - (167,274) (367,302) (534,576) 232,756 125,602 181,466 539,824 232,756 125,602 181,466 539,824 932,717 70,532 245,127 1,248,376 5,599,117 2,921,030 4,148,944.00 12,669,091 $ 6,531,834 $ 2,991,562 $ 4,394,071 13,917,467 $ (536,459) $ (140,917) $ 110,879 $ (566,497) 49,308 255,587 304,895 (10,719) - - (10,719) (28,067) (28,067) 31,679 31,679 (10,579) - - (10,579) (28,852) 203,810 64,497 239,455 1,246,830 3 - 1,246,833 11,617 - - 11,617 1,211,909 253,121 320,084 1,785,114 $ 675,450 $ 112,204 $ 430,963 $ 1,218,617 City of Santa Clarita, California Description of Agency Funds As of and for the Year June 30, 2020 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. Community Facilities District No. 2016-1—To account for monies held to account for debt service requirements for Community Facilities District No. 2016-1. 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 167 Assets Cash and investments Receivables Interest Taxes Due from external parties 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 City of Santa Clarita, California Combining Statement of Assets and Liabilities Agency Funds As of June 30, 2020 Assessment District No. 99-1 Community Facilities District No. 2002-1 $ 221,681 $ 112,159 $ 1,046,428 705 357 3,323 469 1,231 - 56,426 62,172 1,651,788 $ 279,281 $ 175,919 $ 2,701,539 $ 715 $ - $ - 278,566 175,919 2,701,539 $ 279,281 $ 175,919 $ 2,701,539 .:a Santa Clarita Community Watershed and Santa Clarita Facilites Recreation Public District Conservancy Television No.2016-1 Authority Authority Totals $ 435,948 $ 7,318 $ 89 $ 1,823,623 1,386 - - 5,771 16,988 - - 18,688 - 139,732 - 139,732 16,162,073 - - 17,932,459 - 9,937,976 - 9,937,976 - 67,728 - 671728 $ 16,616,395 $ 10,152,754 $ 89 $ 29,925,977 $ - $ 134,732 $ 16,616,395 10,018,022 _ $ 16,616,395 $ 10,152,754 $ - $ 135,447 89 29,790,530 89 $ 29,925,977 169 City of Santa Clarita, California Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2020 Balance Balance June 30, 2019 Additions Deletions June 30, 2020 Assessment District No. 92-2 Assets Cash and investments $ 196,620 $ 83,174 $ 58,113 $ 221,681 Receivables Interest 782 705 782 705 Taxes 207 469 207 469 Restricted assets Cash and investments with fiscal agents 56,351 53,314 53,239 56,426 Total Assets $ 253,960 $ 137,662 $ 112,341 $ 279,281 Liabilities Accounts payable $ - $ 715 $ - $ 715 Due to external parties $ 253,960 $ 137,662 $ 113,056 $ 278,566 Total Liabilities $ 253,960 $ 138,377 $ 113,056 $ 279,281 Assessment District No. 99-1 Assets Cash and investments $ 117,774 $ $ 5,615 $ 112,159 Receivables Interest 468 111 357 Taxes 484 747 1,231 Restricted assets Cash and investments with fiscal agents 61,389 783 - 62,172 Total Assets $ 180,115 $ 1,530 $ 5,726 $ 175,919 Liabilities Due to external parties $ 180,115 $ $ 4,196 $ 175,919 Total Liabilities $ 180,115 $ $ 4,196 $ 175,919 Communitv Facilities District No. 2002-1 Assets Cash and investments $ 966,722 $ 79,706 $ - $ 1,046,428 Receivables Interest 3,840 - 517 3,323 Restricted assets Cash and investments with fiscal agents 1,650,827 961 - 1,651,788 Total Assets $ 2,621,389 $ 80,667 $ 517 $ 2,701,539 Liabilities Accounts payable $ 4,114 $ - $ 4,114 $ - Due to external parties 2,617,275 84,264 - 2,701,539 Total Liabilities $ 2,621,389 $ 84,264 $ 4,114 $ 2,701,539 170 Community Facilities District No. 2016-1 Assets Cash and investments Receivables Interest Taxes Restricted assets Cash and investments with fiscal agents Total Assets City of Santa Clarita, California Combining Statement of Changes in Assets and Liabilities (Continued) Agency Funds For the Year Ended June 30, 2020 Balance June 30, 2019 Additions $ - $ 435,948 $ 1,386 16,988 Balance Deletions June 30, 2020 - $ 435,948 1,386 16,988 - 16,162,073 - 16,162,073 $ 2,621,389 $ 16,616,395 $ - $ 16,616,395 Liabilities Due to external parties - 16,616,395 - 16,616,395 Total Liabilities $ 2,621,389 $ 16,616,395 $ - $ 16,616,395 Santa Clarita Watershed Recreation and Conservancy Authority Assets Cash and investments $ 3,136 $ 4,182 $ - $ 7,318 Due from external parties - 139,732 - 139,732 Capital assets Land 9,937,976 - - 9,937,976 Building, net of accumulated depreciation 71,490 - 3,762 67,728 Total Assets $ 10,012,602 $ 143,914 $ 3,762 $ 10,152,754 Liabilities Accounts payable Due to external parties Total Liabilities Santa Clarita Public Television Authority Assets Cash and investments Total Assets Liabilities Due to external parties Total Liabilities $ 200 $ 134,532 $ - $ 134,732 10,012,402 5,620 - 10,018,022 $ 10,012,602 $ 140,152 $ - $ 10,152,754 $ 46 $ 43 $ - $ 89 $ 46 $ 43 $ - $ 89 $ 46 $ 43 $ - $ 89 $ 46 $ 43 $ - $ 89 171 City of Santa Clarita, California Combining Statement of Changes in Assets and Liabilities (Continued) Agency Funds For the Year Ended June 30, 2020 Balance Balance June 30, 2019 Additions Deletions June 30, 2020 Total Agency Funds Assets Cash and investments $ 1,284,298 $ 603,053 $ 63,728 $ 1,823,623 Receivables Interest 5,090 2,091 1,410 5,771 Taxes 691 18,204 207 18,688 Due from external parties - 139,732 - 139,732 Restricted assets - Cash and investments with fiscal agents 1,768,567 16,217,131 53,239 17,932,459 Capital assets Land 9,937,976 - - 9,937,976 Building, net of accumulated depreciation 71,490 - 31762 67,728 Total Assets $ 13,068,112 $ 16,980,211 $ 122,346 $ 29,925,977 Liabilities Accounts payable $ 4,314 $ 135,247 $ 4,114 $ 135,447 Due to external parties 13,063,798 16,843,984 117,252 29,790,530 Total Liabilities $ 13,068,112 $ 16,979,231 $ 121,366 $ 29,925,977 172 Statistical Section June 30, 2020 City of Santa Cla rita 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 Financial Trends PAGE These tables contain trend information that may assist the reader in the City's current financial performance by placing it in historical perspective. 176-185 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. 186-201 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. 202-208 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. 209-210 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. 211-213 175 City of Santa Clarita Net Position by Component ' Last Ten Fiscal Years Ended June 30, 2020 (accrual basis of accounting) FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 Governmental Activities Net investment in capital assets $ 984,052,712 $ 920,036,752 $ 895,056,642 $ 867,144,998 $ 810,324,041 Restricted for: Capital projects - - - - - Specific projects and programs 146,874,629 119,375,331 113,286,625 87,272,723 70,773,322 Total restricted 146,874,629 119,375,331 113,286,625 87,272,723 70,773,322 Unrestricted 80,879,095 122,991,202 85,155,060 105,514,664 115,356,272 Total governmental activities net position $ 1,211,806,436 $ 1,162,403,285 $ 1,093,498,327 $ 1,059,932,385 $ 996,453,635 Business -Type Activities Net investment in capital assets $ 80,308,956 $ 83,906,440 $ 79,199,471 $ 79,589,102 $ 76,687,260 Unrestricted (1,465,963) 269,116 (888,318) (1,202,362) 3,101,763 Total business -type activities net position $ 78,842,993 $ 84,175,556 $ 78,311,153 $ 78,386,740 $ 79,789,023 Primary Government Net investment in capital assets $ 1,064,361,668 $ 1,003,943,192 $ 974,256,113 $ 946,734,100 $ 887,011,301 Restricted 146,874,629 119,375,331 113,286,625 87,272,723 70,773,322 Unrestricted 79,413,132 123,260,318 84,266,742 104,312,302 118,458,035 Total primary government net position $ 1,290,649,429 $ 1,246,578,841 $ 1,171,809,480 $ 1,138,319,125 $ 1,076,242,658 Note: ('I ) 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 IVi FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 $ 818,817,043 $ 799,926,613 $ 738,271,282 $ 743,281,558 $ 717,613,095 - - 14,292,447 3,275,312 3,452,815 73,541,304 71,643,713 54,229,493 46,915,965 30,201,655 73,541,304 71,643,713 68,521,940 50,191,277 33,654,470 79,211,600 52,551,033 65,706,424 79,141,211 67,397,688 $ 971,569,947 $ 924,121,359 $ 872,499,646 $ 872,614,046 $ 818,665,253 $ 78,495,871 $ 83,296,545 $ 76,561,407 $ 73,778,640 $ 75,416,868 2,766,972 2,250,491 3,835,316 3,099,419 503,446 $ 81,262,843 $ 85,547,036 $ 80,396,723 $ 76,878,059 $ 75,920,314 $ 897,312,914 $ 883,223,158 $ 814,832,689 $ 817,060,198 $ 793,029,963 73,541,304 71,643,713 68,521,940 50,191,277 33,654,470 81,978,572 54,801,524 69,541,740 82,240,630 67,901,134 $ 1,052,832,790 $ 1,009,668,395 $ 952,896,369 $ 949,492,105 $ 894,585,567 177 City of Santa Clarita Changes in Net Position €1r Last Ten Fiscal Years Ended June 30, 2020 (accrual basis of accounting) FISCAL YEAR 19 -2 0 18 -19 17 -18 16 -17 15 -16 Expenses Governmental Activities General government $ 54,710,525 $ 62,309,457 $ 53,928,438 $ 44,390,099 $ 39,155,006 Public safety 29,907,832 27,757,002 27,232,724 25,231,712 23,778,931 Public works 33,663,857 20,772,164 14,771,925 23,563,825 38,223,035 Recreation and community service 16,047,345 17,585,165 23,472,469 16,224,154 15,594,958 Community development 8,942,864 7,214,786 6,957,438 7,057,301 10,505,906 Neighborhood Services 12,862,529 12,622,824 1,082,836 1,815,637 - Unallocated infrastructure depreciation 21,043,711 20,630,522 19,259,333 18,833,113 18,342,933 Interest on long-term debt 3,549,649 2,589,767 1,638,960 1,378,888 2,194,181 Total governmental activities expenses 180,728,313 171,481,687 148,344,123 138,494,729 147,794,950 Business -Type Activities Transit 31,060,676 32,065,240 28,309,870 29,858,499 28,127,407 Total business -type activities expenses 31,060,676 32,065,240 28,309,870 29,858,499 28,127,407 Total primary government expenses $ 211,788,989 $ 203,546,927 $ 176,653,993 $ 168,353,228 $ 175,922,357 Program Revenues Governmental Activities Charges for services: General government $ 8,215,989 $ 8,547,181 $ 10,007,154 $ 6,740,507 $ 22,914,059 Public safety 1,484,005 1,937,603 1,429,900 1,231,974 1,162,551 Public works 12,201,244 14,669,328 15,792,197 11,549,806 16,407,616 Recreation and community service 3,635,790 6,344,242 8,306,076 6,191,011 8,142,336 Community development 1,552,869 1,704,920 1,901,897 1,906,079 1,843,296 Neighborhood Services 30,575,191 29,338,661 27,090,508 25,044,704 - Operating grants and contributions 22,066,816 13,574,920 9,259,079 5,977,971 7,687,397 Capital grants and contributions 41,462,296 59,565,349 31,807,581 55,220,052 23,629,474 Total governmental activities program revenues 121,194,200 135,682,204 105,594,392 113,862,104 81,786,729 Business -Type Activities Charges for services: Transit 6,785,178 7,662,186 6,987,488 7,231,136 7,546,433 Operating grants and contributions 13,405,112 15,292,991 10,226,946 8,459,236 9,153,499 Capital grants and contributions 5,701,142 10,434,282 3,102,269 9,138,643 3,504,305 Total business -type activities program revenues 25,891,432 33,389,459 20,316,703 24,829,015 20,204,237 Total primary government revenues $ 147,085,632 $ 169,071,663 $ 125,911,095 $ 138,691,119 $ 101,990,966 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 178 FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 $ 46,224,813 $ 41,807,284 $ 35,921,943 $ 33,664,470 $ 47,048,462 22,235,368 22,187,434 19,940,098 27,391,075 21,280,904 36,103,144 26,183,862 28,651,261 30,623,718 25,799,166 22,619,337 22,550,301 21,809,820 19,282,538 11,281,552 5,720,237 6,193,101 7,214,293 5,896,640 11,547,650 18,072,657 17,561,539 15,163,864 16,844,238 16,392,901 1,827,094 1,872,832 1,992,574 3,391,058 4,650,566 152,802,650 138,356,353 130,693,853 137,093,737 138,001,201 28,062,668 26,819,161 25,653,753 24,930,635 24,127,043 28,062,668 26,819,161 25,653,753 24,930,635 24,127,043 $ 180,865,318 $ 165,175,514 $ 156,347,606 $ 162,024,372 $ 162,128,244 $ 26,783,616 $ 31,970,148 $ 24,323,027 $ 13,719,117 $ 398,181 1,605,059 1,847,403 2,284,334 2,079,109 2,305,608 13,056,586 12,463,046 9,943,014 7,209,724 4,929,602 4,525,662 4,390,686 4,371,888 4,156,386 4,220,977 1,774,482 1,961,243 1,611,184 5,152,484 12,059,509 12,561,608 19,421,199 9,061,950 16,032,433 14,090,686 30,107,231 22,530,841 33,585,797 28,616,388 31,325,725 90,414,244 94,584,566 85,181,194 76,965,641 69,330,288 6,779,579 7,587,497 6,863,086 6,616,778 6,573,879 8,228,348 8,984,127 8,579,209 7,385,264 6,913,534 1,423,440 10,804,747 8,513,238 5,041,992 13,043,418 16,431,367 27,376,371 23,955,533 19,044,034 26,530,831 $ 106,845,611 $ 121,960,937 $ 109,136,727 $ 96,009,675 $ 95,861,119 fro City of Santa Clarita Changes in Net Position €1r Last Ten Fiscal Years Ended June 30, 2020 (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 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 19-20 18-19 17-18 16-17 15-16 (59,534,113) (35,799,482) (42,749,731) (24,060,399) (66,008,221) (5,169,244) 1,324,219 (7,993,167) (5,029,484) (7,923,170) (64,703,357) (34,475,263) (50,742,898) (29,089,883) (73,931,391) $ 36,621,145 $ 38,546,183 $ 37,252,523 $ 36,147,727 $ 37,807,385 E 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 19-20 18-19 17-18 16-17 15-16 (59,534,113) (35,799,482) (42,749,731) (24,060,399) (66,008,221) (5,169,244) 1,324,219 (7,993,167) (5,029,484) (7,923,170) (64,703,357) (34,475,263) (50,742,898) (29,089,883) (73,931,391) $ 36,621,145 $ 38,546,183 $ 37,252,523 $ 36,147,727 $ 37,807,385 46,420,350 43,761,925 42,284,749 39,924,749 40,072,597 8,604,265 8,369,481 8,523,791 8,208,347 8,392,789 1,418,026 1,227,947 1,320,018 1,275,363 1,383,473 2,726,113 3,352,776 3,489,281 3,639,264 3,813,437 207,931 147,752 162,103 144,665 129,053 12,311,467 12,528,843 591,177 1,052,254 4,142,959 472,227 1,206,740 2,661,916 737,513 1,080,771 2,050 ('t,6nn) 10,935 11,711 459,709 153,690 (4,435,608) (5,924,278) (3,602,443) (6,390,264) - - - - 108,937,264 104,704,439 90,372,215 87,539,150 90,891,909 (9,629) 32,613 (1,242) (28,735) 59,086 71,963 20,238 53,223 - (153,690) 4,435,608 5,924,278 3,602,443 6,390,264 (13,19) 4,540,184 5,943,274 3,626,931 6,449,350 $ 108,773,945 $ 109,244,623 $ 96,315,489 $ 91,166,081 $ 97,341,259 $ 49,403,151 $ 68,904,957 $ 47,622,484 $ 63,478,751 $ 24,883,688 (5,332,563) 5,864,403 (2,049,893) (1,402,553) (1,473,820) $ 44,070,588 $ 74,769,360 $ 45,572,591 $ 62,076,198 $ 23,409,868 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 IGif (9,629) 32,613 (1,242) (28,735) 59,086 71,963 20,238 53,223 - (153,690) 4,435,608 5,924,278 3,602,443 6,390,264 (13,19) 4,540,184 5,943,274 3,626,931 6,449,350 $ 108,773,945 $ 109,244,623 $ 96,315,489 $ 91,166,081 $ 97,341,259 $ 49,403,151 $ 68,904,957 $ 47,622,484 $ 63,478,751 $ 24,883,688 (5,332,563) 5,864,403 (2,049,893) (1,402,553) (1,473,820) $ 44,070,588 $ 74,769,360 $ 45,572,591 $ 62,076,198 $ 23,409,868 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 IGif $ 49,403,151 $ 68,904,957 $ 47,622,484 $ 63,478,751 $ 24,883,688 (5,332,563) 5,864,403 (2,049,893) (1,402,553) (1,473,820) $ 44,070,588 $ 74,769,360 $ 45,572,591 $ 62,076,198 $ 23,409,868 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 IGif FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 $ (62,388,406) $ (43,771,787) $ (68,670,913) $ (60,128,096) $ (68,670,913) (11,631,301) 557,210 2,403,788 (5,886,601) 2,403,788 $ (74,019,707) $ (43,214,577) $ (66,267,125) $ (66,014,697) $ (66,267,125) $ 34,355,412 $ 33,480,522 $ 32,057,358 $ 28,828,139 $ 27,701,757 38,556,890 35,652,080 32,341,369 34,818,426 24,996,219 8,512,818 7,796,070 7,141,953 6,920,244 6,697,241 1,169,780 947,470 706,180 590,474 3,082,456 3,124,904 2,781,527 2,556,774 2,380,547 2,106,521 85,703 86,531 91,062 - - - - - 87 883 3,316,058 812 475 2,240,594 2,090,322 (82,870) 1,509,201 3,756,112 678,937 781,986 310,676 5,372,890 9,148,163 27,410 18,174 - - - (7,329,516) (5,692,032) (5,187,224) (6,844,199) (5,808,300) 12,633,832 15, 780,230 - - - - 109,836,994 77,942,650 69,935,278 73,663,605 75,808,702 17,592 4,791 29,660 147 (27,303) 7,329,516 5,692,032 5,187,224 6,844,199 5,808,300 7,347,108 5,696,823 5,216,884 6,844,346 5,780,997 $ 117,184,102 $ 83,639,473 $ 75,152,162 $ 80,507,951 $ 81,589,699 $ $ $ $ 40,413,284 $ $ 47,448,588 $ 34,170,863 $ 1,264,365 $ 53,948,793 $ 7,137,789 (4,284,193) 6,254,033 7,620,672 957,745 8,184,785 $ 43,164,395 $ 40,424,896 $ 8,885,037 $ 54,906,538 $ 15,322,574 U-1 City of Santa Clarita Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2020 (modified accrual basis of accounting) FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 General Fund Reserved $ $ $ $ $ Unreserved Nonspendable 9,810,973 12, 050,141 12, 390, 885 15, 742, 945 11,108,252 Restricted 23,063,669 - - - - Committed - - - - - Assigned 97,293,470 120,981,128 88,674,761 79,367,084 79,367,084 Unassigned 60,273,125 58,930,970 47,116,235 53,905,237 50,669,580 Total General Fund $190,441,237 $191,962,239 $148,181,881 $149,015,266 $141,144,916 All Other Governmental Funds Reserved $ $ $ $ $ Unreserved: Special revenue funds Debt service fund Capital projects fund - Nonspendable 575,276 772,627 5,882 976,841 1,134,103 Restricted 112,631,199 108,394,699 113,286,625 86,664,536 86,240,243 Committed 9,277 13,460 15,008 14,000 14,000 Assigned 791,914 1,040,181 1,117,165 2,151,360 1,881,728 Unassigned (3,127,904) (3,266,496) (6,786,531) (5,897,790) (6,975,198) Total all other governmental funds $110,879,762 $106,954,471 $107,638,149 $ 83,908,947 $ 82,294,876 FUND BALANCES Fiscal Year Ended June 30, 2020 Other1111111111 All Funds 41111191 37% General 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 IM FISCAL YEAR 0) 14-15 13-14 12-13 11-12 10-11 11,024,338 11,519,143 11,910,059 18,902,350 23,845,861 - - - 66,257 12,356,339 55,336,807 51,718,096 47,106,536 309,078 572,781 50,141,486 45,654,640 35,320,706 50,664,338 46,915,238 $116,502,631 $108,891,879 $ 94,337,301 $ 69,942,023 $ 83,690,219 1,455,067 606,996 670,612 28,885,983 28,813,152 85,763,293 84,268,720 68,957,999 46,915,965 57,205,072 14,000 612,829 716,826 - - 1,843,822 3,412,127 4,466,367 3,275,312 3,637,410 (8,633,303) (9,300,647) (10,665,597) (56,718,519) (72,692,440) $ 80,442,879 $ 79,600,025 $ 64,146,207 $ 22,358,741 $ 16,963,194 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years 183 City of Santa Clarita Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2020 (modified accrual basis of accounting) FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 Revenues: Taxes $ 95,997,830 $ 95,406,064 $ 93,032,465 $ 89,340,115 $ 91,598,734 Licenses and permits 7,538,878 9,951,586 7,688,342 7,408,357 7,283,898 Developer fees 2,917,250 6,458,182 9,888,734 4,211,890 6,272,799 Investment income 11,777,753 12,045,344 595,650 1,030,146 3,937,618 Intergovernmental 33,746,890 36,086,192 36,491,705 23,922,361 31,380,753 Fines and forfeitures 1,736,201 1,851,190 1,372,687 1,117,620 973,753 Service charges 42,052,534 42,117,270 41,793,226 36,639,646 36,828,067 Other revenues 3,508,593 1,677,809 1,744,075 690,974 1,789,724 Total Revenues 199,275,929 205,593,637 192,606,884 164,361,109 180,065,346 Expenditures: Current: General government 50,929,600 59,638,451 50,728,642 41,138,676 35,969,981 Public safety 30,511,022 28,342,578 27,217,567 25,214,091 23,777,171 Public works 72,953,711 51,343,366 57,213,646 43,459,620 21,327,662 Recreation and community service 13,846,768 15,450,815 21,589,318 20,446,596 37,937,050 Community development 8,709,340 7,344,064 6,988,331 6,583,484 10,673,993 Neighborhood services 13,100,419 12,823,905 1,162,647 1,667,058 - Capital outlay 4,213,593 5,053,670 12,083,887 9,759,258 10,562,953 Debt service: Principal 2,482,109 2,833,260 2,138,803 2,167,429 2,852,140 Interest, professional services and fiscal charges 2,901,257 2,520,153 1,647,842 1,237,357 4,539,815 Redemption of district credits - - - - - Total Expenditures 199,647,819 185,350,262 180,770,683 151,673,569 147,640,765 Excess of Revenues Over (Under) Expenditures (371,890) 20,243,375 11,836,201 12,687,540 32,424,581 Other Financing Sources (Uses) Revenue bonds issued/issuance premium 25,850,000 15,848,271 - 32,997,352 Proceeds of long-term debt 1,463,083 (35,099) (32,907,353) Escrow payment, costs of bonds issuance and others - Proceeds from capital lease - - - Transfers in 20,787,975 56,075,180 25,690,566 8,046,713 11,940,563 Transfers out (18,011,796) (60,534,955) (30,444,125) (11,249,832) (17,960,861) Issuance of district credits - - - Total Other Financing Sources (Uses) 2,776,179 22,853,308 11,059,613 (3,203,119) (5,930,299) Extraordinary Item: Dissolution of Santa Clarita Redevelopment Agency - - - - - Net change in fund balances 2,404,289 43,096,683 22,895,814 9,484,421 26,494,282 Fund balances - Beginning of Year 298,916,710 255,820,027 232,924,213 223,439,792 196,945,510 Fund balances- End of Year $301,320,999 $298,916,710 $255,820,027 $232,924,213 $223,439,792 Debt service as percentage of noncapital expenditures 2.77% 2.98% 2.14% 2.40% 5.72% 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 184 FISCAL YEAR 0) 14-15 13-14 12-13 11-12 10-11 $ 85,789,556 $ 80,285,660 $ 73,972,006 $ 73,625,713 $ 72,474,882 5,567,280 5,366,972 4,246,957 4,097,709 3,675,424 10,764,554 2,600,997 15,828,388 7,181,986 282,776 2,026,507 1,911,491 1,702,006 2,739,794 3,798,498 31,953,692 34,355,734 27,452,216 28,375,142 19,780,700 1,261,752 1,661,157 2,114,166 1,674,085 1,891,500 37,738,754 42,156,582 36,311,324 28,145,012 23,608,272 511,117 5,943,608 332,146 6,425,792 7,685,141 175, 613,212 174, 282,201 161, 959,209 152, 265,233 133,197,193 43,196,168 36,294,205 35,433,288 50,816,449 42,213,597 22,188,641 22,137,338 19,894,859 25,412,420 21,230,594 36,082,625 24,385,865 27,968,407 20,753,607 34,210,327 21,007,651 20,498,108 19,824,550 19,523,584 21,853,319 5,883,441 6,185,263 7,252,424 5,923,872 11,575,365 23,224,180 36,580,589 23,837,533 27,403,439 21,311,885 1,992,479 1,837,174 1,750,538 2,338,787 2,246,218 1,850,703 1,885,546 2,039,144 3,743,134 4,796,695 5,105,402 - 14,368,419 - - 160, 531,290 149, 804, 088 152, 369,162 155, 915,292 159, 438, 000 15,081,922 24,478,113 9,590,047 (3,650,059) (26,240,807) - - - 252,068 - 7,850,640 9,757,447 9,069,495 16,538,674 50,869,852 (14,478,956) (15,524,498) (14,256,719) (29,810,448) (64,714,376) 11, 297, 334 12, 270, 335 (6,628,316) 5,530,283 7,083,111 (13,019,706) (13,844,524) 8,317,116 8,453,606 30,008,396 16,673,158 (8,352,649) (40,085,331) 188, 491, 904 158, 483, 508 141, 810, 350 100, 653,413 140, 738, 744 $196,945,510 $ 188,491,904 $ 158,483,508 $ 92,300,764 $ 100,653,413 2.80% 3.26% 2.95% 4.40% 5.96% MR City of Santa Clarita Assessed Values (1) 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 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 2019-20 2,076,418 2,208,225 4,284,643 15,147,396,256 19,912,518,511 149,977,284 (890,135,683) 34,319,756,368 ASSESSED VALUATION by CATEGORIES (Total Secured and Unsecured) Fiscal Year Ended June 30, 2020 PERSONAL PROPERTY, 2.04% 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 2019-20 M 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 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% 225,813,184 275,047,748 584,844,131 (9,114,469) 850,777,410 36,074,068,573 35,174,818,421 8.29% 0.08989% 230,072,192 40,000 35,000 30,000 25,000 N C O 20,000 c 15,000 10,000 5,000 TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 9-10 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Fiscal Year 187 City of Santa Clarita Redevelopment Agency M Assessed Values (111 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 2019-20 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 188 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 N/A N/A N/A N/A N/A N/A N/A N/A N/A liGull, City of Santa Clarita Assessed Values —Taxable Property Last Ten Fiscal Years FISCAL YEAR CATEGORY 19-20 18-19 17-18 16-17 15-16 Residential Commercial Industrial Irrigated Dry farm Recreational Institutional Government Miscellaneous Vacant land SBE Nonunitary Possessory Int. Unsecured Unknown TOTALS: 30,000 25,000 20,000 15,000 10,000 5,000 $ 27,571,753,581 $ 25,140,365,171 $ 23,734,569,687 $ 21,784,467,001 $ 20,809,579,112 3,681,744,410 3,557,018,366 3,399,444,104 3,248,599,972 3,059,958,633 1,878,969, 596 1,861,078,681 1, 790, 582, 919 1, 706, 030, 432 1,799,119,742 3,341,172 3,707,035 2,993,570 2,960,760 2,936,120 116,868,740 113,347,606 106,578,193 99,802,827 104,324,505 233,475,135 230,449,000 193,500,837 213,333,035 162,056,819 1,323,707 371,122 363,846 356,714 220,358 346,079 339,297 315,717 309,530 348,240 702,751,187 593,951,571 554,513,132 449,270,431 419,750,992 4,284,643 4,576,418 4,576,418 3,696,751 3,696,751 129,182,761 127, 296,292 120, 357, 965 117, 718,179 115, 205, 002 850,777,410 848,468,038 819,549,000 797,363,610 853,667,044 - - 31 20 20 $ 35,174,818,421 $32,480,968,597 $30,727,345,419 $28,423,909,262 $ 27,330,863,338 ASSESSED VALUE - TAXABLE PROPERTY Last Ten Fiscal Years 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Fiscal Year ® Residential ® Commercial a Industrial ® Vacant land 0 All others IP FISCAL YEAR 14-15 13-14 12-13 11-12 10-11 $ 19,755,522,402 $ 18,138,258,224 $ 14,971,655,728 $ 15,212,586,674 $ 15,239,936,469 2,952,772,231 2,847,760,176 2,794,405,083 2,748,247,727 2,820,296,027 1, 642, 718, 866 1, 561, 091, 316 1,413,623,056 1,455,126,754 1,463,696,151 2,834,466 2,827,311 2,796,388 3,016,072 3,004,749 101, 870, 300 100,138, 918 104, 981,278 106, 506,146 121, 791, 852 142, 862, 940 136, 824,169 132,119, 758 125, 982, 002 127, 363,481 216,042 215,066 210,850 206,717 205,173 341,421 1,017,342 864,299 847,359 841,034 507,997,067 509,125,263 565,117,297 533,608,937 308,820,538 3,696,751 3,696,751 3,696,751 3,696,751 4,015,175 112, 978, 072 113, 541,478 125, 301, 717 131, 534,263 136, 599, 828 888,132,057 854,976,697 870,669,758 847,579,230 887,372,458 20 20 - - - $26,111,942,635 $24,269,472,731 $20,985,441,963 $21,168,938,632 $21,113,942,935 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. City of Santa Clarita Assessed Values —Use Category Summary Fiscal Year 2019-20 CATEGORY PARCELS ASSESSED VALUE PERCENT EXEMPTIONS NET TAXABLE VALUE PERCENT Residential 61,733 $ 27,668,510,085 76.6% $ 96,756,504 $ 27,571,753,581 78.38% Commercial 920 3,743,337,666 10.4% $ 61,593,256 3,681,744,410 10.47% Industrial 733 2,103,235,035 5.8% $ 224,265,439 1,878,969,596 5.34% Irrigated 6 3,341,172 0.0% $ - 3,341,172 0.01% Recreational 35 119,600,262 0.3% $ 2,731,522 116,868,740 0.33% Institutional 99 730,652,557 2.0% $ 497,177,422 233,475,135 0.66% Government 6 1,323,707 0.0% $ - 1,323,707 0.00% Miscellaneous 8 346,079 0.0% $ - 346,079 0.00% Vacant land 3,773 710,362,727 2.0% $ 7,611,540 702,751,187 2.00% SBE Nonunitary (14) 4,284,643 0.0% $ - 4,284,643 0.01% Possessory Int. (2,125) 129,182,761 0.4% $ - 129,182,761 0.37% Unsecured (4,363) 859,891,879 2.4% $ 9,114,469 850,777,410 2.42% Exempt 1,245 62,973,638 0.2% $ 62,973,638 - 0.00% Unknown 4 - 0.0% $ - - 0.00% TOTALS: 62,060 $ 36,137,042,211 100.00% $ 962,223,790 $ 35,174,818,421 100.00% ASSESSED VALUE by USE CATEGORY NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2019-20 Fiscal Year 2019-20 ® All Others, ❑Industrial, ® All Others, Industrial, 7.26% 5.34% 5.81% 5.82% ® Commercial, '< 10.47%%%%fII Commercial , 10.36% Residential, 76.57% Source: HdL Coren & Cone, Los Angeles County Assessor 2019-20 Combined Tax Rolls. Residential, 78.38% IRX City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) Last Ten Fiscal Years Fiscal Year LOS ANGELES GENERAL COUNTY SCV WATER AGENCY COUNTY COUNTY SCHOOL SANITATION FLOOD DISTRICTS DISTRICTS CONTROL TOTAL 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 2019-20 1.000000 - 0.070600 0.357180 - - 1.427780 1.200000 1.000000 0.800000 0.600000 0.400000 0.200000 0.000000 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2019-20 GENERAL SCHOOL DISTRICTS SCV WATER AGENCY SAN I TATI O I• LA COUNTY DISTRICTS Source: HdL Coren & Cone, Los Angeles County Assessor 2019-20 Tax Rate Table COUNTY FLOOD CONTROL M16i 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 2019-20 0.086630 0.000000 0.086630 0.00000% 8.98900% Agency 2019-20 City of Santa Clarita Tax District 1 (249.01) 0.05920 Notes: General fund tax rates are SCV Water Agency (302.01) 0.06550 representative and based upon the direct Children's Institutional Tuition Fund (400.21) 0.00327 and overlapping rates for the largest Consolidated Fire Protection District of LA Co. (007.30) 0.18090 General Fund tax rates area (TRA) by net County School Service Fund Saugus Union (581.06) 0.00905 taxable value. Total Direct Rate is the County School Service Hart William S. Hart (757.06) 0.00039 weighted average of all individual direct County School Services (400.15) 0.00165 rates applied by the government preparing Development Center Handicapped Saugus Union (581.07) 0.00104 the statistical section information. Educational Augmentation Fund Impound (400.01) 0.13200 The percentages presented in the columns Educational Revenue Augmentation Fund (ERAF) (400.00) 0.05430 above do not sum across rows. In 1978 Greater LA Co. Vector Control (061.80) 0.00031 California voters passed Proposition 13, Santa Clarita Library (249.56) 0.02740 which set the property tax at a 1.00% fixed LA County Fire - Ffw (007.31) 0.00550 amount. This 1.00% is shared by all the LA County Flood Control Improvement District (030.10) 0.00217 taxing agencies for which the subject LA County Flood Control Maintenance (030.70) 0.01210 property resides within. In addition to the LA County General (001.05) 0.18580 1.00% fixed amount, property owners are LA County Accum Cap Outlay (001.20) 0.00013 charged taxes as a percentage of assessed Saugus Union School District (581.01) 0.06280 property values for the payment of any Santa Clarita Community College (814.04) 0.04320 voter -approved bonds. 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 SCV Water Agency (302.01) 0.070600 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) 0.019405 Newhall Elementary School District Debt Services 1999 Ser. A (581.52) 0.019405 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.54) 0.005896 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55) 0.005896 Santa Clarita Community College Debt Services 2005 Refunding Bonds (81 0.005896 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52) 0.005896 Santa Clarita Community College Debt Services 2006 Ser. 2012 0.005896 William S. Hart Un.Hsd Debt Services (757.51) 0.010986 William S. Hart Un.Hsd Debt Services 2008 Ser. B 0.010986 William S. Hart Un.Hsd Debt Services 2008 Ser. C 0.010986 William S. Hart Unified Debt Services 2001 Ser. B (757.52) 0.010986 William S. Hart Unified Debt Services 2008 Ser. A (757.53) 0.010986 Total Tax Rate 0.193820 Source: HdL Coren & Cone, Los Angeles County Assessor 2019/20 Tax Rate Table IRE! City of Santa Clarita Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years Ago FISCAL YEAR 2019-20 PERCENT of Number TOTAL TOTAL CITY of ASSESSED ASSESSED OWNER/TAXPAYER Parcels VALUE VALUE Valencia Town Center Venture LP Park Sierra Properties PFI Valencia LLC WESCO IV LLC Saugus Colony Limited IVT River Oaks Valencia LLC EQR Valencia LLC EQR The Oaks LLC Valencia Biomedical Park LLC ARC SLSTCCA001 LLC Total All Others Total Assessed Valuation FISCAL YEAR 2010-11 PERCENT of Number TOTAL TOTAL CITY of ASSESSED ASSESSED OWNER/TAXPAYER Parcels VALUE VALUE 17 $ 396,761,819 1.15 % Valencia Town Center Venture 15 145,491,510 0.42 VTC Business Center 9 137,957,038 0.40 EQR Valencia LLC 2 124,403,923 0.36 Casden Santa Clarita LLC 19 123,330,893 0.36 Walmart Real Estate Business Trust 7 117,300,000 0.34 RREEF America REIT II Corp 218 109,324,749 0.32 Prado Town Center West LLC 28 107,049,908 0.31 Time Warner NY Cable LLC 15 105,222,418 0.31 DSEA River Oaks LLC 4 103,429,572 0.30 ERP Operating LP 334 1,470,271,830 4.28 % 32,903,205,542 95.72 $ 34,373,477,372 100.00 % NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Coren & Cone, LA County Assessor 2019/20 Combined Tax Rolls 18 $ 310,807,017 1.53 % 9 152,909,973 0.75 218 94,754,176 0.47 25 80,989,935 0.40 5 68,791,346 0.34 2 75,552,864 0.37 263 72,078,250 0.36 1 8,576,450 0.04 7 54,889,561 0.27 3 54,459,300 0.27 551 973,808,872 4.80 % 19,296,335,970 95.20 $ 20,270,144,842 100.00 % IRS City of Santa Clarita Property Tax Levies, Tax Collections and Delinquencies Last Ten Fiscal Years FISCAL YEAR TAXES LEVIED PERCENT COLLECTIONS COLLECTIONS COLLECTIONS TOTAL IN SUBSEQUENT COLLECTIONS YEARS TO DATE PERCENT COLLECTIONS TO DATE 2010-11 14,172,030 13,829,640 97.6% 50,605 13,880,246 97.94% 2011-12 14,299,999 13,999,770 97.9% 49,862 14,049,633 98.25% 2012-13 18,634,850 18,297,746 98.2% - 18,297,746 98.19% 2013-14 21,446,963 21,128,332 98.5% - 21,128,332 98.51% 2014-15 23,131,317 22,795,838 98.5% - 22,795,838 98.55% 2015-16 24,304,887 23,957,604 98.6% - 23,957,604 98.57% 2016-17 25,483,385 25,178,564 98.8% - 25,178,564 98.80% 2017-18 27,299,254 26,957,834 98.7% - 26,957,834 98.75% 2018-19 28,692,974 28,469,759 99.2% - 28,469,759 99.22% 2019-20 30,653,870 30,235,002 98.6% - 30,235,002 98.63% 35,000,000 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 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 FISCALYEAR SLEVIES ©COLLECTIONS it 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 IRZ City of Santa Clarita Successor Agency Top Property Owners Based on Net Values Fiscal Year 2019-20 Owner 1 Time Warner Cable 2 Newhall Development Partners LLC (Pending Appeals On Parcels) 3 Saugus Station LLC 4 Peter and Barbara Coeler et al 5 JDH Mulberry LLC 6 Lyons Properties Limited (Pending Appeals On Parcels) 7 Telfair Corporation (Pending Appeals On Parcels) 8 25805 San Fernando LLC 9 RIFT Sprouts LLC et al 10 Xenon Investment Corporation Top Ten Total Agency Total Incremental Net AV To Source: HdL Coren & Cone Secured Unsecured Combined Parcels Value % of Nat AV Parcels Values °f Nat AV Value % of Nat AV Primary Use - $ - 0.00 % 3 $43,266,827 56.67 % $ 43,266,827 9.22 % Cable Television/Internet Facilities 7 19,412,549 2.95 % 1 109,232 0.14 % 19,521,781 4.16 % Vacant Resident Land 1 11,246,724 1.71% - 0.00% 11,246,724 2.40% 3 10,991,609 1.67% 1 6,548 0.01 % 10,998,157 2.34 % Industrial and Warehousing Buildings 1 10,904,993 1.66 % - 0.00 % 10,904,993 2.32 % Villa La Paz Apartments/Commercial Office Bldg. - Mulberry Mobile Home Park 2 9,383,185 1.43 % 0.00 % 9,383,185 2.00 % Santa Clarita Medical Center - Offices 2 9,131,192 1.39 % 0.00 % 9,131,192 1.95 % Retail Strip Center (Newhall Ave & Carl Ct) 1 8,928,397 1.36 % 0.00 % 8,928,397 1.90 - Plaza Clarita - Mixed Use Commercial 1 8,707,590 1.32 % 0.00 % 8,707,590 1.86 % Walnut Village Apartments 3 8,344,811 1.27 % 0.00 % 8,344,811 1.78 % Westside Habitats Apts/Commercial Office Bldg. 21 $ 97,051,050 14.76 % 5 $43,382,607 56.83 % $140,433,657 29.94 657,386,064 76,342,843 733,728,907 $410,664,539 23.63 % $58,411,191 74.27 % $469,075,730 29.94 INA City of Santa Clarita Successor Agency Project Area Assessment Appeals Summary and Tax Collection History Fiscal Years 2010-11 Through 2019-20 Project Area Assessment Appeals Summary—FY 2019-20 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 2010-11 Throuah 2019-20 Current Year Current Year Prior Year Collection Total Collection Year Tax Lew Collection Collection Total Percentaae Percentaae 2010-11 3,618,835 2,744,263 (204,741) 2,539,523 76% 70% 2011-12 ��� 3,762,457 2,934,904 218,094 3,152,998 78% 84% 2012-13 ��� 3,485,808 2,786,791 275,290 3,062,081 80% 88% 2013-14 ��� 3,526,463 2,828,495 815,124 3,643,619 80% 103% 2014-15 ��� 3,836,835 3,185,967 158,652 3,344,619 83% 87% 2015-16 ��� 3,579,829 3,430,748 518,292 3,704,259 96% 103% 2016-17 ��� 4,063,020 3,819,731 797,178 3,983,145 94% 98% 2017-18 ��� 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% 2019-20 (2) 4,715,737 4,618,068 1,503,717 4,689,684 98% 99% 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. ('I) Sources: Ledgers and 2011-12 Revenue & Collection from Year -End Adjsuted Gross TI Collection by CRA reports from Los Angeles County Auditor -Controller. (2) Sources: Ledgers and special reports from Los Angeles County Auditor -Controller commencing February 2012 pursuant to AB X 1 26. IRU Page intentionally left blank. City of Santa Clarita Charge Detail Report for CFD 2002-1 (Valencia Town Center) Fiscal Year 2019-20 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 $ 1,236,368 $ 188,396 $ 1,424,764 0.84 2861-058-072 Valencia Town Center Venture LP 3,427,014 17,816,343 21,243,357 4.81 2861-058-073 Valencia Town Center Venture LP 27,082,525 3,337,324 30,419,849 15.68 2861-058-076 Valencia Town Center Venture LP 862,733 85,685 948,418 1.18 2861-058-077 Valencia Town Center Venture LP 4,658,382 398,454 5,056,836 6.70 2861-058-081 Valencia Town Center Venture LP 15,753,647 166,578,340 182,331,987 14.34 2861-058-084 Valencia Town Center Venture LP 3,249,891 9,419,985 12,669,876 2.05 2861-058-085 Valencia Town Center Venture LP 423,895 211,946 635,841 0.33 Totals: $ 56,694,455 $198,036,473 $254,730,928 45.94 RAT MAX TAX RATE APPLIED CLASS ($) MAX TAX RATE ($) CHARGE ($) 1 $ 37,811 $ 31,916 $ 27,949 $ 23,592 1 37,811 181,870 27,949 134,435 1 37,811 592,948 27,949 438,296 1 37,811 44,768 27,949 33,092 1 37,811 253,332 27,949 187,258 37,811 1&2 & 254,687 542,276 27,953 400,840 1 37,811 77,512 27,949 57,295 1 37,811 12,402 27,949 9,167 $ 1,283,975 NO City of Santa Clarita Ratio of Outstanding Debt by Type Last Ten Fiscal Years GOVERNMENTAL ACTIVITIES SUCCESSOR AGENCY FISCAL CERTIFICATES PRIVATE CAPITAL GOVERNMENTAL TAX ALLOCATION GRAND YEAR OF PARTICIPATION (1) (;3) LOANS BONDS (2) PLACEMENT LEASE (", LEASES ACTIVITIES TOTAL BONDS (1) TOTAL 2010-11 12,700,000 15,525,000 1,413,786 12,805,000 - 42,443,786 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 - - 40,907,417 2012-13 10,480,549 15,379,349 810,000 12,316,280 201,880 39,188,058 39,188,058 2013-14 9,323,138 15,291,374 580,000 12,002,622 154,705 37,351,839 37,351,839 2014-15 8,128,138 15,175,988 300,000 11,673,964 217,615 35,495,705 35,495,705 2015-16 - - 200,000 26,012,352 6,328,411 138,877 32,679,640 32,679,640 2016-17 100,000 25,262,456 4,984,543 60,444 30,407,443 30,407,443 2017-18 - 40,380,831 3,595,740 32,200 44,008,771 33,980,000 77,988,771 2018-19 65,333,412 2,177,480 2,538 67,513,430 33,960,547 101,473,977 2019-20 65,085,696 730,371 497,583 66,313,650 32,360,000 98,673,650 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 forthe 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. (n) 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. (i) 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 P4111l% PERCENTAGE BUSINESS -TYPE ACTIVITIES OF OUTSTANDING TOTAL TAXABLE DEBT DEBTTO LEASE PRIMARY ASSESSED PER PERSONAL PAYABLE TOTAL GOVERNMENT VALUE CAPITA INCOME 42,443,786 0.20 % 240 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 44,008,771 0.14 % 203 N/A 67,513,430 0.21 % 310 N/A 66,313,650 0.19% 299 N/A 350 300 250 200 150 100 50 0 OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 FI-1 Year POW City of Santa Clarita Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years OUTSTANDING GENERAL BONDED DEBT FISCAL YEAR POPULATION ('I REVENUE BONDS CERTIFICATES OF PARTICIPATION TOTAL 2010-11 176,971 12,805,000 28,225,000 41,030,000 2011-12 177,445 12,525,000 27,100,000 39,625,000 2012-13 204,951 12,316,280 25,859,898 38,176,178 2013-14 209,130 12,002,622 24,614,512 36,617,134 2014-15 213,231 11,673,964 23,304,126 34,978,090 2015-16 219,611 26,012,352 - 26,012,352 2016-17 216,350 25,262,456 - 25,262,456 2017-18 216,589 40,380,831 - 40,380,831 2018-19 218,103 65,333,412 - 65,333,412 2019-20 221,932 65,085,696 - 65,085,696 350 300 250 200 150 100 50 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years PERCENTAGE OF TAXABLE ASSESSED VALUE 0.19% 0.19% 0.18% 0.15% 0.13% 0.10% 0.09% 0.13% 0.20% 0.19% 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Fiscal Year Source: ('I) State of California, Finance Department DEBT PER CAPITA 232 223 186 175 164 118 117 186 300 293 City of Santa Clarita Direct and Overlapping Tax and Assessment Debt June 30, 2020 2019-20 Assessed Valuation: $35,174,818,421 (Net of Redevelopment Agency Incremental Value of $469,075,730) 2019-20 Population: 221,932 Percent City's Share Total Debt Applicable of Debt 06/30/2020 To City 06/30/2020 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Santa Clarita Community College District $ 327,994,648 76.14% $ 249,728,565 William S. Hart Union High School District 337,530,900 76.13% $ 256,962,274 William S. Hart Union High School District Community Facilities District No. 90-1 215,000 100% $ 215,000 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 Districts 14,858,470,000 0.00001 % $ 1,486 Castaic Union School District 19,500,000 28.022% $ 5,464,290 Newhall School District 5,915,000 60.36% $ 3,570,294 Newhall School District School Facilities Improvement District No. 2011-1 58,090,000 61.19% $ 35,542,947 Saugus Union School District 13,986,729 93.73% $ 13,110,181 Saugus Union School District School Facilities Improvement District No. 2014-1 33,970,000 93.95% $ 31,914,136 Saugus Union School District Community Facilities District No. 2006-1, Improvement Area No. 1 18,775,000 99.29% $ 18,641,510 Saugus Union School District Community Facilities District No. 2006-1, Improvement Area No. 2 20,460,000 100.00% $ 20,460,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 1 7,080,000 100% $ 7,080,000 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 2 7,605,000 100% $ 7,605,000 Saugus Union School District Community Facilities District No. 2019-1 9,275,000 100% $ 9,275,000 Saugus -Hart School District Community Facilities District No. 2000-1 8,245,000 100% $ 8,245,000 Saugus-Castaic School District Facilities Financing Authority Community Facilities District No. 2006- 16,000,000 100% $ 16,000,000 Sulphur Springs Union School District 58,000,940 93.71 % $ 54,350,941 Sulphur Springs Union School District No 2002-1 23,985,000 100.00% $ 23,985,000 Sulphur Springs Union School District No 2006-1 19,145,000 100% $ 19,145,000 City of Santa Clarita Open Space and Parkland Assessment District 12,805,000 100% $ 12,805,000 City of Santa Clarita Landscaping and Lighting Streetlighting Zones A and B 14,280,000 100% $ 14,280,000 City of Santa Clarita Community Facilities District No. 2002-1 13,440,000 100.00% $ 13,440,000 City of Santa Clarita Community Facilities District No. 2016-1 17,230,000 100% $ 17,230,000 City of Santa Clarita 1915 Act Bonds 535,000 100% $ 535,000 Los Angeles County Regional Park and Open Space Assessment District TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 864,516,623 Los Angeles County General Fund Obligations 2,317,550,679 2.18% $ 50,545,780 Los Angeles County Superintendent of Schools Certificates of Participation 5,182,434 2.18% $ 113,029 Los Angeles County Sanitation District No. 32 Authority 5,592,354 78.09% $ 4,367,069 Santa Clarita Community College District Certificates of Participation 8,090,000 76.14% $ 6,159,564 William S. Hart Union High School District Certificates of Participation 43,550,015 76.13% $ 33,154,626 Castaic Union School District Certificates of Participation 3,290,000 28.022% $ 921,924 Saugus Union School District Certificates of Participation 10,330,000 93.733% $ 9,682,619 Sulphur Springs Union School District Certificates of Participation 25,375,000 93.71% $ 23,778,151 Los Angeles Unified School District Certificates of Participation 164,430,000 0.00001 % $ 16 City of Santa Clarita Obligations 35,862,954 100.00% $ 35,862,954 (2) TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 164,585,733 Total Net Direct and Overlapping General Fund Debt $ 164,585,733 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 32,360,000 100.000% 32,360,000 Total Direct Debt $ 48,667,954 Gross Total Overlapping Debt 1,012,794,403 Net Total Overlapping Debt $1,012,794,403 GROSS COMBINED TOTAL DEBT $1,061,462,357 (;) NET COMBINED TOTAL DEBT $1,061,462,357 (1) Percentage of overlapping debt applicable to the city is estimated using taxable assed property value. Applicable percentages were estimated by 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 value. (2) City of Santa Clarita Obligations includes $730,371 for the Private Placement Lease, $497,583 for the Kyocera Copier Lease, $8,785,000 for the 2016A series Golden Valley Road bond, and $25,850,000 for the 2019 Series Sheriff Station Bond. (;) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2019-20 Assessed Valuation: Direct Debt($12,850,000)...........................................................................0.04% Total Overlapping Tax and Assessment Debt...................................................2.46% Total Direct Debt($48,667,954)...................................................................0.14% Combined Total Debt...................................................................................3.02% Ratios to Redevelopment Successor Agency Incremental Valuation ($469.075.730): Total Overlapping Tax Increment Debt..............................................................6.90% Source: Avenu Insights & Analytics City of Santa Clarita Legal Debt Margin Information Last Ten Fiscal Years FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 14-15 Assessed valuation $ 35,174,818,421 $ 32,480,968,597 $ 30,727,345,419 $ 28,685,821,032 $ 27,330,863,338 $ 26,111,942,635 Conversion percentage 25% 25% 25% 25% 25% 25% Adjusted assessed valuation 8,793,704,605 8,120,242,149 7,681,836,355 7,171,455,258 6,832,715,835 6,527,985,659 Debt limit percentage 15% 15% 15% 15% 15% 15% Debt limit 1,319,055,691 1,218,036,322 1,152,275,453 1,075,718,289 1,024,907,375 979,197,849 Total net debt applicable to limit: General obligation bonds - Legal debt margin $ 1,319,055,691 $ 1,218,036,322 $ 1,152,275,453 $ 1,075,718,289 $ 1,024,907,375 $ 979,197,849 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 FISCAL YEAR 13-14 12-13 11-12 10-11 $24,269,472,731 $20,985,441,963 $21,168,938,632 $21,113,942,935 25% 25% 25% 25% 6,067,368,183 5,246,360,491 5,292,234,658 5,278,485,734 15% 15% 15% 15% 910,105,227 786,954,074 793,835,199 791,772,860 $ 910,105,227 $ 786,954,074 $ 793,835,199 $ 791,772,860 0% 0% 0% 0% LEGAL DEBT MARGIN Last Ten Fiscal Years Fiscal Year PAM 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 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 - - - 2019-20 25,891,432 31,223,995 (5,332,563) - - - NOTE: ('I) Includes Other revenues, Transfers in and Capital contributions (2) Includes Transfers out and Other expenses PUR 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 (1) INCREASE POPULATION (1) INCREASE INCOME (2) INCOME (2) RATE (3) 2011 176,971 -0.38% 9,818,605 -0.04% 44,423 575,044,998 7.60% 2012 177,445 0.27% 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% 63,913 849,493,416 5.10% 2019 218,103 0.70% 10,253,716 -0.29% N/A N/A 4.80% 2020 221,932 1.76% 10,172,951 -0.79% N/A N/A 13.60% 17.00% 15.00% 13.00% 11.00% 9.00% 7.00% 5.00% 3.00% 1.00% -0.38% 1.00% J 2011 15.50% POPULATION INCREASE Last Ten Fiscal Years 2.'Q4% 1.96% 2.99% 2012 2013 2014 2015 2016 YEAR 1.76% 0.11% 0.70% 2018 2019 2020 Sources: (1) State of California, Finance Department, as of 1/1/2020: E-1 (2) U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Personal Income and Unemployment rates are for the regional area, Los Angeles. The City's related information is not available. Information lags two years. (3) State of California, Department of Employment Development (EDD), Oct 16, 2020 Note: Reduction in 2017 population numbers due to change in the county controls. The primary factor was a lowering of the estimated school enrollment. `AID City of Santa Clarita Principal Employers Current Fiscal Year and Nine Fiscal Years Ago 2020* 2011 PERCENT PERCENT NUMBER of NUMBER of of TOTAL of TOTAL EMPLOYER EMPLOYEESEMPLOYMENT EMPLOYER EMPLOYEESEMPLOYMENT Six Flags Magic Six Flags Magic Mountain 3,200 10.43% Mountain 2,230 9.16% Princess Cruises 2,092 6.82% Princess Cruises 1,625 6.67% Henry Mayo Newhall Henry Mayo Newhall Memorial Hospital 1,917 6.25% Memorial Hospital 1,356 5.57% Boston Scientific 1,000 3.26% Speciality Laboratories 850 3.49% The Master's College 796 2.59% The Master's College 841 3.45% Walmart 705 2.30% Woodward HRT 740 3.04% Cal Arts 700 2.28% Walmart 592 2.43% Woodward HRT 680 2.22% Cal Arts 525 2.16% Scorpion Internet Marketing & Design 653 2.13% Parmavite 480 1.97% Advanced Bionics 550 1.79% Aerospace Dynamics 470 1.93% Largest firms M 12,293 40.06% Largest firms M 9,709 39.87% All others 18,394 59.94% All others 14,644 60.13% Grand total 30,687 100.00% Grand total 24,353 100.00% * As of March 2020 NOTE: ('I) Non -governmental employers Source: 2020 Economic Outlook Santa Clarita Valley Economic Dev Corp & College of the Canyons 2011 CAFR City of Santa Clarita Full -Time and Part -Time City Employees by Function Last Ten Fiscal Years Function General government Public safety (1 ) Public works Community development Recreation and Comm Svcs Neighborhood Services (2) Transit Totals 500.00 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 84.00 81.00 76.00 76.00 91.00 87.60 87.60 89.60 84.35 85.75 141.50 139.50 126.50 128.50 131.50 125.00 122.00 129.00 126.00 127.00 45.00 44.00 43.00 44.00 37.00 41.00 41.00 32.00 30.50 33.00 68.25 68.25 63.90 63.90 112.15 111.15 109.15 108.15 105.90 106.50 102.60 99.60 79.00 74.00 10.00 10.00 12.00 12.00 12.00 11.00 11.00 11.00 13.00 12.00 451.35 442.35 400.40 398.40 383.65 375.75 370.75 369.75 359.75 364.25 CITY OF SANTA CLARITA - EMPLOYEES Last Ten Fiscal Years 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Fiscal Year ('I) Police and Fire services are provided by the County (2) The Neighborhood Services department was added for FY 2016-17 Source: City of Santa Clarita, Adopted Budget -Funded Regular Fulltime Equivalent Positions `AN City of Santa Clarita Operating Indicators by Function Last Ten Fiscal Years Function Police: Parking citations issued Parking revenue collected Public works: Street resurfacing (miles) Parks and Recreation: Number of recreation classes Number of facility rentals (times) Transit: Number of customers served FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 13,992 24,214 15,505 13,133 9,035 4,765 4,786 5,726 5,521 6,577 $ 516,477 $ 364,954 $ 498,749 $ 470,843 $ 379,384 $ 320,682 $ 323,040 $ 341,607 $ 335,663 $ 323,408 38.7 26.0 38.9 45.0 15.5 80.0 20.9 18.0 24.0 24.0 2,197 2,773 2,903 2,992 2,918 2,189 2,557 2,548 2,106 2,080 11,778 12,787 12,013 19,924 13,390 19,018 14,604 13,000 11,042 10,754 2,131,694 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 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 `IAM City of Santa Clarita Capital Assets Statistics by Function Last Ten Fiscal Years Function Public works: Streets (miles) Street lights M Traffic signals (City Jurisdiction) Traffic signals (Joint Jurisdiction) Parks and recreation: Number of parks Community centers Transit: Stations FISCAL YEAR 19-20 18-19 17-18 16-17 15-16 14-15 13-14 12-13 11-12 10-11 570 540 540 537 516 497 496 496 496 496 18,662 18,662 18,662 17,843 17,843 17,843 17,843 17,843 15,081 14,963 195 187 187 186 180 180 177 177 171 170 4 5 5 5 5 5 5 5 6 1 33 32 32 32 32 32 29 29 24 23 2 2 2 2 2 2 2 1 1 1 4 4 4 4 4 4 4 4 4 4 (1) The City of Santa Clarita assumed responsibility for the Streetlight Maintenance District from Los Angeles County in 1998. Subsequently, in 2019 the City purchased the majority of streetlights from Southern California Edison. At this time the city owns and is responsible for maintaining an inventory of 17,514 streetlights, inclusive of 989 Highway Safety Lights which are attached to traffic signals. The remaining 159 streetlights are owned and maintained by Southern California Edison. Source: City of Santa Clarita, Administrative Services Department - Finance Division I"AW Federal Awards Reports in Accordance with the Uniform Guidance June 30, 2020 City of Santa Clarita, California E id.1"lly., City of Santa Clarita, California Table of Contents June 30, 2020 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................................................................................................................................................................... 3 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 Schedule of Expenditures of Federal Awards............................................................................................................ 8 Notes to Schedule of Expenditures of Federal Awards............................................................................................. 9 Schedule of Findings and Questioned Costs............................................................................................................10 Section I - Summary of Auditor's Report............................................................................................................10 Section II - Financial Statement Findings............................................................................................................11 Section III — Federal Award Findings and Questioned Costs...............................................................................12 Schedule of Prior Audit Findings and Recommendations........................................................................................13 „l..d,l a].... Cl% L IRUSIIINESS ADVISOIRS 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 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, 2020, 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 22, 2020. 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) as a basis for designing 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. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. hal, °uuuslpiiires you, liirislpiiires us. (.,4d bniilyuccirlilr 3 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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rancho Cucamonga, California December 22, 2020 4 „l..d,l a].... lPAs IIRII IIINIi.SS ADVISOIRS 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 the City's major federal program for the year ended June 30, 2020. The City's major federal program is 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 the City's major federal program 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 and 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 the major federal program. However, our audit does not provide a legal determination of the City's compliance. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niilyuccirlilr 5 10681 Foothill Blvd., Ste. 300 Rancho Cucamonga, CA 91730-3831 T 909.466.4410 F 909.466.4431 EOE Opinion In our opinion, the City's complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2020. 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 the federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the 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 a 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. 11 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, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 22, 2020, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Rancho Cucamonga, California December 22, 2020 7 City of Santa Clarita, California Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 Pass -Through Federal Entity Amount Federal Grantor/Pass-Through CFDA Identification Federal Provided to Grantor/Program or Cluster title Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development Direct Assistance: Community Development Block Grant/Entitlement Grants Community Development Block Grant/Entitlement Grants Community Development Block Grant/Entitlement Grants Community Development Block Grant/Entitlement Grants Subtotal CDBG Entitlement Grants Cluster Total U.S. Department of Housing and Urban Development 14.218 B-16-MC-06-0576 $ 499,522 $ 14.218 B-17-MC-06-0576 366,255 14.218 B-18-MC-06-0576 370,108 14.218 B-19-MC-06-0576 651,452 466,699 1,887,337 466,699 1,887,337 466,699 U.S. Department of Justice Direct Assistance: Edward Byrne Memorial Justice Assistance Grant Program 16.738 2017-D1-BX-0715 13,715 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019-D1-BX-0442 6,686 Subtotal Edward Byrne Memorial Justice Assistance Grant Program 20,401 Direct Assistance: COVID-19-Coronavirus Emergency Supplemental Funding Program 16.034 2020-VD-BC-0572 14,207 Total U.S. Department oflustice 34,608 U.S. Department of Transportation Passed through the State of California, Transportation Department: Highway Planning and Construction 20.205 HSIPL-5450(091) 24,116 Highway Planning and Construction 20.205 HSIPL-5450(098) 10,500 Highway Planning and Construction 20.205 HSIPL-5450(093) 15,692 Highway Planning and Construction 20.205 HSIPL-5450(094) 18,571 Highway Planning and Construction 20.205 BHLS-5405(082) 47,307 Highway Planning and Construction 20.205 BHLS-5450 (008) 71,365 Highway Planning and Construction 20.205 APTLNI-5450(090) 10,272 Highway Planning and Construction 20.205 FERSTPL-5450(096) 53,540 Subtotal Highway Planning and Construction Cluster 251,363 Total Passed throuh State of California 251,363 Direct Assistance: Federal Transit Formula Grants 20.507 CA-90-Y276-02 27,947 Federal Transit Formula Grants 20.507 CA-90-Y851-01 295,790 Federal Transit Formula Grants 20.507 CA-2016-044-00 652,225 Federal Transit Formula Grants 20.507 CA-2016-051-00 1,956,390 Federal Transit Formula Grants 20.507 CA-2017-138-00 1,658,341 Federal Transit Formula Grants 20.507 CA-2018-089-00 45,768 Federal Transit Formula Grants 20.507 CA-2019-125-00 181 Subtotal Federal Transit Cluster 4,636,642 Total U.S. Department of Transportation 4,888,005 Total Federal Awards $ 6,809,950 $ 466,699 See Notes to Schedule of Expenditures of Federal Awards 8 City of Santa Clarita, California Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2020 Note 1- Basis of Presentation The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the City of Santa Clarita CAM under programs of the federal government for the year ended June 30, 2020. 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. The information is presented in accordance with the 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). Because the schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or fund balance, or cash flows of the City. Amounts reported in the accompanying schedule 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. Note 2 - Summary of Significant Accounting Policies Funds received under the various grant programs have been recorded within the special revenue and enterprise funds of the City. The City utilizes the modified accrual basis of accounting for the special revenue funds, and the full accrual basis of accounting for the enterprise funds. Expenditures reported in the schedule, including subrecipient expenditures, are reported on the modified accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Note 3 - Indirect Cost Rate The City does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. 9 City of Santa Clarita, California Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Section I — Summary of Auditor's Results FINANCIAL STATEMENTS Type of auditor's report issued Unmodified Internal control over financial reporting: Material Weaknesses identified No Significant deficiencies identified not considered to be material weaknesses None reported FEDERAL AWARDS Internal control over major federal programs: Material Weaknesses identified Significant deficiencies identified not considered to be material weaknesses Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516: Identification of major federal programs: Name of Federal Program or Cluster CDBG - Entitlement Grants Cluster Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low -risk auditee? No None reported Unmodified No CFDA Number 14.218 $750,000 Yes 10 City of Santa Clarita, California Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Section II — Financial Statement Findings None noted. 11 City of Santa Clarita, California Schedule of Findings and Questioned Costs Year Ended June 30, 2020 Section III — Federal Award Findings and Questioned Costs None noted. 12 City of Santa Clarita, California Schedule of Prior Audit Findings and Recommendations Year Ended June 30, 2020 Financial Statement Findings Finding No. Area Status of Corrective Action 2019-001 Financial Reporting and Closing Implemented 2019-002 Personnel Action Forms and Pay Rate Approvals Implemented Federal Awards Findings None noted. 13 Financial Report June 30, 2020 City of Santa Clarita, California Transit Enterprise Fund E ide Ba 1"lly., City of Santa Clarita, California - Transit Enterprise Fund Table of Contents June 30, 2020 IndependentAuditor's Report................................................................................................................................... 1 Financial Statements Statementof Net Position.....................................................................................................................................4 Statement of Revenues, Expenses and Changes in Fund Net Position..................................................................5 Statementof Cash Flows....................................................................................................................................... 6 Notes to Financial Statements............................................................................................................................... 7 Required Supplementary Information Schedule of the Transit Fund's Proportionate Share of the Net Pension Liability .............................................. 24 Schedule of the Transit Fund's Pension Contributions........................................................................................ 25 Schedule of the Transit Fund's Proportionate Share of the Net OPEB Liability .................................................. 26 Schedule of the Transit Fund's OPEB Contributions............................................................................................ 27 „l..d,l a].... ClP z IIRUSIINIi.SS ADVISOIRS 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 (City), as of and for the year ended June 30, 2020, 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 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. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niilyuccirlilr 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, 2020, 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, 2020, 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 22, 2020 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 22, 2020 3 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Statement of Net Position June 30, 2020 Assets Current assets Pooled cash and investments $ 100 Accounts receivable 1,309 Prepaids 30,841 Due from other governments 4,809,589 Total current assets 4,841,839 Noncurrent assets Capital assets Nondepreciable assets 20,657,920 Depreciable assets, net 63,713,123 Total noncurrent assets 84,371,043 Total assets 89,212,882 Deferred Outflows of Resources Deferred outflows related to OPEB 235,316 Deferred outflows related to pensions 785,514 Total deferred outflows of resources 1,020,830 Liabilities Current liabilities Accounts payable 5,364,016 Compensated absences payable 39,112 Due to the City of Santa Clarita 3,921,774 Total current liabilities 9,324,902 Noncurrent liabilities Compensated absences payable 79,765 Net OPEB liability 400,077 Net pension liability 1,367,413 Total noncurrent liabilities 1,847,255 Total liabilities 11,172,157 Deferred Inflows or Resources Deferred inflows related to OPEB 152,975 Deferred inflows related to pensions 65,587 Total deferred inflows of resources 218,562 Net Position Net investment in capital assets 80,308,956 Unrestricted (1,465,963) Total net position $ 78,842,993 See Notes to Financial Statements 4 Transit Enterprise Fund (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, 2020 Operating revenues Metrolink and EZ pass revenues $ 180,865 Fixed -route passenger fares 2,136,440 Dial -A -Ride passenger fares 89,737 County of Los Angeles operating assistance 2,094,333 Specialized transit services 1,980,500 Miscellaneous revenues 303,303 Total operating revenues 6,785,178 Operating expenses Salaries and benefits 1,200,280 Administrative services 1,227,693 Contract transportation services 19,879,031 FTA funded non -capitalized projects 841,285 Insurance 94,330 Supplies, utilities and other 2,563,458 Depreciation 5,178,662 Total operating expenses 30,984,739 Operating loss (24,199,561) Nonoperating revenues (expenses) Proposition A discretionary 5,093,227 Proposition A specialized transportation 692,936 Proposition C expansion 207,230 Proposition C BSIP 53,790 Proposition C transit mitigation 42,606 Proposition C security allocation 221,849 Measure R bus operations 2,575,268 Measure M bus operations 2,663,671 SB1 State Transportation Assistance 800,205 Low Carbon Transportation 326,853 Intergovernmental revenues 716,677 Transit mitigation fees 10,800 Investment loss (9,629) Loss on disposal of capital assets (75,937) Total nonoperating revenues (expenses) 13,319,546 Loss before contributions and transfers (10,880,015) Capital contributions Federal Transit Administration capital grants 4,636,643 Proposition C MOSIP 1,064,499 Total capital contributions 5,701,142 Transfers to the City of Santa Clarita (153,690) Change in net position (5,332,563) Net Position Beginning of year 84,175,556 End of year $ 78,842,993 See Notes to Financial Statements 5 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Statement of Cash Flows For the Year Ended June 30, 2020 Cash flows from operating activities Cash received from customers and users $ 6,511,942 Cash payments to suppliers of goods and services (22,470,548) Cash payments to employees (2,578,601) Cash received from other sources 303,303 Net cash used in operating activities (18,233,904) Cash Flows from noncapital financing activities Cash transfers to the City of Santa Clarita (153,690) Cash transfers from the City of Santa Clarita 3,921,774 Federal and state funding received 12,761,212 Net cash provided by noncapital financing activities 16,529,296 Cash flows from capital and related financing activities Capital contributions 5,701,142 Acquisition of capital assets (5,748,977) Proceeds from sale of capital assets 29,775 Net cash provided by capital and related financing activities (18,060) Cash flows from investing activities Interest paid (1,477) Net Cash used in investing activities (1,477) Net decrease in cash and cash equivalents (1,724,145) Pooled cash and cash equivalents Beginning of year 1,724,245 End of year $ 100 Reconciliation of operating loss to net cash used in operating activities Operating loss $ (24,199,561) Adjustments to reconcile operating loss to net cash used in operating activities Depreciation 5,178,662 Changes in Pension and OPEB (174,894) Changes in operating assets and liabilities: Decrease in accounts receivable 30,067 Decrease in prepaids (6,239) Increase in accounts payable 913,795 Increase in compensated absences 24,266 Total adjustments 5,965,657 Net cash used in operating activities $ (18,233,904) See Notes to Financial Statements 6 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Note 1- Nature of Business and Summary of Significant Accounting Policies Nature of business: The financial statements of the Transit Enterprise Fund (Transit Fund) of the City of Santa Clarita, California (City) are intended to present the financial position and results of the bus line services operation. The financial statements of the Transit Fund are included as a business -type (enterprise fund) activity in the basic financial statements of the City. 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 fund 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 fund 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. 7 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Pooled cash and investments: The Transit Fund's cash balance was pooled with various other City funds for deposit and investment purposes. The City's treasury is responsible for the cash management of the Transit Fund's cash balance. Cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition, and the Transit Fund's participation in the City investment pool are considered to be cash and cash equivalents. Each City fund owns a share of pooled cash and investments and interest income was apportioned based on its average month -end cash balances in proportion to the total of the pooled cash and investments. Prepaids: Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. Administrative services: Service costs include contractual, professional, and legal 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 (CaIPERS) plan and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. M Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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, 2020 Measurement Period July 1, 2019 to June 30, 2020 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, 2020 was $118,877 of which $39,112 was considered due within one year, and $79,765 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. Effect of New Governmental Accounting Standards Board (GASB) Pronouncements: GASB Statement No. 95— In May 2020, the GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authority Guidance. The objective of this Statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. The requirements of this Statement are effective immediately as they delayed the effective dates of several GASB Statements. The effective dates listed in the Future GASB Pronouncement section have been updated to reflect the postponed effective dates. 9 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Future GASB Pronouncements: 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. This Statement is effective for reporting periods beginning after December 15, 2019. 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; enhancing the comparability of financial statements between governments; and also enhancing the relevance, reliability (representational faithfulness), and consistency of information about the leasing activities of governments. This Statement is effective for reporting periods beginning after June 15, 2021. The City has not determined the effect of this Statement. GASB Statement No. 90 — In September 2018, the GASB issued 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, 2019. The City has not determined the effect of this Statement. GASB Statement No. 91— In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. The objective of this Statement is to provide a single method of reporting conduit debt obligations by issues and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. The City has not determined the effect of this Statement. GASB Statement No. 92 — In January 2020, the GASB issued Statement No. 92, Omnibus 2020. The objectives of this Statement are to enhance comparability in accounting and financial reporting to improve the consistency of authoritative literature by addressing practices issues that have been identified during implementation and application of certain GASB Statements. The Statement is effective for reporting periods beginning after June 15, 2021. The City has not determined the effect of this Statement. GASB Statement No. 93— In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this Statement is to address the accounting and financial reporting implications that result from the replacement of an IBOR. The Statement is effective for reporting periods beginning after June 15, 2021. The City has not determined the effect of this Statement. GASB Statement No. 94— In March 2020, the GASB issued Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangements. The objective of this Statement is to improve financial reporting by addressing issues related to public -private and public -public partnership arrangements (PPPs). The Statement is effective for reporting periods beginning after June 15, 2022. The City has not determined the effect of this Statement. 10 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 GASB Statement No. 96— In May 2020, the GASB issued Statement No. 96, Subscription -based Information Technology Arrangements. The objective of this Statement is to provide guidance on the accounting and financial reporting for subscription -based information technology arrangements (SBITAs) for government end users (governments). The Statement is effective for reporting periods beginning after June 15, 2022. The City has not determined the effect of this Statement. GASB Statement No. 97— In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans —An Amendment of GASB Statement No.14 and No.84 and A Supersession of GASB Statement No.32. The objective of this Statement is (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The Statement is effective for reporting periods beginning after June 15, 2021. 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, 2020: Agency Los Angeles County Federal Transit Administration Due from Other Government Other Agencies $ 2,273,220 2,203,793 326,853 5,723 $ 4,809,589 Due from other governments relate to various program support revenues received from other governments in support of transit operations and programs. 11 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Note 3 - Capital Assets Changes in capital assets of the Fund at June 30, 2020, consisted of the following: Non -depreciable assets Land Construction in progress Total non -depreciable assets Depreciable assets Site improvements Building and improvements Equipment Total depreciable assets Less accumulated depreciation Site improvements Building and improvements Equipment Total accumulated depreciation Total depreciable assets, net Total capital assets, net Note 4 - Pension Plan June 30, 2019 June 30, 2020 Balance Additions Deletions Balance $ 15,087,880 $ - $ - $ 15,087,880 3,806,655 1,763,385 - 5,570,040 18,894,535 1,763,385 - 20,657,920 12,941,276 - - 12,941,276 41,483,799 - - 41,483,799 61,813,881 3,985,592 (2,129,408) 63,670,065 116,238,956 3,985,592 (2,129,408) 118,095,140 (4,400,033) (568,221) - (4,968,254) (13,692,426) (883,347) - (14,575,773) (33,134,592) (3,727,094) 2,023,696 (34,837,990) (51,227,051) (5,178,662) 2,023,696 (54,382,017) 65,011,905 (1,193,070) (105,712) 63,713,123 $ 83,906,440 $ 570,315 $ (105,712) $ 84,371,043 Plan Description All qualified permanent and probationary employees are eligible to participate in the City's Miscellaneous Pension Plan, an agent multiple -employer defined benefit pension plan administered by the California Public Employees' Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. The employees are participants in the Miscellaneous Plan of the City. For financial reporting purposes, the Transit Fund reports a proportionate share of the City's collective net pension liability, pension expense, and deferred inflows and outflows of resources. Accordingly, the disclosures and required supplementary information have been reported for the Transit Fund as a cost sharing participant. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. 12 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements Benefits Provided The Plan's provisions and benefits in effect at June 30, 2020, 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 2.7% at SS 5 years of service monthly for life SO -SS 2.7% 8% Tier 1 Employees hired before April 9, 2011* Miscellaneous Tier 2 2% at 60 5 years of service monthly for life 50-60 2.0% 7% 9.211% $3,466,495 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 CalPERS member with a public agency or in a Classific reciprocal plan within the last 6 months).* June 30, 2020 Tier 3 2% at 62 5 years of service monthly for life 52-62 2.0% 6.25% Tier 3 Employees hired January 1, 2013, or later * * 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 CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. The expense associated with contributions for the Transit Fund employees is charged to payroll at the required rates previously noted. Contributions recognized by the pension plan and contributed by the Transit Fund for the year ended June 30, 2020 were $561,485. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2020, 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 $1,367,413. 13 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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, 2019, 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, 2018, rolled forward to June 30, 2019, 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, 2018 and 2019 were as follows: Proportion -June 30, 2018 Proportion -June 30, 2019 Change - Increase (Decrease) 3.51435 3.51435 0% For the year ended June 30, 2020, the Transit Fund recognized pension expense of $357,782. At June 30, 2020, the Transit Fund reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Net difference between projected and actual earnings on pension plan investments Changes of assumptions Difference between expected and actual experience Contributions subsequent to the measurement date Total Deferred Deferred Outflows Inflows of Resources of Resources $ - $ 20,039 109,892 30,375 114,137 15,173 561,485 - $ 785,514 $ 65,587 The amount of $561,485 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, 2021. Other amounts reported as deferred inflows of resources related to pensions will be recognized as pension expense as follows: Fiscal Year Ending 2021 2022 2023 2024 Total Deferred Outflows/(Inflows) of Resources $ 129,741 (6,496) 18,530 16,667 $ 158,442 14 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Actuarial Assumptions The total pension liabilities in the June 30, 2018, 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 Investment Rate of Return Mortality (1) Depending on age, service and type of employment (2) Derived using CalPERS Membership Data for all Funds Miscellaneous June 30, 2018 June 30, 2019 Entry -Age Normal Cost Method 7.15% 2.75 3.00% (1) 7.375% Net of Pension Plan Investment and Administrative Expenses; includes Inflation (2) The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2018, 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 CalPERS 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, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short- term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. 15 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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. Assumed Asset Real Return Real Return Asset Class Allocation Years 1-10(2) Years 11+(3) 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% (1) In the System's CAFR, fixed income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Gloal Equity Securityes and Global Debt Securities. (2) An expected inflation rate of 2.0% used for this period. (3) 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 Changes in the Discount Rate The following presents the Transit Fund's proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the Transit Fund's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate: Transit Fund's proportionate share of the net pension liability 1% Decrease Current Discount 1% Increase (6.15%) Rate (7.15%) (8.15%) $2,504,382 $1,367,413 $439,676 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the City's CAFR, as well as the separately issued CalPERS financial reports. Note 5 - 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 CalPERS 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 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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 CalPERS 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 $1,017 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. 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. Funding Policy 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 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. 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 2019-2020 was $360,000, of which $8,640 was allocated to the Transit Fund. 17 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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 $6,624 related to the fiscal year 2019-2020 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, 2020, the Transit's Funds proportionate share of cash contributions were $8,640 in payments to the Plan and the estimated implied subsidy was $6,624, resulting in total contributions of $15,264. OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2020, 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 $400,077. The net OPEB liability was measured as of June 30, 2020, 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, 2020, 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, 2019 and 2020 were as follows: Proportion - June 30, 2019 2.40% Proportion - June 30, 2020 2.40% Change - Increase (Decrease) 0% For the year ended June 30, 2020, the Transit Fund recognized OPEB expense of $44,159 and reported deferred inflows and outflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual experience $ - $ 136,919 Changes of assumptions 219,643 16,056 Net difference between projected and actual earnings on plan investments 15,673 Total $ 235,316 $ 152,975 W. Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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, 2020 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: Yearended June 30, 2021 2022 2023 2024 2025 Thereafter Total Amortization $ 7,672 7,696 10,672 11,123 5,396 39,782 $ 82,341 19 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Actuarial Assumptions The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial Assumptions Actuarial Valuation Date June 30, 2018 Contribution Policy Pre -fund cash benefit Actuarially Determined Contribution (ADC) with PARS Balance Fund Implied subsidy benefit on pay- as-you-go basis Discount Rate 4.17% at June 30, 2020 5.17% at June 30, 2019 Expected City contributions projected to be insufficient to pay all benefits from trust, as such a blended rate is used Municipal Bond Index Bond Buyer 20-bond Index 2.21% at June 30, 2020 3.50% June 30, 2019 Long Term Return on Assets 6.50% General Inflation 2.75% per annum Mortality. Retirement, Disabilitv, Termination CalPERS 1997-2015 Experience Study Mortality Improvement Post -retirement mortality projected fully generational with 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 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 < 1/1/08: 100% Hired >_ 1/1/08: 60% Cap Increases No increase on $1,016.58 cap Medical trend for EE+1 cap Mortality rates were based on the 2011 CalPERS actuarial experience study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale BB. The Experience Study report can be obtained on the CalPERS website under Forms and Publications. c Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Changes of Assumptions During the measurement period ending June 30, 2020, the City changed certain assumptions used to the measure the Net OPEB liability. Refer to the table above for details. Due to the decrease in the municipal bond index, since the City uses a blended rate, the overall discount rate was decreased from 5.17% to 4.17% during the year. Discount Rate The discount rate used to measure the total OPEB liability was 4.17 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 31 using the Bond Buyer 20-bond index rate as of June 30, 2020. Before year 31, 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 4.17 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: Asset Class Target Allocation PARS -Balance Expected Real 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 (3.17%) (4.17%) (5.17%) Net OPEB Liability (Asset) $ 656,446 $ 400,077 $ 196,522 21 Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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, 2020: Net OPEB Liability (Asset) 1% Decrease 150,790 Healthcare Trend Rate Current Rate $ 400,077 OPEB Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the City's CAFR. Note 6 - Administrative and Personnel Costs 1% Increase Certain general and administrative costs are allocated to the Transit Fund based upon an approved cost allocation plan. Such allocated costs were $679,238 for the year ended June 30, 2020. Note 7 — Due to the City of Santa Clarita 724,537 At June 30, 2020, the Transit Fund owed the City of Santa Clarita $3,921,774 which represents short term borrowings from the City's investment pool. Note 8 —Transfers to the City of Santa Clarita During the year ended June 30, 2020, 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. 22 Required Supplementary Information June 30, 2020 City of Santa Clarita, California Transit Enterprise Fund N� o O m o 0 E - L ((3 0 CY) � OO Ol LIi Ol � OO LIi LL L N � � Ol °' O °° CU O J l— O M r-I O Rt Rt N N m L fB .2 cu N +� CU 4-j4� L N cu o ci Ol o 0 LLl fB Z c L U Ol c-I M ^O pM c-I 4-C U v L m � � ON 00 o rn 4-10 p M ri L CU a.' c 4� Ln O 47 L 4� 3 o pp M o 0 c-I � n N U o 4J > Rt 00 00 c-I c-I LP rn cu M _04-d O y O O p L.L_ N o N O o o N M M O O M O N ? E LL Ll TTTT TT N Ln Ln ^ O N N p 'O O c-I N ro ^ L L 4JCU 4-� (O U_ y LU Q o p pp o o fl Ln MTT O ? r,fl 3 pQ � r O r-IN O Lr-In TT LM O im U �p (n � O ro E Ln cMI O �O M n LP LP O Ol i--I i�-I L q ^ i�-I 0 O p th M N N Q N 7 0 N t U C � � O � ro >= H a-T aT' Q C _ = O O T O O t E N N O Q Q Q 0 E _ bo O c c o Q U N U N - N T N O O O ro i N > U U T ro Q C N t U -0.0 a-+ O N O +t N N o U a > O Q 3 O Ln �O O ate-+ O C 0 O ate+ ate+ N (a i D O O Q two O *' U �, to _T U Q Q Q O O >O N O 0-to C f0 = +�+ O LL a a U a a Z �r OJ Lao c u N 3 C f0 N c N E N cc N aj E Lr O N O M N t Ln n O a ++ ++ 0 f0 C C N N N N N N f0 f0 N N E E .t n c-I c-I O O O O M M N N C C N N Ln Ln n ii E r, O O 3 N aj m aj E c �o o O -O O � M 7 NI N C O N ,� i O M M O M n LL LL L =3 N f V L n i--I c-I I� M O Q m m Ln 0 L '— 4� N N N _N �L C � H C U U ro O •V1 a)� L C W N W c-I c-I I� ci d-i _ d L Ol Ol c-I Rt N U N cB m m 00 M ) oN Tt a-+ cu VLL ) y_ n O O c LL c (0 L 00 00 00 00 O 00 Q C� U - 41 a% ILrn ILn INn 4— O N cI 4-' N O� _0 N U 00 N Lr) Ln O N L.L 00 cr cr Mr -I M aU C) ON M M O N �L c-i CL 00 n F 00 0 LU p p) 00 n M M N Ol n ? c-I �T 00 TT Ol O N Rz: N 00 00 N c-I Ol Lr L� N to M N p N If) M N C O 7 C O U _0 O N C a �p ++ E N o E � T � -0 f0 Q E T 0 O n to N i O O O O u U O N O i 4- ate-+ U bo C O X a� O * C C N + n 'O O •+-' u U to � c a� 3 c ro Q Ln E U f0 c-I n O — O + 'O O i - O O T O t N Ln f0 -O f0 i O C C > �O U U O O O O O Q U U U U Z �t N Transit Enterprise Fund (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, 2020 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 2020 2019 2018* 400,077 146,648 247,416 2.40% 2.40% 2.40% 919,082 813,498 735,216 43.53% 18.03% 33.65% 71.67% 87.12% 79.08% Notes to Schedule: * Fiscal year 2018 was the first year of implementation, therefore only 3 years are shown. Changes of Assumptions - The discount rate was changed from 5.60% at the June 30, 2018 measurement to 5.17% at the June 30, 2019 measurement date, and then was changed again to 4.17% for the June 30, 2020 measurement date. 0 Contractually determined contribution Contributions in relation to the contractually determined contributions Contribution deficiency (excess) Covered -employee payroll Contributions as a percentage of covered payroll Transit Enterprise Fund (an Enterprise Fund of the City of Santa Clarita, California) Schedule of the Transit Fund's OPEB Contributions For the Year Ended June 30, 2020 2020 2019 2018* $ 26,688 $ 27,048 $ 42,120 $ 11,424 $ 4,889 $ 12,672 919,082 813,498 735,216 1.66% 2.72% 4.01% Notes to Schedule: * Fiscal year 2018 was the first year of implementation, therefore only 3 years are shown Methods and Assumptions for 2019/20 Actuarially Determined Contributions Valuation Date June 30, 2018 Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Amortization Method Level percent of pay Amortization Period 14-year fixed period for 2019/20 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 - 7.5% for 2020, decreasing to an ultimte rate of 4.0% in 2076 Medicare - 6.5% for 2020, decreasing to an ultimate rate of 4.0% in 2076 Mortality CalPERS 1997-2015 experience study Mortality Improvement Post -retirement mortality projected fully generational 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. 27 Financial Report June 30, 2020 City of Santa Clarita, California Air Quality Improvement Special Revenue Fund E.1"deBal"lly". Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Table of Contents June 30, 2020 Independent Auditor's Report...................................................................................................... Financial Statements BalanceSheet............................................................................................................................ Statement of Revenues, Expenditures and Changes in Fund Balance ..................................... Notes to Financial Statements.................................................................................................. Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual ..... Note to Required Supplementary Information......................................................................... .......................... 1 „l..d,l a].... ClP z L 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, 2020, 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. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niilyuccirlilr 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, 2020, 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. 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, 2020, 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 as described in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2020 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 Cucamonga, California December 22, 2020 3 Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Balance Sheet June 30, 2020 Assets Pooled cash and investments $ 548,874 Interest receivable 1,745 Due from South Coast Air Quality Management District 190,259 Total assets $ 740,878 Liabilities, deferred Inflows and fund balance Liabilities Accounts payable and accrued liabilities $ 9,609 Total Liabilities 9,609 Deferred inflows of resources: Unavailable revenues 122,000 Total deferred inflows of resources 122,000 Fund Balance Restricted 609,269 Total Fund Balance 609,269 Total liabilities, deferred inflows of resources and fund balance $ 740,878 See Notes to Financial Statements 4 Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2020 Revenues Assembly Bill 2766 revenues $ 276,639 Investment income 21,639 Total revenues 298,278 Expenditures Administrative 5,666 Air quality improvement program 330,140 Total expenditures 335,806 Net change in fund balance (37,528) Fund balance, beginning of year 646,797 Fund balance, end of year $ 609,269 See Notes to Financial Statements 5 Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Note 1- Summary of Significant Accounting Policies Basis of presentation: The Air Quality Improvement Special Revenue Fund's ("Fund") financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The financial statements reflect the financial position and changes in financial position of the Air Quality Improvement Special Revenue Fund (Fund) of the City of Santa Clarita, California ("City') only. The Governmental Accounting Standards Board (GASB) is the acknowledged standard -setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States. The financial statements were prepared from only the accounts of the Fund. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City and changes in financial position thereof for the year then ended in conformity with generally accepted accounting principles in the United States of America. The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with a self -balancing set of accounts. Monies received under Assembly Bill 2766 (AB 2766) are recorded in the Fund. AB 2766 authorizes the South Coast Air Quality Management District (SCAQMD) to impose an annual vehicle registration fee and to distribute a portion of the collected revenues to all local jurisdictions within the South Coast Air Basin. These revenues are to be used solely to reduce air pollution from motor vehicles by implementing new programs and studies necessary for the implementation of the California Clean Air Act. Fund financial statements: Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balance. The Fund is accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures, and changes in fund balance present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The primary revenue sources are revenues associated with AB 2766 and interest revenue, which are measurable and considered to be available if they are collected within 90 days of the end of the current fiscal period. The Fund recognizes assets of non -exchange transactions in the period when the underlying transaction occurs when all eligibility requirements are met. Non -exchange transactions occur when one government provides (or receives) value to (from) another party without receiving (or giving) equal or nearly equal value in return. The AB 2766 revenue is an example of a non -exchange transaction. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 11 Air Quality Improvement Fund (a Special Revenue Fund of the , California) Notes to Financial Statements June 30, 2020 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. Deferred Inflows of Resources, Unavailable Revenue: Unavailable revenue represents amounts that has been earned but not received within the period of availability. Therefore, this does not provide an available financial resource in the current period, and the recognition is deferred until certain criteria have been met. Note 2 - Pooled Cash and Investments The Fund's pooled cash and investments at June 30, 2020 is $548,874. 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. 7 Air Quality Improvement Fund (a Special Revenue Fund of the , California) Notes to Financial Statements June 30, 2020 Note 3 - Due from South Coast Air Quality Management 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, 2020, the Fund's due from SCAQMD balance totaled $190,259. 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. H-* Required Supplementary Information June 30, 2020 City of Santa Clarita, California Air Quality Improvement Special Revenue Fund Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual For the Year Ended June 30, 2020 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues Assembly Bill 2766 revenues $ - $ 402,929 $ 276,639 $ (126,290) Investment income (loss) 6,000 6,000 21,639 15,639 Total revenues 6,000 408,929 298,278 (110,651) Expenditures Administrative 8,180 8,180 5,666 2,514 Air quality improvement program 27,330 730,653 330,140 400,513 Total Expenditures 35,510 738,833 335,806 403,027 Excess (Deficiency) of Revenues (29,510) (329,904) (37,528) (513,678) Net Change in Fund Balance $ (29,510) $ (329,904) (37,528) $ (513,678) Fund Balance at Beginning of Year 646,797 Fund Balance at End of Year $ 609,269 See Note to Required Supplementary Information 10 Air Quality Improvement Fund (a Special Revenue Fund of the City of Santa Clarita, California) Note to Required Supplementary Information June 30, 2020 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. 11 Financial Report June 30, 2020 City of Santa Clarita, California Open Space Preservation District Special Revenue Fund E.1"deBal"lly". Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Table of Contents June 30, 2020 Independent Auditor's Report...................................................................................................... Financial Statements BalanceSheet............................................................................................................................ Statement of Revenues, Expenditures and Changes in Fund Balance ..................................... Notes to Financial Statements.................................................................................................. Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ....... Note to Required Supplementary Information......................................................................... .......................... 1 „l..d,l a].... lPAs L 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, 2020, 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. hal, °uuuslpiiires you, liirislpiiires us. u,ii d3niilyuccirlilr 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, 2020, 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. 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, 2020, 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 as described in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the 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 22, 2020 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 22, 2020 3 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Balance Sheet June 30, 2020 Assets Pooled cash and investments $ 5,607,474 Receivables Interest 17,831 Taxes 25,201 Total assets $ 5,650,506 Liabilities and fund balance Liabilities Accounts payable and accrued liabilities $ 58,080 Fund balance Restricted for Open Space Preservation 5,592,426 Total liabilities and fund balance $ 5,650,506 See Notes to Financial Statements 4 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2020 Revenues Special assessments Charges for services Investment income Otherrevenues 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 $ 2,852,828 215,429 82,211 1,793 3,152,261 634,015 49,769 683,784 2,468,477 (745,706) 1,722,771 3,869,655 $ 5,592,426 See Notes to Financial Statements 5 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 Note 1- Organization and Summary of Significant Accounting Policies Organization: On July 17, 2007, the City of Santa Clarita (the City) established the Santa Clarita Open Space Preservation District (the District) pursuant to the provisions of the Landscape and Lighting Act of 1972, being Part 2 of Division 15 of the California Street and Highway Code. The purpose of the District is to fund a portion of the City's open space, park and parkland program consisting of the acquisition, preservation, improvement, servicing, financing and maintenance of open -space land, parks and parkland, and appurtenant equipment and facilities, including the payment of debt service, of benefit to the property within the District. Facilities include, but are not limited to, open -space land, parks, parklands, the Santa Clarita River Watershed, trail systems and wildlife corridors. These are financed by special assessments levied on parcels within the City boundaries. The boundaries of the District are the same as the boundaries of the City. The City established 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. 11 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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, 2020 was $5,607,474 The deposit and investment disclosures required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, as they relate to the pooled cash and investments, are reported in the annual report of the City. The pooled cash and investments are unrated, and average maturity is 30 days or less. 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. 7 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements June 30, 2020 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 $745,706 for current year debt service payments for the Lease Revenue Bond Series 2016B. As of June 30, 2020, $12,805,000 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. E- Required Supplementary Information June 30, 2020 City of Santa Clarita, California Open Space Preservation District Special Revenue Fund Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 2020 Revenues Special assessments Charges for services Investment income 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 Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) $ 2,850,195 $ 2,850,195 $ 2,852,828 $ 2,633 121,442 121,442 215,429 93,987 67,848 67,848 82,211 14,363 - - 1,793 1,793 3,039,485 3,039,485 3,152,261 112,776 289,246 299,269 259,492 39,777 401,820 387,201 363,669 23,532 64,500 270,267 10,854 259,413 - 195,862 49,769 146,093 755,566 1,152,599 683,784 468,815 2,283,919 1,886,886 2,468,477 581,591 (745,706) (745,706) (745,706) - (745,706) (745,706) (745,706) - $ 1,538,213 $ 1,141,180 1,722,771 $ 581,591 3,869,655 $ 5,592,426 See Note to Required Supplementary Information 10 Open Space Preservation District Fund (a Special Revenue Fund of the City of Santa Clarita, California) Note to Required Supplementary Information June 30, 2020 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. 11