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SR 02-09-2016 8C City Council Report City Council Regular Meeting: February 9, 2016 Agenda Item: 8.C 1 of 9 To: Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Financial Operations Subject: Presentation of the City’s Comprehensive Annual Financial Report Recommended Action Staff recommends that the City Council receive and f ile the City’s Comprehensive Annual Financial Report, the independent auditors’ unmodified (clean) report for the City’s financial statements, and the attached Auditor’s Letter to Council for the fiscal year ended June 30, 2015. Executive Summary The Comprehensive Annual Financial Report (CAFR) communicates the City’s financial condition and activity for the year ended June 30, 2015. The City’s operations show signs of stability, a result of the prudent and sound management practices of the City of Santa Monica. The independent auditor’s unmodified (clean) report provides the assurance that the CAFR, and audited information within, fairly present the City’s financial position for the year ended June 30, 2015. This audit is performed in compliance with Ci ty Charter requirements. A letter from the City’s independent auditors communicating that there are no audit findings and discussing other matters is also submitted with this report. The recommended reclassifications included in this letter have not been made as they do not materially change the City’s financial standing or statements . The City of Santa Monica has received a clean audit report for more than three decades. In FY 2013-14, the City was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers’ Association of the United States and Canada (GFOA) for its CAFR for the 31st consecutive time since it began participating in the program in FY 1983-84. Staff anticipates that the current CAFR also conforms to the Certificate of Achievement program requirements. In an effort to make the CAFR more transparent, staff has provided an explanation for key financial performance indicators shown in the report. The City’s external auditors, Macias, Gini & O’Connell LLP presented the CAFR to the Audit Subcommittee on January 19, 2016. The Audit Subcommittee approved the CAFR and recommended that it be presented to the full Council with a 4-0 vote, with Committee Member Vazquez absent. 2 of 9 Background The CAFR is used to communicate the City’s financial condition and activity in a transparent and organized manner. The report presents historical and comparative information that can be useful to City staff, elected officials, and external users, such as debt rating agencies, businesses, other public agencies and the City’s residents. The most recent CAFR and several prior year reports are available at the City’s libraries and on the City’s Finance website (Attachment A). As required by the City Charter, financial statements are prepared by the City and audited by independent auditors who are contracted through a competitive procurement process. The City’s current independent auditor is Macias, Gini & O’Connell LLP (MGO). The quality of the City’s work and the CAFR is measured in two ways: (1) a clean audit report by the independent auditors; and (2) the Certificate of Achievement for Excellence in Financial Reporting, awarded by the Government Finance Officers’ Association of the United States and Canada (GFOA). Attaining the latter is the highest form of recognition in governmental accounting and financial reporting. Auditors follow audit industry standards established by the American Institute of Certified Public Accountants (AICPA). These standards requ ire auditors to provide an opinion on specific areas of the City’s financial statements based on observations, inquiries, testing of transactions and analysis. A clean, unmodified opinion communicates to users that the financial statements are fairly presented and that the information used in the report is reliable. Other minor issues that would not warrant a change in the auditor’s opinion are presented in the form of recommendations to management, suggesting ways that the City could improve reporting in future years. In the letter to Council, auditors have summarized what are known as “passed adjustments” which are adjustments noted during the audit that are not material enough to warrant recording in the current year. MGO consults with staff regarding each of these entries. The adjustments are not required and are considered 3 of 9 immaterial. Staff assesses the auditors’ recommendations and determines the appropriate course of action for each one, typically implementing those that improve transparency and financial reporting on the City’s financial records. A clean report is defined as one without audit-related findings. The City of Santa Monica has received a clean, unqualified/unmodified audit report and the GFOA Award for at least the last 31 years, since the City began participating in the GFOA program in FY 1983-84. The City’s CAFR includes the following major sections and information: Introductory Section  Letter of Transmittal – prepared by management and used to communicate information on areas that may have an impact on the City’s finances now and in the future. This includes economic factors as well as budget and management factors. Financial Section (the main body of the CAFR for current year information)  Independent Auditor’s Report – the City’s report card on the content of the CAFR  Management’s Discussion and Analysis (MD&A) – provides an analytical overview of the City’s financial status  Basic Financial Statements – show finances at a point in time (assets - liabilities) and throughout the year (revenues - expenditures), budget to actual revenues and expenditures, and cash flows o City-Wide Statements – overview of financial information including all of the City’s operations o Fund Financial Statements – a detailed look at funds, showing Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance o Budget to Actual Comparisons – for the General Fund and other select major funds o Notes to the Financial Statements (Notes) – a narrative explanation that accompanies the Basic Financial Statements 4 of 9 Required Supplementary and Supplementary Information Sections  Pension Information – schedule of changes in the pension liability and related ratios; schedule of contributions by plan  OPEB Information – three years of Other Post-Employment Benefits (medical benefits for retired employees) funding information  A breakout of individual funds – for funds that were presented in a cumulative manner in the Financial Section Statistical Section (current and historical information – up to 10 years)  Financial Trends  Revenue Capacity Information  Debt Capacity Information  Demographic and Economic Information  Operating Information MGO presented the CAFR to the Audit Subcommittee of the City Council on January 19, 2016. Subcommittee members were given an opportunity to review the report and ask questions of the external auditor. Among the topics discussed were the required communication and responsibilities of the external audit firm, changes to significant accounting policies, the function of significant accounting estimates, and prior period adjustments recommended by MGO. The Audit Subcommittee received the CAFR and recommended that it be presented to the full Council with a 4 -0 vote, with Committee Member Vazquez absent. Discussion The attached CAFR for FY 2014-15 has received an unmodified, or clean, opinion by the City’s independent auditor, MGO (Attachment B). The CAFR shows that City finances are stable. The following is an explanation of some key indicators shown in the CAFR. General Fund Balance 5 of 9 The most notable measure of a City’s financial health is the General Fund balance. As presented in the Basic Financial Statements, the City’s General Fund had a balance of $375.0 million as of June 30, 2015. This balance is comprised of a number of categories, as follows:  $42.2 million nonspendable, restricted or committed resources that are inventory or are required for specific purposes according to legal/contractual agreements or by ordinance or resolution of the City Council;  $218.6 million assigned funds set aside for specific purposes based on budget priorities (i.e., continuing and future capital projects; potential investments to lower long term costs, such as additional payments to CalPERS to lower the City’s unfunded liability or use as project financing equity; strategic goals; expenditure control budget; and pollution remediation); and  $114.2 million in unassigned funds as follows: o $51.0 million rainy day contingency (15% of annual operating and capital expenditure budget); o $9.7 million economic uncertainty reserve to mitigate potential revenue losses; o $50.2 million for public works infrastructure expenditures; and o $3.3 million fund balance. The strong fund balance and rainy day and economic uncertainty reserves play a key role in Santa Monica’s AAA bond rating. In addition to being an indicator of very strong financial health, the high bond rating allows the City to pursue lower cost financing structures. The General Fund balance increased by $9.0 million, primarily d ue to an increase in property tax, other tax, and license and permit revenues. Citywide Net Position The Statement of Net Position, similar to a balance sheet, shows total assets and liabilities of the City as of June 30, 2015. The total net position of the City for all activities was $1.4 billion. Net position is broken out into three categories: capital, restricted, and unrestricted. 6 of 9 Net Capital Position ($1.2 billion) Capital assets include land, buildings, improvements, intangibles, infrastructure and utility systems, and construction in progress. Intangible assets represent rights of use for items such as software and payments for Santa Monica’s cost of improvements to the City of Los Angeles sewage treatment system. Some notable capital projects that were underway as of June 30, 2015 are:  California Incline and Pedestrian Overpass  Expo Light Rail Phase 2  Colorado Esplanade  Expo Light Rail Maintenance Yard Buffer Park  City Services Building  Citywide (Breeze) Bike Share  Replacement of Elevators in Downtown Parking Structures 2, 4, and 5 Restricted Net Position ($193.7 million) These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 51% of this amount is restricted for affordable housing and committed to various projects, 14% is restricted per federal, state and other grant regulations, 18% is restricted according to development agreement terms, and the remaining amount is restricted for the Cemetery’s trust fund, debt service reserve, and other grant and legislative constraints. Unrestricted Net Position ($74.8 million) Ninety-three percent of this amount is made up of the unrestricted portions of General Fund balance shown above (i.e. committed, assigned and unassigned). The remaining amount is held as reserves in other funds, such as the Water and Wastewater Funds. Healthy capital and operating reserves outside of the General Fund support rate stabilization and disaster recovery strategies for the City’s many activities. Long Term Liabilities While short term liabilities are considered current and payable within a year after the date of the financial statements, long-term liabilities are due after a year and are an 7 of 9 important factor in the City’s financial planning. The primary source of long term liabilities is in the form of bonds and the debt service that is owed on them. $10.1 million in debt service payments were made on one general obligation bond for the Main Library construction, five General Fund revenue bonds for various parking structures and the Public Safety Facility, and one revenue bond to fund capital contributions towards the Hyperion wastewater treatment facility. The City did not issue any new debt for the fiscal year ended June 30, 2015. More information on long term debt can be found in Note 9, page 77 of the CAFR. Pension Liabilities For greater transparency, beginning in FY 2014-15, the Governmental Accounting Standards Board (GASB) established new pronouncements for pension accounting which moves reporting of the unfunded liability from the footnotes to the face of the financial statements. These GASB pronouncements do not affect the amount of the contributions that a government makes to pension plans, which remains government policy. The total net pension liability calculation also has not changed. This liability is an actuarial calculation based on projected future benefit payments for the service of past and current employees less the assets accumulated to pay those liabilities. Factored into the calculation of pension expense are the benefits earned each year, the interest on the unfunded pension liability, changes in benefit terms, if any, and projected earnings on the plans investments. The pronouncements also require that net pension liabilities be allocated to the City’s proprietary funds. Because of the new standards, net position (assets minus liabilities) is reduced by the amount of the unfunded liability, but this does not affect the City’s actual pension costs. A detailed explanation of the Employee Benefits Programs including detailed pension information by plan is included in the Notes section (see Note 16, pages 94 through 106) and the Required Supplementary Information (pages 117 and 118). Recent State-mandated reforms and cost saving measures approved by Council, including an additional $30.1 million paid toward the City’s unfunded pension liability, have worked to mitigate pension cost increases for the City. As shown on page 117 of 8 of 9 the CAFR, the City’s various pension plans are approximately 76% funded, leaving a combined unfunded actuarial liability of approximately $367 million. The City will continue per its Council-adopted policy to pay down at least $1 million of its unfunded liability every year. Furthermore, employees are currently paying for 25% of the total pension cost, and additional increases to public safety employee pension contributions will continue through FY 2016-17 based on collective bargaining agreements. Settlement with the State On October 28, 2013 the City and the Successor Agency entered into a settlement agreement with the State Department of Finance, the State Controller’s Office, and the Board of Equalization stipulating payment of $56.8 million over four equal installments beginning on January 15, 2014 and ending on July 15, 2015. The City paid down the total settlement on January 14, 2015, leading the State to issue a Finding of Completion to the Successor Agency. Among other things, the finding of completion allows the Successor Agency to request the repayment of certain prior loans made from the City to the Redevelopment Agency. One such loan, totaling $36.1 million, was recently approved by the Department of Finance and the first repayment of $7.9 million was received in January 2016. Cash and Investments The CAFR also includes detailed information on the City’s cash and investments. As of June 30, 2015, the City had $741 million in total cash and investments, 88% of which is in the form of investments authorized by the California Government Code and the City’s investment policy. More information on cash and investments is found in Note 5, page 59 of the CAFR. Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of th e recommended action. 9 of 9 Prepared By: Stephanie Manglaras, Accounting Manager Approved Forwarded to Council Attachments: A. Finance Department Website (Web link) B. 2014-15 Comprehensive Annual Financial Report C. Auditor's Letter to Council City of Santa Monica California © Tim Street Porter City of Santa Monica California Comprehensive Annual Financial Report Year ended June 30, 2015 Prepared by the Finance Department Gigi Decavalles-Hughes Director of Finance/City Treasurer Stephanie Manglaras Accounting Manager Randy Chow Financial Reporting Supervisor Imelda De Leon Senior Grants Analyst Jeanne O’Brien Senior Accountant Jason Duvall Accountant II Robert Garcia Accountant II Stella Huang Accountant II Faye Ruggera Accountant II Lisa Nakamine Accountant I Swen Yang Accountant I Camila Vicencio Executive Administrative Assistant City of Santa Monica, California Year Ended June 30, 2015 INTRODUCTORY SECTION CITY OF SANTA MONICA, CALIFORNIA Comprehensive Annual Financial Report For the fiscal year ended June 30, 2015 Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal .......................................................................................................................... v Officials of the City of Santa Monica ................................................................................................ xiii Organizational Chart – City of Santa Monica ................................................................................... xiv GFOA Certificate of Achievement for Excellence in Financial Reporting ....................................... xv FINANCIAL SECTION Independent Auditor’s Report ........................................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information) ............................ 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position ............................................................................................................ 23 Statement of Activities ................................................................................................................ 24 Fund Financial Statements: Balance Sheet – Governmental Funds ........................................................................................ 26 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ........................................................................................................ 27 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ................................................................................................................ 28 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ......................... 29 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual (Non-GAAP Basis) – General Fund ........................................................................................ 30 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual (Non-GAAP Basis) – Special Revenue Source Fund .............................................................. 32 Statement of Net Position – Proprietary Funds ........................................................................... 34 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ...... 35 Statement of Cash Flows – Proprietary Funds ............................................................................ 36 Statement of Fiduciary Net Position – Fiduciary Funds ............................................................. 40 Statement of Changes in Fiduciary Net Position – Fiduciary Fund ............................................ 41 Notes to Basic Financial Statements: Note 1 – Summary of Significant Accounting Policies ............................................................ 43 Note 2 – Budgetary and Legal Compliance .............................................................................. 54 Note 3 – Reconciliation of Fund Balance Sheet/Statement of Net Position to Government- Wide Financial Statements ......................................................................................... 55 Note 4 – Pollution Remediation ................................................................................................ 57 Note 5 – Cash and Investments ................................................................................................. 59 Note 6 – Notes Receivable ........................................................................................................ 67 Note 7 – Capital Assets ............................................................................................................. 73 Note 8 – Unearned Revenue and Deferred Inflows of Resources ............................................. 74 Note 9 – Long-Term Liabilities ................................................................................................ 77 Note 10 – Fund Deficits .............................................................................................................. 80 Note 11 – Interfund Transactions ................................................................................................ 81 Note 12 – Restricted Net Position ............................................................................................... 84 Note 13 – Fund Balances ............................................................................................................ 85 i CITY OF SANTA MONICA, CALIFORNIA Comprehensive Annual Financial Report For the fiscal year ended June 30, 2015 Table of Contents, Continued Page Note 14 – Commitments and Contingencies ............................................................................... 90 Note 15 – Self-Insurance ............................................................................................................. 93 Note 16 – Employee Benefit Programs ....................................................................................... 94 Note 17 – Successor Agency Trust Fund for Assets of Former Redevelopment Agency ............ 106 Note 18 – Subsequent Events ....................................................................................................... 114 Note 19 – Prior Period Adjustments ............................................................................................ 114 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Changes in the Net Pension Liability and Related Ratios ......................................... 117 Schedule of Contributions – Pension Plans .................................................................................... 118 OPEB Funding Information ........................................................................................................... 119 SUPPLEMENTARY INFORMATION NON-MAJOR FUNDS / OTHER FINANCIAL INFORMATION Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Nonmajor Governmental Funds ........................................................ 123 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) – Nonmajor Governmental Funds ................................................................................ 126 Schedule of Revenues, Expenditures and Changes in Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis) – Nonmajor Governmental Funds – Special Revenue Funds: Beach Recreation ..................................................................................................................... 129 Housing Authority ................................................................................................................... 130 Tenant Ownership Rights Charter Amendment (TORCA) ...................................................... 131 Low and Moderate Income Housing Asset .............................................................................. 132 Citizens Option for Public Safety ............................................................................................ 133 Gas Tax ..................................................................................................................................... 134 Disaster Relief ......................................................................................................................... 135 Capital Projects Funds: Clean Beaches and Ocean Parcel Tax ...................................................................................... 136 Community Development Block Grant (CDBG) ..................................................................... 137 Miscellaneous Grants ............................................................................................................... 138 South Coast Air Quality Management District (SCAQMD) ................................................... 139 Parks and Recreation .............................................................................................................. 140 Combining Statement of Net Position – Nonmajor Enterprise Funds ............................................ 142 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Funds ........................................................................................................ 143 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ............................................. 144 Combining Statement of Net Position – Internal Service Funds .................................................... 148 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Internal Service Funds ................................................................................................................ 149 Combining Statement of Cash Flows – Internal Service Funds ..................................................... 150 Combining Statement of Fiduciary Net Position – Agency Funds................................................. 152 Combining Statement of Changes in Fiduciary Assets and Liabilities – Agency Funds ............... 153 ii CITY OF SANTA MONICA, CALIFORNIA Comprehensive Annual Financial Report For the fiscal year ended June 30, 2015 Table of Contents, Continued Table Page STATISTICAL SECTION (Unaudited) Financial Trends Information Net Position by Component – Last Ten Fiscal Years ........................................................... 1 157 Changes in Net Position – Last Ten Fiscal Years ................................................................. 2 158 Fund Balance of Governmental Funds – Last Ten Fiscal Years .......................................... 3 161 Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ........................ 4 162 General Fund Tax Revenues by Source – Last Ten Fiscal Years ......................................... 5 164 Revenue Capacity Information Assessed Value and Actual Value of Taxable Property – Last Ten Fiscal Years ................ 6 165 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years .................................. 7 166 Principal Property Tax Payers – Current Fiscal Year and Nine Years Ago ......................... 8 167 Property Tax Levies and Collections – Last Ten Fiscal Years ............................................. 9 168 Taxable Transactions by Type of Business – Last Ten Calendar Years ............................... 10 169 Debt Capacity Information Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................. 11 170 Ratios of General Bonded Debt – Last Ten Fiscal Years ..................................................... 12 171 Direct and Overlapping Governmental Activities Debt as of June 30, 2015 ........................ 13 172 Computation of Legal Debt Margin – Last Ten Fiscal Years ............................................... 14 173 Wastewater Enterprise Revenue Bonds Coverage – Last Ten Fiscal Years ......................... 15 174 Demographic and Economic Information Demographic and Economic Statistics – Last Ten Calendar Years ..................................... 16 175 Principal Employers – Current Year and Nine Years Ago ................................................... 17 176 Operating Information Full-time Equivalent City Government Employees by Function/Program – Last Ten Fiscal Years ........................................................................................................ 18 177 Operating Indicators by Function/Program – Last Ten Fiscal Years ................................... 19 178 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ................................ 20 179 iii THIS PAGE INTENTIONALLY LEFT BLANK iv tel: 310 458-8281 ● fax: 310-394-0644 Finance Department 1717 Fourth Street, Suite 250 Santa Monica, CA 90401 December 29, 2015 Dear Honorable Mayor and Members of the City Council, City Manager, and Citizens of Santa Monica: Attached is the Comprehensive Annual Financial Report (CAFR) for the City of Santa Monica (City) for the fiscal year ended June 30, 2015 (FY 2014-15). The CAFR has been prepared by Finance Department staff in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB), the authoritative body establishing U.S. generally accepted accounting principles for local governments. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls established for that purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The CAFR has been compiled in a manner designed to fairly set forth the financial positions and results of operations of the City. The CAFR includes disclosures designed to enable the reader to gain an understanding of the City’s financial affairs. In accordance with generally accepted accounting principles, a narrative overview and analysis of the basic financial statements in the form of Management’s Discussion and Analysis (MD&A) is provided and can be found immediately following the independent auditor ’s report. This letter of transmittal complements the MD&A and should be read in conjunction with it. Macias Gini & O’Connell LLP has issued an unmodified (clean) opinion on the City of Santa Monica’s basic financial statements for FY 2014-15. Their report is located at the front of the financial section of this report. PROFILE OF THE CITY OF SANTA MONICA The City of Santa Monica, bordered by the City of Los Angeles on three sides and by the Pacific Ocean on the west, encompasses an area slightly greater than eight square miles and serves a residential population of 93,283 making it the 18th largest of the 88 cities in Los Angeles County. The City of Santa Monica, incorporated in 1886, adopted its City Charter in 1945, and established a council-manager form of government in 1947. Elections are held every two years for either three or four Council members elected to serve four-year terms on the seven-member City Council. Elected Council members select a Mayor and a Mayor Pro-Tempore to preside over Council meetings. v The City Council (Council) appoints a City Manager, a City Attorney and a City Clerk. The City Manager, responsible for supervising day-to-day operations of the City and for carrying out policies set by the Council, appoints Department directors. The City provides a full range of services, including police and fire protection, water and wastewater utilities, street maintenance, public transportation, parking, parks and recreation, planning, and building and safety. Elementary and secondary education is provided by the Santa Monica Malibu Unified School District, and community college education is provided by the Santa Monica Community College District. Court, health, and social services are provided by the County of Los Angeles. Gas, electric and telephone services are provided by private utility companies. Financial data for all funds through which services are provided by the City have been included in this report based on the criteria adopted by GASB. FINANCIAL CONDITION AND OUTLOOK The national economy continues to grow at a mild pace. Economic growth has averaged only 2.2% annually for the last five years, well below typical rates for periods of economic recovery, and the anticipated growth over the next two years is only slightly higher. The labor market has improved with over 3 million added jobs in 2014 and another 2.1 million in the first ten months of 2015, helping to drop the national unemployment rate to 5.0% as of October 2015. The housing market has begun to improve after a period of slowing during 2013 and most of 2014 and, based on recent economic forecasts, home prices and sales are anticipated to continue to grow over the next two years. Inflation is expected to remain low. Like the national economy, the State economy is expected to show modest improvement over the next few years. Unemployment in the State has fallen to 5.8% as of October 2015 after peaking at 12.4% in 2010. Housing sales and median prices have been strong and the commercial real estate market has also showed signs of strength with lower vacancy rates and higher asking rents. The State is expected to have $4.2 billion in reserves by June 2016, with at least $2 billion of this amount going to the rainy day fund according to Proposition 2. This reserve will offer greater stability to the State’s fiscal health. In June 2015, the Governor signed the third consecutive balanced budget. However, rising costs from health care reform, wildfire protection and spending increases for prisons will provide fiscal challenges. In addition, the overall impact of the drought and water restrictions is not known at this time. The City of Santa Monica’s diversified tax base and geographic location have contributed to a strong recovery from the most recent economic downturn. The City’s economically driven tax sources have recovered significantly to reach or exceed pre-recession levels. This strong growth will moderate in the future as the City transitions out of its recovery period. Property values in the City have shown strong increases during the last three years and remain the third highest in Los Angeles County. Assessed values are expected to increase by 5.1% in FY 2015-16 and 3.0% annually in future years. Sales tax receipts have recovered over the last five years after declining sharply during the recession. Growth is expected to be slower going forward, reflecting a shifting of sales to online platforms as well as the departure of several large retailers. Tourism, which provides a strong stimulus to the local economy by creating jobs and producing revenues, continues to be one of the strongest performing components of the local economy. Transient Occupancy Tax revenue growth has averaged 10.0% annually over the last four years. Additional, though moderated, growth is expected over the next two years as average room rates continue to increase and two new hotel properties are scheduled to come online in FY 2016-17. Business license taxes are expected to grow vi slowly, impacted by the loss of several large taxpayers. Utility Users Taxes are expected to grow 1.0- 2.0% annually over the next five years. Included in the sales tax numbers above are revenues from Measure Y. Santa Monica voters passed Measure Y, establishing a ½ cent transaction and use tax, in November 2010. This tax, which is assessed similarly to a sales tax, has no sunset. Along with Measure Y, voters passed Measure YY, an advisory measure that recommends that Council allocate half of the revenue from Measure Y for school purposes. The $15.3 million in transaction and use tax revenues generated in FY 2014-15 were shared equally with the Santa Monica Malibu Unified School District according to the Program Agreement approved by Council on May 26, 2011. Overall, the City’s fund balances continued to benefit from a number of cost saving measures approved by Council and implemented since FY 2010-11. The most noteworthy changes relate to compensation structure changes approved by employees during the collective bargaining process, including annual incremental increases to public safety employee pension contributions, a second tier of reduced retirement benefits for new miscellaneous employees, and decreased pension costs as a result of $30.1 million in pay downs of the City’s net pension liability beginning in FY 2010-11 through the end of FY 2014-15. In February 2014, the Council adopted a policy that, provided that there are sufficient funds, the annual budget would include a minimum set-aside of $1 million in the General Fund, and commensurate set- aside amounts in all other funds, to be used towards payments to the California Public Employees’ Retirement System (CalPERS). These payments would be in addition to the employer contribution determined by CalPERS and would serve to reduce the City's net pension liability. If any additional funds are available, staff would also annually assess the set-aside of any additional funds for CalPERS payments against other unfunded needs, and present the Council with a recommendation. This policy would remain in effect until such time as there is no remaining net pension liability. The City plans to continue to prepay its contributions to CalPERS, the City’s pension fund, as it has done at the beginning of each year since FY 2007-08, and to set aside the discount received from such prepayments for future pension costs or further pay downs of the net pension liability. Despite these mitigating steps taken by the City, CalPERS has made a number of changes to actuarial assumptions that have increased contribution rates. It is important for the City to continue to work with its employees to identify measures that will ensure that increases in ongoing compensation costs do not outstrip those of revenue growth. The passage of the Public Employee Pension Reform Act, or PEPRA, in September 2012 is working to further control cost increases in the future, as new employees are receiving reduced retirement benefits and cities will be encouraged to increase employees’ share of contribution costs. During FY 2014-15, the City began to prefund its Other Postemployment Benefits (OPEB) obligation by paying into an Internal Revenue Code Section 115 irrevocable trust. The trust selected through a request for proposals process was the California Employees’ Retirement Benefit Trust (CERBT), an affiliate of CalPERS. Beginning in FY 2014-15, the City will pay the equivalent of its annual required OPEB contribution into the irrevocable trust. In addition to pension costs, health insurance costs are also increasing and that trend is expected to continue in the near future. All members from all of the City’s collective bargaining groups contribute to healthcare and these contributions will continue to escalate for the next two years. The implementation of the Patient Protection and Affordable Care Act (PPACA) on January 1, 2015 imposed an additional cost burden on the City in the form of new taxes levied on health insurance companies that are passed through to customers (employers such as the City). Additionally, the City is required to monitor all as-needed staff working an average of 30 hours or more per week and ensure that this staff is offered health insurance benefits. On July 13, 2015, the State enacted a law requiring all employers to provide a minimum of three sick leave days to all employees, including as-needed employees. The City planned for these changes in its budget. vii As part of the FY 2013-15 biennial budget development process, City departments were asked to find ways to offset their current budgets by 5.0%. By focusing on core services and recurrent savings, departments identified expenditure savings of $5.5 million in FY 2013-14, increasing to $6.2 million in FY 2014-15. Departments also put in place enhanced cost recovery efforts, which yielded $4 million in FY 2013-14, and increased to $5.8 million in FY 2014-15. Finally, $3 million in FY 2014-15 projects previously included in the Capital Improvement Program (CIP) plan were rescheduled to reflect updated project timing. In combination, these changes achieved the 5.0% target in FY 2014-15. In FY 2013-14, staff determined that, based on stronger than anticipated revenue growth, the City would be able to restore the cuts made to the CIP program. On June 27, 2012, as part of the FY 2012-13 State budget package, the State Legislature passed and the Governor signed AB 1484, a measure meant to clarify existing legislation related to the dissolution of redevelopment. The Successor Agency submitted to the California Department of Finance (DOF) an inventory of all housing assets and an accounting of all available cash and cash-equivalent housing assets (the Housing Due Diligence Review) and non-housing assets (the Non-Housing Due Diligence Review), and held meet and confer sessions with the DOF on both of the Due Diligence Reviews and the ROPS to appeal a number of DOF denials. Despite the appeals, the DOF maintained its decisions with one exception and the City, as Successor Agency, filed a lawsuit against the DOF protesting these terms. On October 21, 2013, the Successor Agency reached a settlement agreement with the DOF to pay $56.7 million as full remittance and payment of all uncommitted or unobligated cash and cash-equivalent balances previously held by the Redevelopment Agency (RDA) and identified in the Due Diligence Reviews. Under the terms of the agreement, the Successor Agency would make four equal payments through July 2015. The Successor Agency paid the settlement in full on January 14, 2015, accelerating the final payment by six months. On January 16, 2015, the DOF issued a Finding of Completion to the Agency, allowing the Agency to apply for repayment of previously-denied City/Agency agreements, and starting the process for the preparation of a Long Range Property Management Plan (LRPMP), which details disposition of the various Successor Agency properties. The Successor Agency has received Final and Conclusive Determinations on its tax allocation bonded indebtedness and its bank loans, ensuring that the DOF will continue to approve the use of tax increment funds for debt service payments. The Successor Agency’s continued strong financial position, backed by a healthy property tax base, contributed to Santa Monica’s Earthquake Redevelopment debt receiving the highest rating offered to redevelopment debt in California by Moody’s on May 21, 2013; the debt was further upgraded by Moody’s to A2 in August 2015, and Standard and Poor’s and Fitch both affirmed their previous rating of AA and AA-, respectively, in November 2015. In addition, the State Department of Finance has declared that a number of the City’s assets that were formerly owned by the Redevelopment Agency, such as the City’s eight Downtown parking structures, are indeed governmental purpose assets and are therefore exempt from disposition as required under RDA dissolution law. The State Controller’s Office completed its review of assets transferred from the Redevelopment Agency to the City, and issued its final report on June 30, 2015. The report identified $19,149,678 in unauthorized transfers from the Redevelopment Agency to the City. This amount was included as a General Fund liability in FY 2013-14, based on an earlier draft report. The most significant and lasting impacts of the dissolution of redevelopment are the loss of ongoing funding for affordable housing rehabilitation and production in the City, and the suspension of the Civic Center Joint Use Project with the Santa Monica-Malibu Unified School District and the rehabilitation of the Civic Auditorium. Despite the negative impacts of redevelopment dissolution, the City ended the fiscal year with a positive operating balance and a General Fund fund balance of $375.0 million. Large reserves provide flexibility viii and resources for capital projects, future expenditures, retirement contribution increases and economic uncertainty, and Santa Monica continues to be a top destination for visitors and a high demand location for employers. While the cost saving measures and unanticipated revenue growth are assisting the City in maintaining a balanced budget over the next several years, an additional safeguard lies in the economic uncertainty reserve, which Council created in FY 2008-09 at $8.2 million, and increased in FY 2010-11 by $1.5 million for a $9.7 million balance at June 30, 2015. The reserve will be used as a buffer, if needed, to allow the City to bring its budget into balance in a measured way, minimizing the impact to our employees and residents to the greatest extent possible. As stated previously, corrective actions to date have allowed the City to avoid the need to use any of the reserve so far. Looking forward, in August 2015, Council approved five strategic initiatives that will guide the allocation of the City’s resources over the next three to five years. These include mobility, maintaining an inclusive and diverse community (affordable housing), taking a leadership role in addressing homelessness on a regional level, continuing the partnership to pave the way for community members to learn and thrive, and maintaining local control of land occupied by the Santa Monica Airport. At the same time, staff will continue to work on implementing measures approved along with the FY 2014-15 budget in June 2015, including adapting to climate change, public safety enhancements to respond to higher call volumes and the additional visitors, enhanced funding in the areas of community and cultural services grants, enforcement of the short term vacation rental ordinance and implementation of the seismic retrofit program. A new open data portal allows the public easy access to a growing database of information, in addition to the Opengov application that allows users to view the City's budget from a number of perspectives. Staff will continue to develop new forums to help the public stay connected to their government, and a newly- released Wellbeing Index will guide department efforts to serve the community. The City convened a new Audit Committee in FY 2015-16. This Committee will monitor the work and reports of the City's internal and external auditors and the progress made on process improvements proposed in the recently-completed internal controls review of financial operations throughout the City. In addition to the internal controls review, the City completed the Institute for Local Government's (ILG) Good Governance Checklist, which assessed a broader range of processes, including stewardship of public resources, personnel, campaigns and transparency in decision making. While the City fared well in both assessments, there is always room for improvement and staff is taking measures to meet best practices, including adopting a code of ethics in November 2015. Citywide Budget On June 24, 2014, Council adopted the FY 2014-15 Budget as the second year of the FY 2013-15 Biennial Budget; and adopted the first year and approved the second year of the FY 2014-16 Biennial Capital Improvement Program Budget. On October 28, 2014, January 27, 2015, and October 27, 2015 Council approved certain revisions to the FY 2014-15 Revised Budget that adjusted revenues, expenditures and staffing. On June 23, 2015, Council adopted the first year and approved the second year of the FY 2015- 17 Biennial Budget, and adopted the second year of the FY 2014-16 Biennial Capital Improvement Program Budget. The FY 2015-16 Adopted Budget includes $564.4 million in expenditures, net of reimbursements and transfers, for all funds. This represents a decrease of 11.1% over the revised FY 2014-15 Budget, primarily due to decreased capital spending. Citywide revenues, net of reimbursements and transfers, are estimated at $571.9 million, an increase of $26.8 million or 5%, from the FY 2014-15 estimated actual. ix The General Fund operating budget for FY 2015-16, net of reimbursements and transfers, is estimated at $319.1 million and Capital Improvement Projects add an additional $28.5 million for a total General Fund budget of $347.6 million. Operating expenditures are anticipated to increase $10.9 million, or 3.5%, as compared to the revised budget for FY 2014-15. General Fund revenues for FY 2015-16, net of reimbursements and transfers, are budgeted at $347.6 million, an increase of $3.6 million or 1.0% from the FY 2014-15 estimated actual revenues. The FY 2015-17 Budget reflects self-supporting funds in generally sound financial condition. The Wastewater Fund remains healthy following multi-year rate increases approved by Council in FY 2008- 09. In May 2014, following a rate study, Council voted to increase Resource Recovery and Recycling rates by the consumer price index each year; this adjustment took effect on July 1, 2014. And in February 2015, Council approved new rates, based on up to 9.0% increases each year, for the Water Fund that took effect on March 1, 2015. Water rate increases are driven by the need to augment conservation plans, offset reduced revenues due to declining water sales (due to citywide mandatory water conservation), and increase capital program funding to address the needs for continued infrastructure investment and Sustainable Water Master Plan requirements. The Big Blue Bus’ service integration plan with Expo Light Rail will result in 56,000 additional revenue service hours, 10 new buses on the road, 18 new motor coach operators, as well as 8 additional staff dedicated to the expanded operation. This service increase will require a rate increase in January 2016. The Beach and Airport Funds will also generate adequate revenues to sustain their operations throughout the next five years. The Cemetery Fund is anticipated to require an annual $0.2 million subsidy from the General Fund, pending Council’s adoption of a strategic plan to increase burial plots and provide green burial services. The Housing Authority Fund has a projected operating structural deficit of approximately $0.5 million in FY 2015-16 due to the loss of Redevelopment funding for the administration of the senior voucher program, and the reduction of U.S. Department of Housing and Urban Development (HUD) allocations. The Pier Fund is not able to sustain an adequate balance to cover its operating costs and large capital expenditures. As a result, a $0.9 million subsidy will be required in FY 2015-16. Major Projects The planned Expo Light Rail Phase 2 project between Culver City and Santa Monica is a significant transit alternative that will connect to the regional rail system and provide new transit options for Santa Monica residents, employees, and visitors. The project will provide relief for the tremendous and growing congestion on the I-10/Santa Monica Freeway, one of the busiest travel corridors in the country. City staff is currently working to ensure rail line and stations are integrated into streets, neighborhoods and districts, provide high-quality service, and connect to major destinations. Phase 2 construction began in 2012 and service is anticipated to commence in spring 2016. The California Incline Bridge Replacement and Pedestrian Overpass project will reconstruct the California Incline roadway/structures with a new bridge and roadway adjacent to Palisades Bluffs. The widened bridge will improve access for pedestrians as well as bicyclists and will meet current seismic codes and design standards. This project will also enhance the stability of the bluff above the roadway and bridge. The project will utilize Special Revenue Source funding and Federal Highway Bridge Program and Transportation Equity Act (TEA-21) funds. Water funds will be used to replace the existing 100-year old water line under the roadway section of the project. The project started construction in April 2015 and will be completed in July 2016. x The Colorado Esplanade is a multi-modal streetscape and circulation infrastructure project that fully integrates the downtown Light Rail station by providing optimal access for pedestrians, bicycles and vehicles in and around the station area. The project also implements the Civic Center Specific Plan circulation improvements for Main/Second Street. The improvements will integrate the Civic Center, Downtown, and Pier/Oceanfront districts, and create a gateway to Downtown Santa Monica. The project will include improvements for vehicles, pedestrians, bikes and transit. The project will be funded out of the General Fund and a Metro Pedestrian Improvement Grant. The project started construction in January 2015 and will be completed in April 2016. The Exposition Light Rail (Expo) Maintenance Yard Buffer Park will create a 2.35 acre neighborhood park located within a buffer zone between the Expo Maintenance Facility and the neighboring residential area. The project utilizes funding from the General Fund, California Department of Housing and Community Development Housing-Related Parks (HRP) Grant, Proposition A Local Return Rail Reserve and park mitigation funds. The project is expected to start construction in January 2016 and will be completed in winter 2016. The City Services Building project will construct a new building parallel to the Public Safety Facility across the rear of City Hall, enclosing the City Hall courtyard. This location could accommodate 40,000 square feet of office space on three levels with optimal adjacency to City Hall. This new building, which is anticipated to require bond financing, would provide sufficient space to accommodate off-site staff requiring City Hall adjacency currently located in leased spaces. The design-build team was hired in 2014 and the project is scheduled to be completed in 2020. The Citywide Bikeshare project (Breeze Bike Share) includes the purchase, construction, installation and operation of a bicycle sharing system comprised of 500 bicycles and 1,000 racks beginning at 75 locations throughout the City and expected to grow over time based on demand. The system utilizes “smart bike” technology, allowing for flexibility with respect to regional integration and size and location of stations. CycleHop, LLC is operating the system on the City’s behalf for up to seven years. The project utilizes grant funding from Metro Call for Projects and South Coast Air Quality Management District (SCAQMD) as well as the General Fund and Proposition C Local Return money as matching funding for the grants. Operational costs are subsidized by Hulu, LLC’s sponsorship. Remaining costs will be covered by user fees, with the shortfall, if any, budgeted in the coming year in the General Fund. The Breeze Bike Share was launched in November 2015 and is currently the only public bike share system operating in Los Angeles County. The City currently has three fire safety projects underway. The City has started design of a new 25,000 square foot above-grade fire station at 1337-45 7th Street, to replace the existing 60 year old Fire Station No. 1 at 1444 7th Street. The project began in 2013 and will be completed in spring 2019. Additionally, Fire Station 3, located at 1302 19th Street, requires a seismic retrofit of the existing building. This project began in September 2012 and will be completed by April 2017. Lastly, the Fire Training Facility located at City Yards is aged and does not meet current needs; an interim training facility project would replace existing trailers with code-compliant modular facilities that would provide structural stability, improve service, and meet current Americans with Disabilities Act (ADA) requirements. This project began in December 2013 and will be completed in August 2016. Nine existing elevators in Downtown Parking Structures 2, 4, and 5, installed when the structures were built in the 1960's, have been identified for replacement due to age, frequent service outages, high maintenance costs, and lack of code compliance. This project would provide new, code-compliant elevators, reducing maintenance costs and downtime. This project is funded in the General and Parking Authority Funds. This project began in September 2014 and is scheduled for completion in February 2016. xi Long-Term Financial Planning The City is dedicated to financial planning in all areas of the organization. Financial planning takes the form of continuous review and refinement of fiscal policies, development of five-year forecasts, and an understanding of the initiatives being undertaken by the entire organization. AWARDS 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 Monica for its CAFR for the fiscal year ended June 30, 2014. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of State and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Santa Monica has received a Certificate of Achievement for each of the last thirty years. We believe our current CAFR also conforms to the Certificate of Achievement program requirements. In keeping with past practice, a copy of this CAFR will be placed on file in the City libraries and sent to City management personnel, bond rating agencies, and other agencies which have expressed an interest in the financial affairs of the City. It is also available at www.smgov.net/finance. ACKNOWLEDGEMENTS The preparation and development of this report would not have been possible without the year-round work of the Finance Department staff and their special efforts, working in conjunction with the City’s independent auditors, to produce this report. I would like to take this opportunity to compliment and thank the staff members of the City who were associated with the preparation of this report. I would also like to thank the City Council for their continued interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Gigi Decavalles-Hughes Director of Finance/City Treasurer xii OFFICIALS OF THE CITY OF SANTA MONICA As of December 23, 2015 City Council Tony Vazquez, Mayor Ted Winterer, Mayor Pro Tempore Gleam Davis Sue Himmelrich Kevin McKeown Pam O’Connor Terry O’Day Administration and Department Heads City Manager Rick Cole Assistant City Manager Elaine Polachek Deputy City Manager Danielle Noble City Attorney Marsha Jones Moutrie City Clerk (Director of Records and Election Services) Sarah Gorman Director of Finance/City Treasurer Gigi Decavalles-Hughes Director of Human Resources Donna Peter Chief Information Officer Jory Wolf Chief of Police Jacqueline Seabrooks Fire Chief (Acting) Dennis Downs Director of Planning and Community Development David Martin City Librarian Maria Carpenter Director of Community and Cultural Services Karen Ginsberg Director of Transit Services Edward F. King Director of Housing and Economic Development Andy Agle Director of Public Works Martin Pastucha xiii ORGANIZATION OF THE CITY OF SANTA MONICA as of December 23, 2015 CITIZENS CITY COUNCIL City Manager Rick Cole City Attorney Marsha Jones Moutrie Records & Election Services Sarah Gorman Assistant City Manager Elaine Polachek Police Jacqueline Seabrooks Fire (Acting) Dennis Downs Big Blue Bus Edward F. King Community & Cultural Services Karen Ginsberg Finance Gigi Decavalles-Hughes Library Maria Carpenter Human Resources Donna Peter Housing & Economic Development Andy Agle Information Systems Jory Wolf Planning & Community Development David Martin Public Works Martin Pastucha Deputy City Manager Danielle Noble xiv xv THIS PAGE INTENTIONALLY LEFT BLANK xvi City of Santa Monica, California Year Ended June 30, 2015 FINANCIAL SECTION www.mgocpa.com Certified Public Accountants Sacramento Walnut Creek Oakland Los Angeles Century City Newport Beach San Diego Macias Gini & O’Connell LLP 777 S. Figueroa Street, Suite 2500 Los Angeles, CA 90017 1 Independent Auditor’s Report To the Honorable City Council City of Santa Monica, 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 Monica, California (the City), as of and for the fiscal year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Notes 1, 16 and 19 to the basic financial statements, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an Amendment of GASB Statement No.68, effective July 1, 2014. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of changes in the net pension liability and related ratios, the schedule of contributions – pension plans, and the OPEB funding information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the 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 accompanying introductory section, combining and individual fund statements and 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 fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 3 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 29, 2015, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Los Angeles, California December 29, 2015 THIS PAGE INTENTIONALLY LEFT BLANK 4 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis For the fiscal year ended June 30, 2015 (Unaudited) As management of the City of Santa Monica, California (City), we offer readers of the City’s Comprehensive Annual Financial Report (CAFR) this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2015. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the City’s basic financial statements, which immediately follow this section, and the CAFR transmittal letter in the preceding Introductory Section. FINANCIAL HIGHLIGHTS  The total assets and deferred outflows of the City for its governmental and business-type activities exceeded its liabilities and deferred inflows as of June 30, 2015 by $1.4 billion. Of this amount, $1.2 billion is net investment in capital assets, $193.8 million is for restricted uses as specified by entities outside of the City government, and $74.8 million is for unrestricted uses in accordance with finance-related legal requirements reflected in the City’s fund structure.  The City’s total net position increased $30.0 million during the current fiscal year due to an increase in governmental activities net position of $30.1 million and a decrease in business-type activities net position of $0.1 million. In comparison to the prior fiscal year, there was an increase in the change in governmental activities by $20.0 million. This increase was primarily due to increases in tax revenues of $13.8 million, increases in charges for services of $9.3 million, and a $14.1 million decrease in the amount of extraordinary loss. This was offset by a decrease in capital and operating grants of $7.2 million, a decrease in other revenue and special assessments of $6.5 million and a decrease in investment income of $2.5 million. In comparison to the prior fiscal year, there was a decrease in the change in business-type activities net position by $9.4 million. This decrease was primarily due to a decrease in capital grant revenue of $18.2 million and an increase in transfers of $0.6 million offset by an increase in operating grants of $6.4 million at the Big Blue Bus, an increase in charges for services of $1.4 million, and an increase in other general revenues of $1.0 million decreasing this year’s net position by $0.1 million compared to last year’s increase in net position of $9.2 million.  The net position in governmental activities was restated due to prior period adjustments totaling $333.8 million and the net positon in business-type activities was restated due to prior period adjustments totaling $87.1 million. These adjustments predominantly relate to the implementation of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Reporting for Pensions – An Amendment of GASB Statement No. 27 and GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – An Amendment of GASB No. 68 (GASB 68) which records the City’s net pension liability.  At the end of the current fiscal year, the City’s governmental funds reported total ending fund balances of $558.1 million, an increase of $22.9 million change in fund balances of governmental funds in comparison to the prior fiscal year. This increase in fund balance is primarily due to increases in tax revenues of $12.1 million, and decreases of $5.1 million in library expenses, a decrease of $18.3 million in housing and community development expenses, and a decrease in the amount of extraordinary loss of $11.8 million related to a payment due to the Successor Agency. These were offset by increases of $6.4 million in general government expenses, $5.4 million in public safety expenses, and $13.6 million in general services expenses. 5 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited)  At the end of the current fiscal year, the General Fund fund balance was $375.0 million, an increase of $9.0 million from the previous fiscal year. Restricted and assigned General Fund fund balances increased by $5.6 and $6.0 million, respectively. This was offset by a decrease in unassigned General Fund fund balance of $4.0 million. Restricted General Fund fund balance increased primarily due to increases in notes receivables of $5.6 million to affordable housing developers. Assigned General Fund fund balance increased primarily due to an increase in the continuing and future capital projects assignments of $46.5 million which consists of obligations from unfinished and future capital projects, an increase in strategic initiatives of $5.4 million, an increase in project equity of $11.9 million, a $2.5 increase in expenditure control budget amounts, and an increase of $1.7 for open encumbrances. These were offset by a decrease in the Redevelopment Agency (RDA) assignment of $45.5 million, a decrease of $4.9 million in the workers’ compensation/other postemployment benefits (OPEB) assignment, $3.3 million in pollution remediation assignment, and $8.3 million in other purposes to reflect updated or remaining estimates for assignments.  The City’s capital assets decreased by $23.9 million or 1.9% primarily due to the completion of major projects in the previous fiscal year that are now beginning to incur depreciation expense. Please see the table on page 73 and for further detail of capital assets see note 7.  The City’s long-term debt decreased by $6.8 million or 6.4% during the current fiscal year. Please see the table on page 77 and for further detail of long-term debt see note 9. OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements include three components: government-wide financial statements, fund financial statements, and notes to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to statements of a private-sector business. The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between the assets, deferred outflows of resources, liabilities and deferred inflow of resources reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods. The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the City include general government, public safety (police and fire), general services, library, cultural and recreation and housing and community 6 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) development. The business-type activities of the City include water, wastewater, stormwater, resource recovery and recycling, pier, airport, cemetery, Big Blue Bus and Parking Authority. Component units are included in the basic financial statements and consist of legally separate entities for which the City is financially accountable and that have either the same governing board as the City or a governing board appointed by the City of Santa Monica City Council. The blended component units include the Santa Monica Public Financing Authority, the Parking Authority of the City of Santa Monica and the Housing Authority of the City of Santa Monica. The government-wide financial statements can be found on pages 23 and 24 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near -term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances are accompanied by a reconciliation to the government-wide financial statements in order to facilitate this comparison between governmental funds and governmental activities. The City maintains 19 individual governmental funds for financial reporting purposes. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the General and Special Revenue Source Funds, which are considered to be major funds. Data for the other 17 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the nonmajor funds supplementary section of this report. The City Council adopts an annual appropriated budget for its General Fund and 8 special revenue funds (no budget is adopted for the Rent Control Fund and Asset Seizure Fund) and 5 capital project funds. The City Council does not adopt budgets for the two permanent funds or the one debt service fund. A budgetary comparison statement has been provided for the General Fund and the Special Revenue Source Fund in the basic financial statements. The governmental funds financial statements can be found on pages 26 through 32 of this report. 7 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Proprietary funds. Proprietary funds provide the same type of information as the government-wide financial statements, but in more detail. The proprietary fund financial statements provide separate information for water, wastewater, recycling, and bus operations, which are considered to be major funds of the City. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its vehicle operations, risk management program and information technology and communications operations. The vehicle operations and insurance services for bus operations primarily benefit business- type activities and are included within business-type activities in the government-wide financial statements. All other risk management functions, information technology and communication services primarily benefit governmental funds and are included within governmental activities in the government-wide financial statements. Individual fund data for the internal service funds is provided in the supplementary information section of this report. The proprietary funds financial statements can be found at pages 34 through 37 of this report. Fiduciary funds. Fiduciary funds consist of a private-purpose trust fund and agency funds. A private- purpose trust fund was created in 2012 and is used to pay enforceable obligations of the former Redevelopment Agency (Former Agency). Agency funds are used to account for resources held for the benefit of parties outside of the City. The fiduciary funds are not included in the government-wide financial statements because the resources are not available to support the City’s operations. The fiduciary funds financial statements can be found on pages 40 through 41 of this report. Notes to the basic financial statements. The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements begin on page 43 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1.4 billion at the close of the current fiscal year. As shown below, the largest portion of the City’s net position, $1.2 billion or 81.1%, reflects the City’s investment in capital assets less any related outstanding debt and associated deferred outflows of resources used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt and associated deferred outflows of resources, it should be noted that resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate liabilities. An additional portion of the City’s net position, $193.8 million or 13.6%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $74.8 million or 5.3%, may be used to meet the City’s ongoing obligations to citizens and creditors. 8 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) At the end of the current fiscal year, the City reports positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. A summary of the government-wide statement of net position follows: 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 (restated)(restated)(restated) Current and other assets 765.9 $ 799.0 196.7 185.2 962.6 984.2 Capital assets 788.4 798.4 457.9 471.8 1,246.3 1,270.2 Total assets 1,554.3 1,597.4 654.6 657.0 2,208.9 2,254.4 Deferred outflows of resources 49.7 0.4 12.6 0.6 62.3 1.0 Current and other liabilities 52.9 49.5 36.7 31.4 89.6 80.9 Long-term liabilities 577.8 322.4 103.3 40.2 681.1 362.6 Total liabilities 630.7 371.9 140.0 71.6 770.7 443.5 Deferred inflows of resources 65.1 - 14.4 - 79.5 - Net position: Net investment in capital assets 705.1 710.1 447.3 460.9 1,152.4 1,171.0 Restricted 178.7 136.5 15.1 11.7 193.8 148.2 Unrestricted 24.3 379.2 50.5 113.4 74.8 492.6 Total net position 908.1 $ 1,225.8 512.9 586.0 1,421.0 1,811.8 CITY OF SANTA MONICA Summary of Net Position (in millions) Governmental activities Business-type activities Total Restatement of prior balances. FY 2013-14 was restated for prior period adjustments relating to the OPEB liability and capital assets. The beginning balances were not restated for the implementation of GASB 68 because the information was not available. Current and other assets decreased $21.6 million or 2.2% for the current year. This decrease is primarily due to a reduction of $21.9 million of net pension asset which was removed from the statement of net position as part of the implementation of GASB 68. Current and other liabilities increased $8.7 million or 10.8% mostly due to an increase in unearned revenue related to business license fees of $5.1 million being received in advance of the period that they are earned plus an increase in amount due to other governments of $2.6 million related to grant funds to be returned to the grantor. Long-term liabilities increased $318.5 million or 87.8% from the prior year primarily due to the implementation of GASB 68. 9 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) A summary of the government-wide statement of changes in net position follows: 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 Revenues Program revenues: Charges for services 130.5$ 121.2 99.7 98.3 230.2 219.5 Operating grants and contributions 26.3 27.8 47.1 40.7 73.4 68.5 Capital grants and contributions 5.4 12.6 10.3 28.5 15.7 41.1 General revenues: Sales and use taxes 51.1 49.2 — — 51.1 49.2 Business license taxes 31.5 30.8 — — 31.5 30.8 Property taxes 52.8 47.7 — — 52.8 47.7 Transient occupancy taxes 47.6 44.4 — — 47.6 44.4 Utility users taxes 32.1 32.8 — — 32.1 32.8 Real property transfer taxes 7.9 6.3 — — 7.9 6.3 Parking facility taxes 11.1 9.2 — — 11.1 9.2 Other taxes 3.0 2.9 — — 3.0 2.9 Investment income 4.1 6.6 1.4 1.6 5.5 8.2 Other revenue and special assessments 11.6 18.1 6.2 5.2 17.8 23.3 Total revenues 415.0 409.6 164.7 174.3 579.7 583.9 Expenses General government 74.0 73.2 — — 74.0 73.2 Public safety 112.3 113.9 — — 112.3 113.9 General services 72.0 69.6 — — 72.0 69.6 Cultural and recreation services 53.7 54.3 — — 53.7 54.3 Library 12.7 13.3 — — 12.7 13.3 Housing and community development 53.8 53.7 — — 53.8 53.7 Interest on long-term debt 3.5 3.9 — — 3.5 3.9 Water — — 21.4 24.7 21.4 24.7 Resource recovery and recycling — — 23.8 24.1 23.8 24.1 Pier — — 6.9 6.3 6.9 6.3 Wastewater — — 17.3 20.5 17.3 20.5 Airport — — 5.3 5.4 5.3 5.4 Stormwater management — — 2.2 0.7 2.2 0.7 Cemetery — — 2.2 2.1 2.2 2.1 Big Blue Bus — — 83.1 79.2 83.1 79.2 Parking authority — — 0.4 0.4 0.4 0.4 Total expenses 382.0 381.9 162.6 163.4 544.6 545.3 Excess of revenues over expenses before extraordinary items and transfers 33.0 27.7 2.1 10.9 35.1 38.6 Extraordinary loss (5.1) (19.2) — — (5.1) (19.2) Transfers 2.3 1.7 (2.3) (1.7) — — Change in net position 30.2 10.2 (0.2) 9.2 30.0 19.4 Beginning net position, as restated 877.9 1,201.5 513.0 590.9 1,390.9 1,792.4 Ending net position 908.1$ 1,211.7 512.8 600.1 1,420.9 1,811.8 Governmental activities Business-type activities Total CITY OF SANTA MONICA Summary of Changes in Net Position (in millions) 10 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Governmental Activities. The City’s governmental activities increased net position, as restated, by $30.2 million, or 3.4%, for the current fiscal year. This increase is due in part to increases in general revenue sources such as Sales and Use Taxes ($1.9 million) Property Taxes ($5.1 million), Transient Occupancy Tax ($3.2 million), Parking Facility Tax ($1.9 million) Real Property Transfer Tax ($1.6 million), all indicative of a continuously improving economic environment, plus a decrease to the amount of extraordinary loss of $14.1 million related to a one-time payment from the City to the Successor Agency in FY 13-14 as a result of the State Controller audit of transfers of previous RDA assets. 11 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Revenue Sources: Governmental Activities. As shown in the chart below, the top five sources of revenue account for 75.7% of total revenues. They are Charges for Services at $130.5 million, with an increase of $9.3 million or 7.7% over the prior year, Property Taxes at $52.8 million, with an increase of $5.1 million or 10.7%, Sales and Use Taxes at $51.1 million, with an increase of $1.9 million or 3.9%, Transient Occupancy Taxes at $47.6 million, with an increase of $3.2 million or 7.2%, and Utility Users Taxes at $32.1 million, with a decrease of $0.7 million or 2.1%. The increases were primarily due to better economic conditions. 31.4% 6.3% 1.3% 12.3% 7.6% 12.7% 11.5% 7.7%1.9% 2.7% 0.8% 1.0% 2.8% Sources of Revenue Governmental Activities Charges for services Operating grants and contributions Capital grants and contributions Sales and use taxes Business license taxes Property taxes Transient occupancy taxes Utility users taxes Real property transfer taxes Parking facility taxes Other taxes Investment income Other general revenues 12 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Functional Expenses: Governmental Activities. As displayed in the chart below, public safety, cultural and recreation, general government, general services, and housing and community development accounted for 95.8% of total governmental activity-related expenses. Explanations of significant variances in key City functions from the prior year are explained below: 1. General government expenses increased $0.8 million from prior year primarily due to a $1.8 million increase to salaries and benefits and a $1.6 million increase to supplies and expense. These were offset by a reduction in pension expense of $0.9 million as a result of the implementation of GASB 68 and a reduction in OPEB expense of $1.7 million. 2. Public safety expense decreased by $1.6 million from the prior year primarily due to a reduction in pension expense of $2.5 million as a result of the implementation of GASB 68 and a reduction in Workers’ Compensation expense of $2.4 million offset by a $3.1 million increase in salaries and benefits. The decrease in Workers’ Compensation expense was partly due to additional governmental activities contributions reported in General Services expense. 3. General services expense increased by $2.3 million primarily due to an increase of $3.5 million in Workers’ Compensation expense offset by a decrease of pension expense of $0.9 million due to the implementation of GASB 68. 4. Cultural and recreation expenses decreased by $0.6 million primarily due to a decrease of pension expense of $0.4 million due to the implementation of GASB 68. 19.4% 29.4%18.8% 14.1% 3.3%14.1%0.9% Functional Expenses Governmental Activities General government Public safety General services Cultural and recreation Library Housing and community development Interest on long-term debt 13 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Program Expenses: Governmental Activities. The following chart compares program revenues and expenses for governmental activities: $0 $20 $40 $60 $80 $100 $120 General government Public safety General services Cultural and recreation services Library Housing and community development Expenses and Program Revenues Governmental Activities (millions) Revenues Expenses 14 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Business-type Activities. The City’s business-type activities net position, as restated, decreased by $0.1 million, or less than 0.1%, from the prior year. Revenue Sources: Business-type activities. As shown in the chart below, the top three sources of revenue, which are charges for services, operating and capital grants, and contributions, account for 95.4% of total business-type revenues of $164.8 million. The chart also displays the key sources of revenue for business-type activities as a percentage of total revenues. 60.5% 6.3% 28.6% 3.8%0.8% Sources of Revenue Business-type Activities Charges for services Capital grants and contributions Operating grants and contributions Other general revenues Investment income 15 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Business-type Expenses: Business Activities. As displayed in the chart below, the Big Blue Bus, Resource Recovery and Recycling, Water and Wastewater enterprise Funds accounted for 89.5% of total business-type activity expenses. Other business-type activities of the City include the Airport, Pier, Cemetery and Mausoleum, Storm Water Management, and Parking Authority Funds. Explanations of significant variances in major business-type activity expenses from the prior year are: 1. Water Fund – Decrease in operating expenses is due primarily from decreases in water purchased from the Metropolitan Water District. This occurred due to the City’s wa ter conservation efforts, leading to less days where peak demand exceeded the City’s internal water output. 2. Wastewater Fund – Decrease in operating expenses is primarily related to an accounting adjustment reclassifying transfers to personnel expenses as compared to the previous year, offset by increases in materials and supplies due to maintenance on the Santa Monica Urban Runoff Recycling Facility. 3. Big Blue Bus Fund – Increase in operating expenses is primarily related to the increase in personnel costs of overtime, workers’ compensation and salary cost of living increases. 13.2% 14.6% 4.2% 10.6% 3.3%1.4%1.4% 51.1% 0.2% Business-type Expenses Water Resource recovery and recycling Pier Wastewater Airport Stormwater management Cemetery Big Blue Bus Parking authority 16 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Program Expenses: Business-type Activities. The following chart compares program revenues and expenses for business-type activities: Big Blue Bus expenses exceeded revenues primarily due to a reversal of $4.5 million in capital grant revenue previously recognized. This occurred because the BBB vendor did not meet contractual requirements and refunded the monies to the BBB, who in turn remitted the funds to the grantor. The cash will be redrawn to fund another qualified project and revenue will be recognized at that time. Additionally, capital grant revenues used to purchase capital assets, such as buses or pay for preventative maintenance and parts, are recognized currently while the related depreciation expense is reported over the life of the assets. $0 $20 $40 $60 $80 $100 Water Resource recovery and recycling Pier Wastewater Airport Storm water management Cemetery Big Blue Bus Parking authority Expenses and Program Revenues Business-type Activities (in millions) Revenues Expenses 17 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) FINANCIAL ANALYSIS OF THE CITY'S MAJOR FUNDS As noted earlier, the City uses fund accounting to demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial requirements. At the end of the current fiscal year, the City’s governmental funds reported total fund balances of $558.1 million, an increase of $11.1 million, or 2.0% in comparison with the prior year. The primary reasons for the increase are discussed below. General Fund The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the total fund balance was $375.0 million. The General Fund fund balance increased $9.0 million, or 2.5%, during the fiscal year ended June 30, 2015. Key factors in changes in revenues and expenditures from the prior year are as follows: 1. Revenues reflect a net increase of $14.7 million, or 4.4%, over the prior fiscal year primarily from increases in property tax of $4.9 million, or 9.8%, other taxes of $5.2 million, or 4.2%, and licenses and permits of $2.5 million, or 6.7%. Total General Fund revenues were $352.7 million for FY 2014-15. 2. Expenditures were $6.9 million, or 2.1%, less than the prior fiscal year primarily due to decreases in expenditures for housing and community development of $20.2 million, or 43.4%, a decrease in library expenditures of $5.1 million, or 29.8%, an increase in public safety expenditures $4.5 million, or 4.0%, an increase in general government of $6.1 million, or 8.9%, and an increase in general services expenditures of $7.2 million or 15.8%. The decrease in housing and community development is due to completion of construction of the new Tongva Park and Ken Genser Square adjacent to City Hall. Library expenditures decreased with the completion of the Pico Branch Library. Public safety and general services expenditures increased due to increases in personnel, retirement and medical insurance costs. General services also increased due to an increase in capital projects from FY 2013-14 of $2.4 million and an increase and salaries and benefits of $6.0 million. Special Revenue Source Fund The Special Revenue Source Fund fund balance increased by $2.8 million, or 5.5%, from the prior year. Other revenue and special assessments increased by $1.7 million, or 18.3% mainly due to a $5.3 million settlement payment received during the fiscal year offset by a decrease in proceeds of $1.1 million and a decrease of $2.2 million received for the City accepting responsibility for Lincoln Boulevard from Caltrans. 18 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Nonmajor Governmental Funds All non-major governmental funds’ fund balance decreased $0.8 million, or 0.6% from the previous fiscal year. Total revenue decreased $4.9 million, or 8.3%, primarily due to a decrease in miscellaneous grants of $3.5 million and a decrease in investment income of $1.3 million. Proprietary funds. 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, as restated, of the enterprise funds decreased $0.9 million, or 0.2%. Water Fund Total net position, as restated, of the Water Fund increased $0.6 million, or 1.2%, primarily due to the decrease in water purchases due to conservation measures implemented in FY 2014-15. Wastewater Fund The total net position, as restated, of the Wastewater Fund increased $2.6 million, or 1.3%. The net position increased primarily because of reductions in other expense which reported a $1.0 million loss on redemption of the 2005 Wastewater bonds and $0.4 million in bad debt write offs in FY 13-14. Resource Recovery and Recycling Fund The total net position, as restated, of the Resource Recovery and Recycling Fund increased $1.0 million, or 26.2%. The increase was primarily due to an increase in charges for services. Big Blue Bus Fund Total net position, as restated, of the Big Blue Bus Fund decreased $5.5 million, or 2.6%. This was due primarily to an $18.1 million decrease in capital grants, offset by a $6.4 million increase in recognized shared sales tax proceeds when compared to FY 2013-14. General Fund Budgetary Highlights Differences between the original budget versus the final amended budget and the final amended budget versus the actual are briefly summarized as follows: The final revenue budget exceeds the original budget by $9.6 million. Actual total revenues were greater than final budget totals by $18.4 million. This was partially due to property tax, other taxes, charges for services, license and permits and investment income revenues exceeding final budget by $8.7 million, $1.2 million, $2.1 million, $2.5 million, and $0.5 million, respectively. The final expenditure budget is greater than the original budget by $83.3 million. The increase is primarily due to the capital budgeting process. The original capital budget includes only amounts adopted by Council as part of the biennial capital budgeting process. However, large capital projects often span across numerous years and remaining capital budgets from previous fiscal periods are rolled 19 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) over to the current fiscal year in order to complete those projects. The final budget includes both newly adopted and rolled over amounts. Significant projects that were rolled over include the City Services Building, the Early Childhood Center, the Colorado Esplanade, the Enterprise Resource Planning system and the EXPO maintenance yard buffer at $7.6 million, $5.6 million, $5.5 million, $5.0 million and $3.1 million, respectively. Final actual budgetary basis expenditures came in under final budget by $55.6 million due to the timing of capital improvement projects expenditures and controlled spending on salaries, and other direct and indirect administrative costs. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City’s investment in capital assets as of June 30, 2015 amounted to $1.2 billion (net of accumulated depreciation), a decrease of $23.9 million from the prior year balance. This investment in a broad range of capital assets, including land, infrastructure, structures and improvements, equipment, and construction in progress, is detailed as follows: 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 (restated)(restated)(restated) Land 206.4 $ 206.4 64.8 64.8 271.2 271.2 Land held under easement 72.2 72.2 — — 72.2 72.2 Construction in progress 23.0 24.7 12.2 26.4 35.2 51.1 Buildings 246.9 257.1 98.4 102.5 345.3 359.6 Improvements other than buildings 99.6 86.3 9.9 7.3 109.5 93.6 Machinery and equipment 7.5 8.4 60.9 65.1 68.4 73.5 Infrastructure 131.1 141.4 145.9 140.3 277.0 281.7 Utility systems 1.0 1.2 — — 1.0 1.2 Intangibles 0.7 0.7 65.8 65.4 66.5 66.1 Capital assets, net 788.4 $ 798.4 457.9 471.8 1,246.3 1,270.2 CITY OF SANTA MONICA Capital Assets (net of depreciation) (in millions) Governmental activities Business-type activities Total Some of the City’s major capital asset events in FY 2014-15 were: Governmental Activities: 1. $1.2 million in construction in progress for real time beach parking signs. 2. $3.9 million in construction in progress for the parking structure elevator replacement. 3. $1.4 million in construction in progress for the Colorado Esplanade. 4. $4.0 million in construction in progress for the California Incline. 20 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) Business-Type Activities: 1. $2.6 million increase in intangibles for the capital payments made to the City of Los Angeles for Santa Monica’s shared cost of the Amalgamated System in the Wastewater Fund. 2. $3.0 million increase in infrastructure for ongoing water main replacement in the Water fund. 3. $3.2 million increase in improvements other than buildings for the bus stop improvement project in the Big Blue Bus fund. 4. $4.6 million disposal for return of non-conforming fare boxes to the vendor in the Big Blue Bus fund. Additional information on the City’s capital assets can be found in note 7 to the basic financial statements. As of June 30, 2015, the City had $91.2 million in construction commitments. For additional information on commitments see note 14. Long-term Debt. At the end of the current fiscal year, the City’s total long-term debt outstanding was $94.5 million, a decrease from the prior year of $6.3 million or 6.3%. This amount was comprised of $83.7 million in revenue bonds, which are secured by both governmental and business-type revenue sources, $8.9 million in general obligation bonds which are backed by the full faith and credit of the City, and $1.9 million in various notes and loans payable. This is shown in the following table: 2014-15 2013-14 2014-15 2013-14 2014-15 2013-14 General obligation bonds (backed by the City)8.9 $ 10.1 — — 8.9 10.1 Revenue bonds (backed by specific tax, fee 74.7 79.6 9.0 8.9 83.7 88.5 and lease revenues) Notes and loans 0.4 0.4 1.5 1.8 1.9 2.2 Total 84.0 $ 90.1 10.5 10.7 94.5 100.8 CITY OF SANTA MONICA Outstanding Debt (in millions) Governmental activities Business-type activities Total Additional information on the City’s long-term debt can be found in note 9 to the basic financial statements. ECONOMIC FACTORS AND BIENNIAL BUDGET The City’s adopted General Fund budget for FY 2015-17 supports the basic responsibilities of local government, the policy interests of City Council Members and diverse concerns of the residents. Management feels that there are adequate resources available to fund the proposed expenditures. 21 CITY OF SANTA MONICA, CALIFORNIA Management’s Discussion and Analysis, Continued For the fiscal year ended June 30, 2015 (Unaudited) In preparing the budget for FYs 2015-17, many factors were taken into consideration:  Continuing increases in health care, pension, and workers’ compensation costs.  Continued increases in Transient Occupancy (TOT), Sales, Property, and Business License revenues due to a vibrant, diverse and still improving economy.  The financial impact of the dissolution of the RDA may require the City to seek financing for replacement or retrofitting of key City facilities, and look to secure new funding streams to support continuation of the City’s affordable housing program. Recently, the City was able to begin repayment of a loan made by the City to the former RDA with the first approved payment amounting to $7.9 million.  Mobility and planning efforts that will improve circulation to, from and within the City limits, including the opening of EXPO light rail in Spring 2016, the accompanying Big Blue Bus service integration plan that will create connections to light rail stations and increase north-south corridor service, and the new bikeshare program. At the same time, staff will focus on completing upcoming area plans, including the Downtown Specific Plan and the Bergamot Area Plan.  Maintaining an inclusive and diverse community through efforts to maintain and augment the City’s affordable housing and increase the City’s minimum wage.  Securing local control of the City land occupied by the Santa Monica Airport.  Taking a leadership role in regional efforts to address homelessness and continuing the partnerships to help the community learn and thrive.  Implementing policies and programs to mitigate climate change and its effects, including the greenhouse gas emissions reduction strategy, water conservation, and a zero waste strategic plan.  Enhancing public safety staffing and services to respond to an increasing number of visitors to the City. CONTACTING THE CITY'S FINANCE DEPARTMENT This management’s discussion and analysis is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. If you have questions or need additional financial information, please visit the City of Santa Monica’s Finance Department website at www.smgov.net/finance or call (310) 458-8281. 22 City of Santa Monica, California Year Ended June 30, 2015 Basic Financial Statements CITY OF SANTA MONICA, CALIFORNIA Statement of Net Position June 30, 2015 Governmental Activities Business-Type Activities Total ASSETS Cash and investments (note 5)$422,833,822 149,567,815 572,401,637 Receivables (net of allowances for uncollectibles): Accounts 63,676,672 20,764,252 84,440,924 Interest 1,118,039 384,689 1,502,728 Notes (note 6)123,470,130 -123,470,130 Other governments 3,428,351 -3,428,351 Internal balances 16,697,481 (16,697,481)- Inventory -2,757,015 2,757,015 Deposits 61,785 -61,785 Prepaids 2,967,694 38,951 3,006,645 Restricted cash and investments (note 5)66,395,373 39,891,067 106,286,440 Restricted cash and investments with fiscal agent (note 5)33,186,079 -33,186,079 Advances to Successor Agency (note 11 and 17)32,020,006 -32,020,006 Capital assets (note 7): Capital assets not being depreciated: Land 206,448,024 64,849,212 271,297,236 Land held under easement 72,237,823 -72,237,823 Construction in progress 23,003,611 12,210,426 35,214,037 Capital assets being depreciated: Buildings 342,254,196 147,870,482 490,124,678 Improvements other than buildings 159,531,718 30,973,150 190,504,868 Utility systems 1,742,913 -1,742,913 Machinery and equipment 35,064,633 174,530,713 209,595,346 Infrastructure 331,597,720 227,511,380 559,109,100 Intangibles 695,710 93,979,245 94,674,955 Less accumulated depreciation (384,155,562)(294,060,733)(678,216,295) Total capital assets, net 788,420,786 457,863,875 1,246,284,661 TOTAL ASSETS 1,554,276,218 654,570,183 2,208,846,401 DEFERRED OUTFLOWS OF RESOURCES Loss on refundings of debt 293,878 495,734 789,612 Deferred outflows from pensions (note 16)49,402,897 12,089,750 61,492,647 TOTAL DEFERRED OUTFLOWS OF RESOURCES 49,696,775 12,585,484 62,282,259 LIABILITIES Accounts payable 15,637,376 8,297,652 23,935,028 Accrued liabilities 9,063,079 3,791,737 12,854,816 Accrued interest payable 1,177,591 124,044 1,301,635 Contracts payable (retained percentage)560,214 363,975 924,189 Unearned revenue (note 8)24,914,043 9,072,663 33,986,706 Due to other governments -2,648,622 2,648,622 Deposits payable from restricted assets 1,584,055 12,375,690 13,959,745 Long-term liabilities: Compensated absences due within one year (note 9)7,505,505 2,367,751 9,873,256 Compensated absences due in more than one year (note 9)4,298,901 1,105,947 5,404,848 Claims payable due within one year (notes 9 and 15)9,984,378 2,306,350 12,290,728 Claims payable due in more than one year (notes 9 and 15)31,333,803 2,383,910 33,717,713 Due to Successor Agency within one year (note 17)19,149,678 -19,149,678 Loans and bonds payable due within one year (note 9)6,235,000 284,383 6,519,383 Loans and bonds payable due in more than one year (note 9)81,453,861 10,817,730 92,271,591 Pollution remediation obligation due within one year (note 4)4,608,967 2,754,434 7,363,401 Pollution remediation obligation due in more than one year (note 4)92,771,992 15,389,208 108,161,200 Other long-term liability (note 4)8,704,750 -8,704,750 Net OPEB obligation (note 16)8,119,142 2,204,631 10,323,773 Net pension liability (note 16)303,675,074 63,634,076 367,309,150 TOTAL LIABILITIES 630,777,409 139,922,803 770,700,212 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pensions (note 16)65,134,108 14,384,568 79,518,676 NET POSITION Net investment in capital assets 705,144,194 447,257,495 1,152,401,689 Restricted for (note 12): Housing and community development 98,984,696 -98,984,696 Clean beaches and ocean parcel tax 8,101,808 -8,101,808 Beach and parks recreation 8,250,332 -8,250,332 Miscellaneous grants 11,705,833 -11,705,833 Debt service 5,091,427 -5,091,427 Development projects 34,609,461 -34,609,461 Perpetual care - nonexpendable 11,418,771 -11,418,771 Rail system and Prop 1B -15,102,480 15,102,480 Other 462,429 -462,429 Unrestricted 24,292,525 50,488,321 74,780,846 TOTAL NET POSITION $908,061,476 512,848,296 1,420,909,772 See accompanying notes to basic financial statements. 23 CITY OF SANTA MONICA, CALIFORNIA Statement of Activities For the fiscal year ended June 30, 2015 Program Revenues Net (Expense) Revenue and Change in Net Position Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business-Type Activities Total Governmental Activities: General government $74,025,357 56,875,636 1,706,268 653,245 (14,790,208)-(14,790,208) Public safety 112,278,370 22,601,990 1,672,910 786,367 (87,217,103)-(87,217,103) General services 71,906,263 2,144,800 4,132,413 1,625,630 (64,003,420)-(64,003,420) Cultural and recreation services 53,694,823 21,359,942 1,813,650 -(30,521,231)-(30,521,231) Library 12,678,896 601,618 --(12,077,278)-(12,077,278) Housing and community development 53,831,747 26,957,697 17,007,015 2,316,736 (7,550,299)-(7,550,299) Interest on long-term debt 3,521,630 ---(3,521,630)-(3,521,630) Total governmental activities 381,937,086 130,541,683 26,332,256 5,381,978 (219,681,169)-(219,681,169) Business-Type Activities: Water 21,356,497 22,664,712 ---1,308,215 1,308,215 Resource recovery and recycling 23,819,237 24,425,879 ---606,642 606,642 Pier 6,909,632 6,813,625 ---(96,007)(96,007) Wastewater 17,335,625 20,162,516 ---2,826,891 2,826,891 Airport 5,293,714 5,897,240 ---603,526 603,526 Stormwater management 2,172,116 1,458,352 ---(713,764)(713,764) Cemetery 2,154,147 1,604,607 ---(549,540)(549,540) Big Blue Bus 83,106,447 16,664,916 47,098,487 10,333,281 -(9,009,763)(9,009,763) Parking authority 403,822 ----(403,822)(403,822) Total business-type activities 162,551,237 99,691,847 47,098,487 10,333,281 -(5,427,622)(5,427,622) Total Primary Government $544,488,323 230,233,530 73,430,743 15,715,259 (219,681,169)(5,427,622)(225,108,791) General revenues: Taxes: Business 31,468,959 -31,468,959 Property 52,771,401 -52,771,401 Transient occupancy 47,628,525 -47,628,525 Sales and use 51,089,716 -51,089,716 Utility users 32,065,724 -32,065,724 Real property transfer 7,903,119 -7,903,119 Parking facility 11,071,958 -11,071,958 Other 2,970,162 -2,970,162 Motor vehicle in lieu, unrestricted 37,990 -37,990 Other revenue and special assessments 11,518,022 6,230,537 17,748,559 Investment income 4,084,621 1,408,083 5,492,704 Extraordinary loss (note 17)(5,106,828)-(5,106,828) Transfers 2,341,674 (2,341,674)- Total general revenues, extraordinary loss and transfers 249,845,043 5,296,946 255,141,989 Change in net position 30,163,874 (130,676)30,033,198 Net position at beginning of year, as restated (note 19)877,897,602 512,978,972 1,390,876,574 Net position at end of year $908,061,476 512,848,296 1,420,909,772 See accompanying notes to basic financial statements. 24 CITY OF SANTA MONICA, CALIFORNIA Major Governmental Fund Financial Statements General Fund – To account for all financial resources necessary to carry out basic governmental activities of the City that are not accounted for in another fund. The General Fund supports essential City services such as police and fire protection, street maintenance, libraries, parks and open space management. Special Revenue Source Fund (Special Revenue Fund Type) – To account for receipt and expenditure of monies restricted, committed or assigned for specific uses. 25 CITY OF SANTA MONICA, CALIFORNIA Balance Sheet Governmental Funds June 30, 2015 Special Revenue Fund General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds ASSETS Cash and investments (note 5)$289,983,870 39,721,147 35,401,813 365,106,830 Restricted cash and investments (note 5)59,998,642 -6,396,731 66,395,373 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 62,057,677 7,579 1,590,830 63,656,086 Notes (note 6)17,488,870 34,341,141 71,640,119 123,470,130 Interest 745,079 84,447 191,899 1,021,425 Other governments --3,428,351 3,428,351 Due from other funds (note 11)1,330,116 --1,330,116 Deposits 58,528 -3,257 61,785 Prepaids 2,913,201 -45,078 2,958,279 Restricted cash and investments with fiscal agent (note 5)13,142,231 -20,043,848 33,186,079 Advances to other funds 16,901,899 --16,901,899 Advances to Successor Agency trust fund (note 11)24,155,332 -7,864,674 32,020,006 Total assets $488,775,445 74,154,314 146,606,600 709,536,359 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $12,051,854 229,894 3,190,950 15,472,698 Accrued liabilities 8,638,341 -358,379 8,996,720 Contracts payable (retained percentage)195,883 21,997 342,334 560,214 Due to other funds (note 11)--1,303,299 1,303,299 Due to Successor Agency trust fund (note 11)19,149,678 --19,149,678 Unearned revenue (note 8)7,710,102 18,697,810 6,131 26,414,043 Deposits payable 690,040 825,000 69,015 1,584,055 Advances from other funds (note 11)--3,842,973 3,842,973 Total liabilities 48,435,898 19,774,701 9,113,081 77,323,680 Deferred inflows of resources (note 8)65,315,519 -8,794,206 74,109,725 Fund balances (note 13) Nonspendable 23,725,864 -11,463,849 35,189,713 Restricted 17,951,299 34,609,461 110,292,577 162,853,337 Committed 520,574 17,825,734 51,975 18,398,283 Assigned 218,630,183 1,944,418 7,705,199 228,279,800 Unassigned 114,196,108 -(814,287)113,381,821 Total fund balances 375,024,028 54,379,613 128,699,313 558,102,954 Total liabilities, deferred inflows of resources, and fund balances $488,775,445 74,154,314 146,606,600 709,536,359 See accompanying notes to basic financial statements. 26 CITY OF SANTA MONICA, CALIFORNIA Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position June 30, 2015 Fund balances - total governmental funds 558,102,954$ Amounts reported for governmental activities in the statement of net position are different because (Note 3): (1)Capital assets used in governmental activities are not current financial resources and therefore are not reported in the balance sheet.788,329,667 (2)Pension contributions paid in 2014-15 are reported as deferred outflows 49,083,860 (3)Deferred loss on refundings of debt is not a current financial resource and therfore is not reported in the balance sheet.293,878 (4)Long-term liabilities are not due and payable in the current period and therefore are not reported in the balance sheet.(516,749,792) (5)Other long-term assets, net of other long term liabilities, are not available to pay for current period expenditures and, therefore, are deferred in the funds and recognized as revenue in the statement of activities.75,609,715 (6)Pension assets investment returns greater than projected are reported as deferred inflows (64,768,231) (7)Internal service funds are used by management to charge the costs of vehicle management, information technology and risk management to individual funds. The assets and liabilities of the information technology and risk management (excluding bus) internal service funds are included in the governmental activities in the statement of net position.18,159,425 Net position of governmental activities 908,061,476$ See accompanying notes to basic financial statements. 27 CITY OF SANTA MONICA, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the fiscal year ended June 30, 2015 Special Revenue Fund General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Revenues: Property taxes $55,044,307 --55,044,307 Sales and use taxes 51,089,716 --51,089,716 Other taxes 129,105,916 -2,969,106 132,075,022 Licenses and permits 39,370,036 -120,652 39,490,688 Intergovernmental 1,594,357 -29,418,970 31,013,327 Charges for services 37,332,249 1,307,522 17,741,581 56,381,352 Fines and forfeitures 16,287,290 --16,287,290 Investment income 3,313,550 16,481 672,848 4,002,879 Rental income 9,504,058 -1,098,613 10,602,671 Settlement income 2,433,175 --2,433,175 Other revenue and special assessments 7,604,408 11,106,992 2,347,209 21,058,609 Total revenues 352,679,062 12,430,995 54,368,979 419,479,036 Expenditures: Current: General government 74,087,552 11 653,738 74,741,301 Public safety 114,939,986 8,455 2,238,446 117,186,887 General services 52,416,042 718,387 18,235,970 71,370,399 Cultural and recreation services 41,234,941 5,124 9,190,549 50,430,614 Library 12,025,143 --12,025,143 Housing and community development 26,398,364 4,475,259 22,837,717 53,711,340 Debt service expenditures: Principal --6,075,000 6,075,000 Interest --3,785,591 3,785,591 Total expenditures 321,102,028 5,207,236 63,017,011 389,326,275 Excess (deficiency) of revenues over (under) expenditures 31,577,034 7,223,759 (8,648,032)30,152,761 Other financing sources (uses): Transfers in (note 11)9,358,120 -10,420,089 19,778,209 Transfers out (note 11)(10,357,844)(4,407,204)(2,524,841)(17,289,889) Total other financing sources (uses)(999,724)(4,407,204)7,895,248 2,488,320 Extraordinary item: Extraordinary item - payment to the Successor Agency (note 17)(21,564,585)--(21,564,585) Net change in fund balances 9,012,725 2,816,555 (752,784)11,076,496 Fund balances at beginning of year 366,011,303 51,563,058 129,452,097 547,026,458 Fund balances at end of year $375,024,028 54,379,613 128,699,313 558,102,954 See accompanying notes to basic financial statements. 28 Net change in fund balances – total governmental funds 11,076,496 $ Amounts reported for governmental activities in the statement of activities are different because: Capital assets: 1)The acquisition of capital assets requires the use of current financial resources but has no effect on net position.17,234,708 2) The cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense in the statement of activities.(26,910,737) 3) The loss on disposal of capital assets is recorded as an expense in the statement of activities but is not recorded in the fund statements.(211,185) Measurement focus: 4) Change in accrued interest payable.(81,614) 5) Principal payments on long-term obligations use current financial resources but have no effect on net position.6,075,000 6) Bond premiums are recorded as other financing sources in the fund statements but are amortized in the statement of activities.348,025 7) Bond discounts are recorded as other financing uses in the fund statements but amortized in the statement of activities.(2,450) 8) Deferred loss on refundings is amortized in the statement of activities.(67,817) 9) The increase in compensated absences liability does not use current financial resources but is recorded as an increase in expense in the statement of activities.126,899 10) Interest income related to redevelopment advances are recorded as revenue in the statement of activities but are reported as deferred inflows of resources in the fund statements. 75,690 11) FEMA grant revenue previously recognized in the statement of activities is recorded as revenue in the fund statements.(151,759) 12) Revenue previously recognized on fund statements from pollution remediation resources are not recognized as revenue in the statements of activities.(2,433,175) 13) The increase in OPEB obligation does not require the use of current financial resources but is recorded as an expense in the statement of activities. (89,893) 14) Pollution remediation expense activity was recorded in a prior year and reduced the liability in the statement of net position.1,732,583 15) Decrease in advance to the Successor Agency is reported as an extraordinary item on the statement of activities.(3,335,255) 16) Expense related to the Successor Agency settlement agreement has been previously recognized in the statement of activities.19,793,012 17) GASB 68 pension reporting timing differences.7,793,568 18) Property tax revenue received previously recognized in the statement of activities. (2,272,906) 19) Interest income related to airport advances recorded as revenue in the fund statements but previous recognized. (256,237) Internal service funds: 20) Certain internal service funds are used by management to charge the costs of information technology and risk management to individual funds. The net expense of certain internal service funds is reported with governmental activities.1,720,921 Change in net position (statement of activities, governmental activities) 30,163,874 $ See accompanying notes to basic financial statements. CITY OF SANTA MONICA, CALIFORNIA Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities For the fiscal year ended June 30, 2015 29 Actual, Original Final budgetary Variance with budget budget Actual Encumbrance basis final budget Revenues: Property taxes 46,035,429 $ 46,377,224 55,044,307 —    55,044,307 8,667,083 Sales and use taxes 50,278,444 51,036,257 51,089,716 —    51,089,716 53,459 Other taxes 123,771,000 127,921,000 129,105,916 —    129,105,916 1,184,916 Licenses and permits 36,819,623 36,897,659 39,370,036 —    39,370,036 2,472,377 Intergovernmental 369,653 562,427 1,594,357 —    1,594,357 1,031,930 Charges for services 34,973,692 35,261,593 37,332,249 —    37,332,249 2,070,656 Fines and forfeitures 15,411,414 16,026,414 16,287,290 —    16,287,290 260,876 Investment income 1,806,200 2,775,200 3,313,550 —    3,313,550 538,350 Rental income 9,101,375 9,301,375 9,504,058 —    9,504,058 202,683 Settlement income 2,433,175 2,433,175 2,433,175 —    2,433,175 —     Other revenue and special assessments 3,689,230 5,733,252 7,604,408 —    7,604,408 1,871,156 Total revenues 324,689,235 334,325,576 352,679,062 —    352,679,062 18,353,486 Expenditures: General government: City council 938,905 1,303,814 1,104,578 18,145 1,122,723 181,091 City manager 12,993,299 13,067,005 11,204,150 474,604 11,678,754 1,388,251 Record and election services 2,675,776 2,697,340 2,714,455 —    2,714,455 (17,115) Finance 12,114,300 12,220,116 11,328,067 35,248 11,363,315 856,801 City attorney 10,074,046 10,182,801 9,988,263 —    9,988,263 194,538 Human resources 4,263,816 4,318,262 3,960,410 —    3,960,410 357,852 Information systems 8,332,844 8,671,925 8,076,643 294,833 8,371,476 300,449 Planning and community development 13,425,098 13,503,161 12,728,410 249,400 12,977,810 525,351 Community and cultural services 553,467 553,467 574,340 —    574,340 (20,873) Housing and economic development 16,500 16,500 130 —    130 16,370 Other 4,273,883 5,897,366 4,685,759 119,667 4,805,426 1,091,940 Capital improvement 6,425,748 18,595,910 7,722,347 1,029,611 8,751,958 9,843,952 Total general government 76,087,682 91,027,667 74,087,552 2,221,508 76,309,060 14,718,607 Public safety: City Manager 358,031 357,164 76,350 —    76,350 280,814 Police 75,679,964 78,264,583 76,948,527 1,729 76,950,256 1,314,327 Fire 32,755,878 35,098,173 34,471,508 33,740 34,505,248 592,925 Other —    3,302,417 2,255,007 200,000 2,455,007 847,410 Capital improvement 4,056,000 9,830,444 1,188,594 2,199,539 3,388,133 6,442,311 Total public safety 112,849,873 $ 126,852,781 114,939,986 2,435,008 117,374,994 9,477,787 See accompanying notes to basic financial statements.(Continued) For the fiscal year ended June 30, 2015 CITY OF SANTA MONICA, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis) General Fund 30 Actual, Original Final budgetary Variance with budget budget Actual Encumbrance basis final budget General services: Public works 40,331,347 $ 41,019,699 39,531,881 378,281 39,910,162 1,109,537 Other (2,460,940) 3,270,491 2,668,526 1,902 2,670,428 600,063 Capital improvement 18,745,799 31,598,151 10,215,635 8,895,788 19,111,423 12,486,728 Total general services 56,616,206 75,888,341 52,416,042 9,275,971 61,692,013 14,196,328 Cultural and recreation services: Community and cultural services 24,187,628 24,873,860 24,478,883 487,091 24,965,974 (92,114) Other 16,007,558 16,804,475 16,145,552 3,201 16,148,753 655,722 Capital improvement 1,602,783 7,643,449 610,506 131,076 741,582 6,901,867 Total cultural and recreation services 41,797,969 49,321,784 41,234,941 621,368 41,856,309 7,465,475 Library: Library 12,127,053 12,539,441 11,814,125 189,513 12,003,638 535,803 Other —    490,018 40,380 15,700 56,080 433,938 Capital improvement —    499,205 170,638 72,199 242,837 256,368 Total library 12,127,053 13,528,664 12,025,143 277,412 12,302,555 1,226,109 Housing and community development: Planning and community development 17,887,152 18,812,501 17,417,713 1,035,460 18,453,173 359,328 Housing and economic development 5,464,496 5,712,888 4,786,933 238,615 5,025,548 687,340 Other 2,545,381 2,989,731 2,594,298 92,969 2,687,267 302,464 Capital improvement —    24,574,956 1,599,420 15,787,455 17,386,875 7,188,081 Total housing and community development 25,897,029 52,090,076 26,398,364 17,154,499 43,552,863 8,537,213 Total expenditures 325,375,812 408,709,313 321,102,028 31,985,766 353,087,794 55,621,519 Excess (deficiency) of revenues over (under) expenditures (686,577) (74,383,737) 31,577,034 (31,985,766) (408,732) 73,975,005 Other financing sources (uses): Transfers in 6,365,298 9,957,200 9,358,120 —    9,358,120 (599,080) Transfers out (10,163,403) (10,364,403) (10,357,844) —    (10,357,844) 6,559 Total other financing sources (uses)(3,798,105) (407,203) (999,724) —    (999,724) (592,521) Extraordinary item : Payment to the Successor Agency —    (21,564,585) (21,564,585) —    (21,564,585) —     Total extraordinary item —    (21,564,585) (21,564,585) —    (21,564,585) —     Net change in fund balance (4,484,682) (96,355,525) 9,012,725 (31,985,766) (22,973,041) 73,382,484 Fund balance at beginning of year 366,011,303 366,011,303 366,011,303 —    366,011,303 —     Fund balance at end of year 361,526,621 $ 269,655,778 375,024,028 (31,985,766) 343,038,262 73,382,484 See accompanying notes to basic financial statements. For the fiscal year ended June 30, 2015 CITY OF SANTA MONICA, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis) General Fund 31 Ac t u a l , Or i g in a l Fi n a l bu d g etar y Variance with bu d g e t bu d g e t Ac t u a l En c u m b r a n c e basis final bud g et Re v e n u e s : Ch a r g e s f o r s e r v i c e s 8 2 6 , 7 9 5 $ 8 2 6 , 7 9 5 1 , 3 0 7 , 5 2 2 — 1 , 3 0 7 , 5 2 2 4 8 0 , 7 2 7 In v e s t m e n t i n c o m e — — 16 , 4 8 1 — 16,481 16,481 Ot h e r 4, 0 8 4 , 7 7 3 10 , 2 2 4 , 0 5 1 11 , 1 0 6 , 9 9 2 — 11,106,992 882,941 To t a l r e v e n u e s 4, 9 1 1 , 5 6 8 11 , 0 5 0 , 8 4 6 12 , 4 3 0 , 9 9 5 — 12,430,995 1,380,149 Ex p e n d i t u r e s : Ge n e r a l g o v e r n m e n t Ca p i t a l i m p r o v e m e n t — 16 8 , 6 9 8 11 16 8 , 6 9 8 168,709 (11) To t a l g e n e r a l g o v e r n m e n t — 16 8 , 6 9 8 11 16 8 , 6 9 8 168,709 (11) Pu b l i c s a f e t y : Po l i c e 21 , 4 5 6 21 , 4 5 6 8, 4 5 5 — 8,455 13,001 To t a l p u b l i c s a f e t y 21 , 4 5 6 21 , 4 5 6 8, 4 5 5 — 8,455 13,001 Ge n e r a l s e r v i c e s : Ca p i t a l i m p r o v e m e n t 1, 3 9 9 , 3 1 4 2, 3 8 3 , 6 4 8 71 8 , 3 8 7 59 5 , 3 2 5 1,313,712 1,069,936 To t a l g e n e r a l s e r v i c e s 1, 3 9 9 , 3 1 4 2, 3 8 3 , 6 4 8 71 8 , 3 8 7 59 5 , 3 2 5 1,313,712 1,069,936 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Co m m u n i t y a n d c u l t u r a l s e r v i c e s 25 , 0 0 0 25 , 0 0 0 5, 1 2 4 — 5,124 19,876 Ca p i t a l i m p r o v e m e n t — 50 , 7 8 5 — — — 50,785 To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 25 , 0 0 0 75 , 7 8 5 5, 1 2 4 — 5,124 70,661 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Pl a n n i n g a n d c o m m u n i t y d e v e l o p m e n t 92 , 0 0 0 92 , 0 0 0 4, 6 9 3 — 4,693 87,307 Ho u s i n g a n d e c o n o m i c d e v e l o p m e n t 2, 2 6 0 , 9 3 6 14 , 2 0 7 , 6 7 6 4, 2 8 7 , 0 2 5 1, 4 4 9 , 0 0 0 5,736,025 8,471,651 Ca p i t a l i m p r o v e m e n t — 4, 8 6 2 , 9 6 2 18 3 , 5 4 1 2, 2 7 3 , 5 8 6 2,457,127 2,405,835 To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 2, 3 5 2 , 9 3 6 19 , 1 6 2 , 6 3 8 4, 4 7 5 , 2 5 9 3, 7 2 2 , 5 8 6 8,197,845 10,964,793 To t a l e x p e n d i t u r e s 3, 7 9 8 , 7 0 6 21 , 8 1 2 , 2 2 5 5, 2 0 7 , 2 3 6 4, 4 8 6 , 6 0 9 9,693,845 12,118,380 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s ov e r ( u n d e r ) e x p e n d i t u r e s 1, 1 1 2 , 8 6 2 (1 0 , 7 6 1 , 3 7 9 ) 7, 2 2 3 , 7 5 9 (4 , 4 8 6 , 6 0 9 ) 2,737,150 13,498,529 Ot h e r f i n a n c i n g u s e s : Tr a n s f e r s o u t (8 3 6 , 1 0 1 ) (4 , 5 3 6 , 1 0 1 ) (4 , 4 0 7 , 2 0 4 ) — (4,407,204) 128,897 To t a l o t h e r f i n a n c i n g u s e s (8 3 6 , 1 0 1 ) ( 4 , 5 3 6 , 1 0 1 ) ( 4 , 4 0 7 , 2 0 4 ) — (4,407,204) 128,897 Ne t c h a n g e i n f u n d b a l a n c e 27 6 , 7 6 1 (1 5 , 2 9 7 , 4 8 0 ) 2, 8 1 6 , 5 5 5 (4 , 4 8 6 , 6 0 9 ) (1,670,054) 13,627,426 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 51 , 5 6 3 , 0 5 8 51 , 5 6 3 , 0 5 8 51 , 5 6 3 , 0 5 8 — 51,563,058 — Fu n d b a l a n c e a t e n d o f y e a r 51 , 8 3 9 , 8 1 9 $ 3 6 , 2 6 5 , 5 7 8 5 4 , 3 7 9 , 6 1 3 ( 4 , 4 8 6 , 6 0 9 ) 4 9 , 8 9 3 , 0 0 4 1 3 , 6 2 7 , 4 2 6 Se e a c c o m p a n y i n g n o t e s t o b a s i c f i n a n c i a l s t a t e m e n t s . F or t h e fi sc a l y e a r e n d e d J un e 30 , 20 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A St a t e m e n t o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Sp e c i a l R e v e n u e S o u r c e F u n d 32 CITY OF SANTA MONICA, CALIFORNIA Proprietary Fund Financial Statements Major Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or services. Water Fund – To account for revenues and expenses of providing water service to the citizens of the City. Wastewater Fund – To account for revenues and expenses associated with maintaining the sanitary sewer systems within the City. Resource Recovery and Recycling Fund – To account for revenues and expenses of operating the City's refuse collection, street sweeping and cleaning, and recycling programs. Big Blue Bus Fund – To account for revenues and expenses related to operation of the City's municipal bus lines. Internal Service Funds – To account for the financing of goods or services provided by one department or agency to other departments or agencies of the City or to other governments, on a cost-reimbursement basis. 33 CITY OF SANTA MONICA, CALIFORNIA Statement of Net Position Proprietary Funds June 30, 2015 Business-Type Activities - Enterprise Funds Water Wastewater Resource Recovery and Recycling Big Blue Bus Nonmajor enterprise funds Total enterprise funds Total internal service funds ASSETS Current assets: Cash and investments (note 5)$42,127,418 34,458,704 4,698,030 21,850,655 10,134,658 113,269,465 94,025,342 Restricted cash and investments (note 5)387,737 1 -19,304,986 3,179,654 22,872,378 - Receivables (net, where applicable, of allowances for uncollectibles): Accounts 2,966,659 2,663,084 3,060,795 11,616,467 442,927 20,749,932 34,906 Interest 99,351 76,680 36,209 84,717 26,503 323,460 157,843 Inventory ---2,680,562 -2,680,562 76,453 Prepaids 11,391 9,273 -15,119 3,168 38,951 9,415 Total current assets 45,592,556 37,207,742 7,795,034 55,552,506 13,786,910 159,934,748 94,303,959 Noncurrent assets: Restricted cash and investments (note 5)1,793,254 3,964,354 10,961,081 -300,000 17,018,689 - Advances to other funds (note 11)-167,186 ---167,186 - Capital assets (note 7): Land 21,006 3,189,132 -60,276,362 1,362,712 64,849,212 - Construction in progress 952,815 262,144 325,316 10,626,220 43,931 12,210,426 - Buildings 1,532,511 251,447 314,223 129,417,341 16,354,960 147,870,482 - Improvements other than buildings 1,015,098 421,868 173,736 10,617,020 18,745,428 30,973,150 - Machinery and equipment 2,395,861 1,649,296 504,312 132,926,367 1,446,411 138,922,247 36,932,921 Infrastructure 46,397,013 153,807,977 --27,306,390 227,511,380 - Intangibles 3,575,000 90,404,245 ---93,979,245 - Less: accumulated depreciation (27,973,897)(78,367,141)(790,686)(126,866,656)(35,266,868)(269,265,248)(26,028,821) Net capital assets 27,915,407 171,618,968 526,901 216,996,654 29,992,964 447,050,894 10,904,100 Total noncurrent assets 29,708,661 175,750,508 11,487,982 216,996,654 30,292,964 464,236,769 10,904,100 TOTAL ASSETS 75,301,217 212,958,250 19,283,016 272,549,160 44,079,874 624,171,517 105,208,059 DEFERRED OUTFLOWS OF RESOURCES Loss on refundings of debt -495,734 ---495,734 - Deferred outflows from pensions 1,037,254 379,553 1,711,783 7,645,046 746,974 11,520,610 888,177 TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,037,254 875,287 1,711,783 7,645,046 746,974 12,016,344 888,177 LIABILITIES Current liabilities: Accounts payable 2,283,743 688,946 712,043 3,434,632 516,020 7,635,384 826,946 Accrued liabilities 254,042 88,282 372,717 2,827,729 148,832 3,691,602 166,484 Contracts payable (retained percentage)139,917 33,441 -174,837 15,780 363,975 - Compensated absences due within one year (note 9)199,989 64,079 298,149 1,570,248 141,622 2,274,087 143,296 Claims payable due within one year (notes 9 and 15)------12,290,728 Unearned revenue (note 8)---9,072,663 -9,072,663 - Accrued interest payable -111,063 --12,981 124,044 - Loans and bonds payable due within one year (note 9)----284,383 284,383 - Due to other governments ---2,648,622 -2,648,622 - Due to other funds (note 11)----26,817 26,817 - Liabilities payable from restricted assets - deposits 387,737 -10,961,081 99,793 927,079 12,375,690 - Pollution remediation obligation due within one year (note 4)2,754,434 ----2,754,434 - Total current liabilities 6,019,862 985,811 12,343,990 19,828,524 2,073,514 41,251,701 13,427,454 Long-term liabilities: Compensated absences due in more than one year (note 9)228,017 45,343 285,380 331,016 124,534 1,014,290 141,974 Advances from other funds (note 11)----13,226,112 13,226,112 - Claims payable due in more than one year (notes 9 and 15)------33,717,713 Loans and bonds payable due in more than one year (note 9)-9,604,321 --1,213,409 10,817,730 - Pollution remediation obligation due in more than one year (note 4)15,389,208 ----15,389,208 - Net OPEB obligation 264,509 82,592 407,147 1,226,970 110,147 2,091,365 195,751 Net pension liability 5,413,607 2,043,225 8,715,991 40,239,083 4,085,097 60,497,003 4,755,630 Total long-term liabilities 21,295,341 11,775,481 9,408,518 41,797,069 18,759,299 103,035,708 38,811,068 TOTAL LIABILITIES 27,315,203 12,761,292 21,752,508 61,625,593 20,832,813 144,287,409 52,238,522 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pensions 1,223,753 461,874 1,970,261 9,096,098 923,442 13,675,428 1,075,017 NET POSITION Net investment in capital assets 27,915,407 162,510,380 526,901 216,996,654 28,495,172 436,444,514 10,904,100 Restricted for Rail Reserve and Prop 1B (note 12)---15,102,480 -15,102,480 - Unrestricted 19,884,108 38,099,991 (3,254,871)(22,626,619)(5,424,579)26,678,030 41,878,597 TOTAL NET POSITION $47,799,515 200,610,371 (2,727,970)209,472,515 23,070,593 478,225,024 52,782,697 Net position, business-type activities - internal service funds 38,235,010 Net adjustment to reflect the allocation of the internal service funds net loss (3,611,738) Net position of business-type activities $512,848,296 See accompanying notes to basic financial statements. 34 CITY OF SANTA MONICA, CALIFORNIA Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the fiscal year ended June 30, 2015 Business-Type Activities - Enterprise Funds Water Wastewater Resource Recovery and Recycling Big Blue Bus Nonmajor enterprise funds Total enterprise funds Total internal service funds Operating revenues Charges for services $22,664,712 20,162,516 24,425,879 16,414,704 15,608,773 99,276,584 35,739,819 Total operating revenues 22,664,712 20,162,516 24,425,879 16,414,704 15,608,773 99,276,584 35,739,819 Operating expenses Personnel services 5,323,229 934,302 10,164,471 47,296,493 5,129,287 68,847,782 4,620,838 Administrative indirect 1,042,787 458,344 1,163,647 4,520,152 1,428,395 8,613,325 920,336 Contractual services 1,547,317 5,499,298 4,053,138 2,248,962 2,034,329 15,383,044 510,320 Repairs and maintenance 1,054,393 531,216 2,196,185 5,695,760 1,533,816 11,011,370 1,554,222 Materials and supplies 2,021,457 1,489,225 5,281,802 5,780,943 1,132,187 15,705,614 3,702,879 Utilities 2,003,796 11,796 51,619 483,161 659,172 3,209,544 66,772 Water purchases 5,040,548 ----5,040,548 - Casualty property and liability costs 407,679 310,953 189,831 2,739,118 488,989 4,136,570 61,767 Claims expense net of claims reserve adjustment ------13,930,460 Insurance and bonds ------4,691,742 Miscellaneous fees and costs 2,923 6,450 403 3,988 800 14,564 1,063,160 Depreciation and amortization 1,153,739 6,605,966 11,243 13,777,667 1,440,810 22,989,425 3,034,731 Other 1,591,273 1,293,551 822,661 369,988 1,890,916 5,968,389 - Total operating expenses 21,189,141 17,141,101 23,935,000 82,916,232 15,738,701 160,920,175 34,157,227 Operating income (loss)1,475,571 3,021,415 490,879 (66,501,528)(129,928)(61,643,591)1,582,592 Nonoperating revenues (expenses) Shared sales tax proceeds ---47,098,487 -47,098,487 - Investment income 372,023 268,636 130,056 319,058 92,646 1,182,419 560,936 Interest expense -(166,655)--(581,096)(747,751)- Gain (loss) on disposal of capital assets (148,918)-(7,105)3,800 (636,798)(789,021)(234,781) Other nonoperating revenues 543,673 316,448 763,973 3,517,859 912,183 6,054,136 681,857 Total nonoperating revenues (expenses) net 766,778 418,429 886,924 50,939,204 (213,065)52,798,270 1,008,012 Income (loss) before capital contributions and transfers 2,242,349 3,439,844 1,377,803 (15,562,324)(342,993)(8,845,321)2,590,604 Capital contributions ---10,333,281 -10,333,281 - Transfers in (note 11)---74,200 2,129,633 2,203,833 - Transfers out (note 11)(1,675,619)(852,892)(408,079)(380,818)(1,228,099)(4,545,507)(146,646) Change in net position 566,730 2,586,952 969,724 (5,535,661)558,541 (853,714)2,443,958 Net position at beginning of year, as restated (note 19)47,232,785 198,023,419 (3,697,694)215,008,176 22,512,052 479,078,738 50,338,739 Net position at end of year $47,799,515 200,610,371 (2,727,970)209,472,515 23,070,593 478,225,024 52,782,697 Change in net position $(853,714) Net adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 723,038 Change in net position of business-type activities $(130,676) See accompanying notes to basic financial statements. 35 Business-type activities - Enterprise Funds Water Wastewater Resource Recovery and Recycling Big Blue Bus Nonmajor enterprise funds Total enterprise funds Total internal service funds Cash flows from operating activities: Cash received from customers 24,187,043$ 21,608,895 26,175,975 15,616,157 15,889,703 103,477,773 35,770,026 Cash payments for materials and services (15,314,660) (9,019,587) (13,969,396) (21,094,270) (9,662,096) (69,060,009) (13,414,739) Cash paid for claims and related services —    —    —    —    —    —    (10,264,035) Cash payments to employees for services (5,597,418) (993,921) (10,566,213) (49,115,385) (5,246,820) (71,519,757) (4,814,046) Other revenue received 543,673 316,448 763,973 3,517,859 912,183 6,054,136 681,857 Net cash provided by (used in) operating activities 3,818,638 11,911,835 2,404,339 (51,075,639) 1,892,970 (31,047,857) 7,959,063 Cash flows from noncapital financing activities: Sales tax proceeds —    —    —    45,267,705 —    45,267,705 —     Advances (repayment) from other funds —    107,380 —    —    (752,781) (645,401) —     Transfers in —    —    —    74,200 2,129,633 2,203,833 —     Transfers out (1,675,619) (852,892) (408,079) (380,818) (1,228,099) (4,545,507) (146,646) Net cash provided by (used in) noncapital financing activities (1,675,619) (745,512) (408,079) 44,961,087 148,753 42,280,630 (146,646) Cash flows from capital and related financing activities: Capital contributions received —    —    —    16,597,331 —    16,597,331 —     Acquisition and construction of capital assets (3,817,259) (3,069,524) (61,643) (6,969,244) (358,650) (14,276,320) (3,254,101) Proceeds from sale of capital assets —    —    —    119,435 —    119,435 —     Refund from vendor for return of capital asset —    —    —    4,469,597 —    4,469,597 —     Reduction in long-term obligations —    —    —    —    (277,175) (277,175) —     Interest paid on long-term obligations —    (266,550) —    —    (583,498) (850,048) —     Net cash provided by (used in) capital and related financing activities (3,817,259) (3,336,074) (61,643) 14,217,119 (1,219,323) 5,782,820 (3,254,101) Cash flows from investing activities – interest received on investments 323,868 245,702 117,659 279,510 88,630 1,055,369 523,688 Net cash provided by investing activities 323,868 245,702 117,659 279,510 88,630 1,055,369 523,688 Net increase (decrease) in cash and cash equivalents (1,350,372) 8,075,951 2,052,276 8,382,077 911,030 18,070,962 5,082,004 Cash and cash equivalents at beginning of year 45,658,781 30,347,108 13,606,835 32,773,564 12,703,282 135,089,570 88,943,338 Cash and cash equivalents at end of year 44,308,409$ 38,423,059 15,659,111 41,155,641 13,614,312 153,160,532 94,025,342 Cash and investments 42,127,418$ 34,458,704 4,698,030 21,850,655 10,134,658 113,269,465 94,025,342 Restricted cash and investments 2,180,991 3,964,355 10,961,081 19,304,986 3,479,654 39,891,067 —     Total cash and cash equivalents 44,308,409$ 38,423,059 15,659,111 41,155,641 13,614,312 153,160,532 94,025,342 (Continued) See accompanying notes to basic financial statements CITY OF SANTA MONICA, CALIFORNIA Statement of Cash Flows Proprietary Funds For the fiscal year ended June 30, 2015 36 Business-type activities - Enterprise Funds Water Wastewater Resource Recovery and Recycling Big Blue Bus Nonmajor enterprise funds Total enterprise funds Total internal service funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss)1,475,571$ 3,021,415 490,879 (66,501,528) (129,928) (61,643,591) 1,582,592 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Add depreciation 1,153,739 6,529,699 11,243 13,777,667 1,440,810 22,913,158 3,034,731 Add amortization —    76,267 —    —    —    76,267 —     Other nonoperating revenue received 543,673 316,448 763,973 3,517,859 912,183 6,054,136 681,857 Change in assets and liabilities and deferred outflows and inflows of resources: (Increase) decrease in accounts receivable 1,513,278 1,446,379 907,585 (399,289) 331,557 3,799,510 30,207 (Increase) decrease in prepaids 529 165 —    10,197 2,456 13,347 (9,415) Increase in inventory —    —    —    (398,988) - (398,988) (7,902) Increase (decrease) in accounts payable 734,876 581,081 (210,110) 1,136,593 (511,728) 1,730,712 (826,224) Increase in deposits 9,053 —    842,511 13,040 5,505 870,109 —     Increase in contracts payable —    —    —    —    15,780 15,780 —     Decrease in unearned revenue —    —    —    (412,298) (56,132) (468,430) —     Increase (decrease) in accrued liabilities (425,895) 7,586 27,244 (265,886) 5,569 (651,382) (32,062) Increase (decrease) in pollution remediation liability (917,200) —    —    —    —    (917,200) 3,666,425 Net OPEB obligation 2,959 924 4,554 13,724 1,232 23,393 2,190 Net pension liability and related changes in deferred outflows and inflows of resources (212,125) (68,129) (383,313) (1,511,904) (124,334) (2,299,805) (163,336) Decrease in noncurrent accrued liabilities (59,820) —    (50,227) (54,826) —    (164,873) —     Total adjustments 2,343,067 8,890,420 1,913,460 15,425,889 2,022,898 30,595,734 6,376,471 Net cash provided by (used in) operating activities 3,818,638$ 11,911,835 2,404,339 (51,075,639) 1,892,970 (31,047,857) 7,959,063 See accompanying notes to basic financial statements Proprietary Funds For the fiscal year ended June 30, 2015 CITY OF SANTA MONICA, CALIFORNIA Statement of Cash Flows 37 THIS PAGE INTENTIONALLY LEFT BLANK 38 CITY OF SANTA MONICA, CALIFORNIA Fiduciary Fund Financial Statements Private-Purpose Trust Fund is fiduciary in nature and used to distribute the assets of the dissolved Redevelopment Agency of the City of Santa Monica to the affected tax entities after the payment of enforceable obligations. The Redevelopment Agency of the City of Santa Monica was dissolved on February 1, 2012. Agency Funds are custodial in nature and used to receive and disburse funds for an entity/individual, which is not part of the City. 39 CITY OF SANTA MONICA, CALIFORNIA Statement of Fiduciary Net Position Fiduciary Funds June 30, 2015 Total Private-Purpose Trust Fund Total Agency Funds ASSETS Restricted cash and investments (note 5)$14,442,806 7,721,593 Restricted cash with fiscal agent (note 5)6,780,487 - Accounts receivable -139,241 Due from general fund (notes 11 and 17)19,149,678 - Total assets 40,372,971 7,860,834 DEFERRED OUTFLOWS OF RESOURCES Loss on refunding of bonds 2,313,873 - LIABILITIES Accounts payable and accrued liabilities -7,860,834 Accrued interest payable 3,961,683 - Due to other governments 4,458,538 - Long term liabilities: Advances from other funds - due within one year (notes 11 and 17)11,158,105 - Advances from other funds - due in more than one year (notes 11 and 17)20,861,901 - Loans and bonds payable, due within one year (note 17)14,439,522 - Loans and bonds payable, due in more than one year (note 17)186,173,626 - Total liabilities 241,053,375 7,860,834 NET POSITION Restricted for the dissolution of the Former Redevelopment Agency $(198,366,531)- See accompanying notes to basic financial statements. 40 CITY OF SANTA MONICA, CALIFORNIA Statement of Changes in Fiduciary Net Position Fiduciary Fund For the fiscal year ended June 30, 2015 Private-Purpose Trust Fund Additions: Property tax distribution $30,533,233 Investment income 98,350 Total additions 30,631,583 Deductions: Project expenses 4,172,867 Interest expense 8,643,496 Total deductions 12,816,363 Extraordinary items: Extraordinary gain on interest reduction (note 17)3,335,245 Extraordinary gain on payment from the City of Santa Monica (note 17)1,771,573 Total extraordinary items 5,106,818 Change in net position 22,922,038 Net position at beginning of year (221,288,569) Net position at end of year $(198,366,531) See accompanying notes to basic financial statements. 41 THIS PAGE INTENTIONALLY LEFT BLANK 42 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements For the fiscal year ended June 30, 2015 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. THE REPORTING ENTITY The City of Santa Monica, California (City) was incorporated November 30, 1886. The City operates under a Council-Manager form of government and provides traditional municipal services as authorized by its charter as well as various enterprise services. As required by accounting principles generally accepted in the United States of America (GAAP), the accompanying basic financial statements present the activities of the City and its component units. The component units discussed below are included in the City’s reporting entity because of the significance of their operations or financial relationships with the City. As required by GAAP, these basic financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The following entities are reported as blended component units because they have substantively the same governing board as the primary government and there is either a financial benefit or burden relationship between the City and the component unit or the City’s management has operational responsibility for the component unit. Blended component units, although legally separate entities are, in substance, part of the City’s operations and data from these units are combined with data of the City. Additional detailed information and/or separately issued financial statements for these component units can be obtained from the City’s Director of Finance. The Parking Authority of the City of Santa Monica (Authority) was established by the City in 1950 for the acquisition or building of parking facilities owned by the City Parking Authority. The Housing Authority of the City of Santa Monica (Housing Authority) was established by the City in 1975 to address unsanitary and unsafe inhabited dwelling accommodations and the shortage of affordable safe and sanitary dwelling accommodations for persons with low incomes. Since January 1, 1989, the Housing Authority has administered the Section 8 Housing Assistance Payments Program funded by the United States Department of Housing and Urban Development on behalf of the City. The Santa Monica Public Financing Authority (PFA) was established in 1995 for the purpose of assisting local agencies in financing capital improvements, working capital, and liability or other projects. The Successor Agency for the Redevelopment Agency of the City of Santa Monica (Successor Agency) was established on February 1, 2012 by resolution of City Council. The Successor Agency is primarily responsible for winding down the operations of the former Redevelopment Agency and makes payments and performs existing obligations of the former Redevelopment Agency. The Successor Agency is a fiduciary component unit and is presented as a private-purpose trust fund. The Santa Monica Arts Foundation promotes the arts by raising funds to finance art programs. On June 8, 1990, the City Council merged the City’s Arts Commission with the Santa Monica Arts Foundation. While the Arts Foundation meets the requirements of being reported as a component unit of the City, the 43 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 operating results are immaterial to the City as a whole and therefore it is not included in the City’s basic financial statements. The Santa Monica Pier Corporation, originally named the Santa Monica Pier Restoration Corporation, is an organization created in 1984 as a nonprofit public benefit corporation. The Pier Corporation maintains and operates public educational and recreational programs and events at the Santa Monica Pier as part of a service agreement with the City. It also assists the City with public outreach on Santa Monica Pier related issues. The governing Board of the Corporation is appointed by the City of Santa Monica City Council for the benefit of the citizens of Santa Monica. Separate financial statements for this organization can be obtained from the City’s Director of Finance. These basic financial statements do not present this entity for which the City may meet criteria for discrete presentation because the economic resources received or held by the individual organization are not significant to the primary government. B. BASIC FINANCIAL STATEMENTS Basic financial statements consist of the following:  Government-wide financial statements;  Fund financial statements; and  Notes to the basic financial statements. The government-wide financial statements consist of the statement of net position and the statement of activities and report information on all of the non-fiduciary activities of the primary government and its component units. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. All internal balances in the statement of net position have been eliminated, with the exception of those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total 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. Exceptions to this general rule are charges between the City’s Water Fund and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the City include general government, public safety, general services, cultural and recreation services, library and housing and community development. The business-type activities of the City include water, wastewater, stormwater, resource recovery and recycling, pier, airport, cemetery, Big Blue Bus, and parking authority. 44 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated based on the annual cost allocation plan. 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 or segment, and 2) grants and contributions, including special assessments, which are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate fund 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 and major individual enterprise funds are reported as separate columns in the fund financial statements. For the year ended June 30, 2015 the City implemented the provisions of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Reporting for Pensions – An Amendment of GASB Statement No. 27 and GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – An Amendment of GASB no. 68. GASB Statement No. 68 provides requirements on how pension costs and obligations are measured and reported in the basic financial statements. When an organization’s pension liability exceeds the pension plan’s net position available for paying benefits, there is a net pension liability which must be reported in the basic financial statements. In addition, GASB 68 requires that projected benefit payments be discounted to their actuarial present value using a single rate that reflects (1) a long-term expected rate of return on pension plan investments to the extent that the pension plan’s fiduciary net position is projected to be sufficient to pay benefits and pension plan assets are expected to achieve that rate and (2) a tax-exempt, high-quality municipal bond rate to the extent that the conditions under (1) are not met. Reference Note 16 for information regarding the City’s pension obligations. GASB issued Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment of GASB Statement No. 68 (GASB 71) requires that, at transition to the new accounting standards in accordance with GASB 68, a government should recognize a beginning deferred outflow of resources for its pension contributions made after the measurement date of the beginning net pension liability. However, it continues to require that the beginning balances for other deferred outflows and inflows be reported at transition only if it is practical to determine such amounts. As of July 1, 2014, the City restated beginning net position in the amount of $417.5 million to record the beginning deferred pension contributions and net pension liability and remove the net pension asset balance determined in accordance with GASB Statement 27. C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary funds financial statements. Agency funds do not have a measurement focus but use the accrual basis of accounting. Revenues are 45 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental funds 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. The City in general considers revenues available if they are collected within 60 days. Additionally, grants and similar items are recognized as receivables as soon as all eligibility requirements have been met and are recognized as revenue when amounts are considered available. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when payment is due. Property taxes, sales taxes, franchise taxes, licenses, interest, special assessments, charges for services and other miscellaneous revenue are all considered to be susceptible to accrual and have been recognized as revenue in the current fiscal period subject to availability. Entitlements and shared revenues are recorded at the time of receipt or earlier if susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred, all other eligibility requirements have been met and are recorded at the time of receipt or earlier, and susceptible to accrual criteria are met. All other revenue items are considered to be measurable and available only when cash is received by the government. The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all the financial resources and the legally authorized activities of the City, except those required to be accounted for in other specialized funds. The Special Revenue Source Fund accounts for receipt and expenditure of monies restricted, committed or assigned for specific uses. Funding comes primarily from developer and other fees. The City reports the following major enterprise funds: The Water Fund accounts for the activities of the City’s water service to the citizens. The Wastewater Fund accounts for the activities of maintaining the sanitary sewer system within the City. 46 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The Resource Recovery and Recycling Fund accounts for the activities of the City’s refuse collection, street sweeping and cleaning, and recycling programs. The Big Blue Bus Fund accounts for the activities of the City’s municipal bus lines. Additionally, the City reports the following fund types: Special Revenue Funds account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Capital Projects Funds account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Debt Service Funds account for and report financial resources that are restricted, to expenditures for principal and interest. Permanent Funds account for resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support specific programs. Internal Service Funds account for vehicle operations, risk management, and information technology and communications operations that provide services to other departments of the City on a cost reimbursement basis. Fiduciary Funds consist of a Private-purpose Trust Fund and Agency funds. The Private-purpose Trust Fund is established by the City to succeed the former redevelopment agency. The City serves as a custodian for the assets of the dissolved redevelopment agency pending distribution to the affected tax entities after the payment of enforceable obligations. Agency funds account for assets held by the City as a trustee or as an agent for individuals or other government units. Agency funds are custodial in nature and do not involve measurement of results of operations. These funds account for assets held by the City in an agency capacity for development fees collected on behalf of the school district, various employee payroll deductions that will be remitted to various agencies and other assets held by the City in an agency capacity. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation and amortization on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 47 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 D. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, NET POSITION OR FUND BALANCE Cash and Investments In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal and escrow agents in accordance with related bond indentures and agreements. The cash and investments balance in each fund represents that fund's equity share of the City's cash and investment pool. As the City places no restrictions on the deposit or withdrawal of its equity from the pool by a particular fund, the pool operates like a demand deposit account for the participating funds. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on quarter-end balances and is adjusted at year-end. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund. The City's investments are carried at fair value, except for guaranteed investment contracts, which are carried at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. The fair value of equity and debt securities is determined based on sales prices or bid-and-asked quotations from Securities and Exchange Commission (SEC) registered securities exchanges or National Association of Securities Dealers Automated Quotations (NASDAQ) dealers. The fair value of the City's share of Local Agency Investment Fund (LAIF) is reported to the City on a quarterly basis. LAIF operates in accordance with laws and regulations of the State of California. The reported value of the pool is the same as the fair value of pool shares. Changes in fair value are allocated to each participating fund on an annual basis. For purposes of the statement of cash flows, the City has defined cash and cash equivalents to be change and petty cash funds, equity in the City's cash and investment pool, and restricted, non-pooled investments with initial maturities of three months or less. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund receivables/interfund payables, i.e., due to/due from other funds, the current portion of interfund loans or advances to/from other funds, the non-current portion of interfund loans. Any residual balances outstanding between the governmental activities and the business- type activities are reported in the government-wide financial statements as internal balances. Advances between funds and notes receivables, as reported in the fund financial statements, are offset by nonspendable fund balance in the applicable governmental funds to indicate that they are not in spendable form and are not available for appropriation. However, if the use of the proceeds from the collection of those receivables is restricted, committed, or assigned, they will be included in the appropriate fund balance classification, rather than nonspendable fund balance. 48 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 All trade receivables are shown net of an allowance for uncollectible accounts and estimated refunds due. As of June 30, 2015, the allowance for uncollectible accounts for governmental and business-type activities is $587,020 and $1,127,771, respectively. Unbilled service receivables are accrued for at year-end. Property Taxes Assessed property values are determined on an annual basis for the period July 1 to June 30 by the Los Angeles County Assessor as of January 1. Article XIIIA of the State Constitution (Proposition 13, approved by voters in June 1978) limits the real property tax rate to 1% of the full market cash value plus rates imposed to fund indebtedness approved by the voters. Locally assessed property is appraised at the 1975-76 full cash value, the base year value, and is adjusted each year after 1975 by the change in the consumer price index, not to exceed an increase of 2%. Property is reappraised to current full value upon either a change in ownership or new construction. If property values decline below the base year value, the value is adjusted to reflect the lower value. Taxes are levied annually in September and become a lien on real property at January 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively, at which time applicable penalties and interest are assessed. Inventory and Prepaid Items All materials and supplies inventory is valued at cost using the average cost method. The costs of such inventories are recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items are recorded as expenditures/expenses when consumed rather than when purchased. Restricted Assets Certain proceeds of the City's bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position and balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants. In the absence of specific statutory provisions governing the issuance of bonds, certificates or leases, these bond monies may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. These ordinances, resolutions and indentures are generally more restrictive than the City's general investment policy. In no instance have additional types of investments been authorized that are not permitted by the City's general investment policy. Capital Assets Capital assets, which include land, buildings and improvements, machinery and equipment, intangibles, 49 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 utility systems and infrastructure assets (e.g., roads, sidewalks, curbs and gutters and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets other than buildings, improvements, and infrastructure are defined by the City as assets with an initial individual cost of $50,000 or more and an estimated useful life of more than one year except for the Big Blue Bus fund, which follows transit funding guidelines by capitalizing any expenditure which is funded by capital grant subsidies not related to bus repairs and maintenance. The City defines buildings, improvements other than buildings, and infrastructure as assets with an individual cost of $100,000 or more and an estimated useful life of more than one year. Such assets are recorded at historical cost. Donated capital assets are recorded at estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred, net of interest earned on unspent proceeds of tax-exempt borrowings, during the construction phase of capital assets of business-type and enterprise funds activities is included as part of the capitalized value of the assets constructed. No interest was capitalized during the fiscal year ended June 30, 2015. Capital assets of the City are depreciated using a straight-line method, with a mid-year convention (only half a year’s depreciation is recorded in the first and last year of the asset) over the following estimated useful lives: The City has elected not to capitalize its collection of artwork. GASB Statement No. 34 waives the requirement for artwork capitalization if the collection meets all the following conditions:  The collection is held for reasons other than financial gain.  The collection is protected, kept unencumbered, cared for, and preserved.  The collection is subject to an organizational policy requiring that the proceeds from sales of collection items be used to acquire other items for collections. The City’s artwork collection meets the above criteria and therefore qualifies for the exemption from the capitalization requirement. The collection includes both permanent and portable artworks, artworks integrated into overall projects, murals, and stand-alone permanently installed paintings and sculptures, art integrated into the design of public works projects (not stand-alone), and a contemporary collection of almost 100 portable artworks, which are on display in public areas of City facilities. Assets Years Buildings 5 to 85 Improvements other than buildings 2 to 50 Infrastructure 15 to 75 Utility systems Intangibles 20 20 to 100 Machinery and equipment 2 to 30 50 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Lease Obligations The City leases various assets under operating lease agreements. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits up to a maximum determined by bargaining unit agreements. Employees are paid 100% of their accumulated vacation when they terminate employment for any reason. All vacation is accrued when incurred in the government-wide and proprietary fund financial statements. A liability is reported in the governmental funds only if they have matured, for example, as a result of employee resignations or retirements. Additionally, employees of the International Association of Sheet Metal, Air, Rail and Transportation Workers are able to exchange unused sick days balances for equal dollars of medical insurance premiums. In order to qualify, the employee must have 10 years of service at retirement and at least 50 days of unused sick leave. Long-Term Liabilities In the government-wide financial statements, proprietary funds financial statements and private-purpose trust fund statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Initial-issue bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Offering costs are expensed when incurred. Bonds payable are reported net of the unamortized portion of applicable premium or discount. Deferred amount on refunding are reported as deferred outflows of resources. Bond issuance costs, including underwriters' discount, are expensed when incurred. Amortization of bond premiums or discounts and deferred amounts on refunding are included in interest expense. In the governmental funds financial statements, bond premiums, discounts and issuance costs are recognized during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Interest and principal payments are reported as debt service expenditures. Deferred Outflows/Inflows of Resources The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Unamortized portions of the loss on refunding debt are reported as deferred outflow of resources. In addition to this, when an asset is recorded in the governmental fund financial statements but the revenue is not available, a deferred inflows of resources is reported until such time as the revenue becomes available. 51 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Pension contributions made during the fiscal year are reported as deferred outflows and the excess of investment returns over projected returns in the pension trust are reported as deferred inflows in accordance with GASB Statements Nos. 68 and 71. Net Position and Fund Balance In the government-wide financial statements and proprietary funds financial statements, net position is reported in three categories: net investment in capital assets, restricted net position and unrestricted net position. Net investment in capital assets represents capital assets less accumulated depreciation less outstanding principal of related debt. Net investment in capital assets does not include the unspent proceeds of capital debt or the related amount of debt, liabilities and deferred inflows related to those assets. Restricted net position represents assets restricted by parties outside of the City (such as creditors, grantors, contributors, laws and regulations of other governments, or law through constitutional provisions or enabling legislation) and includes unspent proceeds of bonds issued to acquire or construct capital assets and those unspent proceeds are offset by an equivalent amount of debt and deferred inflows to those assets. The nonexpendable portion of permanent funds is reported as a component of restricted net position. The City's other components of restricted net position are temporarily restricted (ultimately expendable) assets. All other components of net position are considered unrestricted. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then use unrestricted resources as needed. As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent based on the adopted City Council policy in the City’s most recently adopted budget. As of June 30, 2015, fund balances for governmental funds include nonspendable, restricted, committed, assigned and unassigned balances. In the fund financial statements, governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance represents amounts that are restricted for specific purposes when constraints placed on the use of resources are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. Both ordinances and resolutions can create committed fund balance. Amounts that can only be used for specific purposes pursuant to constraints imposed by ordinance of the government’s highest level of decision making authority, City Council, are reported as committed fund balance. Ordinances make up the local laws of the City. An ordinance is a legislative act prescribing general rules of organization or conduct relating to the corporate affairs of the municipality. Council action shall be taken by ordinance when required by law, or where prescribed conduct may be enforced by penalty and represents the most binding constraint. Once adopted, ordinances become effective upon 30 days after publication, unless otherwise set forth. A resolution is an administrative act, which is a formal statement of policy concerning matters of special or temporary character. The adoption of a resolution by the City Council can also establish, modify, or rescind a fund balance commitment previously created by resolution. 52 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Assigned fund balance are amounts that are constrained by the government’s intent by the governing body itself or a body or official to which the governing body has delegated the authority to assign amounts to be used for specific purposes. The City Council, in the City’s most recently adopted budget, which included the fiscal policies contained in the fund balance policies, has delegated the authority to assign fund balances to the City Manager or their designee. Unassigned fund balance represents fund balance that has not been restricted, committed, or assigned to specific purposes within the general fund. Unassigned fund balance can also be used in other governmental funds where the fund balance is negative, because a negative amount should not be reported for restricted, committed or assigned in any fund. In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned. Self-Insurance Program The City has self-insurance programs to provide for general liability, bus and automobile liability, and workers' compensation claims. These activities are accounted for in self-insurance internal service funds. Premiums are charged to individual funds and are designed to cover current and future expenses. The City's Risk Manager oversees the self-insurance programs. It is his or her duty to ensure that programs are operated in accordance with City policies. The City’s Risk Manager also provides budget guidance and case reserves and claims analysis. It is the City's intent to maintain cash reserves in the self- insurance funds equal to or greater than estimated losses. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s defined benefit retirement plans, Miscellaneous and Public Safety Police and Fire, of the California Employees’ Retirement System (“CalPERS”) and additions to/deductions from the Plans’ 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. Use of Estimates The preparation of basic financial statements in conformance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the basic financial statements and accompanying notes. Actual results may differ from those estimates. 53 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (2) BUDGETARY AND LEGAL COMPLIANCE The City Council is required to adopt an annual budget resolution by June 30 each fiscal year for the General Fund, each special revenue fund and each capital projects fund, except the Rent Control Fund and the Asset Seizure Fund. The legal level of budgetary control is the department level. The City Council also approves annual operating budgets for the City’s proprietary and internal service funds to facilitate management evaluation and control. The budget is prepared on a non-GAAP budgetary basis, which considers encumbrances outstanding at year- end as an expenditure of that year. Encumbrances outstanding at the beginning of a fiscal year, which were recognized as budgetary expenditures in the prior year, are recognized as GAAP-basis expenditures but not as budgetary expenditures unless re-appropriated. It is the City’s policy to only re-appropriate capital encumbrances and unencumbered balances of specific capital appropriations. In addition, capital leases are budgeted on a cash basis, whereas GAAP requires the full amount of the leased asset purchased to be shown as an expenditure of the current year. Appropriations in governmental funds outstanding at year-end lapse, except for encumbered amounts, for which fund balances are restricted, committed or assigned at year-end for governmental funds. A Comprehensive Annual Financial Report Budget Supplement is prepared to reconcile expenditures/expenses at the legal level of control to the summarized amounts presented in the Comprehensive Annual Financial Report and can be obtained from the Finance Department. The actual results of operations on a budgetary basis compared to the appropriations adopted by the City Council for budgeted major governmental funds are included in the fund financial statements. The comparisons of actual results with the budget for nonmajor funds are presented as supplemental information in the combining schedules. For the fiscal year ended June 30, 2015, expenditures exceeded appropriations in the following funds/departments: General Fund – Record and election services, Community and cultural services. The overage in the General Fund is due to vacation cash-out. Funds are set aside in the fund balance for vacation cash-out, however, the budget is not adjusted at year-end to reflect the cash-out; Special Revenue Source Fund – General government. Other funds reporting expenditures in excess of budget include the following: Low and Moderate Income Housing Asset Special Revenue Fund – General services; Gas Tax Special Revenue Fund – General services; Community Development Block Grant Capital Projects Fund– General government and general services; and Air Quality Management District Capital Projects Fund – General government and general services. The budget for these expenditures is not adjusted at year-end because the amounts are immaterial. See statements on pages 30-32 and 129-140 for detail of amounts. 54 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (3) RECONCILIATION OF FUND BALANCE SHEET/STATEMENT OF NET POSITION TO GOVERNMENT-WIDE FINANCIAL STATEMENTS Amounts reported for governmental activities in the government-wide statement of net position are different from those reported for governmental funds in the funds balance sheet. The following provides a reconciliation of those differences: Assets Total governmental funds Long-term assets and liabilities (1) Total governmental activities internal service funds (2) Other adjustments and eliminations (3) Statement of net position totals Cash and investments 365,106,830$ - 57,726,992 - 422,833,822 Restricted cash and investments 66,395,373 - - - 66,395,373 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 63,656,086 - 20,586 - 63,676,672 Notes 123,470,130 - - - 123,470,130 Interest 1,021,425 - 96,614 - 1,118,039 Other governments 3,428,351 - - - 3,428,351 Internal balances - - 3,611,738 13,085,743 16,697,481 Due from other funds 1,330,116 - - (1,330,116) - Deposits 61,785 - - - 61,785 Prepaids 2,958,279 - 9,415 - 2,967,694 Restricted cash and investments with fiscal agent 33,186,079 - - - 33,186,079 Advances to other funds 16,901,899 - - (16,901,899) - Advances to Successor Agency 32,020,006 - - - 32,020,006 Capital assets, net - 788,329,667 91,119 - 788,420,786 Total assets 709,536,359$ 788,329,667 61,556,464 (5,146,272) 1,554,276,218 Deferred Outflows of Resources Loss on refundings of debt - 293,878 - - 293,878 Deferred outflows from pensions - 49,083,860 319,037 - 49,402,897 Total deferred outflow of resources -$ 49,377,738 319,037 - 49,696,775 Liabilities, Deferred Inflows of Resources and Fund Balances/Net Position Liabilities: Accounts payable 15,472,698 - 164,678 - 15,637,376 Accrued liabilities 8,996,720 - 66,349 10 9,063,079 Accrued interest payable - 1,177,591 - - 1,177,591 Contracts payable (retained percentage)560,214 - - - 560,214 Due to other funds 1,303,299 - - (1,303,299) - Unearned revenue 26,414,043 - - (1,500,000) 24,914,043 Deposits payable 1,584,055 - - - 1,584,055 Compensated absences due within one year - 7,455,873 49,632 - 7,505,505 Compensated absences due in more than one year - 4,248,584 50,317 - 4,298,901 Claims payable due within one year - - 9,984,378 - 9,984,378 Claims payable due in more than one year - - 31,333,803 - 31,333,803 Due to Successor Agency within one year 19,149,678 - - - 19,149,678 Loans and bonds payable due within one year - 6,235,000 - - 6,235,000 Loans and bonds payable due in more than one year - 81,453,861 - - 81,453,861 Pollution remediation obligation due within one year - 4,608,967 - - 4,608,967 Pollution remediation obligation due in more than one year - 92,771,992 - - 92,771,992 Other long term liability - 8,704,750 - - 8,704,750 Net OPEB obligation - 8,036,657 82,485 - 8,119,142 Advances from other funds 3,842,973 - - (3,842,973) - Net pension liability - 302,056,517 1,618,557 - 303,675,074 Total liabilities 77,323,680 516,749,792 43,350,199 (6,646,262) 630,777,409 Deferred Inflows of Resources Unavailable revenue 74,109,725 - - (74,109,725) - Deferred inflows from pensions - 64,768,231 365,877 - 65,134,108 Total deferred inflows of resources 74,109,725 64,768,231 365,877 (74,109,725) 65,134,108 Total fund balances/net position 558,102,954 256,189,382 18,159,425 75,609,715 908,061,476 Total liabilities, deferred inflows of resources and fund balance/net position 709,536,359$ 837,707,405 61,875,501 (5,146,272) 1,603,972,993 55 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 1)Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the balance sheet. Capital assets of internal service funds of $91,119 net of accumulated depreciation, are not included in this amount. 1,171,251,893$ Less accumulated depreciation/amortization (382,922,226) 788,329,667 Loss on refundings of debt 293,878 Deferred outflows from pension 49,083,860 General obligation bonds (8,890,000) Revenue bonds (74,705,000) Loans payable (400,000) Accrued interest on long-term debt (1,177,591) Unamortized premium on long-term debt (3,696,101) Unamortized issue discount on long-term debt 2,240 Employee compensated absences (11,704,457) Accrued pollution remediation costs (97,380,959) Other long term liabilities (8,704,750) Accrued OPEB liability (8,036,657) Net pension liability (302,056,517) Total long-term liabilities (516,749,792) Deferred inflows from pension (64,768,231) 256,189,382$ 2) 14,547,687$ 3,611,738 18,159,425$ 3)Other adjustments and eliminations: 75,609,715$ Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds and recognized as revenue in the statement of activities. Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the balance sheet. Internal service funds are used by management to charge the costs of information technology and communications operations, self-insurance comprehensive, auto and workers' compensation to individual funds. The assets and liabilities of these internal service funds are included in the governmental activities on the statement of net position. Adjustments for Internal Service Funds are necessary to "close" those funds by recording charges to and payments from business-type activities to completely cover the Internal Service Funds' costs for the year. 56 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Amounts reported for business-type activities in the government-wide statement of net position are different from those reported for enterprise funds in the fund statement of net position. The following provides a reconciliation of those differences: Total business-Other Total type internal adjustments Statement of enterprise service and net position funds funds (1)eliminations totals Cash and investments $113,269,465 36,298,350 - 149,567,815 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 20,749,932 14,320 - 20,764,252 Interest 323,460 61,229 - 384,689 Internal balances - (3,611,738) (13,085,743) (16,697,481) Inventory 2,680,562 76,453 - 2,757,015 Prepaids 38,951 - - 38,951 Restricted cash and investments 39,891,067 - - 39,891,067 Advances to other funds 167,186 - (167,186) - Capital assets, net 447,050,894 10,812,981 - 457,863,875 Total assets $624,171,517 43,651,595 (13,252,929) 654,570,183 Loss on refunding of debt 495,734 - - 495,734 Deferred outflows from pension 11,520,610 569,140 - 12,089,750 Total deferred outflows of resources $12,016,344 569,140 - 12,585,484 Accounts payable 7,635,384 662,268 - 8,297,652 Accrued liabilities 3,691,602 100,135 - 3,791,737 Accrued interest payable 124,044 - - 124,044 Contracts payable (retained percentage)363,975 - - 363,975 Due to other funds 26,817 - (26,817) - Unearned revenue 9,072,663 - - 9,072,663 Liabilities payable from restricted assets 12,375,690 - - 12,375,690 Advances from other funds 13,226,112 - (13,226,112) - Due to other governments 2,648,622 - - 2,648,622 Compensated absences due within one year 2,274,087 93,664 - 2,367,751 Compensated absences due in more than one year 1,014,290 91,657 - 1,105,947 Claims payable due within one year - 2,306,350 - 2,306,350 Claims payable due in more than one year - 2,383,910 - 2,383,910 Loans and bonds payable due within one year 284,383 - - 284,383 Loans and bonds payable due in more than one year 10,817,730 - - 10,817,730 Pollution remediation obligation due within one year 2,754,434 - - 2,754,434 Pollution remediation obligation due in more than one year 15,389,208 - - 15,389,208 Net OPEB obligation 2,091,365 113,266 - 2,204,631 Net pension liability 60,497,003 3,137,073 - 63,634,076 Total liabilities 144,287,409 8,888,323 (13,252,929) 139,922,803 Deferred Inflows of Resources $13,675,428 709,140 - 14,384,568 $478,225,024 34,623,272 - 512,848,296 1) 38,235,010$ 3,611,738$ Adjustment for Internal Service Funds are necessary to "close" those funds for charges to and payments from participating governmental-type activities to completely cover the Internal Service Funds' costs for the year. Internal service funds are used by management to charge the costs of vehicle management, information technology and risk management to individual funds. The assets and liabilities of the vehicle management and self-insurance bus internal service funds are included in business-type activities in the statement of net position. Total Net Position Assets Liabilities Deferred Outflows of Resources Deferred Inflows of Resources (4) POLLUTION REMEDIATION The City follows the guidance of GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, establishing accounting and financial reporting standards for pollution (including contamination) remediation obligations, which are obligations to address the current or potential detrimental 57 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups. On December 1, 2006, the City amended a settlement agreement that it had entered into in 2004 with a consortium of oil companies in relation to methyl tertiary butyl ether (“MTBE”) contamination that had occurred at the City’s Charnock Well Field. The Charnock Well Field is used to supply drinking water to the City. The amended 2006 agreement called for the oil companies to pay the City $131.0 million in exchange for the City's agreement to treat to applicable drinking water standards any water produced from the Charnock Well Field, which contains MTBE, tertiary butyl alcohol (“TBA”) and related petroleum hydrocarbons. Prior to this amended 2006 agreement and under the terms of other settlement agreements with other companies, the City received an additional $141.0 million also related to MTBE contamination of the City's Charnock Well Field. The City has received all of the proceeds from each of these agreements, including the amended 2006 agreement. To meet its Charnock Well Field water treatment obligation, the City has constructed and is operating a water treatment remediation plant using the proceeds of the 2006 and the other earlier settlements. On November 13, 2009, the City entered into a settlement and release agreement with The Gillette Company (Gillette), guaranteed by The Procter & Gamble Company, in relation to ground water contamination of the City’s Olympic Well Field. The Olympic Well Field is used to supply drinking water to the City. The agreement calls for Gillette to make payments to the City ranging from $150,000 to $11,183,175 annually, totaling $68,000,000 to be made over 30 years which included the City receiving title to property valued at $3,250,000. To date the City has received cash payments of $38,029,051. Under the agreement, the City has agreed to treat to applicable drinking water standards any water that it produces from the Olympic Well Field. The agreement also includes a provision that provides for Gillette to potentially share in the proceeds of settlement agreements, if any, that the City may receive from other parties related to their contamination of the Olympic Well Field. Under this sharing provision, in 2021 Gillette may recoup up to a maximum of $8,704,750 of the funds it pays to the City from the proceeds of these other settlement agreements. On May 15, 2012, the City entered into a settlement and release agreement with The Boeing Company (Boeing) also in relation to ground water contamination of the City’s Olympic Well Field. The agreement calls for Boeing to make payments to the City ranging from $150,000 to $5,000,000 annually to be made over a ten year period, totaling $39,500,000. On December 12, 2012, the agreement was modified with $21,000,000 being due from Boeing in January 2013 and payments of $3,670,000 being due from Boeing annually beginning in 2017 through 2021. The City received Boeing's payment of $21,000,000 on January 7, 2013. Under the agreement, the City has agreed to treat to applicable drinking water standards any water that it produces from the Olympic Well Field. To date, $21,150,000 has been recognized as income in the fund financial statements. Using the expected cash flow technique, the City has measured the potential water treatment liability under the agreements by the anticipated cost of construction/remediation contracts, which include a contingency of 10% for unforeseen costs. 58 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Additionally, the City engages in an ongoing program of pollution remediation related to its various properties. Two such sites are currently undergoing remediation in the form of either soil or vaporous contaminant removal or containment. By State law these occurrences are required to be reported to California Department of Health Services. The balance of the pollution remediation liability is $97,380,959 in the governmental activities of which $4,608,967 is due within one year and $18,143,642 in the business-type activities, of which $2,754,434 is due within one year. (5) CASH AND INVESTMENTS Cash and investments as of June 30, 2015 are classified in the accompanying financial statements as follows: Statement of net position: Cash and investments 572,401,637$ Restricted cash and investments 106,286,440 Restricted cash with fiscal agent 33,186,079 Fiduciary funds: Restricted cash and investments 22,164,399 Restricted cash with fiscal agent 6,780,487 Total cash and investments 740,819,042$ Cash and investments as of June 30, 2015 consist of the following: Cash on hand 28,922$ Deposits with financial institutions 85,369,077 Investments 655,421,043 Total cash and investments 740,819,042$ All interest income legally accrues to the benefit of the General Fund in the absence of a legal provision to the contrary. Accordingly, accumulated interest income from the Special Revenue Source Fund in the amount of $310,440 has been included as interest income in the General Fund. 59 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate 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. The table also does not address certain escrow accounts established for purposes such as construction project retention, which are governed by the specific escrow agreement(s). Authorized *Maximum *Maximum Investment types by investment *Maximum percentage investment authorized by state law policy maturity of portfolio in one issuer Local agency bonds Yes 5 years None None U.S. Treasury obligations Yes 5 years None None U.S. agency securities/obligations Yes 5 years None 50% State obligations - California and others Yes 5 years None None CA Local Agency obligations Yes 5 years None None Banker's acceptances Yes 180 days 10% 30% Commercial paper-select agencies Yes 270 days 15% 10% Commercial paper-other agencies Yes 270 days 15% 10% Negotiable certificates of deposit Yes 5 years 30% 10% CD Placement services Yes 5 years 30% None Repurchase agreements Yes 1 year None None Reverse repurchase agreements Yes 92 days 20% of base value None Corporate medium-term notes Yes 5 years 30% None Supranationals Yes 5 years 30% None Mutual funds Yes N/A 20% 10% Money market mutual funds Yes N/A 20% 10% Mortgage pass-through securities Yes 5 years 20% None Time deposits Yes 5 years None None Collateralized certificates of deposit Yes 5 years None None County pooled investment funds Yes N/A None None Local Agency Investment Fund (LAIF) Yes N/A None None JPA pools (other investment pools) Yes N/A None None * Based on state law requirements or investment policy requirements, whichever is more restrictive. 60 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 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 generally authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. Maximum Maximum Authorized Maximum percentage investment investment type maturity allowed in one issuer U.S. Treasury obligations None None None Federal Housing Administration debentures None None None U.S. agency securities None None None Time deposits None None None Unsecured certificates of deposit 180 days None None Banker's acceptances 180 days None None State obligations None None None Repurchase agreements 1 year None None Pre-refunded municipal obligations None None None Commercial paper 270 days None None Money market mutual funds None None None Investment contracts 30 years None None 61 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Investments Authorized by Actions of the City Council Cemetery and Mausoleum Perpetual Care funds are received from Woodlawn Cemetery users for the perpetual care of cemetery grounds and of the mausoleum. The funds are legally restricted to the extent that only earnings, and not principal, can be used for restricted perpetual care purposes. These funds represent the accumulation of unspent monies from non-government sources and are not considered by the City to constitute “surplus funds” of a local government. Accordingly, these funds are not considered by the City to be subject to the provisions of the California Government Code Section 53601 or the City’s investment policy. These funds have been invested per instructions of the City Council. The table below identifies the investment types generally authorized for these investments. Current City Council instructions limit amount invested in equities to 60% of the total portfolio with the balance to be invested in fixed income securities. The table also identifies certain provisions of these agreements that address interest rate risk and concentration of credit risk. Maximum Maximum Authorized Maximum percentage investment investment type maturity allowed in one issuer U.S. Treasury obligations None None None U.S. agency securities None None None Equities None 60% None Corporate bonds None None None Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The fair value of callable securities is also sensitive to market changes in that if interest rates decrease between the time of purchase and the call date, the likelihood that a bond will be called and reinvested at a lower interest rate increases. The City’s portfolio also includes certain callable structured investments for which the coupon interest rate increases if the investments are not called on or before certain pre-determined dates. The fair value of these investments, which falls into the Federal agency security category, is also sensitive to market changes. 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. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees, Wells Fargo loan proceeds held in a custodial account with another party, and other funds held jointly with another party in escrow accounts) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity. For purposes of the schedule shown 62 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 below, any callable securities are assumed to be held to maturity. Investment type Amount 12 Months or Less 13 to 24 Months 25 to 60 Months More than 60 Months Held by City: Federal agency securities 418,435,351$ 114,866,491 58,895,776 244,673,084 — Corporate medium term notes 134,066,810 30,147,051 41,450,025 62,469,734 — Municipal bonds 6,633,659 — — 6,633,659 — U.S. Treasury Notes 3,012,420 — — 3,012,420 — Supranationals 5,010,820 — 2,001,940 3,008,880 — State investment pool 49,621,091 49,621,091 — — — Held by others: Treasury notes/ bonds 1,354,874 — 619,116 306,223 429,535 Federal agency securities 2,359,162 972,709 — 835,216 551,237 Corporate medium term notes 3,787,426 97,427 99,612 2,369,207 1,221,180 Money market funds 26,572,634 26,572,634 — — — Total 650,854,247$ 222,277,403 103,066,469 323,308,423 2,201,952 Remaining maturity (in months) Equities of $4,566,796 not included. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City’s investments as of June 30, 2015 (including investments held by bond trustees) do not include any investments that are highly sensitive to interest rate fluctuations to a greater degree than already indicated in the information provided above. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type. 63 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Minium legal Investment type Amount rating AAA/AAAm AA+AA AA-A+A A-BBB+BBB BBB-Not rated Held by City: Federal agency securities 418,435,351$ N / A — 373,434,626 — — — — — — — — 45,000,725 Corporate medium term notes 134,066,810 A 15,561,995 13,825,484 18,086,950 55,030,915 22,559,500 9,001,966 — — — — — Municipal bonds 6,633,659 N/A — — 1,115,864 5,517,795 — — — — — — — U.S. Treasury notes 3,012,420 N/A — 3,012,420 — — — — — — — — — Supranationals 5,010,820 AA 5,010,820 — — — — — — — — — — State investment pool 49,621,091 N / A — — — — — — — — — — 49,621,091 616,780,151 Held by others: Treasury notes/bonds 1,354,874 N / A — 1,354,874 — — — — — — — — — Federal agency securities 2,359,162 N / A — 2,359,162 — — — — — — — — — Corporate medium term notes 3,787,426 N / A — — — 192,209 38,918 1,203,908 829,658 1,009,933 102,400 410,400 — Money market funds 26,572,634 *26,343,036 — — — — — — — — — 229,598 650,854,247$ 46,915,851 393,986,566 19,202,814 60,740,919 22,598,418 10,205,874 829,658 1,009,933 102,400 410,400 94,851,414 Actual ratings - Standard & Poor's Equities of $4,566,796 not included. *Money market mutual funds must have the highest rating of at least two nationally recognized rating organizations or must have the investment advisor registered with the SEC with no less than 5 yrs. experience and have assets under management. in excess of $500 million. The unrated money market fund amount is part of the Cemetery and Mausoleum Perpetual Care Funds and therefore is not subject to the minimum legal rating. However, it does meet the second criteria of no less than 5 year experience and have assets under management in excess of $500 million. 64 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The Cemetery and Mausoleum perpetual care funds are funds held in trust by the City to pay for perpetual care costs at the City-owned cemetery. Investment of these funds is not covered by the State Government Code. The guidelines for investment of these funds are set by the City Council, and the funds are managed by an outside investment firm using those guidelines. Concentration of Credit Risk In regards to limitations on the amount that can be invested in any one issuer, the City’s investment policy generally follows stipulations by the California Government Code. However, the City’s policy adds an additional stipulation that no more than 50% of the portfolio may be invested in a single issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments (excluding investments held by others) are as follows: Issuer Investment type Reported amount FNMA (Fannie Mae)Federal agency securities 58,013,105$ 9.4 % Federal Farm Credit Bank Federal agency securities 60,116,868 9.7 FHLMC (Freddie Mac)Federal agency securities 120,061,205 19.5 Federal Home Loan Bank Federal agency securities 171,234,443 27.8 % of Investments 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 will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The collateral is held by the pledging financial institution’s trust department and is considered held in the City’s name. The investments held by the City were not subject to custodial credit risk at June 30, 2015. As of June 30, 2015, no City investments were held by the same broker-dealer (counterparty) that was used by the City to buy the securities. For investments identified herein as held by bond trustee, the bond trustee, under direction of the City/ Redevelopment Successor Agency/Parking Authority selects the investment under the terms of the applicable 65 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 trust agreement, acquires the investment, and holds the investment on behalf of the applicable agency. Investment in State Investment Pool Both the City and the Successor Agency (SA) are voluntary participants in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of City investments in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. As of June 30, 2015, $49,621,091 was invested in the City’s account and no funds were invested in the SA account. The total amount invested by all public agencies in LAIF at that date was $21.5 billion. The LAIF is part of the State’s Pooled Money Investment Account (PMIA). As of June 30, 2015, the investments in the PMIA totaled $69.7 billion, of which 97.9% is invested in non-derivative financial products and 2.1% in structured notes and asset-backed securities. The weighted average of LAIF investments was 239 days as of June 30, 2015. LAIF is not rated. 66 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (6) NOTES RECEIVABLE Notes receivable related to governmental activities total $123,470,130 as follows: Balance at June 30, 2014 Increases Decreases Balance at June 30, 2015 General Fund Employee housing (a)985,473$ — 985,473 — Community Corporation of Santa Monica (b)3,086,277 — — 3,086,277 Community Corporation of Santa Monica (c)448,280 — — 448,280 Community Corporation of Santa Monica (d)4,420,698 — — 4,420,698 FAME Santa Monica Senior Apartments (e)2,599,186 4,817,162 — 7,416,348 Step Up (f)1,296,212 733,225 — 2,029,437 Mountain View Mobile Home Park resident (g)— 87,830 — 87,830 Total General Fund 12,836,126 5,638,217 985,473 17,488,870 Special Revenue Source Fund Community Corporation of Santa Monica (h)6,774,763 — — 6,774,763 Community Corporation of Santa Monica (i)3,350,000 — — 3,350,000 Community Corporation of Santa Monica (j)4,816,378 — — 4,816,378 Santa Monica Housing Partners (k)19,400,000 — — 19,400,000 Total Special Revenue Source Fund 34,341,141 — — 34,341,141 Nonmajor Governmental Funds Community Corporation of Santa Monica (l)681,080 — — 681,080 Community Corporation of Santa Monica (m)2,900,000 — — 2,900,000 Community Corporation of Santa Monica (n)7,100,000 — — 7,100,000 Low- and moderate-income housing (DPRLP) (o)200,000 — — 200,000 Low- and moderate-income housing (DPRLP) (o)200,000 — — 200,000 Low- and moderate-income housing (p)973,406 — — 973,406 Ocean Park Community Center (q)1,200,000 — — 1,200,000 Community Corporation of Santa Monica (r)6,345,807 — — 6,345,807 Community Corporation of Santa Monica (s)995,696 — 995,696 — Step Up (t)7,170,000 — — 7,170,000 Community Corporation of Santa Monica (u)4,234,506 — — 4,234,506 Community Corporation of Santa Monica (v)841,600 — — 841,600 Santa Monica Housing Partners (w)5,684,455 — — 5,684,455 Community Corporation of Santa Monica (x)3,044,820 — — 3,044,820 Community Corporation of Santa Monica (y)8,958,823 — 979,167 7,979,656 Community Corporation of Santa Monica (z)4,786,704 — 349,703 4,437,001 FAME Santa Monica Senior Apartments (aa)4,058,652 — — 4,058,652 MERL Program (bb)11,085,148 — 237,696 10,847,452 Step Up (cc)2,407,860 603,958 — 3,011,818 Community Corporation of Santa Monica (dd)729,866 — — 729,866 Total nonmajor governmental funds 73,598,423 603,958 2,562,262 71,640,119 Total notes receivable 120,775,690$ 6,242,175 3,547,735 123,470,130 67 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 General Fund a. On June 11, 2010, the City made a housing loan to Rodney S. Gould, City Manager, in the amount of $1,000,000 for the purchase of a home within the City limits. The loan is secured by a deed of trust and has a term of 30 years with an interest rate of 3.27%. The outstanding principal, together with any outstanding interest, is due and payable in full on or before the 30-year anniversary date of the loan. Monthly interest payments are due on the first calendar day of each month. The City Manager retired in January 2015 and paid off the loan in October 2014. As of June 30, 2015, the total outstanding balance of the loan was $0. b. A promissory note dated January 12, 2009 in the amount of $6,223,333 was executed with Community Corporation of Santa Monica for an affordable housing project located at 430-508 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to 3% and the term to 55 years. As of June 30, 2015, $3,086,277 from the General Fund had been disbursed to the borrower. See items “j” and “x” below for amounts disbursed from the Special Revenue Source Fund and nonmajor governmental funds. c. A promissory note dated February 1, 2011 in the amount of $9,407,103 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2602 Broadway. This is a 55- year loan with an interest rate of 3% per annum. As of June 30, 2015, $448,280 had been disbursed to the borrower. d. A promissory note dated February 2, 2009 in the amount of $5,595,897 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2802 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated November 29, 2011, which increased the note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As of June 30, 2015, $4,420,698 had been disbursed to the borrower. e. A promissory note dated June 16, 2009 in the amount of $4,424,711 was executed with FAME Santa Monica Senior Apartments, L.P. for an affordable housing project located at 1754 19th Street. This loan was superseded by a loan in the amount of $11,475,000 dated November 17, 2011 and it is a 0% interest loan for 55 years. As of June 30, 2015, $7,416,348 had been disbursed to the borrower. f. A promissory note dated December 15, 2010 in the amount of $3,645,422 was executed with Step Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is for the acquisition and predevelopment of the site. This loan was superseded by a loan in the amount of $5,041,255 dated January 25, 2012. It is a 3% interest loan for 55 years after the project is built. As of June 30, 2015, $2,029,437 had been disbursed to the borrower. g. A shared appreciation promissory note dated October 18, 2012 in the amount of $87,830 was executed with residents for a unit purchase in Mountain View Mobile Home Park. This is a 55-year loan with a 0% interest rate. As of June 30, 2015, $87,830 had been loaned to the borrower. 68 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Special Revenue Source Fund h. A revised promissory note dated March 9, 2005 in the amount of $6,774,763 was executed with Pacific Court Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 2209 Main Street. Forty-four low- and very low-income housing units were constructed on the site. This is a 55-year loan with 1% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2015, $6,774,763 had been disbursed to the borrower. i. A revised promissory note dated October 26, 2004 in the amount of $3,350,000 was executed with 1424 Broadway Apartments Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year loan with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2015, $3,350,000 had been disbursed to the borrower. j. A promissory note dated January 12, 2009 in the amount of $6,223,333 was executed with Community Corporation of Santa Monica for the acquisition and predevelopment expenses for an affordable housing project located at 430-508 Pico Boulevard This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to 3% and the term to 55 years. As of June 30, 2015, $4,816,378 had been disbursed to the borrower. k. A promissory note dated December 8, 2011 in the amount of $19,400,000, was executed with Santa Monica Housing Partners for the acquisition and predevelopment expenses for an affordable housing project located at 1725 Ocean Ave. This is a 0% interest loan with the principal amount due and payable after 55-year anniversary of conversion to permanent financing. As of June 30, 2015, $19,400,000 had been disbursed to the borrower. Nonmajor Governmental Funds l. On October 22, 1998, the City executed a promissory note with Community Corporation of Santa Monica for the construction of a twenty unit, large family, affordable housing complex located at 708 Pico Boulevard. $579,000 was funded from the City’s Pico Neighborhood Trust Fund but now known as CDBG Housing Trust Fund, while $221,000 is funded from the Community Development Block Grant (CDBG) Fund. This note is a 0% interest loan to be repaid from residual receipts of the project and is due on October 22, 2053. As of June 30, 2015, the outstanding balance is $681,080. m. A revised promissory note dated October 26, 2004 in the amount of $2,900,000 was executed with 1424 Broadway Apartments Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year loan with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2015, $2,900,000 had been disbursed to the borrower. 69 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 n. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount of $4,458,033, $1,691,967 and $950,000, respectively for a total of $7,100,000 were executed with 26th and Santa Monica Family Housing Limited Partnership, c/o Community Corporation of Santa Monica, for an affordable housing project located at 1349 26th Street. Forty-four low- and very low-income housing units are to be constructed on the site. They are 55-year loans with 3% interest rate per annum. Payments are to be made from residual receipts. As of June 30, 2015, $7,100,000 had been disbursed to the borrower. o. Two promissory notes dated December 22, 1988 and December 29, 1989, for $200,000 each, one for 3 Vicente Terrace and one for 2020/30 Cloverfield Boulevard, were executed with the owners of certain rental properties. The first note was for five years at 3% interest per year, and could be renewed for five additional five-year terms as long as the rental properties are maintained for low-and moderate-income households. The first note was due December 22, 1993, and has been extended for the fifth time to December 22, 2018; the second note was due December 29, 1994, and has been extended to December 29, 2019 under the same interest rate and similar terms and conditions. The promissory notes are payable in full upon sale or transfer of the property (whichever occurs first) or upon expiration of the term of the promissory notes. Upon payment to the City, proceeds must be paid to the State of California as repayment for two $200,000 State Department of Housing and Urban Development Deferred Payment Rehabilitation Loan Program (DPRLP) loans. There were no changes in the loan balances during the fiscal year ended June 30, 2015. p. These represent non-interest bearing, limited appreciation and shared appreciation loans made between 1991 and 2001 pursuant to Tenant Ownership Rights Charter Amendment (TORCA) Program guidelines to assist low- and moderate-income households to purchase their rental units. The loans are due the earlier of 20 years or 30 years as applicable or upon resale, transfer or default. As of June 30, 2015, the outstanding balances of such loans total $973,406. q. A promissory note dated September 30, 2003 in the amount of $1,200,000 was executed with Ocean Park Community Center for congregate housing and emergency shelter for very low-income use, located at 1751 Cloverfield Boulevard. This loan is for the acquisition and rehabilitation of the site. This is a 55- year loan with 5.98% interest rate per annum with a two-year deferral period. Payments are to be made from residual receipts. As of June 30, 2015, $1,200,000 had been disbursed to the borrower. r. A revised promissory note dated February 8, 2006 in the amount of $6,745,807 was executed with Community Corporation of Santa Monica for an affordable housing project located at 3021-3031 Santa Monica Boulevard. This loan is for the acquisition, predevelopment expenses and construction of future low- and very low-income housing. This is a 3% interest loan with the principal amount due and payable February 8, 2061, 55-years from February 8, 2006. As of June 30, 2015, $6,345,807 had been disbursed to the borrower. s. A promissory note dated February 10, 2004, in the amount of $1,161,185 was executed with Community Corporation of Santa Monica for the purchase of land for an affordable housing project located at 1342 Berkeley Street. This 0% interest loan was due and payable August 6, 2008, and is secured by the land at 1342 Berkeley. City Council extended the loan due date until December 2014 and the borrower paid 70 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 off the loan in December 2014. As of June 30, 2015, the outstanding balance is $0. t. Two promissory notes dated February 13, 2007, one in the amount of $5,870,000 and one for $1,300,000 were, executed with Step Up on Fifth, L.P. for an affordable housing project located at 1548 Fifth Street. These loans are for the acquisition and construction of the site. This is a 55-year loan with a simple interest rate of 5% per annum. Payments are to be made from residual receipts. As of June 30, 2015, $7,170,000 had been disbursed to the borrower. u. A promissory note dated July 24, 2006 in the amount of $4,234,506 was executed with The Tahiti, L.P. c/o Community Corporation of Santa Monica for an affordable housing project located at 2411-2423 Centinela Avenue. The loan is for the construction of 36 affordable rental housing units. This is a 55- year loan with a simple interest rate of 3% per annum. Payments are to be made from residual receipts. As of June 30, 2015, $4,234,506 had been disbursed to the borrower. v. A promissory note dated December 22, 1988 in the amount of $841,600 was executed with Community Corporation of Santa Monica for low- and very low-income housing at 2020-2030 Cloverfield Boulevard. This is a 35-year loan with 10.44% interest rate per annum. As of June 30, 2015, $841,600 had been disbursed to the borrower. w. An amended promissory note dated February 22, 2008, in the amount of $5,207,314 and a promissory note dated March 15, 2011 for $477,141 were executed with the Santa Monica Housing Partners, L.P. for the development of 20 units of affordable senior housing at 1458 14th Street. The loans represent land acquisition financing that achieves site control. These are 55-year loans with an interest rate of 3% per annum on the $5,207,314 loan and 4.36% on the $477,141 loan. As of June 30, 2015, the outstanding balance is $5,684,455. x. A promissory note dated January 12, 2009 in the amount of $6,223,333 was executed with Community Corporation of Santa Monica for an affordable housing project located at 430-508 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to 3% and the term to 55 years. As of June 30, 2015, $3,044,820 had been disbursed to the borrower. y. A promissory note dated February 1, 2011 in the amount of $9,407,103 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2602 Broadway. This is a 55- year loan with an interest rate of 3% per annum. As of June 30, 2015, the outstanding balance is $7,979,656. z. A promissory note dated February 2, 2009 in the amount of $5,595,897 was executed with Community Corporation of Santa Monica for an affordable housing project located at 2802 Pico Boulevard. This was a 0% interest loan with the principal amount due and payable after a two-year deferral period. It was superseded by a new loan dated November 29, 2011, which increased the note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As of June 30, 2015, the outstanding balance is $4,437,001. 71 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 aa. A promissory note dated June 16, 2009 in the amount of $4,424,711 was executed with FAME Santa Monica Senior Apartments, L.P. for an affordable housing project located at 1754 19th Street. This loan was superseded by a loan in the amount of $11,475,000 dated November 17, 2011. It is 0% interest loan for 55 years. As of June 30, 2015, $4,058,652 had been disbursed to the borrower. bb. The January 17, 1994 Northridge Earthquake resulted in damaged multifamily residences in the City. To facilitate repair of damaged multifamily residences, the U.S. Department of Housing and Urban Development awarded the City a total of $33,388,000 in emergency funds to finance the City's Multifamily Earthquake Repair Loan (MERL) Program. The funds were allocated as follows: $2,027,000 – HOME Program Emergency Supplemental Fund, $6,361,000 – HOME Program Presidential Contingency Fund, and $25,000,000 – CDBG Program Emergency Supplemental Fund. Loans were made between 1995 and 2001. As of June 30, 2015, the following summarizes the total loan amount authorized, amount disbursed since inception of the loan program, the amounts repaid by the borrowers, and the loan balances: cc. A promissory note dated December 15, 2010 in the amount of $3,645,422 was executed with Step Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is for the acquisition and predevelopment of the site. This loan was superseded by a loan in the amount of $5,041,255 dated January 25, 2012. It is 3% interest for 55 years after the project is built. As of June 30, 2015, $3,011,818 had been disbursed to the borrower. dd. A promissory note dated October 21, 1987 in the amount of $778,603 was executed with Community Corporation of Santa Monica for affordable housing projects located at 504 Ashland, 518 Pier, 536 Ashland, 642 Marine, and 3005 Highland. The overall project is called Ocean Park 43 (OP43). This is a 40 year loan with an interest rate of 5% per annum. As of June 30, 2015, $729,866 had been disbursed to the borrower. Due to the length of the repayment plan and uncertainty of collection of housing loans, the City’s policy is not to record interest until received. Loan amount Loan amount Amounts Loan balance at Fund authorized disbursed repaid/forgiven June 30, 2015 Miscellaneous Grants $ 7,790,695 7,790,695 3,374,785 4,415,910 CDBG 21,739,088 21,727,929 15,296,387 6,431,542 Total $ 29,529,783 29,518,624 18,671,172 10,847,452 72 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (7) CAPITAL ASSETS Capital assets activity for the primary government for fiscal year ended June 30, 2015 is as follows: Balance at July 1, 2014, As Restated Increases Decreases Transfers Balance at June 30, 2015 Governmental activities: Capital assets, not being depreciated: Land 206,448,024$ — — — 206,448,024 Land held under easement 72,237,823 — — — 72,237,823 Construction in progress 24,675,620 13,997,007 (22,820) (15,646,196) 23,003,611 Total capital assets, not being depreciated 303,361,467 13,997,007 (22,820) (15,646,196) 301,689,458 Capital assets, being depreciated: Buildings 342,111,330 1,069,389 (628,558) (297,965) 342,254,196 Improvements other than buildings 141,943,370 1,923,811 (279,624) 15,944,161 159,531,718 Utility systems 1,742,913 — — 1,742,913 Machinery and equipment 39,230,284 66,327 (4,231,978) — 35,064,633 Infrastructure 331,410,087 244,503 (56,870) — 331,597,720 Intangibles 695,710 — 695,710 Total capital assets being depreciated 857,133,694 3,304,030 (5,197,030) 15,646,196 870,886,890 Less accumulated depreciation for: Buildings (85,064,215) (9,964,238) 515,721 (872,065) (95,384,797) Improvements other than buildings (55,698,786) (5,337,308) 218,839 872,065 (59,945,190) Utility systems (569,600) (87,146) — — (656,746) Machinery and equipment (30,789,138) (995,113) 4,167,583 — (27,616,668) Infrastructure (189,979,823) (10,559,387) 42,126 — (200,497,084) Intangibles (20,292) (34,785) — — (55,077) Total accumulated depreciation (362,121,854) (26,977,977) 4,944,269 — (384,155,562) Total capital assets, being depreciated, net 495,011,840 (23,673,947) (252,761) 15,646,196 486,731,328 Subtotal governmental activities 798,373,307 (9,676,940) (275,581) — 788,420,786 Business-type activities: Capital assets, not being depreciated: Land 64,849,212 — — — 64,849,212 Construction in progress 26,380,594 2,102,969 (5,002,830) (11,270,307) 12,210,426 Total capital assets, not being depreciated 91,229,806 2,102,969 (5,002,830) (11,270,307) 77,059,638 Capital assets, being depreciated: Buildings 148,140,138 — (269,656) — 147,870,482 Improvements other than buildings 28,078,305 3,216,713 (321,868) — 30,973,150 Machinery and equipment 176,858,980 6,305,268 (11,772,859) 3,139,324 174,530,713 Infrastructure 216,187,565 3,192,832 — 8,130,983 227,511,380 Intangibles 91,332,931 2,646,314 — — 93,979,245 Total capital assets being depreciated 660,597,919 15,361,127 (12,364,383) 11,270,307 674,864,970 Less accumulated depreciation for: Buildings (45,645,579) (4,134,885) 262,540 — (49,517,924) Improvements other than buildings (20,772,311) (663,124) 321,868 — (21,113,567) Machinery and equipment (111,751,823) (13,126,591) 11,234,380 — (113,644,034) Infrastructure (75,894,138) (5,722,271) — — (81,616,409) Intangibles (25,935,021) (2,233,778) — — (28,168,799) Total accumulated depreciation (279,998,872) (25,880,649) 11,818,788 — (294,060,733) Total capital assets, being depreciated, net 380,599,047 (10,519,522) (545,595) 11,270,307 380,804,237 Subtotal business-type activities 471,828,853 (8,416,553) (5,548,425) — 457,863,875 Total 1,270,202,160$ (18,093,493) (5,824,006) — 1,246,284,661 73 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental activities: General government 899,304$ Public safety 1,736,263 General services 14,796,642 Cultural and recreation services 3,853,433 Library 1,297,035 Housing and community development 4,328,060 Capital assets held by the government's internal service funds are charged to the various functions based on their assets' usage 67,240 Total depreciation and amortization expense - governmental activities 26,977,977$ Business-type activities: Water 1,153,739$ Resource Recovery and Recycling 11,243 Pier 547,575 Wastewater 6,529,699 Airport 411,032 Stormwater management 301,816 Cemetery 146,501 Big Blue Bus 13,777,667 Parking authority 33,886 Capital assets held by the government's internal service funds are charged to the various programs based on their assets' usage 2,967,491 Total depreciation and amortization expense - business-type activities 25,880,649$ The City’s infrastructure assets are recorded at historical cost and estimated historical cost in the government- wide statements as required by GASB Statement No. 34. (8) UNEARNED REVENUE AND DEFERRED INFLOWS OF RESOURCES Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental and enterprise funds also defer revenue recognition in connection with resources that have been received as of year-end, but not yet earned (unearned revenue). The interest on advances reported in the General Fund and the nonmajor governmental funds represents interest on advances to the Successor Agency and the Airport Fund and is recognized in the government-wide financial statements. This interest is earned and included in promissory note balances at year-end. GASB Statement 74 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 No. 34 requires the City to recognize and present interfund activity between governmental and business-type funds on the government-wide financial statements. The components of unearned revenue are as follows: Fund financial statements Recognized in government-wide financials Government- wide financial statements Governmental funds: General Fund: Unearned user fees 1,089,605$ — 1,089,605 Business license tax 5,120,497 — 5,120,497 Settlement proceeds 1,500,000 (1,500,000) — Total General Fund 7,710,102 (1,500,000) 6,210,102 Special Revenue Source Fund: Civic Center Village advanced lease payments 18,697,810 — 18,697,810 Total Special Revenue Source Fund 18,697,810 — 18,697,810 Nonmajor governmental funds: Unearned user fees 6,131 — 6,131 Total nonmajor governmental funds:6,131 — 6,131 Total governmental funds 26,414,043 (1,500,000) 24,914,043 Enterprise funds: Big Blue Bus Fund: Unredeemed fare media 9,888 — 9,888 LACMTA funds received prior to meeting all eligibility requirements 9,062,775 — 9,062,775 Total Big Blue Bus Fund 9,072,663 — 9,072,663 Total enterprise funds 9,072,663 — 9,072,663 Total unearned revenue 35,486,706$ (1,500,000) 33,986,706 75 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The components of deferred inflows of resources are as follows: Fund financial statements Recognized in government- wide financials Government- wide financial statements Governmental funds: General Fund: Interest on advances 20,244,569$ (20,244,569) — Settlement proceeds 45,070,950 (45,070,950) — Total General Fund 65,315,519 (65,315,519) — Nonmajor governmental funds: Interest on advances 5,994,018 (5,994,018) — Grants receivable 2,800,188 (2,800,188) — Total nonmajor governmental funds:8,794,206 (8,794,206) — Total deferred inflows of resources 74,109,725$ (74,109,725) — 76 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (9) LONG-TERM LIABILITIES Changes in long-term liabilities: Long-term liability activity for the fiscal year ended June 30, 2015, was as follows: Balance at July 1, 2014 Additions Reductions Balance at June 30, 2015 Due within one year Due beyond one year Governmental Activities: Loans payable 400,000 $ — — 400,000 — 400,000 Revenue bonds 79,570,000 — 4,865,000 74,705,000 5,070,000 69,635,000 General obligation bonds 10,100,000 — 1,210,000 8,890,000 1,165,000 7,725,000 Less deferred amounts: For issuance discounts (4,691) — (2,451) (2,240) — (2,240) For issuance premiums 4,044,129 — 348,028 3,696,101 — 3,696,101 Total loans and bonds payable 94,109,438 — 6,420,577 87,688,861 6,235,000 81,453,861 Compensated absences (1)11,916,009 7,404,882 7,516,485 11,804,406 7,505,505 4,298,901 Claims payable 38,823,615 11,719,978 9,225,412 41,318,181 9,984,378 31,333,803 Subtotal governmental activities 144,849,062 19,124,860 23,162,474 140,811,448 23,724,883 117,086,565 Business-type activities: Loans payable 1,774,966 — 277,174 1,497,792 284,383 1,213,409 Revenue bonds 8,955,000 — — 8,955,000 — 8,955,000 Less deferred amounts: For issuance premiums 749,216 — 99,895 649,321 — 649,321 Total loans and bonds payable 11,479,182 — 377,069 11,102,113 284,383 10,817,730 Compensated absences 3,528,734 2,351,730 2,406,766 3,473,698 2,367,751 1,105,947 Claims payable 3,518,401 2,210,482 1,038,623 4,690,260 2,306,350 2,383,910 Subtotal business-type activities 18,526,317 4,562,212 3,822,458 19,266,071 4,958,484 14,307,587 Total 163,375,379 $ 23,687,072 26,984,932 160,077,519 28,683,367 131,394,152 (1) Compensated absences are predominantly liquidated by General Fund resources. 77 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 A summary of long-term bonds and loans outstanding at year-end is as follows: Date of issue Original issue Final maturity date Interest rate Balance at June 30, 2015 Governmental activities: Revenue bonds (1): Parking Authority Refunding 2002 May 1, 2002 10,480,000$ July 1, 2016 3.50-4.50%2,125,000$ Public Finance Authority 2011 Nov 16, 2011 32,065,000 June 1, 2031 4.00-5.00%29,580,000 Public Finance Authority Refunding 2009 Dec 16, 2009 9,155,000 July 1, 2021 2.00-5.00%5,845,000 Public Finance Authority Refunding 2011 Nov 16, 2011 8,625,000 Dec 1, 2020 2.00-4.00%5,705,000 Public Finance Authority 2004 Dec 14, 2004 38,930,000 July 1, 2033 3.35-5.00%31,450,000 Subtotal revenue bonds - governmental activities 74,705,000 General obligation bonds (1): Main Library Improvements 2012 May 30, 2012 11,325,000 July 1, 2022 0.20-4.00%8,890,000 Subtotal general obligation bonds - governmental activities 8,890,000 Loans payable: State Dept. of Housing and Community Development loan (2)Dec 22, 1988 200,000 Dec 22, 2018 0.00%200,000 State Dept. of Housing and Community Development loan (2)Dec 29, 1989 200,000 Dec 29, 2019 0.00%200,000 Subtotal loans payable 400,000 Subtotal governmental activities 83,995,000 Business-type activities (3): Revenue bonds: Hyperion Project Revenue Refunding 2012 May 30, 2012 8,955,000 Feb 1, 2022 2.00-4.00%8,955,000 Subtotal revenue bonds - business-type activities 8,955,000 Loans: State Water Resources Control Board loan Jan 29, 1999 5,000,000 July 1, 2019 2.60%1,497,792 Subtotal business-type activities 10,452,792 Total 94,447,792$ (1) For construction of City facilities. (2) To fund promissory note receivable from the owner of certain rental property. (3) To fund capital contribution towards wastewater treatment facility. Management believes it is in compliance with all debt covenants. See Note 17. 78 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Annual debt service requirements to maturity are as follows: Fiscal year ending June 30, Principal Interest Principal Interest Principal Interest Principal Interest 2016 5,070,000$ 3,264,051 1,165,000 309,700 — — 6,235,000 3,573,751 2017 5,270,000 3,056,623 1,135,000 275,350 — — 6,405,000 3,331,973 2018 4,350,000 2,864,344 1,130,000 230,050 200,000 — 5,680,000 3,094,394 2019 4,525,000 2,690,594 1,120,000 185,050 200,000 — 5,845,000 2,875,644 2020 4,690,000 2,515,015 1,110,000 140,450 — — 5,800,000 2,655,465 2021-2025 19,030,000 9,868,581 3,230,000 186,925 — — 22,260,000 10,055,506 2026-2030 20,180,000 5,695,234 — — — — 20,180,000 5,695,234 2031-2034 11,590,000 1,059,500 — — — — 11,590,000 1,059,500 74,705,000$ 31,013,942 8,890,000 1,327,525 400,000 — 83,995,000 32,341,467 Fiscal year ending June 30, Principal Interest Principal Interest Principal Interest 2016 —$ 266,550 284,383 38,943 284,383 305,493 2017 — 266,550 291,775 31,549 291,775 298,099 2018 — 266,550 299,361 23,963 299,361 290,513 2019 2,130,000 266,550 307,144 16,179 2,437,144 282,729 2020 2,210,000 181,350 315,129 8,193 2,525,129 189,543 2021-2025 4,615,000 161,850 — — 4,615,000 161,850 8,955,000$ 1,409,400 1,497,792 118,827 10,452,792 1,528,227 Governmental Activities General obligation bonds TotalRevenue bonds Loans payable TotalRevenue bonds Business-type activities Loans payable 79 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Pledged Revenue The City has a number of debt issues that involve the pledging of revenues. The amounts and terms of the remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized are indicated in the summary of long-term bonds and loans and notes outstanding at year-end presented in this note. For the current year, debt service payments as a percentage of the pledged gross revenue (net of certain expenses where so specified in debt covenants) are indicated in the table below. These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment. Annual amount of pledged revenue (net of expenses, where required) Annual debt service payments (of all debt secured by this revenue) Debt service as a percentage of pledged revenue Future amount of pledged revenue Description of pledged revenue/debt: Base rental payments Parking Authority Refunding 2002 1,134,585$ 1,134,585 100%1,133,825 Public Finance Authority 2011, Refunding 2009 2,027,200 2,027,200 100%12,206,725 Public Finance Authority 2004 2,551,583 2,551,583 100%45,920,200 Public Finance Authority 2011 2,667,131 2,667,131 100%42,692,225 Library bond tax revenue Main Library Improvements Refunding 2012 1,443,663 1,486,350 103%8,891,850 Wastewater charges for services Hyperion Project Revenue Refunding 2012 9,631,029 266,550 3%10,364,400 (10) FUND DEFICITS Special Revenue Funds. A deficit fund balance in the amount of $814,287 exists in the Disaster Relief Fund. This fund deficit represents deferred inflows from reimbursable grant expenditures which have already been disbursed. Once cash is received from the grantor, the deficit fund balance will be eliminated. Proprietary Funds. A net deficit in the amount of $5,497,033 exists in the Airport Fund. This fund deficit is a result of reductions in lease revenue, increases in expenditures to maintain the airport’s infrastructure and the City’s implementation of GASB Statement No. 68 in the current year which has required rep orting of the fund’s proportionate share of the City’s net pension liability. It is expected that the fund deficit will continue to decrease as landing fee revenues are collected. A net deficit in the amount of $2,727,970 exists in the Resource Recovery and Recycling Fund. This fund deficit is a result of the City’s implementation of GASB Statement No. 68 in the current year which has required reporting of the fund’s proportionate share of the City’s net pension liability. This net pension liability and corresponding net deficit will be reduced by continued pension contributions in future years. 80 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Internal Service Funds. A net deficit in the amount of $1,059,983 exists in the Self-Insurance Risk Management Administration Fund. This fund deficit is a result of the City’s implementation of GASB Statement No. 68 in the current year which has required reporting of the fund’s proportionate share of the City’s net pension liability. This net pension liability and corresponding net deficit will be reduced by continued pension contributions in future years. A net deficit in the amount of $831,487 exists in the Self-Insurance Workers’ Compensation Fund due to adverse development on new and existing claims related to prior years. This fiscal year the City made an additional $5,000,000 contribution to the fund. Management expects to continue to carefully monitor this fund and intends to alleviate this net deficit through future user charges, instituting cost containment measures, and continuing evaluation of reserve balances. $8,330,000 remains in an assignment in the General Fund to help manage this deficit. (11) INTERFUND TRANSACTIONS The following tables summarize the due to/from other funds, interfund advances to/from, and transfers in/out as of and for the fiscal year ended June 30, 2015. Advances to/from Advances to/from other funds at June 30, 2015 are as follows: Advances to Advances from (receivable fund)(payable fund)Amount General Fund Nonmajor governmental funds 3,842,973$ Nonmajor enterprise funds 13,058,926 Private-Purpose Trust Fund 24,155,332 Total General Fund 41,057,231 Nonmajor governmental funds Private-Purpose Trust Fund 7,864,674 Wastewater Fund Nonmajor enterprise funds 167,186 Total advances to/from 49,089,091$ Advances represent loans made to provide financing resources for capital projects. These amounts are expected to be repaid in future years, subject to the various loan terms. 81 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Due from/to Balances due to/from other funds at June 30, 2015 are as follows: Due from (receivable fund)Amount General Fund Nonmajor governmental funds 1,303,299$ Nonmajor enterprise funds 26,817 Total General Fund 1,330,116 Private-Purpose Trust Fund General Fund 19,149,678 (1) Total due to/from 20,479,794$ (payable fund) Due to (1) Represents interfund receivable due to the Successor Agency based on the California State Controller’s Office Asset Transfer Review. See note 17. Due to/from other funds are primarily short-term loans made to eliminate negative cash balances at year-end. These amounts are expected to be repaid in one year. 82 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Transfers Transfers to/from other funds for the fiscal year ended June 30, 2015 are as follows: Transfer in (receivable fund)Amount General Fund Special Revenue Source Fund 4,407,204$ (1) Non-major governmental funds 546,614 (2) Water Fund 1,649,429 (3) Resource Recovery and Recycling Fund 408,079 (3) Big Blue Bus Fund 380,818 (4) Wastewater Fund 852,892 (3) Non-major enterprise funds 966,438 (5) Internal service funds 146,646 (6) Total General Fund 9,358,120 Nonmajor governmental funds General Fund 10,357,844 (7) Non-major governmental funds 62,245 (8) Total non-major governmental funds 10,420,089 Big Blue Bus Fund Non-major governmental funds 74,200 (9) Total Big Blue Bus Fund 74,200 Non-major enterprise funds Water Fund 26,190 (10) Non-major governmental funds 1,841,782 (11) Non-major enterprise funds 261,661 (12) Total non-major enterprise funds 2,129,633 Total transfers 21,982,042$ Transfer out (payable fund) (1) Transfer of monies to subsidize housing, transportation management and cultural affairs program expenditures; ERP system expenditures and loan payments on City TV property. (2) Transfer of monies to subsidize engineering, housing, human services, and public works expenditures; return of excess debt service funding. (3) Transfer of monies to subsidize environmental program expenditures. (4) Transfer of monies to subsidize counting room operation, transit mall maintenance, and Human Resources staff time. (5) Transfer of monies to subsidize environmental program expenditures and Housing and Economic Development staff time. (6) Transfer of monies to subsidize Workers’ Compensation Self-Insurance Fund staff time. (7) Transfer of monies to subsidize housing program expenditures and for the payment of debt service. (8) Transfer of monies to subsidize housing program expenditures. (9) Transfer of monies to subsidize WISE Paratransit services and other transportation related expenditures. (10) Transfer of monies received from Metropolitan Water District Recycled Water Rebate program. (11) Transfer to subsidize operating and maintenance expenditures associated with the Santa Monica Urban Runoff Recycling Facility Transfer and cemetery management expenditures. (12) Transfer of monies to close Special Aviation. 83 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (12) RESTRICTED NET POSITION Restricted components of net position are subject to external legal constraints. The following categories of net position are restricted as to use by agreements with creditors, developers, grantors, laws or regulations of other governments or enabling legislation: Debt service, Clean Beaches and Ocean Parcel Tax, Beach Recreation, Parks and Recreation, Housing Authority, Community Development Block Grant, Citizens Option for Public Safety, Air Quality Management District, Development projects, Asset Seizure, Streets projects, General Fund housing loan and Other, Low and Moderate Income Housing projects, perpetual care, and construction of rail system. The remaining categories of funds, Tenant Ownership Rights Charter Amendment and Rent Control, are restricted as to use by law. Net position for governmental and business-type activities at June 30, 2015 is restricted as follows: Net position for business-type activities at June 30, 2015 is restricted as follows: (1) Net position restricted by grantors (2) Net position restricted by enabling legislation Housing Authority (1)$45,595 Disaster Relief 1,985,901 Tenant Ownership Rights Charter Amendment (2)8,861,170 Community Development Block Grant (1)17,813,298 Citizens Option for Public Safety (1)162,681 Rent Control (2)1,001,295 Air Quality Management District (1)618,131 Asset Seizure (1)371,723 Street Projects (2)78,221 General fund housing loan (1)17,488,870 Low and Moderate Income Housing Asset Fund (1)50,557,811 Total housing and community development 98,984,696 Clean Beaches and Ocean Parcel Tax (2)8,101,808 Beach and Parks Recreation (2)8,250,332 Miscellaneous Grants (1)11,705,833 Debt Service 5,091,427 Development Projects (1)34,609,461 Perpetual Care - nonexpendable 11,418,771 Other (1) 462,429 Total governmental restricted net position $178,624,757 Construction of Rail System (1)$1,759,377 Prop 1B (2) 13,343,103 Total business-type restricted net position $15,102,480 84 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (13) FUND BALANCES In the fund financial statements, nonspendable, restricted for, committed to, assigned to, and unassigned segregate portions of fund balances that are either not available or have been earmarked for specific purposes. These fund balance categories are in accordance with GASB Statement No. 54. In governmental funds, nonspendable fund balances are presented as a component of fund balances as follows: General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Nonspendable Prepaids 2,913,201$ — 45,078 2,958,279 Advances to other funds 20,812,663 — — 20,812,663 Perpetual care — — 11,418,771 11,418,771 Total nonspendable 23,725,864$ — 11,463,849 35,189,713 Prepaids Since these assets represent goods or services already purchased, the related fund balance is not in spendable form. Advances to other funds Reflects the balances due, net of deferred interest revenues, from other funds that are long-term in nature. These funds are not in spendable form and are not available for appropriation. Perpetual care Represents balance of funds held by the City restricted for use for expenditures associated with perpetual care of the City's cemetery and mausoleum. 85 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 In governmental funds, restricted fund balances are presented as a component of fund balances as follows: General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Restricted for Notes receivable 17,488,870$ 14,941,141 71,640,119 104,070,130 Continuing capital projects — 4,790,276 5,432,141 10,222,417 Encumbrances — — 47,666 47,666 Advances to other funds — — 1,870,656 1,870,656 Special purposes 462,429 911,819 17,937,965 19,312,213 Low- and moderate income housing — 1,788,640 4,645,332 6,433,972 Childcare center — 2,306,936 — 2,306,936 Parks — 741,151 — 741,151 Historical Preservation — 100,000 — 100,000 Traffic — 2,221,790 — 2,221,790 Arts — 938,432 — 938,432 Parking — 2,473,337 — 2,473,337 Roads — 1,799,875 — 1,799,875 Transit — 1,596,064 — 1,596,064 Debt service — — 8,718,698 8,718,698 Total restricted 17,951,299$ 34,609,461 110,292,577 162,853,337 Notes receivable Reflects the balances due on loans that are long-term in nature. Amounts, when collected, will be restricted as to use. Continuing capital projects Reflects the amount needed to fund the full cost of uncompleted capital projects at June 30, 2015. Encumbrances Reflects the amount set aside for future payments on unperformed contracts and open purchase orders at June 30, 2015. Advances to other funds Reflects the balances due, net of deferred interest revenues, from other funds that are long-term in nature and do not represent available expendable resources of the City. Special purposes Represents amounts restricted externally by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. 86 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Low- and moderate-income housing Represents funds restricted for low- and moderate-income housing. Childcare center Represents unspent balance of developer fees restricted for future childcare center. Parks Represents unspent balance of developers fees restricted for parks projects. Historical preservation Represents unspent balance of developers fees restricted for historical preservation projects. Traffic Represents balance of developer fees restricted for traffic mitigation projects. Arts Represents balance of funds received from various sources to be used for arts projects. Parking Represents balance of developer fees restricted for additional parking improvements. Roads Represents balance of funds received from various sources for road projects. Transit Represents balance of fund received from developer contributions for bicycle and light rail infrastructure projects. Debt service Represents balance of funds held by trustees for future debt service and associated payments in the Debt Service Fund. 87 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 In governmental funds, committed fund balances are presented as a component of fund balances as follows: General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Committed to Low-and moderate-income housing 30,574$ 5,250,000 — 5,280,574 Continuing capital projects — 9,970,652 — 9,970,652 Parks — 8,276 — 8,276 Overnight accommodations 490,000 2,032,542 — 2,522,542 Transportation — 564,264 — 564,264 Other purposes — — 51,975 51,975 Total committed 520,574$ 17,825,734 51,975 18,398,283 Low- and moderate-income housing Represents funds committed for affordable low- and moderate-income housing and funds from the sale of City owned properties committed to affordable housing production. Continuing capital projects Reflects the amount needed to fund the full cost of uncompleted capital projects at June 30, 2015. Parks Represents funds from the Parks and Recreation Impact Fee committed for development of new parks and recreation facilities and the improvement of existing and new parkland. Overnight accommodations Represents funds committed to overnight accommodations per the 1990 Low Cost Lodging Mitigation Fee Ordinance. Transportation Represents funds from the Transportation Impact Fee committed for traffic mitigation and constructing transportation improvements. Other purposes Represents funds committed to the lifeguard headquarters and to legal expenses related to rent control. 88 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 In governmental funds, assigned fund balances are presented as a component of fund balances as follows: General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Assigned to Continuing capital projects 62,752,146$ 1,723,875 6,482,785 70,958,806 Future capital projects 32,951,218 — — 32,951,218 Expenditure control budget account 8,318,916 — — 8,318,916 Encumbrances 3,436,659 — 630,403 4,067,062 Project equity/PERS 20,000,000 — 131,980 20,131,980 Compensated absenses 11,244,427 — 460,031 11,704,458 Pollution remediation 56,908,806 — — 56,908,806 Workers' compensation/OPEB 10,095,166 — — 10,095,166 Strategic initiatives 5,413,526 — — 5,413,526 Other purposes 7,509,319 220,543 — 7,729,862 Total assigned 218,630,183$ 1,944,418 7,705,199 228,279,800 Continuing capital projects Reflects the amount needed to fund the full cost of uncompleted capital projects at June 30, 2015. Future capital projects Represents funds set aside for future capital projects or project contingency. Expenditure control budget account Represents expenditure control budget amounts for department use. Encumbrances Reflects the amount set aside for future payments on unperformed contracts and open purchase orders at June 30, 2015. Project equity/PERS Resources set aside for potential additional payments to CalPERS or use as project financing equity to generate future operating savings. Compensated absences Resources set aside for future payments of compensated absences. Pollution remediation Resources held for use in environmental and pollution remediation, involving the Olympic Well Field Restoration Project. 89 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Workers’ Compensation/OPEB Resources set aside for future contributions to workers’ compensation fund and postemployment benefits irrevocable trust. Strategic initiatives Resources set aside for projects to advance council priorities. Other purposes Represents funds assigned for other purposes including amounts set aside for low- and moderate-income housing, Civic Auditorium closeout, RDA dissolution payments, airport litigation, and other purposes. In governmental funds, unassigned fund balances are presented as a component of fund balances as follows: General Fund Special Revenue Source Fund Nonmajor governmental funds Total governmental funds Unassigned Operating and capital contingency 51,015,000$ — — 51,015,000 Future expenditures 50,190,847 — — 50,190,847 Economic uncertainty 9,700,000 — — 9,700,000 Other unassigned 3,290,261 — (814,287) 2,475,974 Total unassigned 114,196,108$ — (814,287) 113,381,821 Operating and capital contingency Represents funds for operating and capital contingency. Future expenditures Represents funds for future expenditures. Economic uncertainty Represents funds to mitigate potential revenue losses due to economic uncertainty. Other unassigned Represents residual classification for the General Fund. In other governmental funds, expenditures incurred for specific purposes exceeded the amounts restricted, committed or assigned, therefore it was necessary to report a negative unassigned fund balance. (14) COMMITMENTS AND CONTINGENCIES Litigation The City is regularly subject to certain legal proceedings and claims that arise in the normal course of City operations. Many of these have not yet been fully adjudicated. In the opinion of the City Attorney, there are 90 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 adequate legal defenses to these actions and it is not anticipated that there will be any adverse material effect on the financial position of the City. Grants The City recognizes as revenue grant monies received as reimbursement for costs incurred in certain Federal and State programs it administers. Although the City’s Federal grant programs have been audited through June 30, 2014 in accordance with the requirements of the Federal Single Audit Act Amendments of 1996 and the related U.S. Office of Management and Budget Circular A-133, these programs may be subject to financial and compliance audits by the reimbursing agencies. The amount, if any, of expenditures, which may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. Construction Commitments The City has a number of construction projects currently underway. Purchase orders, contracts and other commitments for these projects are recorded in order to reserve the portion of the applicable appropriation and are recorded at year-end as assignments of fund balances. Approximately $91.2 million will be payable upon future performance under these contracts. Encumbrances The City uses “encumbrances” to control expenditure commitments for the year. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled. Commitments for such expenditures are encumbered to reserve applicable appropriations. Encumbrances are reported as part of restricted or assigned fund balance on the governmental funds balance sheet. As of June 30, 2015 the restricted and assigned encumbrance fund balances for the governmental funds are reported as follows: General Fund 3,436,659$ Nonmajor governmental funds 678,069 Total 4,114,728$ 91 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Operating Lease Revenue/Expenses The City has entered into operating lease arrangements as lessor for property. The following schedule is an analysis of the City’s investment in property under operating leases by major classes as of June 30, 2015: The following is a schedule of both future minimum lease rental revenue to be received by the City as lessor and lease payments to be made by the City as lessee under operating leases that have initial or remainin g noncancelable lease terms in excess of one year as of June 30, 2015: Fiscal year ending June 30 Rental revenue Lease payments 2016 9,343,857$ 2,431,795 2017 9,247,170 2,278,351 2018 7,776,927 -1,745,441 2019 7,008,968 1,740,643 2020 6,360,064 1,417,714 2021 - 2025 17,853,958 3,035,141 2026 - 2030 14,233,123 161,128 2031 - 2035 11,015,360 - 2036 - 2040 7,480,916 - 2041 - 2045 6,227,430 - 2046 - 2050 4,453,749 - 2051 - 2055 3,792,776 - 2056 - 2060 3,179,576 - 2061 - 2065 3,179,576 - 2066 - 2070 158,979 - Total 111,312,429$ 12,810,213 The total long-term lease rental revenues and expenditures/expenses for the year ended June 30, 2015, were $9,213,388 and $2,431,796, respectively. Land 189,065,432$ Buildings 38,470,463 Improvements other than buildings 10,021,096 Machinery and equipment 1,782,774 Infrastructure 8,213,438 247,553,203 Less: Accumulated depreciation (39,482,282) Total 208,070,921$ 92 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 (15) 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 others; and natural disasters. The City has chosen to establish risk financing internal service funds where assets are set aside for claim settlements associated with such risks of loss up to certain limits and has obtained excess liability coverage through the Authority for California Cities Excess Liability (ACCEL), a joint powers authority of twelve medium-size California municipalities. ACCEL is a member of the California State Association of Counties Excess Insurance Authority for the purpose of providing access to excess workers’ compensation coverage for major employee injury risks through a pr ogram of pooled self-insurance/re-insurance and insurance on a risk sharing basis. The City retains self-insurance up to $1,000,000 for general liability, automobile liability, and bus operations liability. The ACCEL pool covers all general liability losses between $1,000,000 and $5,000,000, and purchases excess liability insurance to cover losses over $5,000,000 and up to $150,000,000. The City shares limits with two other California cities to cover losses over $100,000,000 and up to $150,000,000. The City retains self-insurance up to $750,000 for workers’ compensation. California State Association of Counties Excess Insurance Authority covers up to an additional $4,250,000 for workers’ compensation and arranges for excess of workers’ compensation over $5,000,000 and up to statutory limits. No claim settlements have exceeded insurance coverage in any of the past three years. In order to provide funds to pay claims, ACCEL collects premiums from each member. The premiums paid are credited with investment income at the rate earning on the Authority’s investments. Based on ACCEL’s June 30, 2015 audited financial statements, the net reserves amounts related to the City were $5,811,377 (16% of ACCEL’s total net reserves and incurred but not reported). Total assets of ACCEL at June 30, 2015 were $52,990,324. ACCEL has no capital contributions. The City’s unpaid claims liabilities are based on the results of actuarial studies. The unpaid claims liabilities are compiled by the Risk Manager of the City and include amounts for claims incurred but not reported as of year-end. Claims liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. Net present values of the unpaid claims liabilities are estimated for the year ended June 30, 2015, based on interest rates of 2.0% for general, automobile, and transit and 5.0% for workers’ compensation. Revenues of the risk management funds, together with funds to be provided in the future, are expected to provide adequate resources to meet liabilities as they come due. Nonincremental claims expenses have not been included as part of the liability for claims. 93 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Changes in the liability for claims during the past two fiscal years for the self-insurance funds follow: Fund (by fiscal year) Beginning of year Current-year claims and changes in estimates Claims payments End of year Due within one year June 30, 2014: General Liability and Automobile 3,654,090$ 4,350,739 (1,551,482) 6,453,347 2,343,569 Bus 3,944,023 1,347,258 (1,772,880) 3,518,401 1,961,401 Workers' Compensation 29,524,844 9,962,630 (7,117,206) 32,370,268 6,913,544 37,122,957$ 15,660,627 (10,441,568) 42,342,016 11,218,514 June 30, 2015: General Liability and Automobile 6,453,347$ 1,987,583 (2,383,995) 6,056,935 2,436,553 Bus 3,518,401 2,210,482 (1,038,623) 4,690,260 2,306,350 Workers' Compensation 32,370,268 9,732,395 (6,841,417) 35,261,246 7,547,825 42,342,016$ 13,930,460 (10,264,035) 46,008,441 12,290,728 (16) EMPLOYEE BENEFIT PROGRAMS Santa Monica Public Employees’ Retirement Plan General Information about the Pension Plan The City’s defined benefit pension plan, Santa Monica Public Employees’ Retirement Plan (Plan) provides retirement and disability benefits, annual cost-of living adjustments, and death benefits to plan members and beneficiaries. The Plan is part of the Public Agency portion of the California Public Employees’ Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. State statutes within the Public Employees’ Retirement Law establish a menu of benefit provisions as well as other requirements. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through City resolution. CalPERS issues a separate comprehensive annual financial report available from the CalPERS Executive Office, 400 Q Street, Sacramento, California 95811. 94 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Plan Description All full-time employees of the City and part-time employees who have worked over 1,000 hours during a fiscal year are eligible to participate in either one of the Safety Plans (Police and Fire) or the Miscellaneous Plan (all others). The City is authorized by statute to establish and amend all plan provisions. Related benefits vest after five years of service. Upon five years of service, employees who retire are entitled to receive an annual retirement benefit according to the following Plan provision chart for each employee group: Hire Date Prior to July 1, 2012 Between July 1, 2012 and December 31, 2012 On or after January 1, 2013 Benefit formula 2.70% @ 55 2.00% @ 55 2.00% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefits payments monthly for life monthly for life monthly for life Retirement age 50-55 50-62 52-67 Monthly benefits, as a % of eligible compensation 2.70%1.43% to 2.42%1.00% to 2.50% Cost of living adjustment 2.00%2.00%2.00% Required employee contribution rate 8.00%7.00%6.25% Required employer contribution rate* *Rates for fiscal year 2014-15 18.51%18.51%18.51% Miscellaneous Hire Date Prior to December 31, 2012 On or after January 1, 2013 Benefit formula 3.00% @ 50 2.70% @ 57 Benefit vesting schedule 5 years service 5 years service Benefits payments monthly for life monthly for life Retirement age 50 50-57 Monthly benefits, as a % of eligible compensation 3.00% 2.00% - 2.70% Cost of living adjustment 2.00%2.00% Required employee contribution rate 9.00%12.75% Required employer contribution rate 40.42%40.42% Police Hire Date Prior to December 31, 2012 On or after January 1, 2013 Benefit formula 3.00% @ 55 2.70% @ 57 Benefit vesting schedule 5 years service 5 years service Benefits payments monthly for life monthly for life Retirement age 50-55 50-57 Monthly benefits, as a % of eligible compensation 2.40% - 3.00% 2.00% - 2.70% Cost of living adjustment 2.00%2.00% Required employee contribution rate 9.00%11.25% Required employer contribution rate 30.49%30.49% Fire 95 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Funding Policy Section 20814(c) of the California Public Employees’ Retirement Law 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. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. Active full-time members in the Plan are required to contribute 6.25% to 8.00% (for miscellaneous employees), 9.00% to 12.75% (for Police safety employees), and 9.00% to 11.25% (for Fire safety employees), of their annual covered salary. The City makes such employee contributions on behalf and for employees hired before January 1, 2013 for police safety and before July 1, 2012 for miscellaneous employees. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members earned during the year with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by CalPERS. The miscellaneous members reimburse the City for the cost of an enhanced benefit at a rate of 6.70%. Police safety employees reimburse the City for the cost of an enhanced benefit at a rate of 3.50% and fire safety employees reimburse the City at a rate of 1.00%. In addition, starting July 1, 2014, Fire plan members began paying the employee contribution at a rate of 9.00%. Employees Covered At June 30, 2013, the following employees were covered by the benefit terms for each Plan: Employees Miscellaneous Fire Police Inactive employees or their beneficiaries currently receiving benefits 1,057 138 291 Inactive employees entitled to but not yet receiving benefits 535 14 24 Active members 1,830 106 205 Total 3,422 258 520 Note: Information derived from 2013 Census Data Public Safety 96 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Net Pension Liability The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The total pension liability of each of the Plans is measured as of June 30, 2014, using an annual actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ending June 30, 2014 (the measurement date), the total pension liability was determined using the following actuarial methods and assumptions: Miscellaneous Safety - Police Safety - Fire Valuation date June 30, 2013 June 30, 2013 June 30, 2013 Measurement date June 30, 2014 June 30, 2014 June 30, 2014 Actuarial cost method Actuarial assumptions: Discount rate 7.50%7.50%7.50% Inflation 2.75%2.75%2.75% Payroll growth 3.00%3.00%3.00% Projected salary increase 1 3.30% - 14.20%3.30% - 14.20%3.30% - 14.20% Investment rate of return 2 7.50%7.50%7.50% Mortality 3 Post retirement benefit increase Contract COLA up to 2.75% until Purchasing Power Protections Allowance Floor on Purchasing Power applies, 2.75% thereafter 1 Depending on age, service and type of employment. 2 Net of pension plan investment expenses, including inflation. 3 The mortality table used was developed based on CalPERS' specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 Experience Study report. Entry-Age Normal Derived using CalPERS' membership data for all funds The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2013 valuation were based on the results of a January 2014 actuarial experience study for the period 1997 to 2011, including updates to salary increase, mortality and retirement rates. Further details of the Experience Study can be found on the CalPERS website under “Forms and Publications.” Discount Rate The discount rate used to measure the total pension liability was 7.50 percent for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each 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 97 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 7.50 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.50 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at the CalPERS website under the GASB 68 section. According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. The 7.50 percent investment return assumption used in this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be 15 basis points. An investment return excluding administrative expenses would have been 7.65 percent. Using this lower discount rate has resulted in a slightly higher total pension liability and net pension liability. This difference was deemed immaterial to the City’s financial statements. Refer to the information on the Sensitivity of the Net Pension Liability to Changes in the Discount Rate which calculates the net pension liability based on 1 percentage-point higher and lower than the current rate. CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability Management review cycle to be completed in February 2018. Any changes to the discount rate will require Board action and proper stakeholder outreach. For these reasons, CalPERS expects to continue using a discount rate net of administrative expenses for GASB 67 and 68 calculations through at least the 2017-18 fiscal year. CalPERS will continue to check the materiality of the difference in calculation until such time as the methodology is changed. 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 rate of return, both short- and long-term market return expectations were considered by CalPERS 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 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. 98 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 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. These geometric rates of return are net of administrative expenses. Asset Class New Strategic Allocation % Real Return % Years 1 - 10 1 Real Return % Years 11+2 Global Equity 47.00 5.25 5.71 Global Fixed Income 19.00 0.99 2.43 Inflation Sensitive 6.00 0.45 3.36 Private Equity 12.00 6.83 6.95 Real Estate 11.00 4.50 5.13 Infrastructure and Forestland 3.00 4.50 5.09 Liquidity 2.00 (0.55)(1.05) Total 100.00 1 An expected inflation of 2.50% used for this period 2 An expected inflation of 3.00% used for this period Changes in Net Pension Liability The following tables display the changes in net pension liability recognized over the measurement period for each of the City’s Plans: Miscellaneous Plan: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability/(Asset) (a)(b)(c)=(a)-(b) Balance at 6/30/2013 (VD)1 856,285,199$ 586,695,124$ 269,590,075$ Changes recognized for the measurement period Service cost 24,972,667 - 24,972,667 Interest on total pension liability 63,926,580 - 63,926,580 Contribution - employer - 27,433,064 (27,433,064) Contribution - employee - 11,418,160 (11,418,160) Net investment income 3 - 104,724,175 (104,724,175) Benefit payments, includes employee contribution refunds (32,834,279)(32,834,279)- Net changes 56,064,968$ 110,741,120$ (54,676,152)$ Balance at 6/30/2014 (MD)2 912,350,167$ 697,436,244$ 214,913,922$ 1 VD = Valuation Date 2 MD = Measurement Date 3 Net of administrative expenses of $888,896. Increase (Decrease) 99 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Public Safety - Fire Plan: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability/(Asset) (a)(b)(c)=(a)-(b) Balance at 6/30/2013 (VD)1 199,527,764$ 133,936,461$ 65,591,303$ Changes recognized for the measurement period Service cost 3,975,757 - 3,975,757 Interest on total pension liability 14,735,448 - 14,735,448 Contribution - employer - 4,954,271 (4,954,271) Contribution - employee - 1,421,733 (1,421,733) Net investment income 3 - 23,479,329 (23,479,329) Benefit payments, includes employee contribution refunds (10,085,994)(10,085,994)- Net changes 8,625,211$ 19,769,339$ (11,144,128)$ Balance at 6/30/2014 (MD)2 208,152,975$ 153,705,800$ 54,447,175$ 3 Net of administrative expenses of $194,446. Increase (Decrease) Public Safety - Police Plan: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability/(Asset) (a)(b)(c)=(a)-(b) Balance at 6/30/2013 (VD)1 365,587,519$ 244,062,260$ 121,525,259$ Changes recognized for the measurement period Service cost 8,493,146 - 8,493,146 Interest on total pension liability 27,132,667 - 27,132,667 Contribution - employer - 12,515,162 (12,515,162) Contribution - employee - 3,372,358 (3,372,358) Net investment income3 - 43,315,499 (43,315,499) Benefit payments, includes employee contribution refunds (16,130,411)(16,130,411)- Net changes 19,495,402$ 43,072,608$ (23,577,206)$ Balance at 6/30/2014 (MD)2 385,082,921$ 287,134,868$ 97,948,053$ 3 Net of administrative expenses of $361,114. Increase (Decrease) 100 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plans as of the Measurement Date, calculated using the discount rate of 7.50 percent, as well as the net pension liability if it were calculated using a discount rate that is 1 percentage-point lower (6.50 percent) or 1 percentage-point higher (8.50 percent) than the current rate: Discount Rate Miscellaneous Safety - Fire Safety - Police 1% Decrease 6.50%6.50%6.50% Net Pension Liability 338,401,333$ 80,749,033$ 150,162,372$ Current Discount Rate 7.50%7.50%7.50% Net Pension Liability 214,913,923$ 54,447,175$ 97,948,053$ 1% Increase 8.50%8.50%8.50% Net Pension Liability 112,314,767$ 32,579,325$ 54,985,452$ Plan Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial report. Pension Expense, Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2015, the City recognized pension expense as follows: Plan Pension Expense Miscellaneous 32,756,650$ Fire 6,097,289 Police 12,381,999 Total 51,235,938$ 101 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 As of June 30, 2015, the City has deferred outflows and deferred inflows of resources related to pensions as follows: Deferred Outflows of Resources Deferred Inflows of Resources Deferred Outflows of Resources Deferred Inflows of Resources Deferred Outflows of Resources Deferred Inflows of Resources Pension contributions subsequent to measurement date $ 39,155,736 -$ $ 6,548,136 -$ $ 15,788,775 -$ Net difference between projected and actual earnings on pension plan investments - (48,581,578)- (10,865,413)- (20,071,685) Total 39,155,736$ (48,581,578)$ 6,548,136$ (10,865,413)$ 15,788,775$ (20,071,685)$ Miscellaneous Fire Police The amounts above are net of outflows and inflows recognized in the pension expense for the fiscal year ended June 30, 2015. The $61.5 million reported as deferred outflows of resources is related to contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in fiscal year end 2016. The net differences between projected and actual earnings on pension plan investments will be recognized in future pension expense as follows: Fiscal Year ended June 30 Miscellaneous Fire Police 2016 (12,145,394)$ (2,716,353)$ (5,017,921)$ 2017 (12,145,394) (2,716,353) (5,017,921) 2018 (12,145,394) (2,716,353) (5,017,921) 2019 (12,145,396) (2,716,354) (5,017,922) Deferred Inflows of Resources Deferred Compensation Plans The City offers to its employees an optional deferred compensation plan created in accordance with Section 457 of the Internal Revenue Code. This plan is available to substantially all employees and allows participants to defer a portion of their current income until future years to shelter such funds and earnings from state and federal taxation until withdrawal. The deferred compensation is not available to participants until termination, retirement, death or unforeseeable emergency. The City offers an employer discretionary, defined contribution plan established and governed under Internal Revenue Code Section 401(a). Employee-only contributions are calculated based upon a percentage of employee compensation under agreements with employee bargaining groups and unions. For the fiscal year ended June 30, 2015 the total employee contributions were $535,417. 102 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The City offers to its as-needed employees a separate Section 457 deferred compensation plan under the Omnibus Budget Reconciliation Act (OBRA). This plan is available to all as-needed employees who are not eligible to participate in CalPERS. This plan requires equal employer and employee contributions based on a percentage of earnings. For the fiscal year ended June 30, 2015 the combined employee/employer contributions were $373,994. These plans are administered through third-party administrators. The City does not perform the investing function and has no fiduciary accountability for the plans. Thus, plan assets and any related liabilities to plan participants have been excluded from the City’s basic financial statements. Other Postemployment Benefits In addition to providing pension benefits through CalPERS, the City, in accordance with agreements with various bargaining units and groups, provides medical insurance benefits that are considered other postemployment benefits (OPEB) to certain retired employees under a single employer benefit plan. These benefits are subject to negotiations between the City and each bargaining unit and the related memorandum of understanding (MOU) is approved by the City Council. Employees of the Executive Pay Plan group and management employees of the Rent Control Board are eligible for a City paid medical insurance benefit if their combined retirement age and years of City service equals or exceeds 70. Under the terms of a MOU between the City and a coalition of the various non-sworn bargaining units (Coalition), all non-sworn permanent retirees are allowed to continue participating in one of the City’s health plans at the same rate as active employees. As with other MOU’s, this benefit is subject to bargaining between the City and the Coalition. The City also maintains minimum benefits for public safety employees provided by the City’s contract with its h ealthcare provider. The City pays for OPEB through employer only contributions and has begun contributing to the unfunded liability, with no contribution required from employees. The Plan does not issue a stand-alone financial statement. Annual OPEB Cost and Net OPEB Obligation The City’s OPEB cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance within the parameters of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The ARC represents a level of funding that if paid on an ongoing basis is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years utilizing the level percentage of projected payroll method. The amortization period is open. The City has begun prefunding its OPEB obligation utilizing the CalPERS Employer’s Retirement Benefit Trust. The City’s annual required contribution for FY 2014-15 was 1.6% of covered payroll. 103 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The following table shows the components of the City’s annual OPEB cost for the year, the amount contributed to the plan, and changes in the City’s OPEB obligation to the plan. Net OPEB Obligation and Annual OPEB Cost (dollars in thousands) Annual required contribution 2,507 $ Interest on OPEB obligation 664 Adjustment to annual required contribution (548) Annual OPEB expense 2,623 Contributions made (2,507) Increase in net OPEB obligation 116 Net OPEB obligation - beginning of the year 10,208 Net OPEB obligation - end of the year 10,324 $ Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended June 30 Annual OPEB Costs Annual Contribution Percentage Contribution Net OPEB Obligation 2015 2,623$ 2,507$ 95.6 %10,324$ 2014 2,715 987 36.3 10,208 2013 2,451 711 29.0 8,480 104 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The funded status of the plan as of July 1, 2013, the most recent actuarial valuation date, is as follows: OPEB funding information (dollars in thousands): Valuation date (July 1) Actuarial value of assets Actuarial accrued liability Unfunded actuarial accrued liability (UAAL)Funded ratio Annual covered payroll UAAL as a percentage of payroll 2013 - $ 28,293$ 28,293$ 0%154,532$ 18.31% 105 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Historical data for the funding progress of the Plan is presented as required supplementary information following the notes to the financial statements. This schedule presents multiyear trend information about whether the actuarial values of the plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial methods and assumptions Projections of benefits for financial reporting purposes are based on the plan as understood by the City and its employees and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of each valuation and on the pattern of sharing costs between the employer and plan member at that point. In the July 1, 2013 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions included a 5.00% rate of return, which is a blended rate of expected long-term return on plan assets on the City’s own investments calculated based on the funded level of the plan at the valuation date, and an annual health care cost trend of 9.50% initially, reduced by decrements to an ultimate rate of 5.00% after 11 years. Both rates include a 3.25% inflation assumption. The remaining amortization period (the amortization period is open) at July 1, 2013 was thirty years. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations. Medical Trusts The City contributes, consistent with bargaining unit agreements, monies to medical trusts, defined contribution plan, that provide postemployment medical benefits to employees. The amount of benefits provided to employees under these plans is limited solely to the amount contributed (determined by negotiations between the various bargaining groups and the City) related investment earnings, and forfeitures. For the fiscal year ended June 30, 2015 the City contributed $3,560,419 towards the retiree medical trusts. These are administered through third-party administrators and the City does not perform the investing function or have other significant responsibility relating to the management of plan assets. Thus, plan assets and any related liabilities have been excluded from the City’s basic financial statements. (17) SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld AB 1X26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Santa Monica that previously reported a redevelopment agency within the reporting entity of the City as a blended component unit. 106 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The Bill provides that upon dissolution of a redevelopment agency (RDA), either the sponsoring city or another unit of local government will agree to serve as the “successor agency” to hold the former RDA’s non-housing assets until they are distributed to other units of state and local government and all enforceable obligations have been paid. In accordance with the Bill, the successor agency is a separate legal entity from the sponsoring city or other local government unit. The Bill also provides for the transfer of the former RDA's housing assets to the City, acting in its municipal capacity. On January 10, 2012, the City Council elected to become the Successor Agency for the Redevelopment Agency of the City of Santa Monica in accordance with the Bill as part of City resolution number 10647. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. The assets and activities of the dissolved redevelopment agency are reported in a private-purpose trust fund in the financial statements of the City. Cash and Investments Cash and investments as of June 30, 2015 are classified in the accompanying financial statements as follows: Statement of Fiduciary Net Position: Restricted cash $14,442,806 Restricted cash and investments with fiscal agent 6,780,487 Total cash and investments $21,223,293 Investments of the Successor Agency are governed by Government Code Section 53601 and the City’s Investment Policy, which restrict the term and types of investments that can be made. See Note 5. Investments Authorized by Debt Agreements Investment 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 Successor Agency’s investment policy. 107 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. Maximum Maximum Maximum Percentage Investment Maturity Allowed in One Issuer U.S Treasury Obligations None None None Federal Housing Administration Debentures None None None U.S. Agency Securities None None None Time Deposits None None None Unsecured Certificates of Deposit 180 days None None Banker's Acceptances 180 days None None State Obligations None None None Repurchase Agreements 1 year None None Pre-refunded Municipal Obligations None None None Commercial Paper 270 days None None Money Market Mutual Funds None None None Investment Contracts 30 years None None Authorized Investment Type Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Successor Agency manages its exposure to interest rate risk is 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. Information about the sensitivity of the fair values of the Successor Agency’s investments held by bond trustee to market interest rate fluctuations is provided by the following table that shows the distribution of these investments by maturity. Maturity 12 Months or less Held by bond trustee: Money market mutual funds 6,780,487 $ Investment Type 108 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 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 minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year -end for each investment type. Minimum Legal Total Rating AAAm Held by bond trustee: Money market mutual funds $ 6,780,487 AAAm* 6,780,487 Investment Type Concentration of Credit Risk No investments in any one issuer (other than U.S. Treasury securities, mutual funds, and investment pools) represent 5% or more of total investments. Custodial Credit Risk The Successor Agency does not have significant separate certificates of deposit or demand accounts held by bond trustee that have disclosable custodial credit risk (as defined by GASB Statement No. 40). For the investments held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government. Due to other governments Due to other governments consists of amounts due under various pass-through agreements. 109 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 SUCCESSOR AGENCY LONG-TERM LIABILITIES Changes in long-term liabilities: Long-term liability activity for the fiscal year ended June 30, 2015 was as follows: Balance at July 1, 2014 Additions Reductions Balance at June 30, 2015 Due within one year Due beyond one year Loans and notes payable 79,639,448 $ — 8,832,276 70,807,172 9,089,219 61,717,953 Term loan 43,939,396 — 3,030,302 40,909,094 3,030,303 37,878,791 Tax allocation bonds (1)98,435,000 — 9,780,000 88,655,000 2,320,000 86,335,000 Advances from other funds of the city 35,279,561 75,690 3,335,245 32,020,006 11,158,105 20,861,901 Less deferred amounts: For issuance discounts (121,250) — (8,083) (113,167) — (113,167) For issuance premiums 379,678 — 24,629 355,049 — 355,049 Total loans, notes and bonds payable 257,551,833 $ 75,690 24,994,369 232,633,154 25,597,627 207,035,527 (1) On January 1, 2015, the Ocean Park Redevelopment Refunding Bonds Series 2002 were redeemed. A summary of long-term bonds and loans outstanding at year-end is as follows: Date of issue Original issue Final maturity date Interest rate Balance at June 30, 2015 Tax allocation bonds: Earthquake Recovery Project 2011 *June 7, 2011 41,050,000 July 1, 2042 5.00-5.875%41,050,000$ Earthquake Recovery Project Refunding 2006 *April 1, 2006 64,720,000 July 1, 2030 4.00-5.50%47,605,000 Subtotal tax allocation bonds 88,655,000 Loans and notes: Wells Fargo Bank (1)Mar 11, 2011 60,000,000 Jan 1, 2018 70.00% LIBOR plus 1.50%30,000,000 Bank of America Term Loan (2)May 1, 2008 50,000,000 July 15, 2028 LIBOR plus 1.25%40,909,094 Promissory note to the City of Santa Monica (3)June 30, 1981 871,840 June 29, 2028 7.00%1,893,179 Promissory note to the City of Santa Monica (3)Oct 24, 1978 4,400,000 June 29, 2028 7.00%22,262,153 Promissory note to the City of Santa Monica (3)June 30, 1981 1,243,266 June 29, 2021 12.00%6,171,995 Promissory note to the City of Santa Monica (3)Sept 14, 1983 280,837 June 29, 2021 12.00%1,118,160 Promissory note to the City of Santa Monica (3)July 1, 1996 346,552 Demand LAIF 574,519 Promissory notes (4)Nov 1, 2010 42,500,000 Jan 1, 2042 6.82%40,807,172 Subtotal loans and notes 143,736,272 Total 232,391,272$ *Final and conclusive determination received from the Department of Finance (1) To fund various capital projects (2) To fund low moderate income housing projects (3) For project area costs including the purchase of land and other capital assets. Revisions to the Health and Safety Code changed the interest rate on all City Agency Loans to the historical LAIF rate. (4) For purchase of real estate 110 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Annual debt service requirements to maturity are as follows: Fiscal Year Ending June 30, Principal Interest Principal Interest Principal Interest Principal Interest 2016 2,320,000$ 4,346,806 12,119,528 4,113,413 11,158,105 62,704 25,597,633 8,522,923 2017 2,415,000 4,246,188 12,154,831 4,017,699 3,609,281 53,719 18,179,112 8,317,606 2018 2,520,000 4,141,949 12,192,541 3,915,293 5,517,575 44,425 20,230,116 8,101,667 2019 2,625,000 4,033,248 7,947,107 3,561,206 2,702,223 30,218 13,274,330 7,624,672 2020 2,730,000 3,918,771 3,704,421 3,204,377 2,131,740 23,260 8,566,161 7,146,408 2021-2025 15,575,000 17,634,966 19,277,480 14,330,427 6,901,082 36,865 41,753,562 32,002,258 2026-2030 19,420,000 13,680,244 16,443,872 11,199,635 — — 35,863,872 24,879,879 2031-2035 12,475,000 9,769,106 8,691,397 8,408,602 — — 21,166,397 18,177,708 2036-2040 16,395,000 5,714,778 12,659,759 4,940,240 — — 29,054,759 10,655,018 2041-2042 12,180,000 1,026,666 6,525,329 674,671 — — 18,705,329 1,701,337 88,655,000$ 68,512,722 111,716,265 58,365,563 32,020,006 251,191 232,391,271 127,129,476 Loans and notes payable TotalTax allocation bonds Promissory notes payable City of Santa Monica 111 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Pledged Revenue The Former Redevelopment Agency had a number of debt issues that were assumed by the Successor Agency that involve the pledging of revenues. The amounts and terms of the remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized are indicated in the summary of long-term bonds and loans and notes outstanding at year-end presented in this note. AB1X26 only allows sufficient tax revenues to be allocated to the Successor Agency in an amount equal to pay debt service that is deemed to be an enforceable obligation and debt service payments as a percentage of the pledged gross revenue (net of certain expenses where so specified in debt covenants) will always be 100%. These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment. Annual amount of pledged revenue (net of expenses, where required) Annual debt service payments (of all debt secured by this revenue) Debt service as a percentage of pledged revenue Future amount of pledged revenue Description of pledged revenue/debt: Tax increment Earthquake Recovery Project Refunding 2006 4,453,694$ 4,453,694$ 100% 62,284,136$ Earthquake Recovery Project 2011 2,262,413 2,262,413 100% 90,365,531 Loan Payable 9,115,399 9,115,399 100% 26,614,284 Note Payable 3,300,000 3,300,000 100% 91,500,000 Term Loan 3,702,623 3,702,623 100% 44,889,169 Settlement with the Department of Finance On October 28, 2013, the City and the Successor Agency entered into a settlement agreement with the Department of Finance, the State Controller and the Board of Equalization (collectively “the State”). The agreement resolves the lawsuit filed by the City and the Successor Agency against the State relating to the State’s implementation of AB1X26 and AB 1484. The agreement called for the Successor Agency’s payment of $56,784,229 to the County Auditor-Controller, payable in equal installments due January 15, 2014, July 15, 2014, January 15, 2015 and July 15, 2015. The Successor Agency accelerated the schedule and all remaining payments were made on January 14, 2015. The FY 2014-15 payments less the previous balance owed to the Successor Agency is recorded as an extraordinary loss in the General Fund. As such, the DOF issued a finding of completion to the Successor Agency on January 16, 2015. 112 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 State Controller Asset Transfer Review The Governor and Legislature directed the State Controller's Office (SCO) to review all Redevelopment Agency (RDA) asset transfers made to a city, county or other local agency after January 1, 2011. Any asset transferred to a public agency that was not contractually committed to a third party by June 28, 2011 must be sent to the RDA's successor agency and be used to retire debt or support local services. On June 30, 2015 the SCO issued its final findings on its review of asset transfers. The findings identified two transfers that purportedly did not comply with the redevelopment dissolution statue. Although the City disagreed with the findings, the Successor Agency has recorded a receivable from the City in the amount of $19,149,678 as of June 30, 2015. As of the date of the audit report, the State has not provided any further direction to the Successor Agency as to the final resolution of this item. Repayments of Loan Agreements between the Successor Agency and the City Health and Safety Code Section 34191.4(b)(1) allows for the repayment of loans between the City and the Successor Agency if the following are met:  The Successor Agency has received a finding of completion.  The Successor Agency’s Oversight Board approved the loan is an enforceable obligation.  The Oversight Board makes a finding that the loan was for legitimate redevelopment purposes. Section 34191.4(b)(2) requires recalculation of the accumulated interest on the remaining principal amount from the loan origination at the interest rate earned by funds deposited in the Local Agency Investment Fund. As such the accrued interest on the loans was recalculated using the historical LAIF rate in effect during the outstanding period of the note. This resulted in a $3,335,245 reduction in the accrued interest on the notes. This amount, in addition to $1,771,583 of payments by the City, was recorded as an extraordinary item in both the Government-Wide and Successor Agency financial statements. Subsequent events On September 22, 2015, the Governor signed SB107 into law which allows for the repayment of loans from the City to the Redevelopment Agency in which the City loaned money or transferred real property to the Redevelopment Agency. Additionally, loan interest is now calculated at 3% simple interest which reduces the balance of the notes by $23,253,888 to $8,191,599 which will be recorded in fiscal year 2015-16. It also defines the calculation of funds available to fund loan repayments. On November 6, 2015, the California Department of Finance (DOF) approved the re-establishment of Promissory Note A related to the former Agency’s purchase of 6 parking structures from the Parking Authority. The SB107 allows for the first payment for FY 2015-2016 of $7,937,437 and that amount has been approved by the DOF. The Successor Agency will continue to submit. Repayment of the full loan is subject to a revised repayment formula and requires interest on the remaining principal amount to be recalculated from the date of 113 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 origination of the loan on a quarterly basis at a simple interest rate of 3%. Money will be applied first to principal and second to interest. (18) SUBSEQUENT EVENTS On July 9, 2015 The City refunded its 2004 Public Finance Authority Bonds. On September 25, 2015, Standard and Poors affirmed its AAA rating on the 2012A Wastewater Refunding Bonds. On November 12, 2015, Fitch Ratings affirmed its AA- rating assigned to the Earthquake Recovery Redevelopment Project Series 2011 and Earthquake Recovery Redevelopment Project Series 2006A bonds. Standard and Poors also affirmed their AA / Stable rating in November 2015 for the previously mentioned Redevelopment Agency bonds. (19) PRIOR PERIOD ADJUSTMENTS The accompanying financial statements reflect adjustments resulting from a restatement of beginning net positions as of June 30, 2014 as follows: Changes in Accounting Principle  Decrease in Net Positions of the: Water Fund $6,243,413, Resource Recovery & Recycling $10,007,313, Wastewater Fund $2,354,136, Big Blue Bus Fund $46,165,882, Nonmajor Enterprise Funds $4,686,578, Internal Service Funds $5,470,361, Business-Type Activities $73,064,925, and Governmental Activities $344,396,227 to record beginning net pension liability as a result of the implementation of GASB Statements No. 68 and 71. Correction of Errors  Increase in Net Position of Governmental Activities and decrease in Net Position of the Business-Type Activities of $2,179,971 to allocate net OPEB obligation from the Governmental Type to Business- Type Activities.  Decrease in Net Positions of the: Water Fund $261,550, Resource Recovery & Recycling $402,593, Wastewater Fund $81,668, Big Blue Bus Fund $1,213,246, Nonmajor Enterprise Funds $108,915, Internal Service Funds $193,561 to record net OPEB obligation.  Decrease in Net Position of Governmental Activities of $3,491,179 to correct FEMA grants receivables.  Increase in Net Position of Governmental Activities and decrease in Net Position of the Business-Type Activities of $11,887,021 represents transfer of capital assets from the Parking Authority Nonmajor Enterprise Fund to Governmental Activities for assets owned and maintained by the City. As a result of the prior period adjustments, the restated balance for the Enterprise Funds are: Water Fund $47,232,785, Resource Recovery & Recycling $(3,697,694), Wastewater Fund $198,023,419, Big Blue Bus 114 CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements, Continued For the fiscal year ended June 30, 2015 Fund $215,008,176, and Nonmajor Enterprise Funds $22,512,052. The restated balance for Internal Service Funds is $50,338,739. The combined effect of these prior period adjustments on the government-wide financial statements is to decrease Governmental Activities Net Position from $1,211,717,977 to $877,897,602 and decrease Business- Type Activities Net Position from $600,110,889 to $512,978,972. Reclassifications A reclassification of the Airport Fund was made from major enterprise fund to nonmajor enterprise fund as it did not meet the major fund classification threshold. Resource Recovery & Recycling was reclassified from a nonmajor enterprise fund to a major enterprise fund because it met the major fund classification threshold. 115 THIS PAGE INTENTIONALLY LEFT BLANK 116 City of Santa Monica, California Year Ended June 30, 2015 Required Supplementary Information Miscellaneous Police Fire Total Total Pension Liability Service Cost 24,972,667$ 8,493,146 3,975,757 37,441,570 Interest on the total pension liability 63,926,580 27,132,667 14,735,448 105,794,695 Benefit payments, including refunds of employee contributions (32,834,279) (16,130,411) (10,085,994) (59,050,684) Net change in total pension liability 56,064,968 19,495,402 8,625,211 84,185,581 Total pension liability - beginning 856,285,199 365,587,519 199,527,764 1,421,400,482 Total pension liability - ending (a)912,350,167$ 385,082,921 208,152,975 1,505,586,063 Plan fiduciary net position Contribution - employer 27,433,064$ 12,515,162 4,954,271 44,902,497 Contribution - employee 11,418,160 3,372,358 1,421,733 16,212,251 Net investment income2 104,724,175 43,315,499 23,479,329 171,519,003 Benefit payments (32,834,279) (16,130,411) (10,085,994) (59,050,684) Net change in plan fiduciary - net position 110,741,120 43,072,608 19,769,339 173,583,067 Plan fiduciary net position - beginning 586,695,124 244,062,260 133,936,461 964,693,845 Plan fiduciary net position - ending (b)697,436,244 287,134,868 153,705,800 1,138,276,912 Net pension liability - ending (a)-(b)214,913,922$ 97,948,053 54,447,175 367,309,150 Plan fiduciary net position as a percentage of the total pension liability 76.44%74.56%73.84%75.60% Covered - employee payroll 139,422,993$ 33,591,328 21,186,183 194,200,504 Net pension liability as a percentage of covered- employee payroll 154.15%291.59%256.99%189.14% 1Fiscal year 2015 was the 1st year of implementation, therefore only one year is shown. 2Net of administrative expenses: Miscellaneous - $888,896; Police - 361,114; Fire - $194,446 Notes to Schedule: Benefit Changes: There were no changes in benefits. Changes of Assumptions: There were no changes in assumptions. Schedule of Changes in the Net Pension Liability and Related Ratios 2015 1 CITY OF SANTA MONICA, CALIFORNIA Required Supplementary Information As of June 30, 2015 (Unaudited) 117 Miscellaneous Police Fire Total Actuarially determined contribution 24,422,700$ 11,036,924 4,345,057 39,804,681 Contributions in relation to actuarially - determined contributions (27,433,064) (12,515,162) (4,954,271) (44,902,497) Contribution excess (3,010,364)$ (1,478,238) (609,214) (5,097,816) Covered employee payroll 139,422,993$ 33,591,328 21,186,183 194,200,504 Contributions as a percentage of covered-19.68%37.26%23.38%23.12% employee payroll Notes to Schedule Valuation date Actuarial Cost Method Entry Age Normal Amortization Method Level Percent Payroll Asset Valuation Method Market Value Inflation 2.75% Salary increases A merit scale varying by duration of employment coupled with an assumed annual inflation growth of 2.75% and an annual production growth of 0.25%. Payroll Growth 3.00% Investments Rate of Return 7.5% Net of Pension Plan Investment and Administration Expenses, includes Inflation Retirement Age The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007 Mortality The probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. CITY OF SANTA MONICA, CALIFORNIA Required Supplementary Information 6/30/2013 Schedule of Contributions - Pension Plans As of June 30, 2015 (Unaudited) 118 CITY OF SANTA MONICA, CALIFORNIA Required Supplementary Information – OPEB Funding Information For the fiscal year ended June 30, 2015 (Unaudited) OPEB FUNDING INFORMATION (dollars in thousands): Valuation date (July 1) Actuarial value of assets Actuarial accrued liability Unfunded actuarial accrued liability (UAAL)Funded ratio Annual covered payroll UAAL as a percentage of payroll 2013 - 28,293 $ 28,293$ 0%154,532 $ 18.31% 2011 - 23,841 23,841 0%167,724 14.21% 2009 - 18,747 18,747 0%156,214 12.00% The schedule of funding progress, presents multi-year trend information, which shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. The valuation for FY 2014-15 was not available by the date of the audit report. 119 THIS PAGE INTENTIONALLY LEFT BLANK 120 City of Santa Monica, California Year Ended June 30, 2015 Supplementary Information CITY OF SANTA MONICA, CALIFORNIA Nonmajor Governmental Fund Financial Statements Special Revenue Funds are used to account for specific revenue sources that are restricted or committed to expenditures for particular purposes. The nonmajor special revenue funds used in this report are listed below: Beach Recreation Fund – To account for beach parking and concession revenues restricted or committed for expenditures related to beach maintenance and recreation activities. Housing Authority Fund – To account for the receipt and expenditure of Federal and State funds related to housing programs. Tenant Ownership Rights Charter Amendment (TORCA) Fund – To account for filing fee and conversion tax revenues and expenditures related to various housing programs authorized by Chapter XX of the City Charter. Low and Moderate Income Housing Asset Fund – Under Senate Bill 341, housing assets transferred to the City’s Housing Successor Agency together with any funds generated from housing assets, shall be maintained in a separate Low and Moderate Income Housing Asset Fund. These funds can be used as previously allowed under the Low and Moderate Income Housing Fund established under Community Redevelopment Law, program monitoring and preserving the long-term affordability of units subject to affordability restrictions, homeless prevention and rapid rehousing services, and for the development of affordable housing for lower income households. Asset Seizure Fund – To account for the receipt and expenditure of equitable sharing program funds. Citizens Option for Public Safety Fund – To account for the receipt and expenditure of the Citizens Option for Public Safety program established by AB3229 of 1996. Rent Control Fund – To account for revenues and expenditures that are restricted or committed for rent control activities. Gas Tax Fund – To account for State and County gasoline tax allocations and any Federal funds provided to the City for street-related purposes. Disaster Relief Fund – To account for Federal and State disaster relief revenues and expenditures associated with recovery from the January 17, 1994 Northridge Earthquake. Capital Projects Funds are used to account for the accumulation of resources that are restricted, committed or assigned for the acquisition or construction of major capital facilities of the City other than those financed by proprietary funds and trust funds. The nonmajor capital projects funds used in this report are listed below: Clean Beaches and Ocean Parcel Tax Fund – To account for activity related to implementation of Watershed Management Plan and the passage of Measure V in November 2006. 121 CITY OF SANTA MONICA, CALIFORNIA Community Development Block Grant (CDBG) Fund – 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. Miscellaneous Grants Fund – To account for the receipt and expenditure of Federal, State and County awarded grants and special allocations provided to the City. South Coast Air Quality Management District (SCAQMD) Fund – To account for the receipt and expenditure of Air Quality Management District funds. Parks and Recreation Fund – To account for funds collected under the City's Unit Dwelling Tax. These funds are to be used for the acquisition, improvement and expansion of public parks, playgrounds and recreational facilities. Debt Service Funds are used to accumulate resources that are restricted, committed, or assigned for, and the payment of, general long-term debt principal, interest and related costs. The debt service funds used by the City in this report are listed below: Debt Service Fund – To account for accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs for public facilities. Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for restricted purposes. The specific permanent funds used by the City in this report are listed below: Cemetery Perpetual Care Fund – To account for all funds received by the City from cemetery users for the perpetual care of the cemetery grounds. Mausoleum Perpetual Care Fund – To account for all funds designated for perpetual care of the mausoleum located at the City cemetery. 122 CITY OF SANTA MONICA, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2015 Special Revenue Beach Recreation Housing Authority TORCA Low and Moderate Income Housing Asset Asset Seizure Citizens Option for Public Safety Assets Cash and investments $15,408,506 25,789 5,061,920 3,194,331 835,481 277,747 Restricted cash and investments 69,015 306,982 ---- Receivables (net, where applicable, of allowances for uncollectibles): Accounts 243,290 3,636 --13,440 - Notes --7,719,214 47,358,809 -- Interest 31,897 -9,600 4,762 1,751 443 Other governments -472,835 ---- Deposits ------ Prepaids -14,481 ---- Restricted cash and investments with fiscal agent ------ Advances to Successor Agency trust fund ------ Total assets $15,752,708 823,723 12,790,734 50,557,902 850,672 278,190 Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit) Liabilities Accounts payable $826,697 163,697 394 90 21,440 10,446 Accrued liabilities 167,264 45,547 ---- Contracts payable (retained percentage)1,622 ----- Due to other funds -467,656 ---- Unearned revenue 3,156 ----- Deposits payable 69,015 ----- Advances from other funds 3,842,973 ----- Total liabilities 4,910,727 676,900 394 90 21,440 10,446 Deferred inflows of resources ------ Fund balances (deficit) Nonspendable -14,481 ---- Restricted 8,235,285 45,595 8,861,170 50,557,811 371,723 162,681 Committed 10,000 ----- Assigned 2,596,696 86,747 3,929,170 1 457,509 105,063 Unassigned ------ Total fund balances (deficit)10,841,981 146,823 12,790,340 50,557,812 829,232 267,744 Total liabilities, deferred inflows of resources, and fund balances (deficit)$15,752,708 823,723 12,790,734 50,557,902 850,672 278,190 continued 123 CITY OF SANTA MONICA, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2015 Special Revenue Capital Projects Rent Control Gas Tax Disaster Relief Clean Beaches and Ocean Parcel Tax Community Development Block Grant Miscellaneous Grants Assets Cash and investments $1,463,552 95,058 15,082 8,088,585 98,258 159 Restricted cash and investments ----332,757 5,687,977 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 75,269 --41,021 4,057 1,210,117 Notes ----9,646,188 6,915,908 Interest 5,395 1,636 30 17,978 533 21,139 Other governments --2,800,188 --125,316 Deposits ----3,257 - Prepaids 30,033 --564 -- Restricted cash and investments with fiscal agent ------ Advances to Successor Agency trust fund ----7,864,674 - Total assets $1,574,249 96,694 2,815,300 8,148,148 17,949,724 13,960,616 Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit) Liabilities Accounts payable $25,822 36 -41,788 71,370 1,971,128 Accrued liabilities 121,388 --238 -23,942 Contracts payable (retained percentage)-18,437 -3,750 65,056 253,469 Due to other funds --829,399 --6,244 Unearned revenue 2,975 ----- Deposits payable ------ Advances from other funds ------ Total liabilities 150,185 18,473 829,399 45,776 136,426 2,254,783 Deferred inflows of resources --2,800,188 -5,994,018 - Fund balances (deficit) Nonspendable 30,033 --564 -- Restricted 1,001,295 78,221 -8,101,808 11,819,280 11,705,833 Committed 41,975 ----- Assigned 350,761 ----- Unassigned --(814,287)--- Total fund balances (deficit)1,424,064 78,221 (814,287)8,102,372 11,819,280 11,705,833 Total liabilities, deferred inflows of resources, and fund balances (deficit)$1,574,249 96,694 2,815,300 8,148,148 17,949,724 13,960,616 continued 124 CITY OF SANTA MONICA, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2015 Capital Projects Debt Service Permanent SCAQMD Parks and Recreation Debt Service Cemetery Perpetual Care Mausoleum Perpetual Care Total nonmajor governmental funds Assets Cash and investments $586,514 217,535 -23,109 10,187 35,401,813 Restricted cash and investments -----6,396,731 Receivables (net, where applicable, of allowances for uncollectibles): Accounts -----1,590,830 Notes -----71,640,119 Interest 1,607 449 -84,221 10,458 191,899 Other governments 30,012 ----3,428,351 Deposits -----3,257 Prepaids -----45,078 Restricted cash and investments with fiscal agent --8,718,697 10,145,942 1,179,209 20,043,848 Advances to Successor Agency trust fund -----7,864,674 Total assets $618,133 217,984 8,718,697 10,253,272 1,199,854 146,606,600 Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit) Liabilities Accounts payable $2 23,685 -24,694 9,661 3,190,950 Accrued liabilities -----358,379 Contracts payable (retained percentage)-----342,334 Due to other funds -----1,303,299 Unearned revenue -----6,131 Deposits payable -----69,015 Advances from other funds -----3,842,973 Total liabilities 2 23,685 -24,694 9,661 9,113,081 Deferred inflows of resources -----8,794,206 Fund balances (deficit) Nonspendable ---10,228,578 1,190,193 11,463,849 Restricted 618,131 15,047 8,718,697 --110,292,577 Committed -----51,975 Assigned -179,252 ---7,705,199 Unassigned -----(814,287) Total fund balances (deficit)618,131 194,299 8,718,697 10,228,578 1,190,193 128,699,313 Total liabilities, deferred inflows of resources, and fund balances (deficit)$618,133 217,984 8,718,697 10,253,272 1,199,854 146,606,600 125 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Nonmajor Governmental Funds For the fiscal year ended June 30, 2015 Special Revenue Beach Recreation Housing Authority TORCA Low and Moderate Income Housing Asset Asset Seizure Citizens Option for Public Safety Revenues: Other taxes $--43,944 --- Licenses and permits 120,652 ----- Intergovernmental -15,695,788 --180,726 161,820 Charges for services 12,897,600 ----- Investment income 123,971 297 34,451 10,198 6,646 1,353 Rental income 1,098,613 ----- Other revenue and special assessments 748,958 -76,436 1,519,673 -- Total revenues 14,989,794 15,696,085 154,831 1,529,871 187,372 163,173 Expenditures: Current: General government ------ Public safety ----264,684 105,536 General services 4,643,897 -2,216 505 -- Cultural and recreation services 8,255,761 ----- Housing and community development -16,576,959 30,640 --- Debt service expenditures: Principal ------ Interest ------ Total expenditures 12,899,658 16,576,959 32,856 505 264,684 105,536 Excess (deficiency) of revenues over (under) expenditures 2,090,136 (880,874)121,975 1,529,366 (77,312)57,637 Other financing sources (uses) Transfers in -553,645 ---- Transfers out --(72,749)--- Total other financing sources (uses)-553,645 (72,749)--- Net change in fund balances 2,090,136 (327,229)49,226 1,529,366 (77,312)57,637 Fund balances (deficit) at the beginning of year 8,751,845 474,052 12,741,114 49,028,446 906,544 210,107 Fund balances (deficit) at end of year $10,841,981 146,823 12,790,340 50,557,812 829,232 267,744 continued 126 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Nonmajor Governmental Funds For the fiscal year ended June 30, 2015 Special Revenue Capital Projects Rent Control Gas Tax Disaster Relief Clean Beaches and Ocean Parcel Tax Community Development Block Grant Miscellaneous Grants Revenues: Other taxes $---2,898,594 -- Licenses and permits ------ Intergovernmental -2,581,822 151,759 -1,440,427 8,942,398 Charges for services 4,643,379 ----- Investment income 27,604 5,924 111 60,349 942 71,570 Rental income ------ Other revenue and special assessments 1,626 ----516 Total revenues 4,672,609 2,587,746 151,870 2,958,943 1,441,369 9,014,484 Expenditures: Current: General government ----6,706 641,441 Public safety -----1,868,226 General services -2,935,643 -786,216 421,424 8,889,635 Cultural and recreation services ----317,660 565,641 Housing and community development 4,570,489 ---726,847 932,782 Debt service expenditures: Principal ------ Interest ------ Total expenditures 4,570,489 2,935,643 -786,216 1,472,637 12,897,725 Excess (deficiency) of revenues over (under) expenditures 102,120 (347,897)151,870 2,172,727 (31,268)(3,883,241) Other financing sources (uses) Transfers in ------ Transfers out ---(1,519,812)(116,401)(248,100) Total other financing sources (uses)---(1,519,812)(116,401)(248,100) Net change in fund balances 102,120 (347,897)151,870 652,915 (147,669)(4,131,341) Fund balances (deficit) at the beginning of year 1,321,944 426,118 (966,157)7,449,457 11,966,949 15,837,174 Fund balances (deficit) at end of year $1,424,064 78,221 (814,287)8,102,372 11,819,280 11,705,833 continued 127 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) Nonmajor Governmental Funds For the fiscal year ended June 30, 2015 Capital Projects Debt Service Permanent SCAQMD Parks and Recreation Debt Service Cemetery Perpetual Care Mausoleum Perpetual Care Total nonmajor governmental funds Revenues: Other taxes $-26,568 ---2,969,106 Licenses and permits -----120,652 Intergovernmental 264,230 ----29,418,970 Charges for services ---162,197 38,405 17,741,581 Investment income 6,223 1,615 51,012 250,141 20,441 672,848 Rental income -----1,098,613 Other revenue and special assessments -----2,347,209 Total revenues 270,453 28,183 51,012 412,338 58,846 54,368,979 Expenditures: Current: General government 5,591 ----653,738 Public safety -----2,238,446 General services 556,434 ----18,235,970 Cultural and recreation services -51,487 ---9,190,549 Housing and community development -----22,837,717 Debt service expenditures: Principal --6,075,000 --6,075,000 Interest --3,785,591 --3,785,591 Total expenditures 562,025 51,487 9,860,591 --63,017,011 Excess (deficiency) of revenues over (under) expenditures (291,572)(23,304)(9,809,579)412,338 58,846 (8,648,032) Other financing sources (uses) Transfers in --9,866,444 --10,420,089 Transfers out --(13,518)(497,850)(56,411)(2,524,841) Total other financing sources (uses)--9,852,926 (497,850)(56,411)7,895,248 Net change in fund balances (291,572)(23,304)43,347 (85,512)2,435 (752,784) Fund balances (deficit) at the beginning of year 909,703 217,603 8,675,350 10,314,090 1,187,758 129,452,097 Fund balances (deficit) at end of year $618,131 194,299 8,718,697 10,228,578 1,190,193 128,699,313 128 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : Li c e n s e s a n d p e r m i t s 8 7 , 9 1 1 $ 1 2 0 , 6 5 2 — 1 2 0 , 6 5 2 3 2 , 7 4 1 Ch a r g e s f o r s e r v i c e s 1 1 , 1 2 9 , 7 1 2 1 2 , 8 9 7 , 6 0 0 — 1 2 , 8 9 7 , 6 0 0 1 , 7 6 7 , 8 8 8 In v e s t m e n t i n c o m e 6 8 , 2 5 0 1 2 3 , 9 7 1 — 1 2 3 , 9 7 1 5 5 , 7 2 1 Re n t a l i n c o m e 1 , 4 5 0 , 3 2 2 1 , 0 9 8 , 6 1 3 — 1 , 0 9 8 , 6 1 3 ( 3 5 1 , 7 0 9 ) Ot h e r r e v e n u e a n d s p e c i a l a s s e s s m e n t s 6 9 3 , 0 0 0 7 4 8 , 9 5 8 — 7 4 8 , 9 5 8 5 5 , 9 5 8 To t a l r e v e n u e s 1 3 , 4 2 9 , 1 9 5 1 4 , 9 8 9 , 7 9 4 — 1 4 , 9 8 9 , 7 9 4 1 , 5 6 0 , 5 9 9 Ex p e n d i t u r e s : Ge n e r a l s e r v i c e s : Pu b l i c W o r k s 4 , 8 2 4 , 1 7 3 4 , 4 3 4 , 4 9 7 3 2 , 8 0 1 4 , 4 6 7 , 2 9 8 3 5 6 , 8 7 5 Ot h e r — — — — Ca p i t a l i m p r o v e m e n t 3 6 9 , 4 0 0 2 0 9 , 4 0 0 1 6 0 , 0 0 0 3 6 9 , 4 0 0 — To t a l g e n e r a l s e r v i c e s 5 , 1 9 3 , 5 7 3 4 , 6 4 3 , 8 9 7 1 9 2 , 8 0 1 4 , 8 3 6 , 6 9 8 3 5 6 , 8 7 5 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Co m m u n i t y a n d c u l t u r a l s e r v i c e s 8 , 1 9 5 , 1 9 9 7 , 5 5 3 , 6 0 6 3 0 , 9 1 8 7 , 5 8 4 , 5 2 4 6 1 0 , 6 7 5 Ca p i t a l i m p r o v e m e n t 2 , 9 1 8 , 1 1 6 7 0 2 , 1 5 5 3 1 1 , 6 4 2 1 , 0 1 3 , 7 9 7 1 , 9 0 4 , 3 1 9 To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 1 1 , 1 1 3 , 3 1 5 8 , 2 5 5 , 7 6 1 3 4 2 , 5 6 0 8 , 5 9 8 , 3 2 1 2 , 5 1 4 , 9 9 4 To t a l e x p e n d i t u r e s 1 6 , 3 0 6 , 8 8 8 1 2 , 8 9 9 , 6 5 8 5 3 5 , 3 6 1 1 3 , 4 3 5 , 0 1 9 2 , 8 7 1 , 8 6 9 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s o v e r (u n d e r ) e x p e n d i t u r e s ( 2 , 8 7 7 , 6 9 3 ) 2 , 0 9 0 , 1 3 6 ( 5 3 5 , 3 6 1 ) 1 , 5 5 4 , 7 7 5 4 , 4 3 2 , 4 6 8 Ne t c h a n g e i n f u n d b a l a n c e ( 2 , 8 7 7 , 6 9 3 ) 2 , 0 9 0 , 1 3 6 ( 5 3 5 , 3 6 1 ) 1 , 5 5 4 , 7 7 5 4 , 4 3 2 , 4 6 8 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 8 , 7 5 1 , 8 4 5 8 , 7 5 1 , 8 4 5 — 8 , 7 5 1 , 8 4 5 — Fu n d b a l a n c e a t e n d o f y e a r 5, 8 7 4 , 1 5 2 $ 1 0 , 8 4 1 , 9 8 1 ( 5 3 5 , 3 6 1 ) 1 0 , 3 0 6 , 6 2 0 4 , 4 3 2 , 4 6 8 Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - GA A P B a s i s ) Be a c h R e c r e a t i o n S p e c i a l R e v e n u e F u n d 12 9 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 1 6 , 3 3 8 , 6 4 6 $ 1 5 , 6 9 5 , 7 8 8 — 1 5 , 6 9 5 , 7 8 8 ( 6 4 2 , 8 5 8 ) In v e s t m e n t i n c o m e 2 9 , 5 0 0 2 9 7 — 2 9 7 ( 2 9 , 2 0 3 ) To t a l r e v e n u e s 1 6 , 3 6 8 , 1 4 6 1 5 , 6 9 6 , 0 8 5 — 1 5 , 6 9 6 , 0 8 5 ( 6 7 2 , 0 6 1 ) Ex p e n d i t u r e s : Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Ho u s i n g a n d e c o n o m i c d e v e l o p m e n t 1 7 , 5 4 7 , 8 4 6 1 6 , 5 6 4 , 5 8 8 — 1 6 , 5 6 4 , 5 8 8 9 8 3 , 2 5 8 Ot h e r 1 1 , 6 0 9 — — — 1 1 , 6 0 9 Ca p i t a l i m p r o v e m e n t 1 2 , 3 7 1 1 2 , 3 7 1 — 1 2 , 3 7 1 — To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 1 7 , 5 7 1 , 8 2 6 1 6 , 5 7 6 , 9 5 9 — 1 6 , 5 7 6 , 9 5 9 9 9 4 , 8 6 7 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Ot h e r 2 3 , 4 6 4 — — — 2 3 , 4 6 4 To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 2 3 , 4 6 4 — — — 2 3 , 4 6 4 To t a l e x p e n d i t u r e s 1 7 , 5 9 5 , 2 9 0 1 6 , 5 7 6 , 9 5 9 — 1 6 , 5 7 6 , 9 5 9 1 , 0 1 8 , 3 3 1 De f i c i e n c y o f r e v e n u e s un d e r e x p e n d i t u r e s ( 1 , 2 2 7 , 1 4 4 ) ( 8 8 0 , 8 7 4 ) — ( 8 8 0 , 8 7 4 ) 3 4 6 , 2 7 0 Ot h e r f i n a n c i n g s o u r c e s : Tr a n s f e r s i n 5 0 9 , 0 4 4 5 5 3 , 6 4 5 — 5 5 3 , 6 4 5 4 4 , 6 0 1 Ne t c h a n g e i n f u n d b a l a n c e ( 7 1 8 , 1 0 0 ) ( 3 2 7 , 2 2 9 ) — ( 3 2 7 , 2 2 9 ) 3 9 0 , 8 7 1 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 4 7 4 , 0 5 2 4 7 4 , 0 5 2 — 4 7 4 , 0 5 2 — Fu n d b a l a n c e a t e n d o f y e a r ( 2 4 4 , 0 4 8 ) $ 1 4 6 , 8 2 3 — 1 4 6 , 8 2 3 3 9 0 , 8 7 1 Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Ho u s i n g A u t h o r i t y S p e c i a l R e v e n u e F u n d 13 0 Ac t u a l , bu d g etar y Variance Bu d g et A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g et Re v e n u e s : Ot h e r t a x e s 4 0 , 0 0 0 $ 4 3 , 9 4 4 — 4 3 , 9 4 4 3 , 9 4 4 In v e s t m e n t i n c o m e 3 1 , 0 0 0 3 4 , 4 5 1 — 3 4 , 4 5 1 3 , 4 5 1 Ot h e r r e v e n u e a n d s p e c i a l a s s e s s m e n t s 5 0 , 0 0 0 7 6 , 4 3 6 — 7 6 , 4 3 6 2 6 , 4 3 6 To t a l r e v e n u e s 1 2 1 , 0 0 0 1 5 4 , 8 3 1 — 1 5 4 , 8 3 1 3 3 , 8 3 1 Ex p e n d i t u r e s : Ge n e r a l s e r v i c e s : Ot h e r 4 , 0 0 0 2 , 2 1 6 — 2 , 2 1 6 1 , 7 8 4 To t a l g e n e r a l s e r v i c e s 4 , 0 0 0 2 , 2 1 6 — 2 , 2 1 6 1 , 7 8 4 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Ca p i t a l i m p r o v e m e n t 3 , 9 5 9 , 8 1 0 3 0 , 6 4 0 1 6 5 , 4 9 0 1 9 6 , 1 3 0 3 , 7 6 3 , 6 8 0 To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 3 , 9 5 9 , 8 1 0 3 0 , 6 4 0 1 6 5 , 4 9 0 1 9 6 , 1 3 0 3 , 7 6 3 , 6 8 0 To t a l e x p e n d i t u r e s 3 , 9 6 3 , 8 1 0 3 2 , 8 5 6 1 6 5 , 4 9 0 1 9 8 , 3 4 6 3 , 7 6 5 , 4 6 4 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s o v e r (u n d e r ) e x p e n d i t u r e s ( 3 , 8 4 2 , 8 1 0 ) 1 2 1 , 9 7 5 ( 1 6 5 , 4 9 0 ) ( 4 3 , 5 1 5 ) 3 , 7 9 9 , 2 9 5 Ot h e r f i n a n c i n g u s e s : T r a n s f e r s o u t ( 9 8 , 9 1 0 ) ( 7 2 , 7 4 9 ) — ( 7 2 , 7 4 9 ) 2 6 , 1 6 1 Ne t c h a n g e i n f u n d b a l a n c e ( 3 , 9 4 1 , 7 2 0 ) 4 9 , 2 2 6 ( 1 6 5 , 4 9 0 ) ( 1 1 6 , 2 6 4 ) 3 , 8 2 5 , 4 5 6 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 1 2 , 7 4 1 , 1 1 4 1 2 , 7 4 1 , 1 1 4 — 1 2 , 7 4 1 , 1 1 4 — Fu n d b a l a n c e a t e n d o f y e a r 8, 7 9 9 , 3 9 4 $ 1 2 , 7 9 0 , 3 4 0 ( 1 6 5 , 4 9 0 ) 1 2 , 6 2 4 , 8 5 0 3 , 8 2 5 , 4 5 6 (T O R C A ) S p e c i a l R e v e n u e F u n d Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Te n a n t O w n e r s h i p R i g h t s C h a r t e r A m e n d m e n t 13 1 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In v e s t m e n t i n c o m e 2 , 5 0 0 $ 1 0 , 1 9 8 — 1 0 , 1 9 8 7 , 6 9 8 Ot h e r r e v e n u e a n d s p e c i a l a s s e s s m e n t s 4 0 0 , 0 0 0 1 , 5 1 9 , 6 7 3 — 1 , 5 1 9 , 6 7 3 1 , 1 1 9 , 6 7 3 To t a l r e v e n u e s 4 0 2 , 5 0 0 1 , 5 2 9 , 8 7 1 — 1 , 5 2 9 , 8 7 1 1 , 1 2 7 , 3 7 1 Ex p e n d i t u r e s : Ge n e r a l s e r v i c e s Ot h e r — 50 5 — 505 (505) To t a l g e n e r a l s e r v i c e s — 50 5 — 505 (505) Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Ca p i t a l i m p r o v e m e n t s 60 3 , 9 5 8 — — — 603,958 To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 60 3 , 9 5 8 — — — 603,958 To t a l e x p e n d i t u r e s 60 3 , 9 5 8 50 5 — 505 603,453 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s ov e r ( u n d e r ) e x p e n d i t u r e s (2 0 1 , 4 5 8 ) 1 , 5 2 9 , 3 6 6 — 1 , 5 2 9 , 3 6 6 1 , 7 3 0 , 8 2 4 Ne t c h a n g e i n f u n d b a l a n c e (2 0 1 , 4 5 8 ) 1 , 5 2 9 , 3 6 6 — 1 , 5 2 9 , 3 6 6 1 , 7 3 0 , 8 2 4 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 49 , 0 2 8 , 4 4 6 4 9 , 0 2 8 , 4 4 6 — 4 9 , 0 2 8 , 4 4 6 — Fu n d b a l a n c e a t e n d o f y e a r 48 , 8 2 6 , 9 8 8 $ 5 0 , 5 5 7 , 8 1 2 — 5 0 , 5 5 7 , 8 1 2 1 , 7 3 0 , 8 2 4 Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Lo w a n d M o d e r a t e I n c o m e H o u s i n g A s s e t S p e c i a l R e v e n u e F u n d 13 2 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 2 5 5 , 4 7 3 $ 1 6 1 , 8 2 0 — 1 6 1 , 8 2 0 ( 9 3 , 6 5 3 ) In v e s t m e n t i n c o m e 2 , 3 0 0 1 , 3 5 3 — 1 , 3 5 3 ( 9 4 7 ) To t a l r e v e n u e s 2 5 7 , 7 7 3 1 6 3 , 1 7 3 — 1 6 3 , 1 7 3 ( 9 4 , 6 0 0 ) Ex p e n d i t u r e s : Pu b l i c s a f e t y : Po l i c e 26 7 , 0 2 3 1 0 5 , 5 3 6 1 0 5 , 0 6 3 2 1 0 , 5 9 9 56,424 To t a l p u b l i c s a f e t y 26 7 , 0 2 3 1 0 5 , 5 3 6 1 0 5 , 0 6 3 2 1 0 , 5 9 9 56,424 To t a l e x p e n d i t u r e s 26 7 , 0 2 3 1 0 5 , 5 3 6 1 0 5 , 0 6 3 2 1 0 , 5 9 9 56,424 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s un d e r e x p e n d i t u r e s (9 , 2 5 0 ) 5 7 , 6 3 7 ( 1 0 5 , 0 6 3 ) ( 4 7 , 4 2 6 ) (38,176) Ne t c h a n g e i n f u n d b a l a n c e (9 , 2 5 0 ) 5 7 , 6 3 7 ( 1 0 5 , 0 6 3 ) ( 4 7 , 4 2 6 ) (38,176) Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 21 0 , 1 0 7 2 1 0 , 1 0 7 — 2 1 0 , 1 0 7 — Fu n d b a l a n c e a t e n d o f y e a r 20 0 , 8 5 7 $ 2 6 7 , 7 4 4 ( 1 0 5 , 0 6 3 ) 1 6 2 , 6 8 1 ( 3 8 , 1 7 6 ) Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Ci t i z e n s O p t i o n f o r P u b l i c S a f e t y S p e c i a l R e v e n u e F u n d 13 3 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 2 , 3 9 5 , 9 4 0 $ 2 , 5 8 1 , 8 2 2 — 2 , 5 8 1 , 8 2 2 1 8 5 , 8 8 2 In v e s t m e n t i n c o m e 9 , 0 0 0 5 , 9 2 4 — 5 , 9 2 4 ( 3 , 0 7 6 ) To t a l r e v e n u e s 2 , 4 0 4 , 9 4 0 2 , 5 8 7 , 7 4 6 — 2 , 5 8 7 , 7 4 6 1 8 2 , 8 0 6 Ex p e n d i t u r e s : Ge n e r a l s e r v i c e s : Ot h e r 2, 4 0 1 , 2 4 0 2 , 5 8 5 , 6 4 3 — 2 , 5 8 5 , 6 4 3 ( 1 8 4 , 4 0 3 ) Ca p i t a l i m p r o v e m e n t s 35 0 , 0 0 0 3 5 0 , 0 0 0 — 3 5 0 , 0 0 0 — To t a l g e n e r a l s e r v i c e s 2, 7 5 1 , 2 4 0 2 , 9 3 5 , 6 4 3 — 2 , 9 3 5 , 6 4 3 ( 1 8 4 , 4 0 3 ) To t a l e x p e n d i t u r e s 2, 7 5 1 , 2 4 0 2 , 9 3 5 , 6 4 3 — 2 , 9 3 5 , 6 4 3 ( 1 8 4 , 4 0 3 ) De f i c i e n c y o f r e v e n u e s un d e r e x p e n d i t u r e s (3 4 6 , 3 0 0 ) ( 3 4 7 , 8 9 7 ) — ( 3 4 7 , 8 9 7 ) (1,597) Ne t c h a n g e i n f u n d b a l a n c e (3 4 6 , 3 0 0 ) ( 3 4 7 , 8 9 7 ) — ( 3 4 7 , 8 9 7 ) (1,597) Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 42 6 , 1 1 8 4 2 6 , 1 1 8 — 4 2 6 , 1 1 8 — Fu n d b a l a n c e a t e n d o f y e a r 79 , 8 1 8 $ 7 8 , 2 2 1 — 7 8 , 2 2 1 ( 1 , 5 9 7 ) Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Ga s T a x S p e c i a l R e v e n u e F u n d 13 4 A ct u a l , Bu d g e t A c t u a l E n c u m b r a n c e bu d g e t a r y ba s i s Variance with budget Re v e n u e s : In t e r g o v e r n m e n t a l — $ 1 5 1 , 7 5 9 — 1 5 1 , 7 5 9 1 5 1 , 7 5 9 In v e s t m e n t i n c o m e — 1 1 1 1 1 1 1 1 1 To t a l r e v e n u e s — 1 5 1 , 8 7 0 — 1 5 1 , 8 7 0 1 5 1 , 8 7 0 Ex c e s s o f r e v e n u e s o v e r ex p e n d i t u r e s — 1 5 1 , 8 7 0 — 1 5 1 , 8 7 0 1 5 1 , 8 7 0 Ne t c h a n g e i n f u n d b a l a n c e — 1 5 1 , 8 7 0 — 1 5 1 , 8 7 0 1 5 1 , 8 7 0 Fu n d d e f i c i t a t b e g i n n i n g o f y e a r ( 9 6 6 , 1 5 7 ) ( 9 6 6 , 1 5 7 ) — ( 9 6 6 , 1 5 7 ) — Fu n d d e f i c i t a t e n d o f y e a r ( 9 6 6 , 1 5 7 ) $ ( 8 1 4 , 2 8 7 ) — ( 8 1 4 , 2 8 7 ) 1 5 1 , 8 7 0 Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A St a t e m e n t o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d ( D e f i c i t ) – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Di s a s t e r R e l i e f S p e c i a l R e v e n u e F u n d 13 5 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : Ot h e r t a x e s 3 , 0 1 1 , 0 4 0 $ 2 , 8 9 8 , 5 9 4 — 2 , 8 9 8 , 5 9 4 ( 1 1 2 , 4 4 6 ) In v e s t m e n t i n c o m e 6 7 , 0 0 0 6 0 , 3 4 9 — 6 0 , 3 4 9 ( 6 , 6 5 1 ) To t a l r e v e n u e s 3 , 0 7 8 , 0 4 0 2 , 9 5 8 , 9 4 3 — 2 , 9 5 8 , 9 4 3 ( 1 1 9 , 0 9 7 ) Ex p e n d i t u r e s : Ge n e r a l s e r v i c e s : Pu b l i c w o r k s 8 5 5 , 1 6 9 4 4 4 , 6 3 9 4 7 , 6 6 6 4 9 2 , 3 0 5 3 6 2 , 8 6 4 Ca p i t a l i m p r o v e m e n t 5 , 7 7 3 , 7 1 8 3 4 1 , 5 7 7 6 8 7 , 1 8 1 1 , 0 2 8 , 7 5 8 4 , 7 4 4 , 9 6 0 To t a l g e n e r a l s e r v i c e s 6 , 6 2 8 , 8 8 7 7 8 6 , 2 1 6 7 3 4 , 8 4 7 1 , 5 2 1 , 0 6 3 5 , 1 0 7 , 8 2 4 To t a l e x p e n d i t u r e s 6 , 6 2 8 , 8 8 7 7 8 6 , 2 1 6 7 3 4 , 8 4 7 1 , 5 2 1 , 0 6 3 5 , 1 0 7 , 8 2 4 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s ov e r ( u n d e r ) e x p e n d i t u r e s ( 3 , 5 5 0 , 8 4 7 ) 2 , 1 7 2 , 7 2 7 ( 7 3 4 , 8 4 7 ) 1 , 4 3 7 , 8 8 0 4 , 9 8 8 , 7 2 7 Ot h e r f i n a n c i n g u s e s : T r a n s f e r s o u t ( 1 , 1 4 7 , 7 2 5 ) ( 1 , 5 1 9 , 8 1 2 ) — ( 1 , 5 1 9 , 8 1 2 ) ( 3 7 2 , 0 8 7 ) Ne t c h a n g e i n f u n d b a l a n c e ( 4 , 6 9 8 , 5 7 2 ) 6 5 2 , 9 1 5 ( 7 3 4 , 8 4 7 ) ( 8 1 , 9 3 2 ) 4 , 6 1 6 , 6 4 0 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 7 , 4 4 9 , 4 5 7 7 , 4 4 9 , 4 5 7 — 7 , 4 4 9 , 4 5 7 — Fu n d b a l a n c e a t e n d o f y e a r 2 , 7 5 0 , 8 8 5 $ 8 , 1 0 2 , 3 7 2 ( 7 3 4 , 8 4 7 ) 7 , 3 6 7 , 5 2 5 4 , 6 1 6 , 6 4 0 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 Cl e a n B e a c h e s a n d O c e a n P a r c e l T a x C a p i t a l P r o j e c t s F u n d 13 6 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 1 , 5 1 5 , 4 4 1 $ 1 , 4 4 0 , 4 2 7 — 1 , 4 4 0 , 4 2 7 ( 7 5 , 0 1 4 ) In v e s t m e n t i n c o m e 1 , 0 0 0 9 4 2 — 9 4 2 ( 5 8 ) To t a l r e v e n u e s 1 , 5 1 6 , 4 4 1 1 , 4 4 1 , 3 6 9 — 1 , 4 4 1 , 3 6 9 ( 7 5 , 0 7 2 ) Ex p e n d i t u r e s : Ge n e r a l g o v e r n m e n t : Ot h e r 6 , 4 2 4 6 , 7 0 6 — 6 , 7 0 6 ( 2 8 2 ) To t a l g e n e r a l g o v e r n m e n t 6 , 4 2 4 6 , 7 0 6 — 6 , 7 0 6 ( 2 8 2 ) Ge n e r a l s e r v i c e s : Ot h e r — 2 7 , 5 2 2 — 2 7 , 5 2 2 ( 2 7 , 5 2 2 ) Ca p i t a l i m p r o v e m e n t 4 3 6 , 4 9 8 3 9 3 , 9 0 2 9 4 , 1 7 7 4 8 8 , 0 7 9 ( 5 1 , 5 8 1 ) To t a l g e n e r a l g o v e r n m e n t 4 3 6 , 4 9 8 4 2 1 , 4 2 4 9 4 , 1 7 7 5 1 5 , 6 0 1 ( 7 9 , 1 0 3 ) Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Co m m u n i t y a n d c u l t u r a l s e r v i c e s 1 9 9 , 0 1 0 1 9 9 , 0 1 0 — 1 9 9 , 0 1 0 — Ca p i t a l i m p r o v e m e n t 3 1 9 , 5 7 3 1 1 8 , 6 5 0 5 2 , 1 4 0 1 7 0 , 7 9 0 1 4 8 , 7 8 3 To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 5 1 8 , 5 8 3 3 1 7 , 6 6 0 5 2 , 1 4 0 3 6 9 , 8 0 0 1 4 8 , 7 8 3 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Ot h e r 8 6 9 , 1 1 4 3 7 9 , 0 0 3 1 2 0 , 0 0 0 4 9 9 , 0 0 3 3 7 0 , 1 1 1 Ca p i t a l i m p r o v e m e n t 3 6 0 , 8 9 5 3 4 7 , 8 4 4 — 3 4 7 , 8 4 4 1 3 , 0 5 1 To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 1 , 2 3 0 , 0 0 9 7 2 6 , 8 4 7 1 2 0 , 0 0 0 8 4 6 , 8 4 7 3 8 3 , 1 6 2 To t a l e x p e n d i t u r e s 2 , 1 9 1 , 5 1 4 1 , 4 7 2 , 6 3 7 2 6 6 , 3 1 7 1 , 7 3 8 , 9 5 4 4 5 2 , 5 6 0 Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s ov e r ( u n d e r ) e x p e n d i t u r e s (6 7 5 , 0 7 3 ) ( 3 1 , 2 6 8 ) ( 2 6 6 , 3 1 7 ) ( 2 9 7 , 5 8 5 ) 377,488 Ot h e r f i n a n c i n g u s e s : Tr a n s f e r o u t (2 1 6 , 5 0 0 ) ( 1 1 6 , 4 0 1 ) — ( 1 1 6 , 4 0 1 ) 100,099 Ne t c h a n g e i n f u n d b a l a n c e (8 9 1 , 5 7 3 ) ( 1 4 7 , 6 6 9 ) ( 2 6 6 , 3 1 7 ) ( 4 1 3 , 9 8 6 ) 477,587 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 11 , 9 6 6 , 9 4 9 1 1 , 9 6 6 , 9 4 9 — 1 1 , 9 6 6 , 9 4 9 — Fu n d b a l a n c e a t e n d o f y e a r 11 , 0 7 5 , 3 7 6 $ 1 1 , 8 1 9 , 2 8 0 ( 2 6 6 , 3 1 7 ) 1 1 , 5 5 2 , 9 6 3 4 7 7 , 5 8 7 (C D B G ) C a p i t a l P r o j e c t s F u n d Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Co m m u n i t y D e v e l o p m e n t B l o c k G r a n t 13 7 Ac t u a l , bu d g e t a r y Va r i a n c e Bu d g e t Ac t u a l E n c u m b r a n c e ba s i s wi t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 3 7 , 4 6 3 , 5 8 1 $ 8 , 9 4 2 , 3 9 8 — 8 , 9 4 2 , 3 9 8 ( 2 8 , 5 2 1 , 1 8 3 ) In v e s t m e n t i n c o m e 6 6 , 0 0 0 7 1 , 5 7 0 — 7 1 , 5 7 0 5 , 5 7 0 Ot h e r — 5 1 6 — 5 1 6 5 1 6 To t a l r e v e n u e s 3 7 , 5 2 9 , 5 8 1 9 , 0 1 4 , 4 8 4 — 9 , 0 1 4 , 4 8 4 ( 2 8 , 5 1 5 , 0 9 7 ) Ex p e n d i t u r e s : Ge n e r a l g o v e r n m e n t : Ci t y m a n a g e r 8 3 5 , 0 0 0 2 0 9 , 3 9 2 2 3 5 , 0 0 0 4 4 4 , 3 9 2 3 9 0 , 6 0 8 Co m m u n i t y a n d c u l t u r a l s e r v i c e s 7 9 4 , 5 0 0 3 8 5 , 8 4 0 1 8 7 , 5 0 0 5 7 3 , 3 4 0 2 2 1 , 1 6 0 Pu b l i c w o r k s 5 3 , 2 9 0 4 6 , 2 0 9 — 4 6 , 2 0 9 7 , 0 8 1 To t a l g e n e r a l g o v e r n m e n t 1 , 6 8 2 , 7 9 0 6 4 1 , 4 4 1 4 2 2 , 5 0 0 1 , 0 6 3 , 9 4 1 6 1 8 , 8 4 9 Pu b l i c s a f e t y : Po l i c e 7 6 8 , 0 2 2 4 9 0 , 7 2 7 — 4 9 0 , 7 2 7 2 7 7 , 2 9 5 Fi r e 7 2 6 , 2 9 1 5 8 3 , 9 5 3 — 5 8 3 , 9 5 3 1 4 2 , 3 3 8 Ca p i t a l i m p r o v e m e n t 8 9 2 , 5 4 4 7 9 3 , 5 4 6 — 7 9 3 , 5 4 6 9 8 , 9 9 8 To t a l p u b l i c s a f e t y 2 , 3 8 6 , 8 5 7 1 , 8 6 8 , 2 2 6 — 1 , 8 6 8 , 2 2 6 5 1 8 , 6 3 1 Ge n e r a l s e r v i c e s : Pu b l i c w o r k s 4 3 8 , 0 6 4 1 5 3 , 8 0 9 — 1 5 3 , 8 0 9 2 8 4 , 2 5 5 Bi g B l u e B u s 3 8 7 , 5 3 8 8 1 5 , 7 4 2 — 8 1 5 , 7 4 2 ( 4 2 8 , 2 0 4 ) Ca p i t a l i m p r o v e m e n t 4 3 , 3 0 9 , 0 1 3 7 , 9 2 0 , 0 8 4 1 8 , 2 2 9 , 7 1 5 2 6 , 1 4 9 , 7 9 9 1 7 , 1 5 9 , 2 1 4 To t a l g e n e r a l s e r v i c e s 4 4 , 1 3 4 , 6 1 5 8 , 8 8 9 , 6 3 5 1 8 , 2 2 9 , 7 1 5 2 7 , 1 1 9 , 3 5 0 1 7 , 0 1 5 , 2 6 5 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Co m m u n i t y a n d c u l t u r a l s e r v i c e s 6 2 6 , 5 9 9 5 6 5 , 5 0 1 4 , 7 3 1 5 7 0 , 2 3 2 5 6 , 3 6 7 Pu b l i c w o r k s — 1 4 0 — 1 4 0 ( 1 4 0 ) To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 6 2 6 , 5 9 9 5 6 5 , 6 4 1 4 , 7 3 1 5 7 0 , 3 7 2 5 6 , 2 2 7 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Pl a n n i n g a n d c o m m u n i t y d e v e l o p m e n t 2 2 5 , 0 0 0 ( 3 1 4 ) — ( 3 1 4 ) 2 2 5 , 3 1 4 Bi g B l u e B u s 9 6 , 0 0 0 9 6 , 0 0 0 — 9 6 , 0 0 0 — Ho u s i n g a n d e c o n o m i c d e v e l o p m e n t 5 6 0 , 2 7 3 2 5 8 , 2 1 9 — 2 5 8 , 2 1 9 3 0 2 , 0 5 4 Ca p i t a l i m p r o v e m e n t 6 , 5 0 9 , 7 7 5 5 7 8 , 8 7 7 5 , 2 9 5 , 9 2 3 5 , 8 7 4 , 8 0 0 6 3 4 , 9 7 5 To t a l h o u s i n g a n d c o m m u n i t y d e v e l o p m e n t 7 , 3 9 1 , 0 4 8 9 3 2 , 7 8 2 5 , 2 9 5 , 9 2 3 6 , 2 2 8 , 7 0 5 1 , 1 6 2 , 3 4 3 To t a l e x p e n d i t u r e s 5 6 , 2 2 1 , 9 0 9 1 2 , 8 9 7 , 7 2 5 2 3 , 9 5 2 , 8 6 9 3 6 , 8 5 0 , 5 9 4 1 9 , 3 7 1 , 3 1 5 De f i c i e n c y o f r e v e n u e s un d e r e x p e n d i t u r e s ( 1 8 , 6 9 2 , 3 2 8 ) ( 3 , 8 8 3 , 2 4 1 ) ( 2 3 , 9 5 2 , 8 6 9 ) ( 2 7 , 8 3 6 , 1 1 0 ) ( 9 , 1 4 3 , 7 8 2 ) Ot h e r f i n a n c i n g u s e s : Tr a n s f e r s o u t ( 9 0 5 , 4 4 5 ) ( 2 4 8 , 1 0 0 ) — ( 2 4 8 , 1 0 0 ) 6 5 7 , 3 4 5 To t a l o t h e r f i n a n c i n g u s e s ( 9 0 5 , 4 4 5 ) ( 2 4 8 , 1 0 0 ) — ( 2 4 8 , 1 0 0 ) 6 5 7 , 3 4 5 Ne t c h a n g e i n f u n d b a l a n c e ( 1 9 , 5 9 7 , 7 7 3 ) ( 4 , 1 3 1 , 3 4 1 ) ( 2 3 , 9 5 2 , 8 6 9 ) ( 2 8 , 0 8 4 , 2 1 0 ) ( 8 , 4 8 6 , 4 3 7 ) Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 1 5 , 8 3 7 , 1 7 4 1 5 , 8 3 7 , 1 7 4 — 1 5 , 8 3 7 , 1 7 4 — Fu n d b a l a n c e a t e n d o f y e a r (3 , 7 6 0 , 5 9 9 ) $ 1 1 , 7 0 5 , 8 3 3 ( 2 3 , 9 5 2 , 8 6 9 ) ( 1 2 , 2 4 7 , 0 3 6 ) ( 8 , 4 8 6 , 4 3 7 ) Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Mi s c e l l a n e o u s G r a n t s C a p i t a l P r o j e c t s F u n d 13 8 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : In t e r g o v e r n m e n t a l 2 5 9 , 9 2 5 $ 2 6 4 , 2 3 0 — 2 6 4 , 2 3 0 4 , 3 0 5 In v e s t m e n t i n c o m e 4 , 0 0 0 6 , 2 2 3 — 6 , 2 2 3 2 , 2 2 3 To t a l r e v e n u e s 2 6 3 , 9 2 5 2 7 0 , 4 5 3 — 2 7 0 , 4 5 3 6 , 5 2 8 Ex p e n d i t u r e s : Ge n e r a l g o v e r n m e n t : Ot h e r — 5 , 5 9 1 — 5 , 5 9 1 ( 5 , 5 9 1 ) To t a l g e n e r a l g o v e r n m e n t — 5 , 5 9 1 — 5 , 5 9 1 ( 5 , 5 9 1 ) Ge n e r a l s e r v i c e s : Ot h e r — 3 9 0 , 8 7 3 — 3 9 0 , 8 7 3 ( 3 9 0 , 8 7 3 ) Ca p i t a l i m p r o v e m e n t 5 2 2 , 6 1 9 1 6 5 , 5 6 1 1 6 2 , 2 3 2 3 2 7 , 7 9 3 1 9 4 , 8 2 6 To t a l g e n e r a l s e r v i c e s 5 2 2 , 6 1 9 5 5 6 , 4 3 4 1 6 2 , 2 3 2 7 1 8 , 6 6 6 ( 1 9 6 , 0 4 7 ) To t a l e x p e n d i t u r e s 5 2 2 , 6 1 9 5 6 2 , 0 2 5 1 6 2 , 2 3 2 7 2 4 , 2 5 7 ( 2 0 1 , 6 3 8 ) De f i c i e n c y o f r e v e n u e s un d e r e x p e n d i t u r e s ( 2 5 8 , 6 9 4 ) ( 2 9 1 , 5 7 2 ) ( 1 6 2 , 2 3 2 ) ( 4 5 3 , 8 0 4 ) ( 1 9 5 , 1 1 0 ) Ne t c h a n g e i n f u n d b a l a n c e ( 2 5 8 , 6 9 4 ) ( 2 9 1 , 5 7 2 ) ( 1 6 2 , 2 3 2 ) ( 4 5 3 , 8 0 4 ) ( 1 9 5 , 1 1 0 ) Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 9 0 9 , 7 0 3 9 0 9 , 7 0 3 — 9 0 9 , 7 0 3 — Fu n d b a l a n c e a t e n d o f y e a r 65 1 , 0 0 9 $ 6 1 8 , 1 3 1 ( 1 6 2 , 2 3 2 ) 4 5 5 , 8 9 9 ( 1 9 5 , 1 1 0 ) Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) So u t h C o a s t A i r Q u a l i t y M a n a g e m e n t D i s t r i c t ( S C A Q M D ) C a p i t a l P r o j e c t s F u n d 13 9 Ac t u a l , bu d g e t a r y V a r i a n c e Bu d g e t A c t u a l E n c u m b r a n c e b a s i s w i t h b u d g e t Re v e n u e s : Ot h e r t a x e s 2 5 , 0 0 0 $ 2 6 , 5 6 8 — 2 6 , 5 6 8 1 , 5 6 8 In v e s t m e n t i n c o m e 1 , 0 0 0 1 , 6 1 5 — 1 , 6 1 5 6 1 5 To t a l r e v e n u e s 26 , 0 0 0 2 8 , 1 8 3 — 2 8 , 1 8 3 2,183 Ex p e n d i t u r e s : Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Ca p i t a l i m p r o v e m e n t 23 0 , 7 3 9 5 1 , 4 8 7 4 3 , 5 5 3 9 5 , 0 4 0 135,699 To t a l c u l t u r a l a n d r e c r e a t i o n s e r v i c e s 2 3 0 , 7 3 9 5 1 , 4 8 7 4 3 , 5 5 3 9 5 , 0 4 0 135,699 To t a l e x p e n d i t u r e s 23 0 , 7 3 9 5 1 , 4 8 7 4 3 , 5 5 3 9 5 , 0 4 0 135,699 De f i c i e n c y o f r e v e n u e s un d e r e x p e n d i t u r e s (2 0 4 , 7 3 9 ) ( 2 3 , 3 0 4 ) ( 4 3 , 5 5 3 ) ( 6 6 , 8 5 7 ) 137,882 Ne t c h a n g e i n f u n d b a l a n c e (2 0 4 , 7 3 9 ) ( 2 3 , 3 0 4 ) ( 4 3 , 5 5 3 ) ( 6 6 , 8 5 7 ) 137,882 Fu n d b a l a n c e a t b e g i n n i n g o f y e a r 21 7 , 6 0 3 2 1 7 , 6 0 3 — 2 1 7 , 6 0 3 — Fu n d b a l a n c e a t e n d o f y e a r 12 , 8 6 4 $ 1 9 4 , 2 9 9 ( 4 3 , 5 5 3 ) 1 5 0 , 7 4 6 1 3 7 , 8 8 2 Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Sc h e d u l e o f R e v e n u e s , E x p e n d i t u r e s a n d C h a n g e s i n Fu n d B a l a n c e – B u d g e t a n d A c t u a l ( N o n - G A A P B a s i s ) Pa r k s a n d R e c r e a t i o n C a p i t a l P r o j e c t s F u n d 14 0 CITY OF SANTA MONICA, CALIFORNIA Nonmajor Enterprise Fund Financial Statements Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met: (a) The activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity. Debt that is secured by a pledge of net revenues from fees and charges and the full faith and credit of a related primary government or component unit – even if that government is not expected to make any payments – is not payable solely from fees and charges of the activity. (Some debt may be secured, in part, by a portion of its own proceeds but should be considered as payable “solely” from the revenues of the activity.) (b) Laws or regulations require that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues. (c) The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service). Airport Fund – To account for revenues and expenses connected with management of the Santa Monica Municipal Airport. Pier Fund – To account for revenues and expenses connected with management and development of the Santa Monica Pier. Stormwater Management Fund – To account for revenues and expenses associated with storm water management. Cemetery Fund – To account for revenues and expenses associated with operation of Woodlawn Cemetery and Mausoleum. Special Aviation Fund – To account for revenues and expenses associated with aviation-related State funds provided to the City. Parking Authority Fund – To account for acquisition of parking lots or contributing to the construction of parking structures by the City Parking Authority. 141 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2015 Business-Type Activities - Enterprise Funds Airport Pier Stormwater Management Cemetery Special Aviation Parking Authority Total nonmajor enterprise funds Assets Current assets: Cash and investments $4,204,518 2,848,813 25 --3,081,302 10,134,658 Restricted cash and investments 398,630 528,449 2,252,575 ---3,179,654 Receivables (net, where applicable, of allowances for uncollectibles): Accounts 218,784 63,086 16,537 144,520 --442,927 Interest 10,055 6,203 3,282 43 -6,920 26,503 Prepaids 3,168 -----3,168 Total current assets 4,835,155 3,446,551 2,272,419 144,563 -3,088,222 13,786,910 Noncurrent assets: Restricted cash and investments -----300,000 300,000 Capital assets: Land 8 --4 -1,362,700 1,362,712 Construction in progress -43,931 ----43,931 Buildings 7,769,091 5,916,024 -1,723,603 -946,242 16,354,960 Improvements other than buildings 13,216,394 4,456,986 147,299 782,158 -142,591 18,745,428 Machinery and equipment 734,444 289,426 35,750 379,554 -7,237 1,446,411 Infrastructure -16,566,587 10,739,803 ---27,306,390 Less: accumulated depreciation (16,727,075)(12,153,551)(3,856,761)(2,072,083)-(457,398)(35,266,868) Net capital assets 4,992,862 15,119,403 7,066,091 813,236 -2,001,372 29,992,964 Total noncurrent assets 4,992,862 15,119,403 7,066,091 813,236 -2,301,372 30,292,964 Total assets 9,828,017 18,565,954 9,338,510 957,799 -5,389,594 44,079,874 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows from pensions 237,394 375,615 -133,965 --746,974 Liabilities Current liabilities: Accounts payable 171,112 280,810 25 63,214 -859 516,020 Accrued liabilities 51,927 73,150 -23,685 -70 148,832 Contracts payable (retained percentage)15,780 -----15,780 Compensated absences due within one year 51,872 62,146 -27,604 --141,622 Accrued interest payable --12,981 ---12,981 Loans and bonds payable due within one year --284,383 ---284,383 Due to other funds --969 25,848 --26,817 Liabilities payable from restricted assets - deposits 398,630 528,449 ----927,079 Total current liabilities 689,321 944,555 298,358 140,351 -929 2,073,514 Long-term liabilities: Compensated absences due in more than one year 16,730 102,146 -5,658 --124,534 Advances from other funds 13,058,926 -167,186 ---13,226,112 Loans and bonds payable due in more than one year --1,213,409 ---1,213,409 Net OPEB obligation 31,274 39,803 -39,070 --110,147 Net pension liability 1,440,554 2,004,394 -640,149 --4,085,097 Total long-term liabilities 14,547,484 2,146,343 1,380,595 684,877 --18,759,299 Total liabilities 15,236,805 3,090,898 1,678,953 825,228 -929 20,832,813 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pensions 325,639 453,096 -144,707 --923,442 Net position Net investment in capital assets 4,992,862 15,119,403 5,568,299 813,236 -2,001,372 28,495,172 Unrestricted (10,489,895)278,172 2,091,258 (691,407)-3,387,293 (5,424,579) Total net position $(5,497,033)15,397,575 7,659,557 121,829 -5,388,665 23,070,593 142 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Funds For the fiscal year ended June 30, 2015 Business-Type Activities - Enterprise Funds Airport Pier Stormwater Management Cemetery Special Aviation Parking Authority Total nonmajor enterprise funds Operating revenues Charges for services $5,897,240 6,648,574 1,458,352 1,604,607 --15,608,773 Total operating revenues 5,897,240 6,648,574 1,458,352 1,604,607 --15,608,773 Operating expenses Personnel services 1,227,955 2,058,361 1,127,231 714,970 -770 5,129,287 Administrative indirect 645,982 388,592 -393,821 --1,428,395 Contractual services 300,328 1,404,355 -329,646 --2,034,329 Repairs and maintenance 277,411 551,121 640,423 64,861 --1,533,816 Materials and supplies 610,136 250,108 -269,418 -2,525 1,132,187 Utilities 279,684 228,824 -150,664 --659,172 Casualty property and liability costs 148,262 273,472 -67,255 --488,989 Miscellaneous fees and costs 353 202 151 94 --800 Depreciation and amortization 411,032 547,575 301,816 146,501 -33,886 1,440,810 Other 869,382 951,790 51,310 18,434 --1,890,916 Total operating expenses 4,770,525 6,654,400 2,120,931 2,155,664 -37,181 15,738,701 Operating income (loss)1,126,715 (5,826)(662,579)(551,057)-(37,181)(129,928) Nonoperating revenues (expenses) Investment income 37,191 13,167 15,667 256 992 25,373 92,646 Interest expense (529,911)-(51,185)---(581,096) Loss on disposal of capital assets (8)(268,680)-(1,469)-(366,641)(636,798) Other nonoperating revenues 87,777 165,523 637,547 21,336 --912,183 Total nonoperating revenues (expenses) net (404,951)(89,990)602,029 20,123 992 (341,268)(213,065) Income (loss) before transfers 721,764 (95,816)(60,550)(530,934)992 (378,449)(342,993) Transfers in 261,661 -1,313,711 554,261 --2,129,633 Transfers out -(192,038)(774,400)-(261,661)-(1,228,099) Change in net position 983,425 (287,854)478,761 23,327 (260,669)(378,449)558,541 Net position at beginning of year, as restated (6,480,458)15,685,429 7,180,796 98,502 260,669 5,767,114 22,512,052 Net position at end of year $(5,497,033)15,397,575 7,659,557 121,829 -5,388,665 23,070,593 143 Ai r p o r t Pi e r St o r m w a t e r Ma n a g e m e n t C e m e t e r y Sp e c i a l Av i a t i o n Parking AuthorityTotal nonmajor enterprise funds Ca s h f l o w s f r o m o p e r a t i n g a c t i v i t i e s : C a s h r e c e i v e d f r o m c u s t o m e r s 5 , 8 8 8 , 6 0 2 $ 6 , 8 5 3 , 9 4 4 1 , 5 4 1 , 5 6 1 1 , 6 0 5 , 5 9 6 — — 1 5 , 8 8 9 , 7 0 3 C a s h p a y m e n t s f o r m a t e r i a l s a n d s e r v i c e s (3 , 0 2 5 , 2 9 1 ) (4 , 6 7 5 , 4 9 0 ) (6 9 1 , 8 6 8 ) (1 , 2 6 7 , 7 8 1 ) — ( 1 , 6 6 6 ) (9,662,096) C a s h p a y m e n t s t o e m p l o y e e s f o r s e r v i c e s (1 , 2 2 9 , 1 9 2 ) (2 , 1 2 2 , 4 0 0 ) (1 , 1 2 7 , 2 3 1 ) (7 6 7 , 2 9 7 ) — ( 7 0 0 ) (5,246,820) O t h e r r e v e n u e r e c e i v e d 87 , 7 7 7 16 5 , 5 2 3 63 7 , 5 4 7 21 , 3 3 6 — — 9 1 2 , 1 8 3 N e t c a s h p r o v i d e d b y ( u s e d i n ) o p e r a t i n g a c t i v i t i e s 1, 7 2 1 , 8 9 6 22 1 , 5 7 7 36 0 , 0 0 9 (4 0 8 , 1 4 6 ) — ( 2 , 3 6 6 ) 1,892,970 Ca s h f l o w s f r o m n o n c a p i t a l f i n a n c i n g a c t i v i t i e s : R e p a y m e n t o f a d v a n c e s f r o m o t h e r f u n d s (5 0 0 , 0 0 1 ) — ( 1 0 6 , 4 1 1 ) (1 4 6 , 3 6 9 ) — — ( 7 5 2 , 7 8 1 ) T r a n s f e r s i n 26 1 , 6 6 1 — 1 , 3 1 3 , 7 1 1 55 4 , 2 6 1 — — 2 , 1 2 9 , 6 3 3 T r a n s f e r s o u t — ( 1 9 2 , 0 3 8 ) (7 7 4 , 4 0 0 ) — ( 2 6 1 , 6 6 1 ) — (1,228,099) N e t c a s h p r o v i d e d b y ( u s e d i n ) n o n c a p i t a l f i n a n c i n g a c t i v i t i e s (2 3 8 , 3 4 0 ) (1 9 2 , 0 3 8 ) 43 2 , 9 0 0 40 7 , 8 9 2 (2 6 1 , 6 6 1 ) — 148,753 Ca s h f l o w s f r o m c a p i t a l a n d r e l a t e d f i n a n c i n g a c t i v i t i e s : A c q u i s i t i o n a n d c o n s t r u c t i o n o f c a p i t a l a s s e t s — ( 3 5 8 , 6 5 0 ) — — — — ( 3 5 8 , 6 5 0 ) R e d u c t i o n i n l o n g - t e r m o b l i g a t i o n s — — ( 2 7 7 , 1 7 4 ) (1 ) — — ( 2 7 7 , 1 7 5 ) I n t e r e s t p a i d o n l o n g - t e r m o b l i g a t i o n s (5 2 9 , 9 1 1 ) — ( 5 3 , 5 8 7 ) — — — ( 5 8 3 , 4 9 8 ) N e t c a s h u s e d i n c a p i t a l a n d r e l a t e d f i n a n c i n g a c t i v i t i e s (5 2 9 , 9 1 1 ) (3 5 8 , 6 5 0 ) (3 3 0 , 7 6 1 ) (1 ) — — ( 1 , 2 1 9 , 3 2 3 ) Ca s h f l o w s f r o m i n v e s t i n g a c t i v i t i e s : I n t e r e s t o n i n v e s t m e n t s 33 , 0 7 8 17 , 0 5 0 13 , 7 6 2 25 5 1, 3 8 7 23,098 88,630 N e t c a s h p r o v i d e d b y i n v e s t i n g a c t i v i t i e s 33 , 0 7 8 17 , 0 5 0 13 , 7 6 2 25 5 1, 3 8 7 23,098 88,630 N e t i n c r e a s e ( d e c r e a s e ) i n c a s h a n d c a s h e q u i v a l e n t s 98 6 , 7 2 3 (3 1 2 , 0 6 1 ) 47 5 , 9 1 0 — ( 2 6 0 , 2 7 4 ) 20,732 911,030 Ca s h a n d c a s h e q u i v a l e n t s a t b e g i n n i n g o f y e a r 3, 6 1 6 , 4 2 5 3, 6 8 9 , 3 2 3 1, 7 7 6 , 6 9 0 — 2 6 0 , 2 7 4 3,360,570 12,703,282 Ca s h a n d c a s h e q u i v a l e n t s a t e n d o f y e a r 4, 6 0 3 , 1 4 8 $ 3, 3 7 7 , 2 6 2 2, 2 5 2 , 6 0 0 — — 3 , 3 8 1 , 3 0 2 13,614,312 Ca s h a n d i n v e s t m e n t s 4, 2 0 4 , 5 1 8 $ 2, 8 4 8 , 8 1 3 25 — — 3 , 0 8 1 , 3 0 2 10,134,658 Re s t r i c t e d c a s h a n d i n v e s t m e n t s 39 8 , 6 3 0 52 8 , 4 4 9 2, 2 5 2 , 5 7 5 — — 3 0 0 , 0 0 0 3,479,654 T o t a l c a s h a n d c a s h e q u i v a l e n t s 4, 6 0 3 , 1 4 8 $ 3, 3 7 7 , 2 6 2 2, 2 5 2 , 6 0 0 — — 3 , 3 8 1 , 3 0 2 13,614,312 (Continued) CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Co m b i n i n g S t a t e m e n t o f C a s h F l o w s No n m a j o r E n t e r p r i s e F u n d s Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 14 4 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Co m b i n i n g S t a t e m e n t o f C a s h F l o w s No n m a j o r E n t e r p r i s e F u n d s Fo r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 1 5 A i r p o r t Pi e r S t o r m w a t e r Ma n a g e m e n t C e m e t e r y S p e c i a l Av i a t i o n Parking Authority Total nonmajor enterprise funds Re c o n c i l i a t i o n o f o p e r a t i n g i n c o m e ( l o s s ) t o n e t c a s h p r o v i d e d b y ( u s e d i n ) o p e r a t i n g a c t i v i t i e s : O p e r a t i n g i n c o m e ( l o s s ) 1 , 1 2 6 , 7 1 5 $ ( 5 , 8 2 6 ) ( 6 6 2 , 5 7 9 ) ( 5 5 1 , 0 5 7 ) — ( 3 7 , 1 8 1 ) (129,928) A d j u s t m e n t s t o r e c o n c i l e o p e r a t i n g i n c o m e ( l o s s ) t o n e t c a s h p r o v i d e d b y ( u s e d i n ) o p e r a t i n g a c t i v i t i e s : A d d d e p r e c i a t i o n 41 1 , 0 3 2 54 7 , 5 7 5 30 1 , 8 1 6 14 6 , 5 0 1 — 3 3 , 8 8 6 1,440,810 O t h e r n o n o p e r a t i n g r e v e n u e r e c e i v e d 87 , 7 7 7 16 5 , 5 2 3 63 7 , 5 4 7 21 , 3 3 6 — — 9 1 2 , 1 8 3 C h a n g e s i n a s s e t s a n d l i a b i l i t i e s a n d d e f e r r e d o u t f l o w s a n d i n f l o w s o f r e s o u r c e s : D e c r e a s e i n a c c o u n t s r e c e i v a b l e 41 , 9 8 9 20 5 , 3 7 0 83 , 2 0 9 98 9 — — 3 3 1 , 5 5 7 D e c r e a s e ( i n c r e a s e ) i n p r e p a i d s (2 , 6 8 9 ) 5, 1 4 5 — — — — 2,456 I n c r e a s e ( d e c r e a s e ) i n a c c o u n t s p a y a b l e 93 , 1 5 6 (6 3 2 , 1 7 1 ) 16 2 6 , 4 1 2 — 859 (511,728) D e c r e a s e i n u n e a r n e d r e v e n u e (5 6 , 1 3 2 ) — — - — — ( 5 6 , 1 3 2 ) I n c r e a s e ( d e c r e a s e ) i n a c c r u e d l i a b i l i t i e s 16 , 2 4 2 5, 6 2 6 — ( 1 6 , 3 6 9 ) — 70 5,569 I n c r e a s e i n d e p o s i t s 5, 5 0 5 — — — — — 5,505 N e t O P E B o b l i g a t i o n 35 0 44 5 — 4 3 7 — — 1,232 N e t p e n s i o n l i a b i l i t y a n d r e l a t e d c h a n g e s i n d e f e r r e d o u t f l o w s a n d i n f l o w s o f r e s o u r c e s (1 7 , 8 2 9 ) (7 0 , 1 1 0 ) — ( 3 6 , 3 9 5 ) — — ( 1 2 4 , 3 3 4 ) I n c r e a s e i n c o n t r a c t s p a y a b l e 15 , 7 8 0 — — — — — 15,780 T o t a l a d j u s t m e n t s 59 5 , 1 8 1 22 7 , 4 0 3 1, 0 2 2 , 5 8 8 14 2 , 9 1 1 — 3 4 , 8 1 5 2,022,898 N e t c a s h p r o v i d e d b y ( u s e d i n ) o p e r a t i n g a c t i v i t i e s 1, 7 2 1 , 8 9 6 $ 22 1 , 5 7 7 36 0 , 0 0 9 (4 0 8 , 1 4 6 ) — ( 2 , 3 6 6 ) 1,892,970 14 5 THIS PAGE INTENTIONALLY LEFT BLANK 146 CITY OF SANTA MONICA, CALIFORNIA Internal Service Fund Financial Statements Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City or to other governments, on a cost-reimbursement basis. Vehicle Management Fund – To account for user charges from other funds and expenses related to the replacement, maintenance and the fueling of various City vehicles, including specialized mechanical equipment. Information Technology Replacement and Services Fund – To account for user charges from other funds and expenses related to replacement of computer equipment. Self-Insurance, General Liability and Auto Fund – To account for user charges from other funds and expenses related to the administration and payment of general liability and auto claims. Self-Insurance, Bus Fund – To account for user charges from the Big Blue Bus Fund and expenses related to the administration and payment of municipal bus lines liability claims. Self-Insurance, Risk Management Administration Fund – To account for user charges from other funds and expenses related to the administration of the risk management division. Self-Insurance, Workers' Compensation Fund – To account for user charges from other funds and expenses related to the administration and payment of workers' compensation claims. 147 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Net Position Internal Service Funds June 30, 2015 Vehicle Management Information Technology Replacement and Services Self - Insurance General Liability / Auto Self - Insurance Bus Self - Insurance Risk Management Admin Self - Insurance Workers' Compensation Total internal service funds Assets Current assets: Cash and investments $30,230,867 7,092,625 15,410,517 6,067,483 826,422 34,397,428 94,025,342 Receivables: Accounts 14,320 ---20,586 -34,906 Interest 51,013 14,642 30,406 10,216 352 51,214 157,843 Inventory 76,453 -----76,453 Prepaids ----9,415 -9,415 Total current assets 30,372,653 7,107,267 15,440,923 6,077,699 856,775 34,448,642 94,303,959 Noncurrent assets: Capital assets: Machinery and equipment 35,601,080 1,310,622 2,849 7,386 919 10,065 36,932,921 Less: accumulated depreciation (24,788,099)(1,219,503)(2,849)(7,386)(919)(10,065)(26,028,821) Net capital assets 10,812,981 91,119 ----10,904,100 Total assets 41,185,634 7,198,386 15,440,923 6,077,699 856,775 34,448,642 105,208,059 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows from pensions 569,140 ---319,037 -888,177 Liabilities Current liabilities: Accounts payable 571,168 95,040 48,177 91,100 2,578 18,883 826,946 Accrued liabilities 100,135 ---66,349 -166,484 Compensated absences due within one year 93,664 ---49,632 -143,296 Claims payable due within one year --2,436,553 2,306,350 -7,547,825 12,290,728 Total current liabilities 764,967 95,040 2,484,730 2,397,450 118,559 7,566,708 13,427,454 Long-term liabilities: Compensated absences due in more than one year 91,657 ---50,317 -141,974 Claims payable due in more than one year --3,620,382 2,383,910 -27,713,421 33,717,713 Net OPEB obligation 113,266 ---82,485 -195,751 Net pension liability 3,137,073 ---1,618,557 -4,755,630 Total long-term liabilities 3,341,996 -3,620,382 2,383,910 1,751,359 27,713,421 38,811,068 Total liabilties 4,106,963 95,040 6,105,112 4,781,360 1,869,918 35,280,129 52,238,522 DEFERRED INFLOWS OF RESOURCES Deferred inflows from pensions 709,140 ---365,877 -1,075,017 Net position Net investment in capital assets 10,812,981 91,119 ----10,904,100 Unrestricted 26,125,690 7,012,227 9,335,811 1,296,339 (1,059,983)(831,487)41,878,597 Total net position $36,938,671 7,103,346 9,335,811 1,296,339 (1,059,983)(831,487)52,782,697 148 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the fiscal year ended June 30, 2015 Vehicle Management Information Technology Replacement and Services Self - Insurance General Liability / Auto Self - Insurance Bus Self - Insurance Risk Management Admin Self - Insurance Workers' Compensation Total internal service funds Operating revenues Charges for services $10,345,090 2,054,848 3,164,491 2,500,250 2,702,009 14,973,131 35,739,819 Total operating revenues 10,345,090 2,054,848 3,164,491 2,500,250 2,702,009 14,973,131 35,739,819 Operating expenses Personnel services 3,129,083 -89,677 89,677 828,202 484,199 4,620,838 Administrative indirect 591,353 -18,634 18,634 191,103 100,612 920,336 Contractual services 235,598 -24,910 17,323 47,094 185,395 510,320 Repairs and maintenance 1,554,087 -57 57 (285)306 1,554,222 Materials and supplies 1,732,523 1,931,034 909 909 6,085 31,419 3,702,879 Utilities 65,399 -119 119 492 643 66,772 Casualty property and liability costs 52,590 -520 520 5,331 2,806 61,767 Claims expense net of claims reserve adjustment --1,987,583 2,210,482 -9,732,395 13,930,460 Insurance and bonds --918,384 911,904 1,402,495 1,458,959 4,691,742 Miscellaneous fees and costs 2,170 -556,492 123,022 55,524 325,952 1,063,160 Depreciation and amortization 2,967,491 67,240 ----3,034,731 Total operating expenses 10,330,294 1,998,274 3,597,285 3,372,647 2,536,041 12,322,686 34,157,227 Operating income (loss)14,796 56,574 (432,794)(872,397)165,968 2,650,445 1,582,592 Nonoperating revenues (expenses) Investment income 193,210 53,660 101,133 32,454 (1)180,480 560,936 Loss on disposal of capital assets (170,368)(64,413)----(234,781) Other nonoperating revenues 591,664 -79,689 --10,504 681,857 Total nonoperating revenues (expenses)614,506 (10,753)180,822 32,454 (1)190,984 1,008,012 Income (loss) before transfers 629,302 45,821 (251,972)(839,943)165,967 2,841,429 2,590,604 Transfers out --(146,646)---(146,646) Change in net position 629,302 45,821 (398,618)(839,943)165,967 2,841,429 2,443,958 Net position at beginning of year, as restated 36,309,369 7,057,525 9,734,429 2,136,282 (1,225,950)(3,672,916)50,338,739 Net position at end of year $36,938,671 7,103,346 9,335,811 1,296,339 (1,059,983)(831,487)52,782,697 149 Vehicle Management Information Technology Replacement and Services Self-Insurance General Liability / Auto Self-Insurance Bus Self-Insurance Risk Management Administration Self-Insurance Workers' Compensation Total internal service funds Cash flows from operating activities: Cash received from customers 10,395,883$ 2,054,848 3,164,491 2,500,250 2,681,423 14,973,131 35,770,026 Cash payments for materials and services (4,177,815)(2,025,127)(2,417,764)(983,538)(1,715,049)(2,095,446)(13,414,739) Cash payments for claims and related expenses —    —    (2,383,995)(1,038,623)—    (6,841,417)(10,264,035) Cash payments to employees for services (3,250,009)—    (89,677)(89,677)(900,484)(484,199)(4,814,046) Other nonoperating revenue received 591,664 —    79,689 —    —    10,504 681,857 Net cash provided by (used in) operating activities 3,559,723 29,721 (1,647,256)388,412 65,890 5,562,573 7,959,063 Cash flows from noncapital financing activities: Transfers out —    —    (146,646)—    —    —    (146,646) Net cash used in noncapital financing activities —    —    (146,646)—    —    —    (146,646) Cash flows from capital and related financing activities: Acquisition and construction of capital assets (3,187,775)(66,326)—    —    —    —    (3,254,101) Net cash used in capital and related financing activities (3,187,775)(66,326)—    —    —    —    (3,254,101) Cash flows from investing activities – interest on investments 178,850 48,164 95,242 31,279 (101)170,254 523,688 Net increase (decrease) in cash and cash equivalents 550,798 11,559 (1,698,660)419,691 65,789 5,732,827 5,082,004 Cash and cash equivalents at beginning of year 29,680,069 7,081,066 17,109,177 5,647,792 760,633 28,664,601 88,943,338 Cash and cash equivalents at end of year 30,230,867$ 7,092,625 15,410,517 6,067,483 826,422 34,397,428 94,025,342 Reconciliation of operating income (loss) to net cash provided by (used in) operating income (loss): Operating income (loss)14,796$ 56,574 (432,794)(872,397)165,968 2,650,445 1,582,592 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Add depreciation 2,967,491 67,240 —    —    —    —    3,034,731 Other nonoperating revenue received 591,664 —    79,689 —    —    10,504 681,857 Changes in assets and liabilities and deferred outflows and inflows of resources: (Increase) decrease in accounts receivable 50,793 —    —    —    (20,586)—    30,207 Increase in prepaids —    —    —    —    (9,415)—    (9,415) Increase in inventory (7,902)—    —    —    —    —    (7,902) Increase (decrease) in accounts payable 63,807 (94,093)(897,739)88,950 2,205 10,646 (826,224) Decrease in accrued liabilities (31,198)—    —    —    (864)—    (32,062) Increase (decrease) in claims payable —    —    (396,412)1,171,859 —    2,890,978 3,666,425 Net pension liability and related changes in deferred outflows and inflows of resources (90,995)—    —    —    (72,341)—    (163,336) Net OPEB obligation 1,267 —    —    —    923 —    2,190 Total adjustments 3,544,927 (26,853)(1,214,462)1,260,809 (100,078)2,912,128 6,376,471 Net cash provided by (used in) operating activities 3,559,723$ 29,721 (1,647,256)388,412 65,890 5,562,573 7,959,063 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Cash Flows Internal Service Funds For the fiscal year ended June 30, 2015 150 CITY OF SANTA MONICA, CALIFORNIA Fiduciary Fund Financial Statements Agency Funds are custodial in nature and used to receive and disburse funds for an entity/individual, which is not part of the City. General Trust Fund - To account for funds given to the City for restricted purposes whereby the City is only acting as a pass-through agent. Street Light Fund - To account for all receipts and disbursements associated with 1911 Act Street Light Assessment Bonds. 151 General Street Total Trust Light Agency Funds Assets Restricted cash and investments 7,716,917 $ 4,676 7,721,593 Accounts receivable 139,241 — 139,241 Total assets 7,856,158 4,676 7,860,834 Liabilities Accounts payable and accrued liabilities 7,856,158 4,676 7,860,834 Total liabilities 7,856,158 4,676 7,860,834 Net Position — $ — — CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Fiduciary Net Position Agency Funds June 30, 2015 152 June 30, 2014 Additions Reductions June 30, 2015 Fiduciary Funds Agency Funds: General Trust Assets: Restricted cash and investments 6,544,795 $ 63,932,722 62,760,600 7,716,917 Accounts receivable 89,174 237,735 187,668 139,241 Total assets 6,633,969 $ 64,170,457 62,948,268 7,856,158 Liabilities: Accounts payable and accrued liabilities 6,633,969 $ 121,189,455 119,967,266 7,856,158 Total liabilities 6,633,969 $ 121,189,455 119,967,266 7,856,158 Street Light Assets: Restricted cash and investments 4,676 $ 17,744 17,744 4,676 Total assets 4,676 $ 17,744 17,744 4,676 Liabilities: Accounts payable and accrued liabilities 4,676 $ 17,744 17,744 4,676 Total liabilities 4,676 $ 17,744 17,744 4,676 Total Fiduciary Funds Total Agency Funds Assets: Restricted cash and investments 6,549,471 $ 63,950,466 62,778,344 7,721,593 Accounts receivable 89,174 237,735 187,668 139,241 Total assets 6,638,645 $ 64,188,201 62,966,012 7,860,834 Liabilities: Accounts payable and accrued liabilities 6,638,645 $ 121,207,199 119,985,010 7,860,834 Total liabilities 6,638,645 $ 121,207,199 119,985,010 7,860,834 CITY OF SANTA MONICA, CALIFORNIA Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the fiscal year ended June 30, 2015 153 THIS PAGE INTENTIONALLY LEFT BLANK 154 City of Santa Monica, California Year Ended June 30, 2015 STATISTICAL SECTION Table Page Financial Trends Information These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. 1 Net Position by Component - Last Ten Fiscal Years 157 2 Changes in Net Position - Last Ten Fiscal Years 158 3 Fund Balance of Governmental Funds - Last Ten Fiscal Years 161 4 Changes in Fund Balance of Governmental Funds - Last Ten Fiscal Years 162 5 General Fund Tax Revenues by Source - Last Ten Fiscal Years 164 Revenue Capacity Information These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. 6 Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years 165 7 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 166 8 Principal Property Taxpayers - Current Fiscal Year and Nine Years Ago 167 9 Property Tax Levies and Collections - Last Ten Fiscal Years 168 10 Taxable Transactions by Type of Business - Last Ten Calendar Years 169 Debt Capacity Information These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and government's ability to issue additional debt in the future. 11 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 170 12 Ratios of General Bonded Debt - Last Ten Fiscal Years 171 13 Direct and Overlapping Governmental Activities Debt as of June 30, 2015 172 14 Computation of Legal Debt Margin - Last Ten Fiscal Years 173 15 Wastewater Enterprise Revenue Bonds Coverage - Last Ten Fiscal Years 174 CITY OF SANTA MONICA, CALIFORNIA For the fiscal year ended June 30, 2015 STATISTICAL SECTION (unaudited) 155 Table Page Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 16 Demographic and Economic Statistics - Last Ten Calendar Years 175 17 Principal Employers - Current Year and Nine Years Ago 176 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and activities it performs. 18 Full-Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years 177 19 Operating Indicators by Function/Program - Last Ten Fiscal Years 178 20 Capital Assets Statistics by Function/Program - Last Ten Fiscal Years 179 STATISTICAL SECTION (unaudited), continued CITY OF SANTA MONICA, CALIFORNIA For the fiscal year ended June 30, 2015 156 TABLE 1 20 1 4 - 1 5 20 1 3 - 1 4 20 1 2 - 1 3 20 1 1 - 1 2 20 1 0 - 1 1 20 0 9 - 1 0 20 0 8 - 0 9 20 0 7 - 0 8 2 0 0 6 - 0 7 * 2 0 0 5 - 0 6 * Go v e r n m e n t a l a c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s $ 7 0 5 , 1 4 4 , 1 9 4 69 8 , 2 2 3 , 6 2 0 70 2 , 3 9 2 , 0 6 5 70 8 , 5 6 4 , 3 6 0 5 6 5 , 4 0 2 , 9 0 5 56 1 , 3 0 8 , 7 1 7 57 9 , 3 6 7 , 0 9 3 5 7 3 , 9 7 1 , 9 7 5 5 0 6 , 3 0 7 , 6 7 6 4 8 1 , 6 7 8 , 9 9 6 Re s t r i c t e d 17 8 , 6 2 4 , 7 5 7 13 6 , 5 1 0 , 6 6 1 12 6 , 8 2 7 , 9 4 3 17 1 , 9 6 4 , 3 8 9 19 8 , 9 9 0 , 7 4 1 19 0 , 3 0 2 , 5 6 8 1 8 7 , 1 0 3 , 8 3 1 2 3 2 , 2 8 1 , 1 0 2 2 7 3 , 1 0 4 , 5 0 3 196,818,353 Un r e s t r i c t e d 24 , 2 9 2 , 5 2 5 3 7 6 , 9 8 3 , 6 9 6 3 7 2 , 2 8 5 , 0 0 5 3 7 9 , 3 0 2 , 7 8 9 24 8 , 9 7 7 , 2 0 9 23 8 , 8 5 6 , 9 6 3 2 4 2 , 5 4 2 , 3 7 5 2 0 9 , 4 3 8 , 5 2 2 243,036,538 230,154,215 To t a l g o v e r n m e n t a l a c t i v i t i e s n e t p o s i t i o n 90 8 , 0 6 1 , 4 7 6 1, 2 1 1 , 7 1 7 , 9 7 7 1, 2 0 1 , 5 0 5 , 0 1 3 1, 2 5 9 , 8 3 1 , 5 3 8 1, 0 1 3 , 3 7 0 , 8 5 5 99 0 , 4 6 8 , 2 4 8 1, 0 0 9 , 0 1 3 , 2 9 9 1, 0 1 5 , 6 9 1 , 5 9 9 1,022,448,717 908,651,564 Bu s i n e s s - t y p e a c t i v i t i e s Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 44 7 , 2 5 7 , 4 9 5 4 7 2 , 8 0 8 , 6 9 4 4 5 0 , 3 4 5 , 2 0 4 4 4 8 , 0 2 8 , 2 0 0 44 2 , 3 0 5 , 3 2 2 42 6 , 3 6 7 , 8 7 6 41 8 , 1 5 7 , 5 3 7 3 8 9 , 4 0 9 , 5 1 5 3 7 4 , 5 9 8 , 6 0 9 3 2 4 , 1 0 8 , 6 4 6 Re s t r i c t e d 15 , 1 0 2 , 4 8 0 1 1 , 6 6 5 , 4 5 3 1 3 , 7 3 9 , 4 1 1 1 6 , 0 2 4 , 2 3 5 13 , 5 2 7 , 2 3 8 10 , 8 5 5 , 6 1 1 1 , 6 6 1 , 7 5 8 1 , 6 2 5 , 0 5 7 2 , 5 0 3 , 4 4 8 37,365,926 Un r e s t r i c t e d 50 , 4 8 8 , 3 2 1 1 1 5 , 6 3 6 , 7 4 2 1 2 6 , 8 0 4 , 6 6 8 1 0 4 , 5 8 8 , 4 7 3 10 2 , 7 5 3 , 8 6 6 10 7 , 6 7 0 , 4 9 1 1 1 2 , 0 6 7 , 3 8 6 1 0 4 , 9 5 5 , 4 2 2 114,601,165 129,288,372 To t a l b u s i n e s s - t y p e a c t i v i t i e s n e t p o s i t i o n 51 2 , 8 4 8 , 2 9 6 6 0 0 , 1 1 0 , 8 8 9 5 9 0 , 8 8 9 , 2 8 3 5 6 8 , 6 4 0 , 9 0 8 55 8 , 5 8 6 , 4 2 6 54 4 , 8 9 3 , 9 7 8 53 1 , 8 8 6 , 6 8 1 49 5 , 9 8 9 , 9 9 4 491,703,222 490,762,944 Pr i m a r y g o v e r n m e n t Ne t i n v e s t m e n t i n c a p i t a l a s s e t s 1, 1 5 2 , 4 0 1 , 6 8 9 1 , 1 7 1 , 0 3 2 , 3 1 4 1 , 1 5 2 , 7 3 7 , 2 6 9 1 , 1 5 6 , 5 9 2 , 5 6 0 1, 0 0 7 , 7 0 8 , 2 2 7 98 7 , 6 7 6 , 5 9 3 99 7 , 5 2 4 , 6 3 0 9 6 3 , 3 8 1 , 4 9 0 8 8 0 , 9 0 6 , 2 8 5 8 0 5 , 7 8 7 , 6 4 2 Re s t r i c t e d 19 3 , 7 2 7 , 2 3 7 1 4 8 , 1 7 6 , 1 1 4 1 4 0 , 5 6 7 , 3 5 4 1 8 7 , 9 8 8 , 6 2 4 21 2 , 5 1 7 , 9 7 9 20 1 , 1 5 8 , 1 7 9 18 8 , 7 6 5 , 5 8 9 23 3 , 9 0 6 , 1 5 9 275,607,951 234,184,279 Un r e s t r i c t e d 74 , 7 8 0 , 8 4 6 4 9 2 , 6 2 0 , 4 3 8 4 9 9 , 0 8 9 , 6 7 3 4 8 3 , 8 9 1 , 2 6 2 35 1 , 7 3 1 , 0 7 5 34 6 , 5 2 7 , 4 5 4 35 4 , 6 0 9 , 7 6 1 31 4 , 3 9 3 , 9 4 4 357,637,703 359,442,587 To t a l p r i m a r y g o v e r n m e n t n e t p o s i t i o n $ 1 , 4 2 0 , 9 0 9 , 7 7 2 1 , 8 1 1 , 8 2 8 , 8 6 6 1 , 7 9 2 , 3 9 4 , 2 9 6 1 , 8 2 8 , 4 7 2 , 4 4 6 1 , 5 7 1 , 9 5 7 , 2 8 1 1, 5 3 5 , 3 6 2 , 2 2 6 1, 5 4 0 , 8 9 9 , 9 8 0 1, 5 1 1 , 6 8 1 , 5 9 3 1,514,151,939 1,399,414,508 * B e f o r e r e s t a t e m e n t CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ne t P o s i t i o n b y C o m p o n e n t La s t T e n F i s c a l Y e a r s (A c c r u a l B a s i s o f A c c o u n t i n g ) 15 7 TABLE 2 20 1 4 - 1 5 20 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Ex p e n s e s Go v e r n m e n t a l a c t i v i t i e s : Ge n e r a l g o v e r n m e n t 74 , 0 2 5 , 3 5 7 $ 73 , 1 8 8 , 7 8 8 5 6 , 3 1 9 , 1 7 8 6 5 , 6 4 0 , 2 7 1 6 1 , 5 8 6 , 1 5 1 6 1 , 3 9 6 , 0 7 9 4 6 , 6 7 0 , 8 2 6 3 8 , 8 4 9 , 6 2 6 4 5 , 3 2 3 , 2 2 7 3 1 , 2 8 8 , 9 1 0 Pu b l i c s a f e t y 11 2 , 2 7 8 , 3 7 0 1 1 3 , 8 9 9 , 3 5 4 1 0 3 , 5 9 4 , 5 6 7 1 0 8 , 2 0 5 , 4 7 1 9 9 , 9 4 9 , 8 4 8 9 7 , 7 4 4 , 5 6 7 1 0 0 , 7 0 9 , 9 9 0 9 1 , 8 6 2 , 4 0 3 8 7 , 8 3 0 , 4 3 3 8 2 , 8 8 6 , 7 0 7 Ge n e r a l s e r v i c e s 71 , 9 0 6 , 2 6 3 6 9 , 6 3 7 , 5 9 5 6 4 , 6 5 4 , 1 3 1 5 5 , 3 4 1 , 9 2 9 4 3 , 7 6 2 , 2 5 1 7 4 , 2 3 3 , 7 0 8 1 6 1 , 2 2 4 , 0 8 5 1 1 1 , 1 6 8 , 5 8 6 4 1 , 4 0 4 , 2 3 7 6 4 , 7 7 7 , 6 0 2 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s 53 , 6 9 4 , 8 2 3 5 4 , 3 3 9 , 0 2 2 9 4 , 6 3 5 , 1 1 2 6 2 , 1 4 5 , 2 1 9 5 7 , 1 6 3 , 9 2 8 4 0 , 8 9 1 , 4 8 3 4 4 , 0 3 1 , 8 9 5 3 3 , 7 7 6 , 2 1 0 4 3 , 6 4 6 , 8 4 3 4 0 , 0 2 2 , 1 5 1 Li b r a r y 12 , 6 7 8 , 8 9 6 1 3 , 2 8 6 , 9 2 9 1 6 , 1 7 9 , 7 7 9 1 1 , 8 9 9 , 9 4 8 1 1 , 8 0 3 , 7 3 5 1 1 , 3 2 4 , 3 2 7 1 1 , 4 2 2 , 7 8 9 1 1 , 4 5 8 , 2 5 9 1 0 , 6 8 1 , 5 1 8 7 , 9 7 4 , 5 3 4 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t 53 , 8 3 1 , 7 4 7 5 3 , 6 5 2 , 9 9 4 5 4 , 5 3 9 , 1 4 1 1 8 1 , 9 7 0 , 0 1 3 8 9 , 3 2 1 , 5 9 0 1 1 0 , 2 5 1 , 8 6 8 1 1 5 , 8 2 7 , 5 5 5 9 1 , 9 6 6 , 3 6 9 7 4 , 9 8 8 , 3 8 7 5 6 , 7 0 8 , 2 9 8 Ot h e r ( 1 ) — — — — — — — — 4 6 9 , 2 8 5 2 , 2 1 2 , 1 8 6 In t e r e s t o n l o n g - t e r m d e b t 3, 5 2 1 , 6 3 0 3 , 9 1 5 , 3 1 3 3 , 8 9 8 , 3 2 5 6 , 5 8 5 , 6 1 8 1 0 , 4 6 1 , 7 0 0 7 , 0 7 5 , 1 8 7 7 , 2 5 2 , 1 9 7 7 , 6 2 8 , 4 3 7 7 , 9 3 4 , 4 2 8 7 , 5 1 4 , 9 2 4 To t a l g o v e r n m e n t a l a c t i v i t i e s 38 1 , 9 3 7 , 0 8 6 3 8 1 , 9 1 9 , 9 9 5 3 9 3 , 8 2 0 , 2 3 3 4 9 1 , 7 8 8 , 4 6 9 37 4 , 0 4 9 , 2 0 3 40 2 , 9 1 7 , 2 1 9 4 8 7 , 1 3 9 , 3 3 7 3 8 6 , 7 0 9 , 8 9 0 3 1 2 , 2 7 8 , 3 5 8 2 9 3 , 3 8 5 , 3 1 2 Bu s i n e s s - t y p e a c t i v i t i e s : Wa t e r 21 , 3 5 6 , 4 9 7 2 4 , 7 5 0 , 2 3 4 2 0 , 2 4 4 , 0 9 9 1 9 , 6 6 5 , 6 9 6 1 6 , 4 3 0 , 2 0 7 1 6 , 4 1 9 , 2 0 1 1 5 , 9 5 8 , 3 2 8 1 5 , 4 8 9 , 2 3 0 1 4 , 8 3 0 , 5 9 5 1 3 , 8 5 5 , 8 6 3 Re s o u r c e r e c o v e r y a n d r e c y c l i n g 23 , 8 1 9 , 2 3 7 2 4 , 1 1 5 , 4 9 6 2 2 , 7 4 3 , 4 2 7 2 5 , 0 6 5 , 3 3 8 2 1 , 3 3 8 , 1 3 3 2 0 , 2 9 3 , 5 1 0 1 9 , 2 1 9 , 0 7 9 1 6 , 2 7 7 , 7 1 0 1 8 , 6 3 0 , 1 4 1 1 7 , 4 5 9 , 3 1 0 Pi e r 6, 9 0 9 , 6 3 2 6 , 3 1 0 , 2 3 6 6 , 1 4 5 , 5 6 7 5 , 8 0 3 , 9 4 4 5 , 2 9 9 , 8 7 5 5 , 1 2 2 , 0 1 1 5 , 2 0 0 , 0 6 5 4 , 8 6 7 , 4 1 5 9 , 4 8 5 , 7 0 9 7 , 5 4 4 , 0 0 1 Wa s t e w a t e r 17 , 3 3 5 , 6 2 5 2 0 , 4 7 9 , 5 1 4 1 6 , 8 5 3 , 8 6 1 1 8 , 1 8 6 , 8 4 4 1 6 , 5 4 6 , 8 4 4 1 6 , 8 4 4 , 2 7 1 1 9 , 6 0 3 , 4 1 1 2 0 , 0 6 3 , 4 2 0 1 9 , 5 7 9 , 0 3 5 1 9 , 0 0 8 , 9 4 4 Ci v i c a u d i t o r i u m ( 2 ) — — 4 , 6 9 1 , 0 5 1 3 , 2 3 9 , 9 9 9 3 , 6 3 8 , 2 5 7 3 , 6 6 3 , 4 2 7 3 , 9 3 3 , 1 5 9 3 , 7 1 8 , 6 5 2 3 , 5 3 5 , 6 2 4 2 , 8 9 8 , 8 5 3 Ai r p o r t 5, 2 9 3 , 7 1 4 5 , 4 4 0 , 9 4 9 5 , 1 8 8 , 7 0 7 5 , 2 7 0 , 6 8 8 5 , 9 7 0 , 9 1 6 4 , 6 4 0 , 7 8 2 5 , 7 3 7 , 9 2 7 5 , 1 9 9 , 7 0 1 5 , 3 2 5 , 1 9 0 3 , 8 8 2 , 6 3 9 St o r m w a t e r m a n a g e m e n t 2, 1 7 2 , 1 1 6 6 5 1 , 3 6 1 4 0 6 , 7 2 1 4 1 1 , 9 8 5 4 2 2 , 0 4 8 4 2 4 , 1 2 2 7 2 1 , 7 2 8 4 7 4 , 6 8 3 5 0 2 , 1 8 3 6 4 8 , 3 7 4 Ce m e t e r y 2, 1 5 4 , 1 4 7 2 , 0 7 7 , 4 8 6 1 , 8 5 2 , 8 3 9 1 , 8 1 2 , 0 9 8 2 , 4 3 1 , 7 9 1 2 , 6 3 3 , 8 9 3 1 , 9 5 6 , 6 0 9 1 , 7 1 5 , 6 0 5 1 , 4 8 1 , 2 3 8 9 8 9 , 2 7 4 Bi g B l u e B u s 83 , 1 0 6 , 4 4 7 7 9 , 2 1 5 , 6 8 0 7 9 , 2 3 8 , 6 6 8 7 9 , 8 3 5 , 1 5 6 7 5 , 2 1 9 , 4 2 5 7 0 , 8 9 9 , 2 7 7 7 0 , 8 5 5 , 8 0 9 6 5 , 1 8 5 , 0 0 7 5 9 , 6 2 7 , 7 3 6 5 9 , 1 8 0 , 4 8 1 Sp e c i a l a v i a t i o n — — — — — — 2 8 , 9 0 4 18 , 3 3 3 69,374 52,329 Pa r k i n g a u t h o r i t y 40 3 , 8 2 2 3 6 9 , 3 6 7 2 9 5 , 6 5 1 3 1 5 , 7 3 6 4 7 4 , 6 2 9 5 5 4 , 1 1 7 1 , 5 9 8 , 7 6 5 3 4 9 , 5 7 6 7 0 9 , 9 8 2 16,189 To t a l b u s i n e s s - t y p e a c t i v i t i e s 16 2 , 5 5 1 , 2 3 7 1 6 3 , 4 1 0 , 3 2 3 1 5 7 , 6 6 0 , 5 9 1 1 5 9 , 6 0 7 , 4 8 4 1 4 7 , 7 7 2 , 1 2 5 1 4 1 , 4 9 4 , 6 1 1 1 4 4 , 8 1 3 , 7 8 4 1 3 3 , 3 5 9 , 3 3 2 1 3 3 , 7 7 6 , 8 0 7 1 2 5 , 5 3 6 , 2 5 7 To t a l p r i m a r y g o v e r n m e n t a l a c t i v i t i e s e x p e n s e s 5 4 4 , 4 8 8 , 3 2 3 $ 54 5 , 3 3 0 , 3 1 8 5 5 1 , 4 8 0 , 8 2 4 6 5 1 , 3 9 5 , 9 5 3 5 2 1 , 8 2 1 , 3 2 8 5 4 4 , 4 1 1 , 8 3 0 6 3 1 , 9 5 3 , 1 2 1 5 2 0 , 0 6 9 , 2 2 2 4 4 6 , 0 5 5 , 1 6 5 4 1 8 , 9 2 1 , 5 6 9 Pr o g r a m r e v e n u e s Go v e r n m e n t a l a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s : Ge n e r a l g o v e r n m e n t 56 , 8 7 5 , 6 3 6 $ 55 , 8 3 4 , 3 4 8 5 1 , 0 7 5 , 7 5 9 4 8 , 2 3 9 , 9 2 0 4 2 , 7 7 1 , 8 1 2 3 4 , 6 8 1 , 6 0 1 1 9 , 1 9 8 , 3 4 5 1 7 , 1 8 8 , 8 7 6 1 7 , 3 2 6 , 6 7 5 1 2 , 5 6 7 , 2 2 2 Pu b l i c s a f e t y 22 , 6 0 1 , 9 9 0 2 2 , 7 3 6 , 1 6 7 2 1 , 3 2 9 , 5 0 4 2 2 , 0 3 3 , 1 5 6 2 1 , 4 5 6 , 2 8 4 2 2 , 7 5 9 , 7 0 4 1 7 , 0 6 4 , 3 2 2 1 7 , 2 9 8 , 7 4 1 1 7 , 2 0 2 , 2 5 6 1 5 , 7 5 4 , 0 8 5 Ge n e r a l s e r v i c e s 2, 1 4 4 , 8 0 0 2 , 2 3 6 , 7 8 1 2 , 4 6 3 , 4 0 2 2 , 4 2 9 , 5 3 7 2 , 0 0 4 , 9 5 8 3 , 0 6 7 , 4 0 8 2 0 , 2 9 1 , 4 3 9 1 9 , 6 5 0 , 2 3 7 1 8 , 8 4 1 , 2 8 8 1 7 , 8 8 0 , 3 3 6 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s 21 , 3 5 9 , 9 4 2 2 0 , 4 4 8 , 1 6 5 1 7 , 9 2 1 , 7 1 1 1 6 , 0 8 3 , 4 5 1 1 3 , 5 2 3 , 5 0 7 1 4 , 2 1 9 , 2 2 9 1 0 , 6 0 8 , 9 4 8 9 , 4 9 2 , 1 7 4 9 , 0 0 2 , 0 8 4 8 , 5 5 6 , 5 5 7 Li b r a r y 60 1 , 6 1 8 6 1 4 , 7 1 5 4 8 6 , 2 0 4 4 6 5 , 8 9 1 4 8 8 , 2 7 9 4 6 8 , 3 8 5 4 1 0 , 9 0 8 3 6 3 , 9 8 7 3 4 9 , 1 3 9 2 3 2 , 0 2 5 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t 26 , 9 5 7 , 6 9 7 1 9 , 2 7 6 , 2 2 7 2 8 , 2 1 7 , 7 3 6 1 6 , 7 1 2 , 9 2 1 1 4 , 3 0 4 , 2 7 9 1 6 , 2 2 4 , 7 7 7 1 2 , 4 1 6 , 6 5 4 1 4 , 4 3 0 , 3 2 6 1 3 , 9 2 5 , 9 8 0 1 2 , 5 5 3 , 2 6 9 Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s 26 , 3 3 2 , 2 5 6 2 7 , 7 7 3 , 5 2 5 2 5 , 7 9 8 , 8 8 0 2 6 , 7 3 9 , 1 8 7 2 9 , 1 1 1 , 9 1 8 2 7 , 5 5 6 , 7 1 5 3 0 , 1 6 4 , 3 0 0 3 4 , 8 0 3 , 6 5 5 2 8 , 3 6 2 , 5 2 5 2 5 , 1 3 3 , 1 2 4 Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s 5, 3 8 1 , 9 7 8 1 2 , 5 8 3 , 5 9 4 5 , 0 8 2 , 8 4 7 3 , 3 6 9 , 2 2 1 3 , 9 9 7 , 0 7 6 6 , 5 0 6 , 7 6 5 2 0 , 3 7 9 , 8 6 4 4 , 8 6 2 , 3 8 7 4 , 8 3 9 , 9 2 5 5 , 8 3 8 , 8 8 5 To t a l g o v e r n m e n t a l a c t i v i t i e s p r o g r a m r e v e n u e s 1 6 2 , 2 5 5 , 9 1 7 1 6 1 , 5 0 3 , 5 2 2 1 5 2 , 3 7 6 , 0 4 3 1 3 6 , 0 7 3 , 2 8 4 1 2 7 , 6 5 8 , 1 1 3 1 2 5 , 4 8 4 , 5 8 4 1 3 0 , 5 3 4 , 7 8 0 1 1 8 , 0 9 0 , 3 8 3 1 0 9 , 8 4 9 , 8 7 2 9 8 , 5 1 5 , 5 0 3 (c o n t i n u e s n e x t p a g e ) CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ch a n g e s i n N e t P o s i t i o n La s t T e n F i s c a l Y e a r s 15 8 TABLE 2 20 1 4 - 1 5 20 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ch a n g e s i n N e t P o s i t i o n La s t T e n F i s c a l Y e a r s (c o n t i n u e s f r o m p r e v i o u s p a g e ) Bu s i n e s s - t y p e a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s : Wa t e r 22 , 6 6 4 , 7 1 2 2 2 , 9 0 2 , 6 4 0 2 2 , 2 5 4 , 8 6 7 1 9 , 8 9 7 , 4 6 4 1 7 , 5 0 7 , 3 1 5 1 5 , 7 7 1 , 0 8 1 1 5 , 7 7 4 , 0 4 7 1 6 , 1 3 0 , 0 4 4 1 5 , 3 2 3 , 6 5 3 1 3 , 8 6 8 , 3 9 0 Re s o u r c e r e c o v e r y a n d r e c y c l i n g 2 4 , 4 2 5 , 8 7 9 2 3 , 2 7 1 , 7 7 5 2 3 , 5 2 6 , 4 2 3 2 2 , 2 5 3 , 7 5 8 2 1 , 8 7 0 , 5 5 4 2 1 , 5 1 4 , 2 1 9 2 1 , 6 3 1 , 3 1 3 1 8 , 8 4 2 , 7 0 2 1 8 , 7 6 6 , 1 0 7 1 7 , 0 9 7 , 8 1 3 Pi e r 6, 8 1 3 , 6 2 5 5 , 9 5 3 , 1 7 3 4 , 5 8 9 , 5 0 3 6 , 0 0 4 , 0 0 5 4 , 7 2 9 , 7 2 5 3 , 7 7 7 , 2 1 9 3 , 5 1 8 , 1 4 5 3 , 1 0 7 , 3 4 9 3 , 0 8 1 , 3 3 8 2 , 6 9 3 , 2 0 0 Wa s t e w a t e r 20 , 1 6 2 , 5 1 6 2 1 , 0 3 3 , 6 9 9 2 1 , 1 2 6 , 0 5 4 2 0 , 0 0 7 , 2 1 9 1 7 , 8 2 0 , 8 0 5 1 5 , 1 9 8 , 0 2 2 1 3 , 7 5 1 , 5 8 8 1 2 , 7 9 7 , 7 8 6 1 2 , 4 7 2 , 0 7 3 1 1 , 1 7 5 , 0 5 1 Ci v i c a u d i t o r i u m ( 2 ) — — 1 , 4 6 8 , 3 0 0 1 , 6 6 7 , 1 7 2 2 , 6 0 3 , 1 4 6 2 , 6 2 0 , 8 9 7 2 , 9 7 5 , 7 4 9 3 , 1 1 7 , 0 3 3 2 , 7 8 9 , 1 9 6 2 , 6 0 8 , 7 5 9 Ai r p o r t 5, 8 9 7 , 2 4 0 5 , 3 9 6 , 7 9 7 4 , 1 8 5 , 1 7 2 3 , 8 9 1 , 7 1 6 3 , 7 4 8 , 6 7 4 3 , 7 6 8 , 4 2 6 3 , 9 8 9 , 8 5 1 4 , 2 7 9 , 2 6 8 3 , 9 9 2 , 1 9 0 3 , 8 6 2 , 4 5 5 St o r m w a t e r m a n a g e m e n t 1, 4 5 8 , 3 5 2 1 , 3 9 5 , 6 2 8 1 , 4 3 9 , 5 2 2 1 , 4 1 9 , 9 8 0 1 , 1 6 7 , 0 7 3 1 , 6 1 3 , 4 2 6 1 , 8 8 5 , 1 4 2 1 , 3 0 1 , 3 5 0 1 , 3 7 6 , 6 7 2 1 , 6 1 0 , 7 1 5 Ce m e t e r y 1, 6 0 4 , 6 0 7 1 , 3 2 5 , 7 7 8 1 , 3 1 5 , 1 1 9 1 , 1 3 3 , 9 9 0 8 5 6 , 1 4 1 9 5 2 , 9 7 2 1 , 0 0 9 , 5 9 5 1 , 0 8 0 , 5 3 2 7 3 5 , 7 1 8 6 6 5 , 3 9 8 Bi g B l u e B u s 1 6 , 6 6 4 , 9 1 6 1 7 , 0 6 0 , 9 2 3 1 6 , 8 6 9 , 8 0 9 1 6 , 6 1 4 , 7 1 1 1 6 , 3 7 0 , 2 9 0 1 4 , 1 6 0 , 1 3 3 1 4 , 3 9 1 , 3 0 0 1 3 , 8 9 8 , 9 8 0 1 3 , 0 7 8 , 6 3 0 1 3 , 3 3 3 , 5 8 4 Pa r k i n g a u t h o r i t y — — — 1 6 1 , 5 0 4 1 5 2 , 2 0 0 1 5 2 , 2 0 0 1 4 9 , 2 0 0 1 4 5 , 6 0 0 1 4 1 , 6 0 0 1 3 8 , 1 0 0 Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s 4 7 , 0 9 8 , 4 8 7 4 0 , 6 9 1 , 0 9 5 3 8 , 2 2 9 , 7 1 8 3 8 , 4 2 4 , 3 5 7 3 6 , 0 0 1 , 8 7 0 3 8 , 8 4 3 , 7 2 2 3 4 , 2 0 3 , 6 0 7 3 2 , 1 8 8 , 5 6 9 3 1 , 7 2 3 , 5 2 8 3 2 , 2 9 7 , 7 3 2 Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s 1 0 , 3 3 3 , 2 8 1 2 8 , 4 3 1 , 7 3 4 2 1 , 4 8 9 , 2 1 6 2 5 , 6 0 9 , 1 5 8 3 2 , 0 4 6 , 9 7 8 2 9 , 2 9 9 , 8 9 4 5 3 , 2 0 9 , 0 3 9 2 0 , 0 3 0 , 4 0 3 1 2 , 1 8 5 , 5 1 8 1 9 , 0 6 1 , 4 8 4 Bu s i n e s s - t y p e a c t i v i t i e s p r o g r a m r e v e n u e s 1 5 7 , 1 2 3 , 6 1 5 1 6 7 , 4 6 3 , 2 4 2 1 5 6 , 4 9 3 , 7 0 3 1 5 7 , 0 8 5 , 0 3 4 1 5 4 , 8 7 4 , 7 7 1 1 4 7 , 6 7 2 , 2 1 1 1 6 6 , 4 8 8 , 5 7 6 1 2 6 , 9 1 9 , 6 1 6 1 1 5 , 6 6 6 , 2 2 3 1 1 8 , 4 1 2 , 6 8 1 To t a l p r i m a r y g o v e r n m e n t p r o g r a m r e v e n u e s 3 1 9 , 3 7 9 , 5 3 2 3 2 8 , 9 6 6 , 7 6 4 3 0 8 , 8 6 9 , 7 4 6 2 9 3 , 1 5 8 , 3 1 8 2 8 2 , 5 3 2 , 8 8 4 2 7 3 , 1 5 6 , 7 9 5 2 9 7 , 0 2 3 , 3 5 6 2 4 5 , 0 0 9 , 9 9 9 2 2 5 , 5 1 6 , 0 9 5 2 1 6 , 9 2 8 , 1 8 4 Ne t ( e x p e n s e ) : Go v e r n m e n t a l a c t i v i t i e s ( 2 1 9 , 6 8 1 , 1 6 9 ) ( 2 2 0 , 4 1 6 , 4 7 3 ) ( 2 4 1 , 4 4 4 , 1 9 0 ) ( 3 5 5 , 7 1 5 , 1 8 5 ) ( 2 4 6 , 3 9 1 , 0 9 0 ) ( 2 7 7 , 4 3 2 , 6 3 5 ) ( 3 5 6 , 6 0 4 , 5 5 7 ) ( 2 6 8 , 6 1 9 , 5 0 7 ) ( 2 0 2 , 4 2 8 , 4 8 6 ) ( 1 9 4 , 8 6 9 , 8 0 9 ) Bu s i n e s s - t y p e a c t i v i t i e s ( 5 , 4 2 7 , 6 2 2 ) 4 , 0 5 2 , 9 1 9 ( 1 , 1 6 6 , 8 8 8 ) ( 2 , 5 2 2 , 4 5 0 ) 7 , 1 0 2 , 6 4 6 6 , 1 7 7 , 6 0 0 2 1 , 6 7 4 , 7 9 2 ( 6 , 4 3 9 , 7 1 6 ) ( 1 8 , 1 1 0 , 5 8 4 ) ( 7 , 1 2 3 , 5 7 6 ) To t a l p r i m a r y g o v e r n m e n t n e t e x p e n s e (2 2 5 , 1 0 8 , 7 9 1 ) ( 2 1 6 , 3 6 3 , 5 5 4 ) ( 2 4 2 , 6 1 1 , 0 7 8 ) ( 3 5 8 , 2 3 7 , 6 3 5 ) ( 2 3 9 , 2 8 8 , 4 4 4 ) ( 2 7 1 , 2 5 5 , 0 3 5 ) ( 3 3 4 , 9 2 9 , 7 6 5 ) ( 2 7 5 , 0 5 9 , 2 2 3 ) ( 2 2 0 , 5 3 9 , 0 7 0 ) ( 2 0 1 , 9 9 3 , 3 8 5 ) Ge n e r a l r e v e n u e s a n d o t h e r c h a n g e s in n e t p o s i t i o n Go v e r n m e n t a l a c t i v i t i e s : Ta x e s : Bu s i n e s s 31 , 4 6 8 , 9 5 9 3 0 , 8 4 7 , 1 0 5 2 8 , 4 6 7 , 4 7 7 2 7 , 3 8 2 , 4 9 5 2 6 , 5 3 1 , 6 2 7 2 7 , 5 8 2 , 3 9 8 2 8 , 8 2 1 , 6 8 8 2 6 , 2 1 1 , 2 2 6 2 4 , 2 3 2 , 7 0 7 2 1 , 7 7 5 , 4 4 2 Pr o p e r t y 5 2 , 7 7 1 , 4 0 1 4 7 , 7 2 9 , 1 0 5 4 3 , 4 7 7 , 1 1 8 5 9 , 1 6 1 , 3 1 3 1 0 8 , 9 9 5 , 3 5 8 1 1 0 , 1 8 8 , 6 1 5 1 0 7 , 2 5 5 , 3 4 5 1 0 1 , 3 2 3 , 7 0 6 8 9 , 8 4 5 , 5 9 1 7 9 , 9 5 1 , 9 3 3 Sa l e s a n d u s e 51 , 0 8 9 , 7 1 6 4 9 , 2 1 0 , 0 3 9 4 7 , 8 8 0 , 6 3 4 4 5 , 8 3 1 , 9 6 1 3 1 , 6 8 9 , 5 3 1 2 6 , 6 3 6 , 6 5 3 2 8 , 2 9 6 , 6 9 6 3 2 , 3 5 6 , 9 4 1 3 3 , 2 6 7 , 2 5 3 3 1 , 8 7 1 , 5 9 3 Ot h e r 1 0 1 , 6 7 7 , 4 7 8 9 5 , 6 0 4 , 3 4 1 9 1 , 3 8 4 , 0 0 6 8 4 , 9 3 5 , 4 9 9 8 0 , 3 7 6 , 9 7 8 7 5 , 3 9 7 , 8 4 4 7 6 , 1 4 6 , 3 8 8 8 1 , 7 6 2 , 2 0 3 7 7 , 0 3 6 , 6 5 1 7 1 , 7 8 8 , 8 5 4 Se t t l e m e n t i n c o m e — — 9 , 6 0 8 , 2 4 7 3 , 7 5 0 , 0 0 0 — — 8 9 , 9 1 0 , 8 7 2 1 , 0 1 2 , 8 6 3 6 9 , 1 5 3 , 5 1 2 6 , 4 5 3 , 8 0 4 Ot h e r r e v e n u e s 11 , 5 1 8 , 0 2 2 1 8 , 0 9 2 , 0 5 8 1 9 , 9 1 7 , 2 5 0 1 2 0 , 2 0 8 , 7 5 7 1 2 , 1 7 3 , 0 9 4 9 , 0 4 3 , 1 1 4 9 , 1 2 8 , 8 9 9 8 , 4 2 8 , 2 6 6 6 , 2 1 3 , 3 2 9 9 , 6 3 8 , 8 1 3 In v e s t m e n t e a r n i n g s 4, 0 8 4 , 6 2 1 6 , 6 1 3 , 3 2 2 1 , 4 3 1 , 3 1 7 5 , 7 9 1 , 8 1 1 7 , 9 9 5 , 4 0 1 1 0 , 0 6 2 , 7 3 9 1 6 , 1 9 8 , 3 8 6 2 2 , 0 2 1 , 9 7 7 2 5 , 5 0 5 , 7 9 8 1 1 , 9 9 5 , 3 5 5 Ex t r a o r d i n a r y g a i n ( l o s s ) (5 , 1 0 6 , 8 2 8 ) ( 1 9 , 1 4 9 , 6 7 9 ) ( 4 8 , 1 8 5 , 1 2 6 ) 2 6 1 , 2 5 5 , 0 8 0 — — — — — — Tr a n s f e r s 2, 3 4 1 , 6 7 4 1 , 6 8 3 , 1 4 6 ( 1 0 , 8 6 3 , 2 5 8 ) ( 6 , 1 4 1 , 0 4 8 ) 1 , 5 3 1 , 7 0 8 ( 2 3 , 7 7 9 ) ( 5 , 8 3 2 , 0 1 7 ) ( 2 , 8 1 5 , 0 4 0 ) ( 9 , 0 2 9 , 2 0 2 ) ( 8 , 3 9 4 , 7 0 2 ) To t a l g o v e r n m e n t a l a c t i v i t i e s 24 9 , 8 4 5 , 0 4 3 2 3 0 , 6 2 9 , 4 3 7 1 8 3 , 1 1 7 , 6 6 5 6 0 2 , 1 7 5 , 8 6 8 2 6 9 , 2 9 3 , 6 9 7 2 5 8 , 8 8 7 , 5 8 4 3 4 9 , 9 2 6 , 2 5 7 2 7 0 , 3 0 2 , 1 4 2 3 1 6 , 2 2 5 , 6 3 9 2 2 5 , 0 8 1 , 0 9 2 (c o n t i n u e s n e x t p a g e ) 15 9 TABLE 2 20 1 4 - 1 5 20 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ch a n g e s i n N e t P o s i t i o n La s t T e n F i s c a l Y e a r s (c o n t i n u e s f r o m p r e v i o u s p a g e ) Bu s i n e s s - t y p e a c t i v i t i e s : Ot h e r r e v e n u e s 6 , 2 3 0 , 5 3 7 5 , 2 0 7 , 4 4 5 1 2 , 5 4 0 , 7 4 6 5 , 3 1 0 , 6 4 3 6 , 7 6 7 , 7 3 0 3 , 9 1 2 , 7 2 5 4 , 1 6 2 , 2 8 3 3 , 4 2 1 , 8 3 7 4 , 1 1 1 , 4 0 7 6 , 0 2 8 , 5 1 6 In v e s t m e n t e a r n i n g s 1 , 4 0 8 , 0 8 3 1 , 6 4 4 , 3 8 8 1 1 , 2 5 9 1 , 1 2 5 , 2 4 1 1 , 3 5 3 , 7 8 0 2 , 8 9 3 , 1 9 3 4 , 2 2 7 , 5 9 5 4 , 4 8 9 , 6 1 1 7 , 4 3 9 , 7 5 9 2 , 6 7 3 , 0 8 0 Tr a n s f e r s ( 2 , 3 4 1 , 6 7 4 ) ( 1 , 6 8 3 , 1 4 6 ) 1 0 , 8 6 3 , 2 5 8 6 , 1 4 1 , 0 4 8 ( 1 , 5 3 1 , 7 0 8 ) 2 3 , 7 7 9 5 , 8 3 2 , 0 1 7 2 , 8 1 5 , 0 4 0 9 , 0 2 9 , 2 0 2 8 , 3 9 4 , 7 0 2 To t a l b u s i n e s s - t y p e a c t i v i t i e s 5 , 2 9 6 , 9 4 6 5 , 1 6 8 , 6 8 7 2 3 , 4 1 5 , 2 6 3 1 2 , 5 7 6 , 9 3 2 6 , 5 8 9 , 8 0 2 6 , 8 2 9 , 6 9 7 1 4 , 2 2 1 , 8 9 5 1 0 , 7 2 6 , 4 8 8 2 0 , 5 8 0 , 3 6 8 1 7 , 0 9 6 , 2 9 8 To t a l p r i m a r y g o v e r n m e n t 2 5 5 , 1 4 1 , 9 8 9 2 3 5 , 7 9 8 , 1 2 4 2 0 6 , 5 3 2 , 9 2 8 6 1 4 , 7 5 2 , 8 0 0 2 7 5 , 8 8 3 , 4 9 9 2 6 5 , 7 1 7 , 2 8 1 3 6 4 , 1 4 8 , 1 5 2 2 8 1 , 0 2 8 , 6 3 0 3 3 6 , 8 0 6 , 0 0 7 2 4 2 , 1 7 7 , 3 9 0 Ch a n g e s i n n e t p o s i t i o n Go v e r n m e n t a l a c t i v i t i e s 3 0 , 1 6 3 , 8 7 4 1 0 , 2 1 2 , 9 6 4 ( 5 8 , 3 2 6 , 5 2 5 ) 2 4 6 , 4 6 0 , 6 8 3 2 2 , 9 0 2 , 6 0 7 ( 1 8 , 5 4 5 , 0 5 1 ) ( 6 , 6 7 8 , 3 0 0 ) 1 , 6 8 2 , 6 3 5 1 1 3 , 7 9 7 , 1 5 3 3 0 , 2 1 1 , 2 8 3 Bu s i n e s s - t y p e a c t i v i t i e s ( 1 3 0 , 6 7 6 ) 9 , 2 2 1 , 6 0 6 2 2 , 2 4 8 , 3 7 5 1 0 , 0 5 4 , 4 8 2 1 3 , 6 9 2 , 4 4 8 1 3 , 0 0 7 , 2 9 7 3 5 , 8 9 6 , 6 8 7 4 , 2 8 6 , 7 7 2 2 , 4 6 9 , 7 8 4 9 , 9 7 2 , 7 2 2 To t a l p r i m a r y g o v e r n m e n t 3 0 , 0 3 3 , 1 9 8 $ 1 9 , 4 3 4 , 5 7 0 ( 3 6 , 0 7 8 , 1 5 0 ) 2 5 6 , 5 1 5 , 1 6 5 3 6 , 5 9 5 , 0 5 5 ( 5 , 5 3 7 , 7 5 4 ) 2 9 , 2 1 8 , 3 8 7 5 , 9 6 9 , 4 0 7 1 1 6 , 2 6 6 , 9 3 7 4 0 , 1 8 4 , 0 0 5 (1 ) O t h e r e x p e n s e s a l l o c a t e d t o p r o g r a m s i n F Y 0 7 - 0 8 . (2 ) C i v i c a u d i t o r i u m m e r g e d w i t h G e n e r a l s e r v i c e s i n F Y 1 3 - 1 4 . 16 0 TABLE 3 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Ge n e r a l F u n d Re s e r v e d $ — — — — — 3 6 , 2 5 7 , 7 7 6 4 1 , 4 3 2 , 2 7 3 8 1 , 0 5 6 , 8 0 0 9 1 , 8 4 3 , 1 8 3 9 7 , 0 4 4 , 5 8 8 Un r e s e r v e d — — — — — 1 7 9 , 2 1 2 , 9 2 0 1 5 5 , 5 2 1 , 9 5 7 6 7 , 7 4 5 , 0 7 9 6 3 , 8 2 6 , 4 2 1 5 5 , 9 2 3 , 6 4 4 * N o n s p e n d a b l e 2 3 , 7 2 5 , 8 6 4 2 2 , 2 5 7 , 8 1 9 2 2 , 1 7 9 , 1 1 9 2 2 , 1 8 1 , 4 9 0 2 6 , 2 4 9 , 1 2 1 — — — — — * R e s t r i c t e d 1 7 , 9 5 1 , 2 9 9 1 2 , 3 7 1 , 6 1 9 2 3 , 8 0 8 , 9 4 0 4 3 , 0 5 6 , 4 4 9 5 0 3 , 6 4 5 — — — — — * C o m m i t t e d 5 2 0 , 5 7 4 5 1 9 , 9 3 7 5 1 9 , 5 0 6 6 4 0 , 0 0 0 7 1 0 , 0 0 0 — — — — — * A s s i g n e d 2 1 8 , 6 3 0 , 1 8 3 2 1 2 , 6 6 9 , 8 7 6 2 2 0 , 4 0 9 , 1 6 8 2 3 3 , 1 5 3 , 4 7 1 1 5 9 , 4 3 0 , 7 5 9 — — — — — * U n a s s i g n e d 1 1 4 , 1 9 6 , 1 0 8 1 1 8 , 1 9 2 , 0 5 2 1 1 7 , 3 2 4 , 3 6 2 1 1 7 , 2 2 5 , 8 7 1 1 0 8 , 3 8 2 , 1 9 1 — — — — — To t a l G e n e r a l F u n d 3 7 5 , 0 2 4 , 0 2 8 3 6 6 , 0 1 1 , 3 0 3 3 8 4 , 2 4 1 , 0 9 5 4 1 6 , 2 5 7 , 2 8 1 2 9 5 , 2 7 5 , 7 1 6 2 1 5 , 4 7 0 , 6 9 6 1 9 6 , 9 5 4 , 2 3 0 1 4 8 , 8 0 1 , 8 7 9 1 5 5 , 6 6 9 , 6 0 4 1 5 2 , 9 6 8 , 2 3 2 Al l o t h e r g o v e r n m e n t a l f u n d s Re s e r v e d — — — — — 1 3 8 , 5 0 4 , 4 3 0 1 3 4 , 7 7 0 , 8 6 5 2 1 7 , 8 8 8 , 7 2 3 3 1 4 , 5 0 7 , 7 3 2 2 2 9 , 2 6 3 , 2 3 2 Un r e s e r v e d , r e p o r t e d i n : Sp e c i a l r e v e n u e f u n d s — — — — — 3 7 , 6 5 7 , 1 8 0 4 2 , 9 0 2 , 4 3 0 6 7 , 3 8 7 , 0 5 5 1 1 , 0 2 7 , 4 7 5 5 , 5 6 9 , 4 8 4 Ca p i t a l p r o j e c t f u n d s — — — — — 5 0 , 4 2 7 , 7 1 5 6 6 , 0 2 1 , 1 4 0 ( 7 , 9 3 7 , 3 3 7 ) ( 5 , 0 5 3 , 7 6 9 ) ( 1 0 , 4 3 4 , 0 1 8 ) * N o n s p e n d a b l e 1 1 , 4 6 3 , 8 4 9 3 0 , 9 3 2 , 4 3 0 3 1 , 5 2 4 , 6 1 0 2 3 , 3 3 1 , 5 9 1 1 0 , 7 8 8 , 1 8 8 — — — — — * R e s t r i c t e d 1 4 4 , 9 0 2 , 0 3 8 1 2 8 , 6 1 0 , 7 1 8 1 2 4 , 8 5 2 , 8 6 2 1 2 3 , 6 5 8 , 2 6 2 1 7 0 , 4 4 9 , 2 6 9 — — — — — * C o m m i t t e d 1 7 , 8 7 7 , 7 0 9 4 , 4 0 4 , 4 9 1 4 , 3 7 2 , 8 2 9 8 7 2 , 8 3 0 5 1 , 9 7 5 — — — — — * A s s i g n e d 9 , 6 4 9 , 6 1 7 1 8 , 0 3 3 , 6 7 3 1 5 , 0 5 7 , 4 7 4 3 2 , 5 5 0 , 0 2 3 1 2 5 , 6 9 7 , 2 7 8 — — — — — * U n a s s i g n e d ( 8 1 4 , 2 8 7 ) ( 9 6 6 , 1 5 7 ) ( 1 , 1 4 8 , 9 3 2 ) ( 1 8 7 , 3 9 6 ) ( 1 6 , 8 6 8 , 3 4 0 ) — — — — — To t a l a l l o t h e r g o v e r n m e n t a l f u n d s $ 1 8 3 , 0 7 8 , 9 2 6 1 8 1 , 0 1 5 , 1 5 5 1 7 4 , 6 5 8 , 8 4 3 1 8 0 , 2 2 5 , 3 1 0 2 9 0 , 1 1 8 , 3 7 0 2 2 6 , 5 8 9 , 3 2 5 2 4 3 , 6 9 4 , 4 3 5 2 7 7 , 3 3 8 , 4 4 1 3 2 0 , 4 8 1 , 4 3 8 2 2 4 , 3 9 8 , 6 9 8 * F u n d B a l a n c e d e s c r i p t i o n s c h a n g e d d u e t o G A S B S t at e m e n t N o . 5 4 i m p l e m e n t a t i o n e f f e c t i v e J u l y 1 , 2 0 1 0 . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Fu n d B a l a n c e o f G o v e r n m e n t a l F u n d s La s t T e n F i s c a l Y e a r s (M o d i f i e d A c c r u a l B a s i s o f A c c o u n t i n g ) 16 1 TABLE 4 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Re v e n u e s Pr o p e r t y t a x e s 5 5 , 0 4 4 , 3 0 7 $ 5 0 , 1 1 3 , 6 9 3 4 4 , 3 9 2 , 4 1 6 4 0 , 2 2 6 , 1 2 4 3 6 , 0 4 8 , 2 6 0 3 7 , 4 1 9 , 6 5 8 3 6 , 7 6 3 , 0 2 6 3 6 , 0 6 7 , 6 3 2 3 2 , 5 8 6 , 1 3 4 2 8 , 0 3 1 , 6 1 8 In c r e m e n t a l p r o p e r t y t a x e s ( 1 ) — — — 1 9 , 7 9 4 , 8 5 1 7 3 , 7 3 5 , 9 5 5 7 3 , 5 2 6 , 7 3 8 7 1 , 2 8 9 , 7 4 9 6 6 , 1 4 8 , 0 4 6 5 8 , 1 6 3 , 6 9 5 5 2 , 8 1 8 , 7 9 4 Sa l e s t a x e s 5 1 , 0 8 9 , 7 1 6 4 9 , 2 1 0 , 0 3 9 4 7 , 8 8 0 , 6 3 4 4 5 , 8 3 1 , 9 6 1 3 1 , 6 8 9 , 5 3 1 2 6 , 6 3 6 , 6 5 3 2 8 , 2 9 6 , 6 9 6 3 2 , 3 5 6 , 9 4 1 3 3 , 2 6 7 , 2 5 3 3 1 , 8 7 1 , 5 9 3 Ot h e r t a x e s 1 3 2 , 0 7 5 , 0 2 2 1 2 6 , 8 3 6 , 9 3 6 1 1 8 , 9 8 3 , 5 2 1 1 1 1 , 3 5 0 , 2 4 5 1 0 7 , 2 8 9 , 5 8 8 1 0 4 , 0 1 2 , 5 4 3 1 0 5 , 6 3 9 , 6 3 5 1 0 9 , 5 5 6 , 3 1 0 1 0 2 , 8 7 0 , 4 5 0 9 7 , 2 0 3 , 2 5 5 Li c e n s e a n d p e r m i t s 3 9 , 4 9 0 , 6 8 8 3 6 , 9 6 7 , 4 9 3 3 3 , 7 7 7 , 5 6 7 3 0 , 6 0 8 , 5 9 2 2 7 , 5 6 4 , 6 6 0 2 0 , 6 5 8 , 5 8 2 2 0 , 3 9 8 , 1 9 1 2 0 , 2 0 3 , 0 8 5 1 9 , 2 3 2 , 0 8 5 1 8 , 3 7 8 , 7 0 5 In t e r g o v e r n m e n t a l 3 1 , 0 1 3 , 3 2 7 3 3 , 0 6 8 , 9 0 6 2 6 , 4 2 0 , 2 6 0 2 8 , 2 7 7 , 0 4 9 3 0 , 8 8 7 , 0 6 4 3 0 , 1 3 2 , 2 6 3 3 6 , 4 0 8 , 4 9 6 3 3 , 0 0 7 , 0 6 1 2 8 , 9 4 8 , 3 9 1 2 0 , 0 2 0 , 9 7 0 Ch a r g e s f o r s e r v i c e s 5 6 , 3 8 1 , 3 5 2 5 5 , 9 7 6 , 7 0 3 5 0 , 7 6 7 , 9 4 5 5 2 , 6 1 3 , 3 3 1 4 5 , 2 4 8 , 4 7 2 4 6 , 9 7 5 , 3 7 0 3 9 , 2 3 8 , 3 8 9 3 6 , 2 2 6 , 6 4 3 3 5 , 8 5 5 , 1 2 4 2 9 , 0 8 3 , 5 6 8 Fi n e s a n d f o r f e i t u r e s 1 6 , 2 8 7 , 2 9 0 1 6 , 2 5 3 , 5 4 6 1 5 , 3 0 3 , 9 9 0 1 5 , 6 5 1 , 8 2 0 1 5 , 9 5 2 , 9 5 7 1 7 , 4 9 2 , 9 2 8 1 4 , 1 1 3 , 9 0 6 1 4 , 5 6 7 , 2 6 2 1 4 , 1 9 1 , 7 2 2 1 3 , 1 0 1 , 7 1 3 In v e s t m e n t e a r n i n g s 4 , 0 0 2 , 8 7 9 6 , 6 9 7 , 5 5 2 1 , 5 1 9 , 5 7 6 4 , 9 8 9 , 9 7 2 9 , 3 7 6 , 6 5 6 9 , 2 1 8 , 8 6 3 1 5 , 4 5 5 , 3 3 2 2 1 , 4 5 0 , 0 7 1 2 4 , 2 2 5 , 1 6 4 1 1 , 6 4 9 , 8 4 9 Re n t a l i n c o m e 1 0 , 6 0 2 , 6 7 1 1 0 , 3 1 1 , 9 6 7 9 , 8 4 3 , 6 3 3 9 , 6 1 9 , 2 5 4 8 , 5 4 1 , 7 0 2 7 , 0 2 6 , 3 8 0 5 , 4 6 7 , 9 4 6 7 , 0 0 6 , 9 7 2 7 , 2 7 9 , 9 9 5 6 , 5 6 2 , 6 5 4 Se t t l e m e n t i n c o m e 2 , 4 3 3 , 1 7 5 2 , 4 3 3 , 1 7 5 5 2 , 2 8 7 , 4 0 4 3 3 , 2 7 7 , 2 7 1 — 4 0 , 1 9 6 , 4 7 2 4 , 4 2 9 , 7 3 8 1 , 0 1 2 , 8 6 3 6 9 , 1 5 3 , 5 1 2 6 , 4 5 3 , 8 0 4 Ot h e r 2 1 , 0 5 8 , 6 0 9 1 9 , 3 0 9 , 1 0 9 2 5 , 5 1 8 , 9 6 5 1 1 9 , 4 9 4 , 0 1 2 1 0 , 3 0 6 , 5 1 2 1 0 , 8 3 3 , 3 5 2 2 8 , 6 5 1 , 2 0 1 1 6 , 6 9 1 , 4 9 7 8 , 4 4 6 , 3 7 2 9 , 7 9 4 , 5 8 7 To t a l r e v e n u e 41 9 , 4 7 9 , 0 3 6 4 0 7 , 1 7 9 , 1 1 9 4 2 6 , 6 9 5 , 9 1 1 5 1 1 , 7 3 4 , 4 8 2 3 9 6 , 6 4 1 , 3 5 7 4 2 4 , 1 2 9 , 8 0 2 4 0 6 , 1 5 2 , 3 0 5 3 9 4 , 2 9 4 , 3 8 3 4 3 4 , 2 1 9 , 8 9 7 3 2 4 , 9 7 1 , 1 1 0 Ex p e n d i t u r e s C u r r e n t Ge n e r a l g o v e r n m e n t 7 4 , 7 4 1 , 3 0 1 6 8 , 3 0 8 , 1 3 4 6 2 , 2 5 0 , 4 7 5 6 3 , 8 1 9 , 0 2 1 6 1 , 1 3 4 , 5 3 3 5 8 , 8 4 3 , 4 3 2 4 5 , 2 4 2 , 6 8 0 3 8 , 5 9 5 , 1 4 0 3 7 , 0 0 6 , 1 2 5 3 3 , 5 6 4 , 0 8 0 Pu b l i c s a f e t y 1 1 7 , 1 8 6 , 8 8 7 1 1 1 , 7 3 7 , 3 2 8 1 0 4 , 4 6 6 , 1 9 1 1 0 6 , 2 1 5 , 5 5 3 9 9 , 4 1 6 , 8 3 0 9 9 , 1 4 2 , 7 0 0 9 6 , 9 8 5 , 0 8 6 8 9 , 0 7 4 , 8 6 3 8 7 , 5 0 9 , 1 5 4 8 2 , 5 7 6 , 1 9 6 Ge n e r a l s e r v i c e s 7 1 , 3 7 0 , 3 9 9 5 7 , 7 5 5 , 6 8 7 5 8 , 0 1 4 , 5 0 5 7 7 , 1 9 6 , 7 7 0 3 4 , 4 0 1 , 5 0 3 9 7 , 7 6 6 , 9 9 3 7 0 , 9 6 3 , 8 1 4 1 1 6 , 6 2 8 , 3 3 9 4 6 , 5 3 7 , 2 8 2 5 1 , 7 9 3 , 2 6 5 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s 5 0 , 4 3 0 , 6 1 4 5 0 , 3 8 6 , 5 8 3 6 4 , 1 0 4 , 7 2 5 6 0 , 3 2 2 , 0 1 4 5 8 , 5 5 7 , 3 8 9 3 8 , 7 0 7 , 8 4 2 5 3 , 0 4 5 , 8 1 0 4 6 , 0 3 5 , 6 2 5 4 9 , 5 4 9 , 4 1 3 4 4 , 9 9 1 , 5 3 7 Li b r a r y 1 2 , 0 2 5 , 1 4 3 1 7 , 1 5 8 , 0 0 1 1 4 , 8 8 0 , 9 3 4 1 1 , 3 2 3 , 9 0 6 1 0 , 5 9 4 , 9 2 5 1 0 , 0 6 7 , 8 6 5 1 0 , 0 9 9 , 0 6 3 1 0 , 2 4 5 , 1 1 0 9 , 4 5 4 , 0 3 4 2 0 , 7 5 9 , 2 6 9 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t 5 3 , 7 1 1 , 3 4 0 7 2 , 0 3 7 , 1 3 1 1 0 7 , 6 9 9 , 0 3 9 1 9 7 , 2 5 7 , 7 9 6 1 3 9 , 2 9 1 , 1 7 9 1 0 8 , 2 7 7 , 2 6 1 1 1 3 , 7 3 0 , 2 4 9 1 1 8 , 4 5 2 , 7 2 7 7 7 , 8 7 1 , 0 2 5 6 1 , 0 9 4 , 9 8 4 Ot h e r — — — — — — — 2 , 7 4 9 , 0 8 6 6 0 9 , 2 2 5 2 , 1 8 9 , 2 2 4 De b t s e r v i c e Pr i n c i p a l 6 , 0 7 5 , 0 0 0 5 , 9 2 0 , 0 0 0 3 , 3 6 5 , 0 0 0 1 3 , 1 8 0 , 7 1 4 9 , 2 4 1 , 9 8 0 7 , 5 3 0 , 0 0 0 8 , 3 7 5 , 0 0 0 8 , 0 7 5 , 0 0 0 7 , 8 0 5 , 0 0 0 6 , 5 1 5 , 0 0 0 In t e r e s t 3 , 7 8 5 , 5 9 1 3 , 9 6 6 , 4 9 5 3 , 9 4 2 , 9 2 5 1 2 , 3 1 2 , 6 2 5 1 0 , 0 5 9 , 5 2 2 1 0 , 0 7 9 , 7 9 9 8 , 3 8 6 , 5 1 8 8 , 9 4 1 , 8 3 2 8 , 2 0 6 , 3 0 9 9 , 9 4 7 , 9 4 9 Bo n d i s s u a n c e c o s t s — — — 4 4 1 , 9 9 3 4 4 0 , 3 0 8 2 1 9 , 4 0 5 — — — 1 , 3 2 4 , 2 8 1 To t a l e x p e n d i t u r e s 3 8 9 , 3 2 6 , 2 7 5 3 8 7 , 2 6 9 , 3 5 9 4 1 8 , 7 2 3 , 7 9 4 5 4 2 , 0 7 0 , 3 9 2 4 2 3 , 1 3 8 , 1 6 9 4 3 0 , 6 3 5 , 2 9 7 4 0 6 , 8 2 8 , 2 2 0 4 3 8 , 7 9 7 , 7 2 2 3 2 4 , 5 4 7 , 5 6 7 3 1 4 , 7 5 5 , 7 8 5 (c o n t i n u e s n e x t p a g e ) CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ch a n g e s i n F u n d B a l a n c e o f G o v e r n m e n t a l F u n d s La s t T e n F i s c a l Y e a r s (M o d i f i e d A c c r u a l B a s i s o f A c c o u n t i n g ) 16 2 TABLE 4 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ch a n g e s i n F u n d B a l a n c e o f G o v e r n m e n t a l F u n d s La s t T e n F i s c a l Y e a r s (M o d i f i e d A c c r u a l B a s i s o f A c c o u n t i n g ) (c o n t i n u e s f r o m p r e v i o u s p a g e ) Ex c e s s ( d e f i c i e n c y ) o f r e v e n u e s ov e r ( u n d e r ) e x p e n d i t u r e s 30 , 1 5 2 , 7 6 1 1 9 , 9 0 9 , 7 6 0 7 , 9 7 2 , 1 1 7 ( 3 0 , 3 3 5 , 9 1 0 ) ( 2 6 , 4 9 6 , 8 1 2 ) ( 6 , 5 0 5 , 4 9 5 ) ( 6 7 5 , 9 1 5 ) ( 4 4 , 5 0 3 , 3 3 9 ) 1 0 9 , 6 7 2 , 3 3 0 1 0 , 2 1 5 , 3 2 5 Ot h e r f i n a n c i n g s o u r c e s ( u s e s ) Tr a n s f e r s i n 1 9 , 7 7 8 , 2 0 9 2 6 , 2 1 0 , 9 1 0 2 1 , 9 0 6 , 2 8 3 9 8 , 8 0 0 , 6 4 1 1 0 8 , 2 0 0 , 6 2 3 5 3 , 6 4 4 , 3 9 6 9 1 , 3 3 2 , 3 0 4 4 6 , 4 9 5 , 4 1 1 2 4 , 7 2 1 , 6 8 4 2 4 , 7 8 2 , 6 9 9 Tr a n s f e r s o u t ( 1 7 , 2 8 9 , 8 8 9 ) ( 2 4 , 6 4 8 , 4 1 4 ) ( 3 2 , 0 1 0 , 0 8 8 ) ( 1 0 5 , 2 5 7 , 8 7 5 ) ( 1 0 6 , 9 5 7 , 8 1 5 ) ( 5 3 , 9 4 8 , 6 7 5 ) ( 9 1 , 6 3 3 , 3 6 8 ) ( 4 9 , 5 7 4 , 8 5 7 ) ( 3 3 , 9 9 8 , 0 8 6 ) ( 3 3 , 5 0 1 , 1 0 6 ) Li n e o f c r e d i t p r o c e e d s — — — — 2 6 , 5 2 8 , 3 9 5 7 , 9 8 6 , 2 8 1 1 5 , 4 8 5 , 3 2 4 — — — Lo n g - t e r m d e b t i s s u e d — — — 3 2 , 1 7 8 , 2 5 0 — — — — — — Re f u n d i n g b o n d s i s s u e d — — — 1 9 , 9 5 0 , 0 0 0 4 1 , 0 5 0 , 0 0 0 9 , 1 5 5 , 0 0 0 — — — 64,720,000 Bo n d s i s s u e d — — — — — — — — — — Pr e m i u m o n b o n d s i s s u e d — — — 4 , 3 3 9 , 8 4 0 4 0 9 , 6 7 4 5 5 8 , 6 9 9 — — — 55,653 Di s c o u n t o n b o n d s i s s u e d — — — — — — — — — (187,264) Pa y m e n t s t o r e f u n d e d b o n d e s c r o w a g e n t — — — ( 2 2 , 2 8 9 , 6 5 4 ) ( 1 , 9 0 0 , 0 0 0 ) ( 9 , 4 7 8 , 8 5 0 ) — — — (63,213,909) Pr o c e e d s f r o m l o a n s p a y a b l e — — — — 1 0 2 , 5 0 0 , 0 0 0 — — — — — To t a l o t h e r f i n a n c i n g s o u r c e s ( u s e s ) 2, 4 8 8 , 3 2 0 1 , 5 6 2 , 4 9 6 ( 1 0 , 1 0 3 , 8 0 5 ) 2 7 , 7 2 1 , 2 0 2 1 6 9 , 8 3 0 , 8 7 7 7 , 9 1 6 , 8 5 1 1 5 , 1 8 4 , 2 6 0 ( 3 , 0 7 9 , 4 4 6 ) ( 9 , 2 7 6 , 4 0 2 ) ( 7 , 3 4 3 , 9 2 7 ) Sp e c i a l i t e m — — ( 2 1 , 2 5 4 , 9 0 8 ) — — — — — — — Ex t r a o r d i n a r y g a i n ( l o s s ) (2 1 , 5 6 4 , 5 8 5 ) ( 3 3 , 3 4 5 , 7 3 6 ) ( 1 4 , 1 9 6 , 0 5 7 ) 1 3 , 7 0 3 , 2 1 3 — — — — — — Ne t c h a n g e i n f u n d b a l a n c e 11 , 0 7 6 , 4 9 6 $ ( 1 1 , 8 7 3 , 4 8 0 ) ( 3 7 , 5 8 2 , 6 5 3 ) 1 1 , 0 8 8 , 5 0 5 14 3 , 3 3 4 , 0 6 5 1 , 4 1 1 , 3 5 6 14 , 5 0 8 , 3 4 5 (4 7 , 5 8 2 , 7 8 5 ) 1 0 0 , 3 9 5 , 9 2 8 2,871,398 De b t s e r v i c e a s a p e r c e n t a g e o f n o n c a p i t a l ex p e n d i t u r e s ( 2 ) 2. 6 5 % 2 . 7 6 % 2 . 0 7 % 5 . 2 3 % 5 . 3 4 % 4 . 2 5 % 4 . 5 4 % 4 . 5 2 % 5 . 5 1 % 6 . 1 0 % (1 ) I n c r e m e n t a l p r o p e r t y t a x w a s r e c e i v e d b y t h e r e d e v e l o p m e n t a g e n c y w h i c h w a s d i s s o l v e d i n F Y 2 0 1 1 - 1 2 (2 ) C a l c u l a t i o n i n c l u d e s o n l y t h e p r i n c i p a l a n d i n t e r e s t c o m p o n e n t s o f d e b t s e r v i c e e x p e n d i t u r e s w h e n c a l c u l a t i n g t h i s r a t i o f o r a l l y e a r s . 16 3 TABLE 5 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 12 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Sa l e s t a x e s 51 , 0 9 0 $ 49 , 2 1 0 4 7 , 8 8 1 4 5 , 8 3 2 3 1 , 6 9 0 26 , 6 3 7 2 8 , 2 9 7 3 2 , 3 5 7 3 3 , 2 6 7 3 1 , 8 7 2 Ut i l i t y u s e r ' s t a x 32 , 0 6 6 3 2 , 8 1 7 3 1 , 4 5 0 3 1 , 2 9 6 3 1 , 6 2 5 3 1 , 6 2 0 3 1 , 5 7 9 3 1 , 6 2 2 3 1 , 2 4 3 3 0 , 0 4 4 Tr a n s i e n t o c c u p a n c y t a x 47 , 6 2 9 4 4 , 3 9 6 4 0 , 9 9 7 3 6 , 1 4 3 3 2 , 7 4 7 2 9 , 8 0 4 3 1 , 2 6 5 3 4 , 9 6 9 3 1 , 8 9 2 2 9 , 2 0 9 Pr o p e r t y t a x e s ( 2 ) 55 , 0 4 4 5 0 , 1 1 4 4 4 , 3 9 2 4 0 , 2 2 6 3 6 , 0 4 8 3 7 , 4 2 0 3 7 , 7 6 3 3 6 , 0 6 8 3 2 , 5 8 6 2 8 , 0 3 2 Bu s i n e s s l i c e n s e t a x e s 30 , 3 5 4 2 9 , 7 8 3 2 7 , 5 1 8 2 6 , 3 2 5 2 5 , 4 8 0 2 6 , 5 5 3 2 7 , 2 1 6 2 4 , 6 5 4 2 2 , 6 3 7 2 0 , 2 7 4 Pa r k i n g f a c i l i t y t a x 11 , 0 7 2 1 0 , 5 9 8 9 , 9 5 4 9 , 3 9 4 8 , 7 8 6 7 , 8 4 8 7 , 9 8 0 7 , 8 2 6 7 , 4 0 0 6 , 8 3 2 Do c u m e n t a r y T r a n s f e r T a x 7, 9 0 3 6 , 2 7 3 6 , 0 2 7 5 , 1 9 2 3 , 9 5 4 3 , 4 3 2 2 , 6 5 3 4 , 7 3 9 6 , 4 0 9 5 , 5 7 3 Ve h i c l e l i c e n s e f e e s 38 39 48 46 49 2 27 3 26 3 39 0 608 2,062 Co n d o m i n i u m t a x e s 45 14 18 37 21 19 35 50 39 24 To t a l 2 3 5 , 2 4 1 $ 22 3 , 2 4 4 2 0 8 , 2 8 5 1 9 4 , 4 9 1 1 7 0 , 8 4 3 16 3 , 6 0 6 1 6 7 , 0 5 1 17 2 , 6 7 5 16 6 , 0 8 1 153,922 (1 ) (2 ) So u r c e : C i t y o f S a n t a M o n i c a F i n a n c e D e p a r t m e n t CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ge n e r a l F u n d T a x R e v e n u e s b y S o u r c e ( 1 ) La s t T e n F i s c a l Y e a r s (I n T h o u s a n d s ) S o u r c e Do e s n o t i n c l u d e H i g h w a y U s e r s T a x e s , w h i c h a r e r e c o r d e d i n t h e G a s T a x F u n d , U n i t D w e l l i n g T a x e s , w h i c h a r e r e c o r d e d i n t h e P a r k s a n d R e c r e a t i o n F a c i l i t i e s F u n d , o r T O R C A C o n v e r s i o n T a x e s , w h i c h a r e r e c o r d e d i n t h e T O R C A F u n d . In c l u d e s a d v a l o r e m p r o p e r t y t a x e s f o r p u r p o s e s o f p a y i n g d e b t se r v i c e o n g e n e r a l o b l i g a t i o n b o n d s . D o e s n o t i n c l u d e t a x i n c r e m e n t r e c e i v e d b y r e d e v e l o p m e n t a r e a . 16 4 TABLE 6 Fiscal year Land Improvements Personal property Public utilities Secured gross Exemptions (1) Secured net Net unsecured Net assessed valuations Total Direct Tax Rate (2) 2014-15 $ 16,867,678 12,433,379$ 437,194$ 742$ 29,738,993$ 1,609,033$ 28,129,960$ 916,381$ 29,046,341$ 1.00% 2013-14 16,046,789 11,701,427 402,171 742 28,151,130 1,573,052 26,578,078 936,031 27,514,109 1.00% 2012-13 14,828,199 10,846,677 370,673 742 26,046,292 1,222,722 24,823,570 942,035 25,765,605 1.00% 2011-12 14,235,295 10,349,621 228,784 742 24,814,442 1,073,027 23,741,415 902,707 24,644,122 1.00% 2010-11 13,795,191 10,070,986 230,387 742 24,097,305 1,095,461 23,001,845 880,331 23,882,176 1.00% 2009-10 13,972,767 9,978,675 234,194 742 24,186,379 1,134,967 23,051,412 969,009 24,020,421 1.00% 2008-09 13,460,087 9,640,425 228,271 742 23,329,524 904,661 22,424,864 987,849 23,412,713 1.00% 2007-08 12,279,875 8,581,600 230,362 742 21,092,580 847,012 20,245,568 877,156 21,122,724 1.00% 2006-07 11,307,028 8,100,539 231,256 743 19,639,566 810,600 18,828,965 876,645 19,705,610 1.00% 2005-06 10,226,948 7,591,414 37,241 743 17,856,346 535,705 17,320,642 777,909 18,098,550 1.00% (1) Includes Homeowner Exemption. City is reimbursed by State for taxes lost because of these exemptions. (2) Excludes Direct and Overlapping Rates. See Table 7 for Direct and Overlapping Rates. Source: Los Angeles County Auditor-Controller CITY OF SANTA MONICA, CALIFORNIA Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years (In Thousands) 165 TABLE 7 Fiscal City County School Miscellaneous year General Fund General Fund districts special districts Total 2014-15 0.01$ 1.00$ 0.13$ — $ 1.14$ 2013-14 0.01 1.00 0.13 — 1.14 2012-13 0.01 1.00 0.13 — 1.14 2011-12 0.01 1.00 0.13 — 1.14 2010-11 0.01 1.00 0.13 — 1.14 2009-10 0.01 1.00 0.13 — 1.14 2008-09 0.01 1.00 0.13 0.01 1.15 2007-08 0.01 1.00 0.10 0.01 1.12 2006-07 0.01 1.00 0.08 0.01 1.10 2005-06 0.01 1.00 0.07 0.01 1.09 CITY OF SANTA MONICA, CALIFORNIA Direct and Overlapping Property Tax Rates* Last Ten Fiscal Years * Property tax rate is per $100 of assessed value. Since 1978-79, the maximum allowable rate is levied by the County, property taxes are collected by the County, and the County allocates the City's share in accordance with distribution formulas established by law. Effective 1981- 82, Proposition 13 allowed jurisdictions to impose rates over the $1.00 base rate only for bonded debt approved by the voters prior to 1978. However, in 1986, the State Constitution was amended to allow rates over the $1.00 base rate for voter approved general obligation bonds. City General Fund is allocated approximately $.14 of each $1.00 of the County General Fund amount. Source: Los Angeles County Auditor-Controller 166 TABLE 8 Ta x a b l e Ta x a b l e as s e s s e d as s e s s e d Ta x p a y er va l u e Ra n k va l u e Ra n k Ca l i f o r n i a C o l o r a d o C e n t e r L L C 49 4 , 3 5 0 , 9 3 7 $ 1 1. 7 0 % 4 3 4 , 6 0 0 , 0 0 0 $ 1 2.29 % Wa t e r G a r d e n R e a l t y H o l d i n g L L C 47 9 , 6 4 4 , 6 7 6 2 1. 6 5 39 3 , 7 2 8 , 1 5 2 3 2.07 SC E n t e r p r i s e s S M B P L L C 36 4 , 4 9 4 , 6 4 2 3 1. 2 5 — — Do u g l a s E m m e t t 1 9 9 8 L L C 32 9 , 1 8 2 , 8 9 5 4 1. 1 3 35 1 , 8 5 9 , 1 8 0 4 1.85 Ja m e s t o w n L a n t a n a N o r t h L P 32 8 , 4 0 0 , 0 0 0 5 1. 1 3 — — Ma c e r i c h S a n t a M o n i c a P l a c e 28 4 , 4 1 1 , 3 0 0 6 0. 9 8 14 2 , 6 9 6 , 5 1 1 5 0.75 CR E P 2 7 0 0 H o l d i n g s L L C 22 0 , 6 0 0 , 0 0 0 7 0. 7 6 — — Oc e a n A v e n u e L L C 18 2 , 1 7 6 , 2 7 5 8 0. 6 3 91 , 3 7 7 , 7 9 3 9 0.48 Ha r t A r b o r e t u m L L C 16 8 , 5 1 1 , 5 8 5 9 0. 5 8 — — Ag e n s y s I n c 15 6 , 0 5 2 , 3 2 5 1 0 0. 5 4 — — St . J o h n ' s H o s p i t a l & H e a l t h C e n t e r — — 39 5 , 1 1 0 , 8 1 4 2 2.08 Ne w S a n t a M o n i c a B e a c h H o t e l — — 12 7 , 8 1 6 , 5 2 8 6 0.67 RA N D C o r p o r a t i o n — — 12 6 , 1 4 6 , 1 3 8 7 0.66 CL P F A r b o r e t u m L i m i t e d P a r t n e r s h i p — — 96 , 9 0 0 , 0 0 0 8 0.51 12 9 9 O c e a n L L C — — 61 , 6 6 1 , 5 1 3 1 0 0.32 To t a l p r i n c i p a l p r o p e r t y t a x p a y e r s a s s e s s e d v a l u e 3, 0 0 7 , 8 2 4 , 6 3 5 $ 10 . 3 5 2, 2 2 1 , 8 9 6 , 6 2 9 $ 11.68 To t a l C i t y n e t t a x a b l e a s s e s s e d v a l u e 29 , 0 4 6 , 3 4 1 , 1 8 8 $ 10 0 . 0 0 % 1 8 , 9 8 6 , 5 1 4 , 7 8 0 $ 100.00 % So u r c e : C i t y o f S a n t a M o n i c a F i n a n c e D e p a r t m e n t ; H d l , C o r e n a n d C o n e ; L o s A n g e l e s C o u n t y A u d i t o r - C o n t r o l l e r va l u e value of t o t a l C i t y of total City ta x a b l e taxable as s e s s e d assessed Pe r c e n t a g e Percentage CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Pr i n c i p a l P r o p e r t y T a x p a y e r s Cu r r e n t F i s c a l Y e a r a n d N i n e Y e a r s A g o 20 1 4 - 1 5 20 0 5 - 0 6 16 7 TABLE 9 Fi s c a l y e a r To t a l s e c u r e d t a x le v y Cu r r e n t s e c u r e d ta x c o l l e c t i o n s De l i n q u e n t s e c u r e d ta x c o l l e c t i o n s ( 1 ) To t a l t a x co l l e c t i o n s Ou t s t a n d i n g de l i n q u e n t t a x e s (2 ) 20 1 4 - 1 5 2 6 , 5 6 7 , 1 1 4 $ 2 6 , 1 9 0 , 1 1 4 $ 9 8 . 6 % 6 0 0 , 6 4 2 $ 2 6 , 7 9 0 , 7 5 6 $ 1 0 0 . 8 % 4 3 8 , 2 4 8 $ 1 . 6 % 20 1 3 - 1 4 2 5 , 1 7 3 , 2 7 3 2 4 , 6 8 9 , 3 7 2 9 8 . 1 5 7 0 , 0 3 7 2 5 , 2 5 9 , 4 0 9 1 0 0 . 3 5 1 2 , 9 4 0 2 . 0 20 1 2 - 1 3 2 3 , 4 4 6 , 7 1 7 2 3 , 4 2 8 , 5 9 0 9 9 . 9 7 1 3 , 9 5 6 2 4 , 1 4 2 , 5 4 6 1 0 3 . 0 5 8 5 , 4 1 7 2 . 5 20 1 1 - 1 2 2 3 , 2 1 1 , 6 2 7 2 2 , 6 4 1 , 8 2 6 9 7 . 5 6 4 5 , 9 2 7 2 3 , 2 8 7 , 7 5 3 1 0 0 . 3 6 6 1 , 3 1 5 2 . 8 20 1 0 - 1 1 2 2 , 2 9 3 , 6 4 8 2 1 , 7 5 9 , 6 8 5 9 7 . 6 9 3 7 , 3 4 0 2 2 , 6 9 7 , 0 2 5 1 0 1 . 8 6 6 9 , 2 3 2 3 . 0 20 0 9 - 1 0 2 2 , 5 8 5 , 6 8 5 2 1 , 7 2 4 , 1 0 5 9 6 . 2 1 , 2 6 2 , 4 8 4 2 2 , 9 8 6 , 5 8 9 1 0 1 . 8 6 9 0 , 9 2 8 3 . 1 20 0 8 - 0 9 2 2 , 4 3 9 , 4 0 1 2 1 , 1 9 5 , 0 6 6 9 4 . 5 1 , 2 3 7 , 3 5 7 2 2 , 4 3 2 , 4 2 3 1 0 0 . 0 6 6 2 , 9 8 3 3 . 0 20 0 7 - 0 8 2 0 , 6 5 4 , 0 4 5 1 9 , 3 0 9 , 7 7 4 9 3 . 5 5 2 8 , 2 0 7 1 9 , 8 3 7 , 9 8 1 9 6 . 0 4 4 2 , 1 0 5 2 . 1 20 0 6 - 0 7 1 9 , 3 5 2 , 4 2 1 1 8 , 4 1 8 , 9 3 8 9 5 . 2 3 7 6 , 5 5 9 1 8 , 7 9 5 , 4 9 7 9 7 . 1 2 7 1 , 7 4 0 1 . 4 20 0 5 - 0 6 1 8 , 0 5 3 , 3 9 8 1 7 , 4 4 5 , 0 9 8 9 6 . 6 4 0 7 , 3 3 4 1 7 , 8 5 2 , 4 3 2 9 8 . 9 2 4 8 , 1 9 9 1 . 4 (1 ) E x c l u s i v e o f p e n a l t i e s a n d c o l l e c t i o n s r e l a t e d t o t a x o v e r r i d e s f o r d e b t s e r v i c e o n g e n e r a l o b l i g a t i o n b o n d s . (2 ) So u r c e : C o u n t y o f L o s A n g e l e s Re f l e c t s C i t y o f S a n t a M o n i c a p r o p o r t i o n a t e s h a r e o f c o u n t y - w i d e o u t s t a n d i n g d e l i n q u e n c i e s . T h e L o s A n g e l e s C o u n t y p r o p e r t y t a x s y s t e m d o e s n o t p r o v i d e C i t y o f S a n t a M o n i c a s p e c i f i c s t a t i s t i c s r e l a t e d to d e l i n q u e n c i e s . S h o u l d t h e C o u n t y c h a n g e t h e i r s y s t e m t o i n c l u d e s p e c i f i c c i t y d a t a , t h e t a b l e w i l l b e u p d a t e d t o a d j u s t d e l i nq u e n t t a x e s b y y e a r . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Pr o p e r t y T a x L e v i e s a n d C o l l e c t i o n s La s t T e n F i s c a l Y e a r s Pe r c e n t o f l e v y co l l e c t e d To t a l s e c u r e d t a x co l l e c t i o n s a s pe r c e n t o f t o t a l t a x le v y Outstanding delinquent taxes as percent of total secured tax levy 16 8 TABLE 10 Bu s i n e s s 20 1 4 20 1 3 20 1 2 20 1 1 20 1 0 20 0 9 20 0 8 20 0 7 2006 2005 Ap p a r e l s t o r e s 40 3 , 1 2 9 $ 41 3 , 7 9 4 40 3 , 5 6 6 38 1 , 9 6 0 30 7 , 4 0 9 27 8 , 9 8 0 31 6 , 9 9 3 33 7 , 9 5 6 342,883 336,512 Ge n e r a l m e r c h a n d i s e 10 2 , 4 1 9 10 7 , 4 8 3 11 4 , 3 7 5 11 1 , 9 6 2 66 , 5 2 1 28 , 3 4 9 50 , 5 4 5 62 , 5 0 4 68,587 76,165 Fo o d s t o r e s 98 , 7 0 9 92 , 7 9 4 86 , 2 1 3 84 , 0 0 7 80 , 7 7 9 82 , 8 4 1 87 , 5 8 6 85 , 5 0 0 81,369 75,821 Ea t i n g & d r i n k i n g p l a c e s 59 4 , 5 5 6 49 0 , 1 6 5 54 1 , 4 3 2 50 3 , 5 4 0 45 6 , 8 4 6 43 1 , 0 1 1 45 7 , 5 4 9 45 9 , 4 0 3 441,502 414,745 Bu i l d i n g m a t e r i a l s 11 5 , 3 1 3 10 4 , 2 4 9 90 , 2 5 5 92 , 2 4 9 88 , 9 1 3 88 , 9 7 1 11 9 , 0 9 5 13 0 , 0 2 5 120,516 106,596 Au t o d e a l e r s & a u t o s u p p l i e r s 73 8 , 3 6 1 69 9 , 1 0 5 64 0 , 1 4 2 63 2 , 3 0 4 60 0 , 1 4 0 60 9 , 5 1 7 64 7 , 5 2 6 71 4 , 1 2 8 715,820 709,660 Se r v i c e s t a t i o n s 12 0 , 5 5 7 13 1 , 8 8 7 13 7 , 2 4 6 13 4 , 9 6 2 15 1 , 9 5 2 10 6 , 1 9 3 14 6 , 2 7 6 13 7 , 3 0 6 132,438 101,214 Ot h e r r e t a i l s t o r e s 62 3 , 3 6 7 62 3 , 2 2 5 64 3 , 2 0 7 63 8 , 6 9 1 52 7 , 6 8 8 51 8 , 0 9 6 62 0 , 0 7 8 68 0 , 4 5 9 644,346 627,242 Re t a i l s t o r e s t o t a l 2, 7 9 6 , 4 1 1 2, 6 6 2 , 7 0 2 2, 6 5 6 , 4 3 6 2, 5 7 9 , 6 7 5 2, 2 8 0 , 2 4 8 2, 1 4 3 , 9 5 8 2, 4 4 5 , 6 4 8 2, 6 0 7 , 2 8 1 2,547,461 2,447,955 Al l o t h e r o u t l e t s 35 5 , 6 6 2 39 2 , 1 6 0 28 9 , 3 8 0 28 4 , 5 7 7 27 6 , 0 9 9 27 0 , 3 3 7 31 7 , 8 1 8 33 6 , 8 6 3 409,547 352,943 To t a l a l l o u t l e t s 3, 1 5 2 , 0 7 3 $ 3, 0 5 4 , 8 6 2 2, 9 4 5 , 8 1 6 2, 8 6 4 , 2 5 2 2, 5 5 6 , 3 4 7 2, 4 1 4 , 2 9 5 2, 7 6 3 , 4 6 6 2, 9 4 4 , 1 4 4 2,957,008 2,800,898 (1 ) A m o u n t s h a v e b e e n r e v i s e d t o r e f l e c t p r i o r y e a r a d j u s t m e n t s ; A m o u n t s d o n o t i n c l u d e a l l o c a t i o n s f r o m S t a t e o r C o u n t y P o o l s . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ta x a b l e T r a n s a c t i o n s b y T y p e o f B u s i n e s s ( 1 ) La s t T e n C a l e n d a r Y e a r s (I n T h o u s a n d s ) Ca l e n d a r Y e a r 16 9 TABLE 11 Fi s c a l ye a r Ge n e r a l ob l i g a t i o n bo n d s Ta x a l l o c a t i o n bo n d s * Le a s e r e v e n u e bo n d s Te r m l o a n s pa y a b l e * Li n e o f Cr e d i t * Wa s t e w a t e r bo n d s Ce r t i f i c a t e s o f pa r t i c i p a t i o n Te r m l o a n s pa y a b l e Ca p i t a l l e a s e s To t a l p r i m a r y go v e r n m e n t Percentage of net assessed valuation (1) Per capita 20 1 4 - 1 5 9 , 8 5 7 , 6 5 2 $ — $ 7 7 , 4 3 1 , 2 0 9 $ 40 0 , 0 0 0 $ — $ 9 , 6 0 4 , 3 2 1 $ — $ 1 , 4 9 7 , 7 9 2 $ — $ 9 8 , 7 9 0 , 9 7 4 $ 0.34%1,059 $ 20 1 3 - 1 4 1 1 , 2 0 5 , 8 9 0 — 8 2 , 5 0 3 , 5 4 8 4 0 0 , 0 0 0 — 9 , 7 0 4 , 2 1 6 — 1 , 7 7 4 , 9 6 6 — 1 0 5 , 5 8 8 , 6 2 0 0 . 3 8 % 1 , 1 4 5 20 1 2 - 1 3 1 2 , 5 1 8 , 2 8 4 — 8 7 , 0 3 9 , 3 0 2 4 0 0 , 0 0 0 — 1 7 , 7 6 3 , 1 2 5 — 2 , 0 4 5 , 1 1 7 — 1 1 9 , 7 6 5 , 8 2 8 0 . 4 6 % 1 , 3 1 6 20 1 1 - 1 2 12 , 6 5 0 , 7 9 3 — 9 0 , 5 7 4 , 8 3 7 4 0 0 , 0 0 0 — 1 9 , 3 1 9 , 8 1 5 — 2 , 3 0 8 , 4 2 2 — 1 2 5 , 2 5 3 , 8 6 7 0 . 5 1 % 1 , 3 8 8 20 1 0 - 1 1 15 , 0 4 4 , 3 9 8 1 0 3 , 5 4 6 , 1 8 5 6 1 , 8 8 2 , 8 9 3 1 0 1 , 4 6 8 , 0 2 0 5 0 , 0 0 0 , 0 0 0 2 0 , 7 2 7 , 5 1 7 — 2 , 5 6 5 , 0 5 4 — 3 5 5 , 2 3 4 , 0 6 7 1 . 4 9 % 3 , 9 3 9 20 0 9 - 1 0 1 6 , 7 9 3 , 4 3 2 6 6 , 7 2 7 , 3 8 4 6 5 , 0 4 9 , 3 4 0 4 0 0 , 0 0 0 2 3 , 4 7 1 , 6 0 5 2 2 , 1 0 7 , 1 0 9 — 2 , 8 3 7 , 4 0 0 — 1 9 7 , 3 8 6 , 2 7 0 0 . 8 2 % 2 , 1 2 9 20 0 8 - 0 9 1 8 , 5 0 7 , 4 6 6 6 9 , 3 4 8 , 4 7 0 6 7 , 8 3 5 , 5 1 6 4 0 0 , 0 0 0 1 5 , 4 8 5 , 3 2 4 2 3 , 4 3 1 , 7 0 2 — 3 , 1 0 3 , 4 0 8 — 1 9 8 , 1 1 1 , 8 8 6 0 . 8 5 % 2 , 1 4 2 20 0 7 - 0 8 2 0 , 1 9 6 , 4 9 8 7 1 , 8 3 9 , 5 5 6 7 1 , 8 3 6 , 3 2 8 — — 2 4 , 7 1 1 , 2 9 4 — 3 , 3 6 3 , 2 3 8 — 1 9 1 , 9 4 6 , 9 1 4 0 . 9 1 % 2 , 1 6 8 20 0 6 - 0 7 2 1 , 8 6 0 , 5 3 1 7 4 , 1 8 3 , 3 2 0 7 5 , 6 8 7 , 1 4 0 — — 2 5 , 9 4 5 , 8 8 6 4 2 0 , 0 0 0 3 , 6 1 7 , 0 4 6 — 2 0 1 , 7 1 3 , 9 2 3 1 . 0 2 % 2 , 2 8 7 20 0 5 - 0 6 2 3 , 4 9 4 , 5 6 4 7 7 , 1 8 3 , 5 1 2 7 8 , 6 3 7 , 9 5 4 — — 2 6 , 9 4 8 , 3 5 2 8 2 0 , 0 0 0 3 , 8 6 4 , 9 8 7 — 2 1 0 , 9 4 9 , 3 6 9 1 . 1 7 % 2 , 4 0 4 No t e : D e t a i l s r e g a r d i n g t h e C i t y ' s o u t s t a n d i n g d e b t c a n b e f o u n d i n t h e N o t e 9 f o t h e F i n a n c i a l S t a t e m e n t s . Al l b o n d s a m o u n t s a r e u p d a t e d t o r e f l e c t n e t o f r e l a t e d p r e m i u m s , d i s c o u n t s , a n d a d j u s t m e n t s . (1 ) N e t a s s e s s e d p r o p e r t y v a l u a t i o n s h a v e b e e n u s e d b e c a u s e p e r s o n a l i n c o m e i s n o t a v a i l a b l e . S e e T a b l e 6 f o r n e t a s s e s s e d v a l u a t i o n s . * R e d e v e l o p m e n t d e b t w a s t r a n s f e r r e d t o t h e S u c c e s s o r A g e n c y o n F e b r u a r y 1 , 2 0 1 2 . Ra t i o s o f O u t s t a n d i n g D e b t b y T y p e La s t T e n F i s c a l Y e a r s Go v e r n m e n t a l a c t i v i t i e s B u s i n e s s - t y p e a c t i v i t i e s CI T Y O F S A N T A M O N I C A , C A L I F O R N I A 17 0 TABLE 12 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Ge n e r a l b o n d e d d e b t o u t s t a n d i n g Ge n e r a l o b l i g a t i o n b o n d s 9 , 8 5 7 , 6 5 4 $ 1 1 , 2 0 5 , 8 9 0 1 2 , 5 1 8 , 2 8 4 1 2 , 6 5 0 , 7 9 3 1 5 , 0 4 4 , 3 9 8 1 6 , 7 9 3 , 4 3 2 1 8 , 5 0 7 , 4 6 6 2 0 , 1 9 6 , 4 9 9 2 1 , 8 6 0 , 5 3 1 23,494,565 Ta x a l l o c a t i o n b o n d s * — — — — 1 0 3 , 5 4 6 , 1 8 5 6 6 , 7 2 7 , 3 8 4 6 9 , 3 4 8 , 4 7 0 7 1 , 8 3 9 , 5 5 5 7 4 , 1 8 3 , 3 2 0 7 7 , 1 8 3 , 5 1 2 To t a l 9 , 8 5 7 , 6 5 4 $ 1 1 , 2 0 5 , 8 9 0 1 2 , 5 1 8 , 2 8 4 1 2 , 6 5 0 , 7 9 3 1 1 8 , 5 9 0 , 5 8 3 8 3 , 5 2 0 , 8 1 6 8 7 , 8 5 5 , 9 3 6 9 2 , 0 3 6 , 0 5 4 9 6 , 0 4 3 , 8 5 1 100,678,077 As s e s s e d v a l u e ( i n t h o u s a n d s ) ( 1 ) 2 9 , 0 4 6 , 3 4 1 $ 2 7 , 5 1 4 , 1 0 9 2 5 , 7 6 5 , 6 0 5 2 4 , 6 4 4 , 1 2 2 2 3 , 8 8 2 , 1 7 6 2 4 , 0 9 6 , 8 5 0 2 3 , 4 8 8 , 8 5 3 2 1 , 1 2 2 , 7 2 4 1 9 , 7 0 5 , 6 1 0 1 8 , 0 9 8 , 5 5 0 Pe r c e n t a g e o f a s s e s s e d Pr o p e r t y v a l u e 0 . 0 3 % 0 . 0 4 % 0 . 0 5 % 0 . 0 5 % 0 . 5 0 % 0 . 3 5 % 0 . 3 7 % 0 . 4 4 % 0 . 4 9 % 0 . 5 6 % Po p u l a t i o n ( 2 ) 9 3 , 2 8 3 9 2 , 1 8 5 9 1 , 0 4 0 9 0 , 2 2 3 9 0 , 1 7 4 9 2 , 7 0 3 9 2 , 4 9 4 9 1 , 4 3 9 9 1 , 1 2 4 9 0 , 7 5 0 Pe r c a p i t a 1 0 6 $ 1 2 2 13 8 14 0 1, 3 1 5 90 1 95 0 1, 0 0 7 1,054 1,109 (1 ) S e e T a b l e 6 f o r A s s e s s e d V a l u e D a t a (2 ) S e e T a b l e 1 6 f o r P o p u l a t i o n D a t a * Re d e v e l o p m e n t d e b t w a s t r a n s f e r r e d t o t h e S u c c e s s o r A g e n c y o n F e b r u a r y 1 , 2 0 1 2 . Al l b o n d s a m o u n t s a r e n e t o f r e l a t e d p r e m i u m s , d i s c o u n t s , a n d a d j u s t m e n t s . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ra t i o s o f G e n e r a l B o n d e d D e b t La s t T e n F i s c a l Y e a r s 17 1 TABLE 13 Estimated Estimated share Debt Percentage of Overlapping Outstanding Applicable (1)Debt Overlapping debt: Los Angeles County General Fund Obligations 1,885,330,518$ 2.418% 45,587,292$ Los Angeles County Superintendent of Schools Certificates of Participation 8,719,113 2.418%210,828 Los Angeles County Flood Control District 15,105,000 2.466%372,489 Metropolitan Water District 110,420,000 1.255% 1,385,771 Santa Monica Community College District 438,732,636 66.429% 291,445,703 Los Angeles Unified School District 10,296,665,000 0.0002%20,593 Santa Monica-Malibu Unified School District 310,824,194 66.478% 206,629,708 Los Angeles County Regional Park and Open Space Assessment District 82,880,000 2.418% 2,004,038 Santa Monica Community College District Certificates of Participation 16,305,000 66.429% 10,831,248 Los Angeles Unified School District Certificates of Participation 307,180,000 0.0002%614 Los Angeles Community College District 3,882,265,000 0.010%388,227 Santa Monica-Malibu Unified School District Certificates of Participation 11,271,501 66.478% 7,493,068 Overlapping Tax Increment Debt 94,840,000 Subtotal, overlapping debt 661,209,579 City direct governmental debt City of Santa Monica Parking Authority Lease Revenue Bonds (2002 Refunding)2,122,754 City of Santa Monica General Obligation Bonds Main Library Improvements (2012)9,857,653 City of Santa Monica Public Safety Lease Revenue Bonds (2009)6,136,495 City of Santa Monica Public Safety Lease Revenue Bonds (2011)6,120,136 City of Santa Monica Civic Parking Structure Lease Revenue Bonds (2004)31,555,064 City of Santa Monica Parking Structure 6 Lease Revenue Bonds (2011)31,496,759 State Dept of Housing and Community Development 400,000 Subtotal, direct debt (2)87,688,861 Total direct and overlapping governmental debt (3)748,898,440$ (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Net of issuance discounts and premiums. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bond and non-bonded capital lease obligations. Source: California Municipal Statistics, Inc. CITY OF SANTA MONICA, CALIFORNIA Direct and Overlapping Governmental Activities Debt As of June 30, 2015 172 TABLE 14 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 To t a l n e t d e b t a p p l i c a b l e t o l i m i t 7 4 , 8 7 6 , 3 0 2 $ 8 0 , 9 9 4 , 6 5 0 8 7 , 0 0 0 , 0 4 8 9 1 , 8 0 4 , 1 6 8 1 5 1 , 2 5 2 , 9 6 4 1 3 3 , 4 9 3 , 2 0 0 1 4 1 , 3 0 2 , 4 1 6 1 4 8 , 6 5 6 , 8 0 0 1 5 6 , 9 3 7 , 6 0 0 165,988,287 De b t l i m i t 3 , 0 6 5 , 5 3 7 , 4 0 0 2 , 9 0 8 , 7 1 6 , 0 8 2 2 , 7 2 0 , 2 2 3 , 1 4 2 2 , 5 9 4 , 3 1 9 , 6 7 4 2 , 5 3 1 , 3 0 5 , 3 5 2 2 , 5 4 5 , 1 2 9 , 9 0 8 2 , 4 4 9 , 4 2 8 , 9 7 0 2 , 2 1 4 , 5 0 2 , 3 7 0 2 , 0 6 8 , 0 1 8 , 9 7 2 1 , 8 7 7 , 3 2 4 , 6 6 3 Le g a l d e b t m a r g i n 2 , 9 9 0 , 6 6 1 , 0 9 8 2 , 8 2 7 , 7 2 1 , 4 3 2 2 , 6 3 3 , 2 2 3 , 0 9 4 2 , 5 0 2 , 5 1 5 , 5 0 6 2 , 3 8 0 , 0 5 2 , 3 8 8 2 , 4 1 1 , 6 3 6 , 7 0 8 2 , 3 0 8 , 1 2 6 , 5 5 4 2 , 0 6 5 , 8 4 5 , 5 7 0 1,911,081,372 1,711,336,376 To t a l n e t d e b t a p p l i c a b l e t o t h e l i m i t as a p e r c e n t a g e o f d e b t l i m i t 2 . 4 4 % 2 . 7 8 % 3 . 2 0 % 3 . 5 4 % 5 . 9 8 % 5 . 2 5 % 5 . 7 7 % 6 . 7 1 % 7 . 5 9 % 8 . 8 4 % Ne t a s s e s s e d v a l u e 2 9 , 0 4 6 , 3 4 1 , 0 0 0 Ad d : e x e m p t p r o p e r t y 1 , 6 0 9 , 0 3 3 , 0 0 0 To t a l g r o s s a s s e s s e d v a l u e 3 0 , 6 5 5 , 3 7 4 , 0 0 0 $ De b t l i m i t - 1 0 % o f t o t a l a s s e s s e d v a l u e ( 1 ) 3 , 0 6 5 , 5 3 7 , 4 0 0 Am o u n t o f d e b t a p p l i c a b l e t o d e b t l i m i t : To t a l b o n d e d d e b t 8 3 , 5 9 5 , 0 0 0 Le s s : As s e t s i n d e b t s e r v i c e f u n d s av a i l a b l e f o r p a y m e n t o f b o n d s 8 , 7 1 8 , 6 9 8 To t a l a m o u n t o f d e b t a p p l i c a b l e t o d e b t l i m i t 7 4 , 8 7 6 , 3 0 2 Le g a l d e b t m a r g i n 2 , 9 9 0 , 6 6 1 , 0 9 8 $ (1 ) P e r S e c t i o n 6 0 7 o f t h e C i t y C h a r t e r , b o n d e d i n d e b t e d n e s s o f t h e C i t y m a y n o t e x c e e d 1 0 % o f t o t a l a s s e s s e d v a l u a t i o n o f p r o p e r t y w i t h i n t h e C i t y , e x c l u s i v e o f a n y i n d e b t e d n e s s i n c u r r e d f o r t h e p u r p o s e o f w a t e r s u p p l y o r s e w e r s o r s t o r m d r a i n s . So u r c e : C i t y o f S a n t a M o n i c a F i n a n c e D e p a r t m e n t CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Co m p u t a t i o n o f L e g a l D e b t M a r g i n La s t T e n F i s c a l Y e a r s 17 3 TABLE 15 Direct Net revenue Gross operating available for revenues (1) expense (2) debt service Principal Interest Total Coverage (3) 20,166,164$ 10,535,135$ 9,631,029$ — $ 266,550$ 266,550$ 36.13 22,556,413 12,823,959 9,732,454 1,785,000 575,698 2,360,698 4.12 22,490,999 9,853,573 12,637,426 1,700,000 674,700 2,374,700 5.32 21,307,472 10,993,468 10,314,004 1,650,000 846,141 2,496,141 4.13 19,117,006 9,547,632 9,569,374 1,600,000 972,738 2,572,738 3.72 17,036,277 9,449,739 7,586,538 1,545,000 1,026,812 2,571,812 2.95 15,978,030 8,305,013 7,673,017 1,500,000 1,071,812 2,571,812 2.98 17,359,852 12,711,059 4,648,793 1,455,000 1,115,463 2,570,463 1.81 16,401,212 12,613,626 3,787,586 1,260,000 1,311,589 2,571,589 1.47 14,437,130 10,463,034 3,974,096 1,190,000 1,419,825 2,609,825 1.52 (1) (2) (3) On December 16, 2013 Moody's upgraded the underlying rating of the 2005 bonds to Aa1 from Aa2. On June 1, 2014, the City redeemed remaining balance $7,810,000 of Wastewater Enterprise Refunding Revenue Bonds 2005. year CITY OF SANTA MONICA, CALIFORNIA Wastewater Enterprise Revenue Bonds Coverage Last Ten Fiscal Years Fiscal Debt service requirement CUSIP 802475 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 Gross revenues included operating revenues plus nonoperating revenues and net interfund transfers through FY 2007-08. Starting in FY 2008-09 gross revenues included operating revenues plus operating transfers specifically related to wastewater operations. Excludes depreciation expense, write-off of disposed assets, and capital-related expenditures. Bond covenant requires a coverage ratio of 1.20 The Hyperion Project, Wastewater Enterprise Revenue Bonds were issued November 26, 1991 at an interest rate of 6.25% with ratings of A1 from Moody's Investors Service, Inc. and A+from Standard & Poor's Corporation. Debt service began in FY 1992-93. These bonds were refunded by the issuance of insured Wastewater Enterprise Revenue Bonds, 1993 Refunding Series on December 22, 1993 with an interest rate of 5.3084% with ratings of Aaa and AAA by Moody's Investors Services, Inc. and Standard & Poor's Corporation, respectively. The Refunding Bonds were insured by AMBAC Indemnity. On October 13, 2005 the City issued $20,305,000 of Wastewater Enterprise Refunding Revenue Bonds bearing interest from 3.00%to 5.00%to defease $21,535,000 of the outstanding 1993 Wastewater Enterprise Revenue Bonds, 1993 Refunding Series with ratings from Moody's Investor Services, Inc. of A1, Standard & Poor's Corporation of AA and Fitch Ratings of AAA. The Refunding Bonds are insured by Financial Guaranty Insurance Company. On April 16, 2010 Moody's upgraded the underlying rating on the Refunding bond to Aa2 and on November 17, 2008 Standard & Poor's Corporation upgraded the underlying rating to AAA. On May 30, 2012 the City issued $8,955,000 Wastewater Refunding Revenue Bonds Series 2012A at interest from 2.00%to 4.00%to defease $9,670,000 of the outstanding 1993 Wastewater Enterprise Revenue Bonds. Standard & Poor's Corporation rated AAA on the 2012A Refunding bond. Source: City of Santa Monica Finance Department 174 TABLE 16 Calendar year Population (1) 2015 93,283 **6.3 % 2014 92,185 $635,892 $48,425 7.1 2013 91,040 604,832 46,337 8.4 2012 90,223 575,044 44,423 8.4 2011 90,174 561,142 43,688 10.5 2010 92,703 565,365 42,784 10.3 2009 92,494 551,271 42,818 9.5 2008 91,439 552,450 42,916 5.5 2007 91,124 539,163 41,875 4.0 2006 90,750 505,197 39,011 4.2 * No data is available for 2015 as of publication date of CAFR Note: Data shown is the Metropolitan Statistical Area of Los Angeles-Long Beach-Santa Ana, CA. Data by City is not available. Source: (1) California Department of Finance (2) and (3) Bureau of Economic Analysis (4) State of California, Employment Development Department, Labor Market Information Division CITY OF SANTA MONICA, CALIFORNIA Demographic and Economic Statistics Last Ten Calendar Years Personal income (2) (millions) personal income (3) Per capita Unemployment rate (4) 175 TABLE 17 Employers Number of employees Rank Number of employees Rank Santa Monica-UCLA Hospital 2,212 1 2.57 % 1,300 5 1.77 % City of Santa Monica 2,004 2 2.32 2,146 2 2.92 Santa Monica College 1,850 3 2.15 2,357 1 3.20 Saint John's Hospital Medical Center 1,720 4 1.99 1,422 4 1.93 Santa Monica-Malibu Unified School District 1,457 5 1.69 1,650 3 2.24 RAND Corporation 827 6 0.96 862 7 1.17 Universal Music Group 736 7 0.85 — — — Treyarch Corp (Including Activision Blizzard) 692 8 0.80 800 8 1.09 ET Whitehall Santa Monica Partners LP 625 9 0.72 750 9 1.02 Lion's Gate Entertainment Corporation 610 10 0.71 — — — MTV Networks — — — 1,060 6 1.44 Symantec Corporation — — — 720 10 0.98 Total jobs provided by principal employers 12,733 13,067 Average total jobs in Santa Monica 86,221 73,544 Principal employers as percent of total jobs 14.77%17.77% Source: City of Santa Monica Economic Development Division, Housing and Economic Development Department Percentage of total City employment Percentage of total City employment CITY OF SANTA MONICA, CALIFORNIA Principal Employers Current Year and Nine Years Ago 2014-15 2005-06 176 TABLE 18 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Ge n e r a l g o v e r n m e n t ( 1 ) 2 6 5 . 7 23 2 . 9 23 0 . 7 23 8 . 6 22 1 . 7 22 2 . 7 21 7 . 0 19 1 . 6 186.1 179.7 Pu b l i c s a f e t y Po l i c e Sw o r n 22 1 . 0 21 6 . 0 21 6 . 0 20 9 . 0 21 6 . 0 21 6 . 0 21 6 . 0 21 6 . 0 216.0 216.0 No n - s w o r n 19 7 . 4 21 7 . 4 22 0 . 4 22 5 . 4 22 1 . 4 22 7 . 4 22 3 . 4 24 6 . 9 243.0 242.0 Fi r e Sw o r n 11 4 . 0 10 8 . 0 10 8 . 0 10 8 . 0 10 5 . 0 10 9 . 0 10 6 . 0 10 7 . 0 106.0 106.0 No n - s w o r n 15 . 8 21 . 0 21 . 0 21 . 0 22 . 0 19 . 0 11 . 0 27 . 3 29.6 26.9 Ge n e r a l s e r v i c e s 25 7 . 3 25 6 . 1 18 4 . 3 18 4 . 3 26 1 . 9 26 1 . 3 26 0 . 1 26 8 . 9 131.7 124.7 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s 15 3 . 7 15 1 . 9 23 1 . 1 23 1 . 1 15 1 . 9 15 2 . 8 14 8 . 5 14 5 . 4 228.3 218.8 Li b r a r y 11 1 . 0 11 4 . 8 10 6 . 1 10 6 . 1 10 7 . 1 10 7 . 3 10 7 . 3 10 7 . 1 107.1 105.4 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t 14 9 . 8 13 8 . 8 14 4 . 4 14 4 . 4 14 6 . 4 14 8 . 4 15 8 . 4 13 9 . 9 145.2 144.1 Be a c h r e c r e a t i o n 48 . 9 49 . 9 46 . 6 46 . 6 46 . 6 47 . 6 46 . 5 24 . 8 24.3 23.3 Wa t e r 46 . 0 46 . 0 46 . 0 46 . 0 47 . 0 47 . 0 47 . 0 52 . 2 52.2 52.2 Re s o u r c e R e c o v e r y & R e c y c l i n g 87 . 7 86 . 7 75 . 2 84 . 2 84 . 2 84 . 0 84 . 0 83 . 1 106.8 106.8 Pi e r 17 . 8 17 . 8 17 . 2 15 . 8 16 . 2 16 . 2 16 . 2 16 . 5 25.8 26.8 Wa s t e w a t e r 22 . 2 22 . 2 22 . 2 22 . 2 22 . 2 22 . 2 22 . 2 39 . 6 39.6 39.7 Ci v i c A u d i t o r i u m — — 1 1 . 0 30 . 3 34 . 4 34 . 4 34 . 4 35 . 0 35.0 35.0 Ai r p o r t 12 . 4 12 . 5 12 . 2 4. 0 12 . 2 12 . 2 12 . 2 12 . 4 12.3 11.3 Ce m e t e r y 7. 1 7. 1 12 . 1 12 . 1 12 . 1 11 . 1 10 . 1 10 . 2 9.5 9.5 Bi g B l u e B u s 43 6 . 0 43 5 . 5 41 9 . 0 41 9 . 0 41 3 . 7 41 8 . 7 41 7 . 7 44 1 . 9 441.9 441.9 Ve h i c l e m a n a g e m e n t 28 . 0 28 . 0 28 . 0 28 . 0 28 . 0 28 . 0 28 . 0 28 . 8 24.8 24.8 Se l f i n s u r a n c e - w o r k e r s ' c o m p e n s a t i o n 12 . 0 12 . 0 14 . 0 14 . 0 12 . 0 12 . 0 12 . 0 12 . 1 12.1 12.1 To t a l a l l f u n d s 2, 2 0 3 . 8 2, 1 7 4 . 6 2, 1 6 5 . 5 2, 1 9 0 . 1 2, 1 8 2 . 0 2, 1 9 7 . 3 2, 1 7 8 . 0 2, 2 0 6 . 7 2,177.3 2,147.0 No t e : I n c l u d e s p e r m a n e n t a n d t e m p o r a r y e m p l o y e e s ( 2 , 0 8 0 h o u r s = 1 f u l l - t i m e p o s i t i o n ) . (1 ) P e r m a n e n t s t a f f i n g i n c r e a s e r e f l e c t s t r a n s f e r s f r o m t h e F i r e a n d P o l i c e D e p a r t m e n t s , a n d n e w p e r s o n n e l t o f u l l y s t a f f t h e j o i n t c o m m u n i c a t i o n s c e n t e r . So u r c e : C i t y o f S a n t a M o n i c a B u d g e t CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Fu l l - T i m e E q u i v a l e n t C i t y G o v e r n m e n t E m p l o y e e s b y F u n c t i o n / P r o g r a m La s t T e n F i s c a l Y e a r s Fu n c t i o n / P r o g r a m 17 7 TABLE 19 Fu n c t i o n / p r o g r a m 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Ge n e r a l g o v e r n m e n t : El e c t r o n i c r e q u e s t s f o r g o v e r n m e n t i n f o r m a t i o n 13 , 4 1 0 , 2 8 3 1 2 , 4 2 0 , 7 7 0 1 2 , 1 7 5 , 1 4 3 1 6 , 0 0 0 , 0 0 0 1 6 , 0 0 0 , 0 0 0 1 5 , 9 0 0 , 0 0 0 1 5 , 7 0 0 , 0 0 0 2 4 , 6 3 1 , 2 2 3 2 0 , 9 9 9 , 3 6 3 1 4 , 2 1 1 , 3 1 9 Ho u r s o f l i v e p u b l i c m e e t i n g c o v e r a g e 31 9 2 8 4 3 3 0 30 0 3 0 0 3 0 0 2 1 6 4 4 4 3 3 2 3 1 0 Pu b l i c s a f e t y : Nu m b e r o f e m e r g e n c y r e s p o n s e i n c i d e n t s 14 , 6 2 9 1 3 , 6 3 7 1 3 , 5 4 0 1 2 , 8 4 2 1 2 , 0 0 0 1 2 , 0 0 5 1 1 , 6 9 0 1 1 , 5 5 3 1 2 , 5 5 1 1 1 , 4 3 5 Nu m b e r o f i n s p e c t i o n s 8, 1 1 9 9 , 0 3 1 8 , 7 0 6 9 , 5 4 9 8 , 5 4 9 7 , 2 3 5 8 , 9 1 8 7 , 0 5 3 6 , 5 6 2 7 , 1 2 5 Ca l l s t o P o l i c e D e p a r t m e n t f o r s e r v i c e 13 3 , 5 1 6 1 2 8 , 3 2 3 1 2 0 , 3 2 0 1 0 5 , 6 4 2 1 0 4 , 0 9 7 1 0 9 , 0 4 5 1 0 7 , 6 0 4 1 0 6 , 4 9 7 1 0 9 , 3 2 8 1 0 5 , 3 0 8 Po l i c e r e p o r t s i s s u e d 13 , 9 8 4 1 3 , 9 8 3 1 3 , 7 0 8 1 3 , 0 8 6 1 3 , 3 7 7 1 3 , 9 9 5 1 4 , 3 7 3 1 4 , 3 4 6 1 5 , 3 3 4 1 4 , 6 1 8 Nu m b e r o f c r i m e s r e c o r d e d 8, 5 0 0 8 , 7 4 4 8 , 9 8 6 8 , 5 7 9 8 , 5 8 1 8 , 7 9 3 9 , 5 6 1 9 , 6 0 4 9 , 9 0 2 9 , 7 6 1 Ge n e r a l s e r v i c e s : Nu m b e r o f s q u a r e f e e t o f s i d e w a l k s r e p a i r e d 10 , 3 5 9 6 , 0 2 5 3 , 2 7 9 4 0 , 0 0 0 4 0 , 0 0 0 3 3 , 6 7 0 1 9 0 , 0 0 0 1 4 0 , 0 0 0 1 2 7 , 1 7 0 9 7 , 5 2 2 Nu m b e r o f g r a f f i t i r e m o v a l s p e r f o r m e d 37 , 9 4 0 3 7 , 9 4 8 3 4 , 2 8 9 2 0 , 0 0 0 2 0 , 0 0 0 1 9 , 5 0 0 1 8 , 4 8 1 2 5 , 2 5 1 2 2 , 8 6 5 1 1 , 7 8 0 Fe e t o f s e w e r m a i n s c l e a n e d 2, 2 0 0 , 8 1 0 1 , 9 3 3 , 5 6 0 2 , 3 2 8 , 8 7 4 2 , 3 1 6 , 7 5 7 1 , 7 5 1 , 7 1 7 1 , 7 6 8 , 0 2 4 1 , 5 3 2 , 1 8 4 7 8 3 , 9 3 2 1 , 1 7 9 , 7 5 9 6 4 7 , 8 4 1 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Nu m b e r o f c a r s p a r k e d i n b e a c h l o t s 2, 5 8 0 , 2 2 5 2 , 5 6 8 , 7 3 3 2 , 1 6 3 , 1 8 6 1 , 5 0 0 , 0 0 0 1 , 5 0 0 , 0 0 0 1 , 7 9 8 , 0 0 0 1 , 4 5 0 , 0 0 0 1 , 6 4 0 , 7 3 3 1 , 6 3 5 , 7 0 7 1 , 5 7 2 , 3 7 4 Se n i o r s e r v i c e s m e a l s s e r v e d 48 , 2 5 3 4 3 , 0 2 0 6 4 , 7 1 1 5 6 , 2 3 2 5 2 , 4 4 0 4 9 , 7 8 6 4 2 , 4 5 9 3 0 , 9 1 7 3 0 , 7 2 1 2 8 , 6 0 9 Nu m b e r o f l o w i n c o m e p e r s o n s r e c e i v i n g p r i m a r y h e a l t h c a r e 3, 0 8 9 3 , 5 1 9 3 , 5 6 8 4 , 1 6 4 4 , 4 5 3 3 , 9 4 2 4 , 3 4 4 3 , 6 5 0 3 , 2 3 1 3 , 3 4 5 Nu m b e r o f y o u t h r e g u l a r l y a t t e n d i n g h o m e w o r k a s s i s t a n c e p r o g r a m s 62 4 5 8 3 4 6 9 46 6 4 5 8 4 2 3 5 5 8 5 4 7 5 1 1 5 3 4 Li b r a r y : Li b r a r y v i s i t o r s 1, 2 6 2 , 7 0 8 1 , 2 6 5 , 2 8 6 1 , 3 7 3 , 6 6 3 1 , 5 0 0 , 0 0 0 1 , 5 0 0 , 0 0 0 1 , 5 0 0 , 0 0 0 1 , 3 0 0 , 0 0 0 1 , 3 2 8 , 6 1 4 1 , 2 7 3 , 6 7 2 9 3 8 , 0 6 7 Ma t e r i a l s u s e d 1, 9 9 8 , 8 6 9 2 , 0 2 1 , 9 3 6 2 , 2 2 5 , 5 7 1 2 , 1 0 0 , 0 0 0 2 , 1 0 0 , 0 0 0 2 , 1 0 0 , 0 0 0 1 , 9 0 0 , 0 0 0 1 , 7 9 5 , 8 4 4 1 , 6 0 7 , 5 3 4 1 , 2 0 2 , 7 5 4 Pu b l i c a c c e s s c o m p u t e r s e s s i o n s 18 2 , 6 5 5 2 1 5 , 9 0 7 2 7 1 , 6 8 0 3 0 0 , 0 0 0 3 0 0 , 0 0 0 3 0 0 , 0 0 0 2 9 0 , 0 0 0 2 8 6 , 0 7 7 2 7 4 , 2 3 9 1 4 5 , 8 2 4 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Bu i l d i n g a n d S a f e t y p l a n c h e c k s c o m p l e t e d 3, 0 8 0 2 , 3 6 6 1 , 9 9 8 1 , 5 0 0 1 , 5 0 0 1 , 7 1 2 1 , 7 9 8 1 , 7 8 6 1 , 6 0 1 1 , 9 7 5 Bu i l d i n g i n s p e c t i o n s p e r f o r m e d 20 , 6 9 0 2 0 , 7 3 2 2 1 , 5 7 6 1 6 , 0 0 0 1 6 , 0 0 0 1 3 , 6 0 8 1 8 , 1 0 3 1 7 , 6 7 1 1 7 , 1 2 0 1 7 , 7 6 5 Tr a n s p o r t a t i o n M a n a g e m e n t s p l a n c h e c k s c o m p l e t e d 74 8 8 3 9 4 6 5 50 0 5 0 0 4 4 4 7 5 0 5 3 1 5 7 3 5 7 2 Re s i d e n t p a r k i n g p a s s e s s o l d 56 , 3 5 6 5 1 , 6 7 4 7 6 , 0 0 0 7 3 , 0 0 0 7 0 , 0 0 0 6 0 , 0 0 0 3 9 , 0 0 0 4 5 , 6 5 7 4 2 , 6 4 5 3 7 , 0 2 8 Nu m b e r o f t r a f f i c s i g n s i n s t a l l e d , r e p l a c e d , r e p a i r e d , o r r e m o v e d 2, 0 7 9 2 , 4 1 7 2 , 8 5 9 5 , 6 0 0 5 , 6 0 0 4 , 6 0 0 5 , 6 0 0 5 , 6 3 3 5 , 4 4 7 1 0 , 6 4 7 Nu m b e r o f p a r k i n g m e t e r s i n s t a l l e d , r e p l a c e d , r e p a i r e d , o r r e m o v e d 5 , 8 7 5 5 , 8 7 4 6 , 1 0 0 2 3 , 0 0 0 2 3 , 0 0 0 4 9 , 0 0 0 4 5 , 2 5 7 4 5 , 5 3 2 4 2 , 6 4 5 2 7 , 1 8 2 Wa t e r : Nu m b e r o f d i r e c t c u s t o m e r a c c o u n t s 17 , 7 9 8 1 7 , 7 6 0 1 7 , 7 0 5 1 7 , 9 0 2 1 7 , 8 2 3 1 7 , 7 0 9 1 7 , 3 5 6 1 7 , 2 7 2 1 7 , 1 7 5 1 7 , 1 7 1 Wa t e r s o l d t o d i r e c t c u s t o m e r s i n w h o l e a c r e f e e t 12 , 3 2 3 1 3 , 3 4 4 1 5 , 1 4 7 1 1 , 9 9 6 1 1 , 7 7 9 1 2 , 6 2 9 1 2 , 8 7 9 1 2 , 9 7 5 1 3 , 3 7 8 1 2 , 7 7 5 Ai r p o r t : Nu m b e r o f t e n a n t a i r c r a f t 32 5 2 7 4 4 2 0 42 0 4 2 0 4 2 0 4 2 0 4 2 0 4 2 0 4 2 0 No i s e o r d i n a n c e v i o l a t i o n s i s s u e d 11 8 1 5 3 1 6 0 14 2 1 4 8 1 5 4 2 1 0 2 4 4 2 2 3 2 4 2 Bi g B l u e B u s : Re v e n u e M i l e s 4, 7 3 4 , 2 0 9 4 , 8 7 0 , 6 5 5 5 , 0 1 9 , 9 6 5 5 , 2 7 8 , 8 5 6 5 , 2 6 7 , 8 0 9 5 , 3 5 2 , 3 2 1 5 , 3 1 6 , 2 2 8 5 , 1 1 4 , 1 6 7 5 , 0 1 6 , 8 2 2 5 , 0 5 3 , 8 9 1 Fa r e b o x r e v e n u e ( i n m i l l i o n s ) 13 . 3 6 1 3 . 6 8 1 4 . 0 9 1 1 . 8 6 1 1 . 7 4 1 1 . 6 3 1 1 . 5 1 1 0 . 9 1 9 . 7 2 9 . 8 0 To t a l p a s s e n g e r t r i p s ( i n m i l l i o n s ) 18 . 7 1 8 . 8 1 9 . 3 2 2 . 0 2 2 . 0 2 2 . 0 2 2 . 0 2 1 . 0 2 1 . 8 2 2 . 0 Nu m b e r o f c u s t o m e r r e l a t i o n s p h o n e c a l l s 56 , 9 9 5 6 4 , 5 2 5 6 9 , 0 7 5 7 3 , 5 8 6 7 3 , 4 4 7 6 9 , 7 3 8 7 1 , 8 6 8 7 4 , 1 3 1 6 0 , 0 9 6 6 0 , 1 5 3 To t a l n u m b e r o f c h a r t e r s 0 3 3 90 3 4 9 2 0 2 2 2 4 5 5 4 1 , 1 2 1 1 , 9 1 8 So u r c e s : V a r i o u s C i t y d e p a r t m e n t s . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Op e r a t i n g I n d i c a t o r s b y F u n c t i o n / P r o g r a m La s t T e n F i s c a l Y e a r s No t e : S t a t i s t i c a l T a b l e i m p l e m e n t e d i n F Y 0 5 - 0 6 p e r G A S B S t a t e m e n t N o . 4 4 . D a t a f r o m p r e v i o u s f i s c a l y e a r s n o t s h o w n . 17 8 TABLE 20 20 1 4 - 1 5 2 0 1 3 - 1 4 2 0 1 2 - 1 3 2 0 1 1 - 1 2 2 0 1 0 - 1 1 2 0 0 9 - 1 0 2 0 0 8 - 0 9 2 0 0 7 - 0 8 2 0 0 6 - 0 7 2 0 0 5 - 0 6 Pu b l i c s a f e t y : Nu m b e r o f p o l i c e v e h i c l e s 2 2 0 2 2 3 2 4 1 2 3 9 2 1 5 2 1 5 2 4 4 2 3 2 2 1 3 1 7 4 Nu m b e r o f f i r e v e h i c l e s 6 8 6 4 5 6 5 2 5 4 5 7 5 8 5 8 6 0 5 5 N u m b e r o f f i r e s t a t i o n s 4 4 5 5 5 5 5 5 5 5 Nu m b e r o f p o l i c e s u b s t a t i o n s i n c l u d i n g P u b l i c S a f e t y F a c i l i t y 3 3 4 44 4 4 4 4 4 Ge n e r a l s e r v i c e s : Sq u a r e f o o t a g e o f a s p h a l t p a v e d s t r e e t s 3 0 , 4 0 3 , 7 8 5 3 0 , 4 0 3 , 7 8 5 3 0 , 4 0 3 , 7 8 5 3 0 , 4 0 3 , 7 8 5 3 0 , 3 8 5 , 1 1 5 3 0 , 5 8 5 , 1 1 5 3 0 , 3 8 5 , 1 1 5 3 0 , 4 2 1 , 8 4 1 3 0 , 4 4 3 , 4 41 30,443,441 Sq u a r e f o o t a g e o f c o n c r e t e p a v e d s t r e e t s 1 , 1 2 8 , 0 3 4 1 , 1 2 8 , 0 3 4 1 , 1 0 6 , 8 3 4 1 , 1 0 6 , 8 3 4 1 , 1 2 5 , 5 0 4 1 , 1 2 5 , 5 0 4 1 , 1 2 5 , 5 0 4 1 , 0 8 8 , 7 7 8 1 , 0 6 7 , 1 7 8 1 , 0 6 7 , 178 Sq u a r e f o o t a g e o f s i d e w a l k s 8 , 4 0 3 , 4 2 8 8 , 4 0 3 , 4 2 8 8 , 3 8 6 , 9 9 8 8 , 3 8 6 , 9 9 8 8 , 3 8 6 , 9 9 8 8 , 3 8 6 , 9 9 8 8 , 3 8 6 , 9 9 8 8 , 3 8 6 , 1 8 3 8 , 3 8 6 , 1 8 3 8 , 3 8 6 , 1 8 3 Sq u a r e f o o t a g e o f c u r b s a n d g u t t e r s 1 , 9 3 0 , 2 1 4 1 , 9 3 0 , 2 1 4 1 , 9 2 7 , 5 6 4 1 , 9 1 7 , 7 1 4 1 , 8 8 3 , 7 1 4 1 , 8 3 4 , 1 6 6 1 , 7 7 6 , 0 8 9 1 , 7 0 2 , 0 7 1 1 , 6 6 3 , 2 7 1 1 , 6 6 3 , 2 7 1 Cu l t u r a l a n d r e c r e a t i o n s e r v i c e s : Nu m b e r o f b e a c h p a r k i n g l o t s 1 6 ( 1 ) 1 7 1 7 1 7 1 7 1 7 1 6 1 6 1 6 1 6 Nu m b e r o f p a r k s 2 9 2 9 2 9 2 7 2 7 2 6 2 6 2 6 2 4 2 3 Nu m b e r o f s w i m c e n t e r s 2 2 2 2 2 2 2 1 1 1 Li b r a r y : Nu m b e r o f f a c i l i t i e s : m a i n a n d b r a n c h e s 5 5 4 4 4 4 4 4 4 4 Ho u s i n g a n d c o m m u n i t y d e v e l o p m e n t : Do w n t o w n s t r u c t u r e v i s i t o r s 6 , 4 0 5 , 6 3 6 ( 2 ) 6 , 4 5 5 , 6 0 2 6 , 7 9 0 , 0 5 8 6 , 6 5 9 , 2 4 6 5 , 9 5 8 , 5 9 3 4 , 0 7 8 , 0 6 2 3, 9 2 8 , 9 0 0 3 , 7 6 8 , 7 4 6 3 , 8 1 7 , 5 5 0 3 , 7 9 1 , 6 4 6 Wa t e r : Nu m b e r o f f e e t o f w a t e r m a i n i n s t a l l e d 10 , 4 6 5 ( 3 ) 9 , 5 1 0 9 , 5 1 0 1 2 , 3 8 4 — — — 2 2 , 6 6 0 2 2 , 6 6 0 2 2 , 6 6 0 Wa t e r m a i n s y s t e m ( i n m i l e s ) 20 5 20 5 2 0 5 20 5 2 0 5 2 0 5 2 0 5 2 0 5 2 0 5 2 0 5 R e c l a i m e d w a t e r m a i n s y s t e m ( i n m i l e s ) 5 (4 ) 5 4 4 4 4 4 4 4 4 Wa s t e w a t e r : Ci t y s e w a g e f l o w i n m i l l i o n g a l l o n s / d a y 13 . 9 12 . 2 1 1 . 4 1 1 . 4 1 1 . 3 1 0 . 6 1 3 . 3 1 0 . 4 1 2 . 3 1 2 . 8 Se w e r m a i n s y s t e m ( i n m i l e s ) 15 1 15 1 1 5 1 15 1 1 5 2 1 5 2 1 5 2 1 5 2 1 5 2 1 5 2 St o r m w a t e r : Da i l y g a l l o n s t r e a t e d f o r r e c y c l i n g b y S M U R R F 17 0 , 0 0 0 1 0 8 , 0 0 0 1 2 3 , 0 0 0 1 2 2 , 8 9 0 3 3 0 , 0 0 0 2 7 5 , 0 0 0 2 7 5 , 0 0 0 3 3 0 , 0 0 0 3 3 0 , 0 0 0 3 3 0 , 0 0 0 St o r m d r a i n s y s t e m ( i n m i l e s ) 59 59 59 59 58 58 58 5 8 5 8 5 8 Ai r p o r t : Ai r c r a f t o p e r a t i o n s ( d e p a r t u r e s a n d a r r i v a l s ) 84 , 6 3 3 85 , 0 5 2 1 0 2 , 1 0 9 1 0 5 , 0 2 6 1 0 6 , 5 2 1 1 1 2 , 2 1 2 1 1 7 , 2 5 0 1 3 6 , 4 8 5 1 3 6 , 2 7 0 1 3 5 , 7 6 5 Bi g B l u e B u s : Nu m b e r o f b u s e s 18 8 20 1 1 9 2 20 0 2 1 4 1 9 9 1 9 7 2 0 2 2 0 2 2 1 1 (1 ) 1 6 5 0 A p p i a n i s r e s i d e n t a l p a r k i n g o n l y a n d h a s b e e n r e m o v e d f r o m c o u n t . (2 ) I n c l u d e s C i v i c a n d L i b r a r y . (3 ) 9 , 3 0 5 L i n e a r F e e t o f p o t a b l e w a t e r m a i n s a n d 1 , 1 6 0 L i n e a r F e e t T U R ( l a n d s c a p i n g w a t e r ) i n s t a l l e d f o r F Y 1 4 - 1 5 (4 ) 4 . 5 a c t u a l ; r o u n d i n g u p c o n s i s t e n t w i t h l a s t y e a r . Fu n c t i o n / p r o g r a m So u r c e s : V a r i o u s C i t y d e p a r t m e n t s . CI T Y O F S A N T A M O N I C A , C A L I F O R N I A Ca p i t a l A s s e t S t a t i s t i c s b y F u n c t i o n / P r o g r a m La s t T e n F i s c a l Y e a r s No t e : S t a t i s t i c a l T a b l e i m p l e m e n t e d i n F Y 0 5 - 0 6 p e r G A S B S t a t e m e n t N o . 4 4 . D a t a f r o m p r e v i o u s f i s c a l y e a r s n o t s h o w n . 17 9 THIS PAGE INTENTIONALLY LEFT BLANK 180 © Tim Street Porter Printed on Recycled Materials www.mgocpa.com Certified Public Accountants Sacramento Walnut Creek Oakland Los Angeles Century City Newport Beach San Diego Macias Gini & O’Connell LLP 777 S. Figueroa Street, Suite 2500 Los Angeles, CA 90017 1 December 29, 2015 To the Honorable City Council City of Santa Monica, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Santa Monica (City) for the fiscal year ended June 30, 2015. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and OMB Circular A-133, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated September 23, 2015. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1B, the City changed accounting principles related to its defined benefit pension plan by implementing Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an Amendment of GASB Statement No. 68 in 2015. The implementation of these statements resulted in a restatement of net position as of July 1, 2014, in the amount of $417.5 million. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the governmental activities’ and business-type activities’ financial statements were: Management’s estimate of the depreciation is based on the estimates useful lives of capital assets using the straight-line method. We evaluated the key factors and assumptions used to develop the depreciation expense in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the claims payable is based on reports prepared by third party administrators, actuarial valuations, and the reports prepared by management. We evaluated the key factors and assumptions used to develop the claims payable in determining that it is reasonable in relation to the financial statements taken as a whole. 2 Management’s estimates of employer and employee contribution requirements, the net pension liability, deferred outflows of resources and deferred inflows of resources for each of the City’s three pension plans, and other postemployment benefits obligation is based on reports prepared by third party administrators and actuarial valuations. We evaluated the assumptions and methods used to measure these estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Management’s estimate of the pollution remediation obligation is based on expected outlays to be incurred to settle those liabilities. We evaluated the key factors and assumptions used to develop the pollution remediation obligation in determining that it is reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significant to financial statement users. The most sensitive disclosures affecting the financial statements were: Note 16 -- Employee Benefit Programs: This note identified the net pension liability, pension expenses, and deferred outflows/inflows of resources related to pension for each of the City’s three pension plans. Note 17 – Successor Agency Trust Fund for Assets of Former Redevelopment Agency: This note discussed the impact of Assembly Bill (AB) 1X26, which provides for the dissolution of all redevelopment agencies in the State of California, on the City as well as the subsequent events that occurred as a result of the dissolution. 1) Settlement with the DOF- On October 28, 2013, the Successor Agency entered into a settlement agreement with the DOF, the State Controller and Board of Equalization (collectively “the State”) for $56,784,229. The agreement resolved the lawsuit by the City and the Successor Agency against the State relating to the State’s implementation of AB 1X26 and AB 1484. The agreement called for the Successor Agency’s payment of $56,784,229 to the County Auditor- Controller, payable in equal installments due January 15, 2014, July 15, 2014, January 15, 2015, and July 15, 2015. The Successor Agency accelerated the payment schedule and all remaining payments were made on of January 14, 2015. As such, the DOF issued a finding of completion to the Successor Agency on January 16, 2015. 2) State Controller Asset Transfer Review- On June 30, 2015, the State Controller’s Office issued its final finding on its review of asset transfers. The findings identified two transfers that purportedly did not comply with the redevelopment dissolution statute. Although the City disagrees with the findings, the Successor Agency has recorded a receivable from the City in the amount of $19,149,679 as of June 30, 2015. As of the date of the audit report, the State has not provided any further direction to the Successor Agency as to the final resolution of this item. Note 19 – Prior Period Adjustments: This note discusses the restatement of beginning net position as of June 30, 2015 due to changes in accounting principle, correction of errors, and reclassifications. The financial statement disclosures are neutral, consistent, and clear. 3 Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to each opinion unit’s financial statements taken as a whole. The following material misstatements detected as a result of the audit procedures were corrected by management:  Adjustment in the amount of $11.9 million to transfer capital assets from the Parking Authority Nonmajor Enterprise Fund to Governmental Activities for assets owned and maintained by the City.  Adjustment to reclassify assigned fund balance in the Special Revenue Source Fund in the amount of $14.8 million to $10.0 million of committed fund balance and $4.8 million of restricted fund balance. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 29, 2015. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 4 Other Matters We applied certain limited procedures to management’s discussion and analysis, the schedule of changes in the net pension liability and related ratios, the schedule of contributions – pension plans, and other postemployment benefit funding information, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund statements and schedules which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory section and statistical section, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the use of City Council and management of the City of Santa Monica and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Macias Gini & O’Connell LLP Los Angeles, California CITY OF SANTA MONICA Summary of Uncorrected Misstatements-Government Wide June 20, 2015 Description Debit Credit 1 Accounts Receivable 3,338,338$ Transient Occupancy Tax 3,338,338$ Transient Occupancy Tax 3,126,348 Net Position at Beginning of Year 3,126,348 To reclass June 2014 Transient Occupancy Tax revenues reported in FY 2014- 15 to FY 2013-14 and accrue June 2015 Transient Occupancy Tax revenues into FY 2014-15. Net effect on FY 2014-15 net position would be an increase of $211,990. 2 Machinery and Equipment 1,616,285 Construction in Progress 1,616,285 Housing and Community Development Expenses 26,938 Accumulated Depreciation 26,938 To record 2 of 9 completed elevators from construction in progress to machinery and equipment and related depreciation. Net decrease to FY 2014- 15 net position would be $26,938. 3 Charges for Services 11,049,497 General Government Expenses 11,049,497 To eliminate the impact of interfund transactions in the government wide statement. The City records revenue and expense versus a decrease to expense. No impact on ending FY 2014-15 net position. 4 Pier Expenses 192,038 Big Blue Bus Expenses 380,818 Transfers Out 572,856 To reclassify FY 2014-15 transfers out between governmental and business- type activities as expenses as they were related to interfund reimbursements. No impact on ending FY 2014-15 net position. Business-Type Activities Governmental Activities 5 CITY OF SANTA MONICA Summary of Uncorrected Misstatements-Fund Level June 30, 2015 Description Debit Credit 1 Accounts Receivable 3,338,338$ Other Taxes 3,338,338$ Other Taxes 3,126,348 Fund Balance at Beginning of Year 3,126,348 To reclass June 2014 Transient Occupancy Tax revenues reported in FY 2014- 15 to FY 2013-14 and accrue June 2015 Transient Occupancy Tax revenues into FY 2014-15. Net effect on FY 2014-15 fund balance would be an increase of $211,990. 2 Transfers In 1,542,618 Cultural and Recreation Services expenditure 525,184 Housing and Community Development expenditure 1,017,434 3 Charges for Services 11,049,497 General Government expenditure 11,049,497 4 Housing and Community Development expenditure 290,020 Transfers Out 290,020 5 Cash 292,790 Liabilities Payable from Restricted Assets - Deposits 292,790 To record deposits payable to match deposit records as of June 30, 2015. No impact on ending FY 2014-15 net position. 6 Repairs and Maintenance expense 99,493 Personnel Services expense 281,325 Transfers Out 380,818 To reclassify FY 2014-15 transfers out as expenditures as they were related to interfund reimbursements. No impact on ending FY 2014-15 fund balance. To reclassify FY 2014-15 transfers in as a reduction to expenditures since they were related to interfund reimbursements. No impact on ending FY 2014- 15 fund balance. Big Blue Bus To reclassify FY 2014-15 transfers out as expenses as they were related to interfund reimbursements. No impact on ending FY 2014-15 net position. General Fund Resource Recovery and Recycling Special Revenue Source To reclassify reimbursements received from other funds related to indirect costs to a reduction in general fund expenditures. The City records revenue versus a decrease to expenditure. No impact on ending FY 2014-15 fund balance. 6 CITY OF SANTA MONICA Summary of Uncorrected Misstatements-Fund Level (Continued) June 30, 2015 Description Debit Credit 7 Cultural and Recreation Services expenditure 599,384 Housing and Community Development expenditure 408,841 Transfers Out 1,008,225 To reclassify FY 2014-15 transfers out as expenditures as they were related to interfund reimbursements. No impact on ending FY 2014-15 fund balance. Aggregated Remaining 7