SR 04-26-2022 3B
City Council
Report
City Council Meeting: April 26, 2022
Agenda Item: 3.B
1 of 17
To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department
Subject: Present Annual Comprehensive Financial Report for Year Ended June 30,
2021
Recommended Action
Staff recommends that the City Council receive and file the City’s Annual
Comprehensive Financial Report (ACFR), the Auditors’ Letter to Council, and the
Independent Auditors’ Report on Internal Control Over Financial Reporting and on
Compliance with Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards for the City’s financial statements for
the fiscal year ended June 30, 2021.
Executive Summary
The Annual Comprehensive Financial Report (ACFR) communicates the City’s financial
condition and activity in a transparent and organized manner and in compliance with
accounting and financial reporting standards established by the Governmental
Accounting Standards Board (GASB). 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 ACFR is available at the City Clerk’s office and ACFRs dating back to 2005
are available on the City’s Finance website at: https://finance.smgov.net/budgets-
reports/annual#/.
This document is prepared annually by Finance staff and audited by the City’s
independent audit firm, Lance, Soll & Lunghard (LSL), CPAs, and presented to the Audit
Subcommittee and the full Council for receipt and filing. The independent auditors’
3.B
Packet Pg. 313
2 of 17
unmodified report communicates that the ACFR, and audited information within, fairly
present the City’s financial position for the fiscal year ended June 30, 2021. This audit
is performed in compliance with City Charter requirements. The City of Santa Monica
has received an unmodified audit report for more than three decades and has been
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 ACFR for 37 consecutive years, since it began participating in the program. To make
the ACFR more transparent, staff has provided an explanation for key financial
performance indicators shown in the report.
An attached report on the City’s internal control over financial reporting and compliance
notes no instances of non-compliance. An additional attached submittal letter states
that the City’s independent auditors encountered no difficulties and had no
disagreements with management during the audit. If the auditors identified any
adjustments that management elected not to adjust in the financial statements, they
would be noted on the report under Corrected and Uncorrected Misstatements. There
were none noted for FY 2020-21.
This year, COVID-19 once again presented unique challenges, including devastating
economic losses as a result of the global economic shutdown and worldwide health
crisis. The result of the City’s financial challenges and related adjustments in response
to the pandemic are detailed throughout the financial statements, schedules and notes
included in the ACFR, including a COVID-19 pandemic note detailing key dates and
funding received.
Typically, a portion of each audit is performed outside of City facilities, however this
year’s entire audit was conducted remotely, with both City staff and external audit staff
working off site. Requested files were shared on a secured site and the City’s current
web based financial system, Tyler Munis, provided remote access to both the audit
team and Finance staff. Financial staff resources shifted to the emergency operations
of the City and cuts made to reporting staff resulted in a slight delay in the ACFR’s
publication.
3.B
Packet Pg. 314
3 of 17
Santa Monica has long relied on conservative fiscal assumptions to plan for the future,
with two-year operating budgets and five-year financial forecasts and capital plans and
continuous review and refinement of fiscal policies and processes. This careful planning
allowed the City to quickly reposition itself in response to the COVID-19 pandemic.
Beginning in mid-March 2020, with the initial State and County Stay at Home Orders,
the public health emergency changed how, and whether, the City could operate
programs and facilities. These Health Officer orders resulted in protracted closures and
contractions in services, and the financial impact of these previous restrictions
continues to result in reduced services today. The COVID-19 pandemic ravaged most of
the City’s revenue streams, with the majority of the impact in the City’s General Fund,
the fund making up two-thirds of the City’s overall budget and supporting public safety,
libraries, streets, recreation, and funding to the School District. Cities like Santa Monica,
with strong tourism, retail and entertainment amenities, were hit the hardest. Santa
Monica’s economy has been and will continue to be significantly impacted by the
COVID-19 pandemic.
The FY 2020-21 Adopted Budget reflected dramatically restructured and reduced
operations to meet the public health and fiscal challenges. In addition, $117 million in
funding from deferred or reduced capital projects, economic uncertainty, contingency
and other reserves, was appropriated or set aside to balance the budget. Council also
authorized staff to temporarily suspend or defer discretionary transfers to the Housing
Trust Fund for affordable housing uses per a November 2016 voter-approved advisory
measure, and the allocation of resources to address the City’s unfunded pension and
other post-employment benefit liabilities. These measures enabled the City to maintain
essential and emergency operations during the pandemic while preserving the City’s
financial resilience to the greatest extent possible. The receipt of American Rescue Plan
Act (ARPA) funding also contributed to maintaining City operations. These funds,
signed into law by President Biden in March 2021, provided $350 billion in direct aid to
state and local government through the Coronavirus Local Fiscal Recovery Fund
(CLFRF). The City received $14.285 million of its $28.57 million allocation in May 2021;
the remaining $14.285 million will be received in May 2022. The funds were used under
3.B
Packet Pg. 315
4 of 17
the provision of lost revenue to provide government services. While this funding is
welcome, it is disproportionate to the City’s revenue losses when compared to most
other cities and states.
The Statement of Net Position, similar to a balance sheet, reports total assets and
liabilities of the City. The total net position of the City for all activities was $1,386.1
million at June 30, 2021, compared to $1,520.1 million at June 30, 2020 as restated,
which is a decrease of $134.0 million or 8.8%. The net position for business-type
activities decreased $67.1 million and the net position for governmental activities
decreased $66.9 million.
In comparison to FY 2019-20, the ending General Fund balance for FY 2020-21
decreased by $44.0 million, to $180.9 million, primarily due to the decrease in revenues
as a result of the global COVID-19 pandemic. As noted above, the City’s strong retail
and hospitality sector was particularly hard hit, resulting in significant declines in
Transient Occupancy and Sales Taxes and in parking-related revenue. Capital
spending on projects such as the City Yards Modernization project also contributed to
the lower fund balance. However, the City issued lease revenue bonds in FY 2021-22
netting $70.0 million to fund the City Yards Modernization project, including a portion
that will reimburse the General Fund for capital expenses already incurred. Lastly, the
General Fund transferred funds to the General Liability Self-Insurance Fund to fund a
large settlement.
The City’s three pension plans are approximately 77% funded with a combined
unfunded long-term actuarial liability of approximately $481 million. All pension figures
presented in the ACFR are based on California Public Employees’ Retirement System
(CalPERS) GASB 68 valuations that have a measurement date of June 30, 2020.
These valuations are used for financial reporting purposes only and are separate from
the CalPERS funding valuations that are used to determine the City’s annual
contribution requirements.
3.B
Packet Pg. 316
5 of 17
Council established an Audit Subcommittee in 2015 to oversee the work of the City’s
auditors and on February 28, 2017, Council directed staff to present the ACFR to the
Audit Subcommittee of the City Council for a detailed review before presenting the
report to the Council as a Consent Calendar item. The Subcommittee has received the
annual ACFR report which included details of the audit process and the financial
reports, a presentation by the independent auditors, and an opportunity for
Subcommittee members to ask questions of the auditors and staff.
Background
As required by the City Charter, financial statements are prepared by the City and
audited by independent auditors. The City selects its independent auditor through a
competitive procurement process that includes members of the Audit Subcommittee as
proposal reviewers. The original contract length was for five years. On February 16,
2020, the Audit Subcommittee directed staff to execute a modification of the LSL
external auditing services contract to extend services for an additional three years and
requested that a new engagement partner be assigned to the City, as recommended by
best practice. LSL is in their sixth year auditing the City.
The quality of the City’s financial reporting and the ACFR are measured in two ways: (1)
an unmodified 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). The attainment
of 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 require auditors to provide an
opinion on specific areas of the City’s financial statements based on observations,
inquiries, testing of transactions, and analysis.
The City’s ACFR includes the following major sections and information:
3.B
Packet Pg. 317
6 of 17
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 ACFR for current year information)
• Independent Auditors’ Report – the City’s report card on the content of the ACFR
• Management’s Discussion and Analysis (MD&A) – provides an analytical
overview of the City’s financial status and results for the year
• Basic Financial Statements – reports finances at a point in time (assets -
liabilities) and throughout the year (revenues - expenditures), and cash flows
o City-Wide Statements – overview of financial information including all of
the City’s operations by financial activity
o Fund Financial Statements – a detailed look at funds, reporting the
Balance Sheet and Statement of Revenues, Expenditures and Changes in
Fund Balance
o Notes to the Financial Statements (Notes) – a narrative explanation that
accompanies the Basic Financial Statements
Required Supplementary and Supplementary Information Sections
• Budget to Actual Comparisons – for all governmental funds with a legally
adopted budget
• Notes to Required Supplementary Information
• Pension Information – schedule of changes in the net pension liability and related
ratios; schedule of contributions by plan
3.B
Packet Pg. 318
7 of 17
• OPEB Information – schedule of changes in the net Other Post-Employment
Benefits (OPEB) liability and related ratios; schedule of contributions
• A breakout of individual non-major 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
Discussion
The attached ACFR for FY 2020-21 has received an unmodified opinion by LSL. An
unmodified opinion communicates that the financial statements are fairly presented and
that the information used in the report is reliable. In their written communications to
Council, the auditors note that they encountered no significant difficulties with
management in performing or completing the audit.
The Statement on Auditing Standards (SAS) 114 establishes standards for the auditors’
communication with those charged with governance. SAS 115 provides guidance on
communicating matters related to the City’s internal controls over financial reporting that
have been identified in an audit of the financial statements. These statements require
the auditors to consider and report on internal controls, significant audit findings, and
other matters as prescribed in the standards as they relate to the audit of the financial
statements. The letters that satisfy the SAS requirements are attached to this report.
3.B
Packet Pg. 319
8 of 17
The City of Santa Monica has received an unqualified/unmodified audit report and the
GFOA Award for 37 years, since the City first participated in the GFOA program in FY
1983-84.
Engagement partner Deborah Harper from LSL communicated via email with Mayor /
Audit Subcommittee Chair Sue Himmelrich and Audit Subcommittee Vice Chair
Elizabeth VanDenburgh on February 24, 2022 to discuss the results of the audit and
answer questions on the audit, financials, and related letters without staff present. The
ACFR was presented to the Audit Subcommittee of the Council on March 14, 2022 by
LSL. Audit Subcommittee members were given the opportunity to review the report and
ask questions to the external auditor and staff. Topics discussed included:
• Deficit Citywide in unrestricted net position on the Statement of Net Position
• Reasons for and recommendations that could be included in a management
letter from an external auditor
• Unfunded pension liability and contributions
• OPEB unfunded liability and contributions
• Guiding Principles to Handle Pension Liability
The Audit Subcommittee received and filed the ACFR with a 5-0 vote.
Overall, the City’s ACFR shows that City finances are stable. The following is an
explanation of some key indicators reported in the ACFR.
General Fund Balance
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 assets exceeded
liabilities by $180.8 million as of June 30, 2021. This balance is comprised of a number
of categories, as follows:
• $9.6 million nonspendable fund balance includes amounts that are not in
spendable form, such as prepaid items and advances to other funds;
3.B
Packet Pg. 320
9 of 17
• $11.1 million restricted fund balance is required for specific purposes as
stipulated by either external resource providers or enabling legislation, including
$8.6 million for bond funded projects;
• There is no committed fund balance, which represents amounts designated for a
specific purpose by formal action from City Council and can only be changed or
lifted by the City Council taking the same formal action that originally imposed the
constraint;
• $114.3 million assigned funds set aside for specific purposes based on budget
priorities (i.e., continuing capital improvement projects; prior year
reappropriations; and funds set aside to sustain the City’s essential services
during the COVID-19 emergency, including a $20 million Shutdown Reserve in
the event prolonged closures further impact revenue streams); and
• $45.9 million in unassigned funds as follows:
o $46.9 million rainy day contingency (historically this has been 15% of
annual operating and revenue-supported capital expenditure budget.
However, it was reduced to 12.5% last year. As the City recovers from the
pandemic, the amount will gradually return to 15%);
o ($1.0) million unrealized loss on investments;
The General Fund’s rainy day and economic uncertainty reserves have long been an
important safeguard for Santa Monica in the event of a devastating downturn. In the
past, this sound financial practice has contributed to a AAA general obligation bond
rating, allowing the City to pursue lower cost financing structures. Since March 2020,
these reserves and contingency funds have allowed the City to continue essential
operations despite the severe revenue dip as a result of the economic crisis caused by
3.B
Packet Pg. 321
10 of 17
the global pandemic. In March 2021, all three of the United States’ leading credit rating
agencies -- Moody’s, S+P, and Fitch Ratings -- affirmed the City of Santa Monica’s AAA
credit rating. Fitch cited that the ‘AAA’ credit rating “is driven by the exceptional
resilience of the city to periods of economic stress, underpinned by its very high
reserves, notwithstanding recent large operating deficits, and a strong expenditure
framework.”
Citywide Net Position
The Statement of Net Position, similar to a balance sheet, reports total assets and
liabilities of the City as of June 30, 2021. 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.
Net Investment in Capital Assets - $1,206.9 million
Net Investment in Capital Assets includes land, buildings, improvements, intangibles,
infrastructure and utility systems, and construction in progress net of accumulated
depreciation/amortization and related debt. Intangible assets represent rights of use for
items such as software, water rights 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, 2021 include City Yards
Modernization and numerous Sustainable Water Master plan infrastructure projects to
help the City achieve water self sufficiency by 2023.
Restricted Net Position - $251.7 million
These assets are subject to agreements with creditors, developers, grantors, or laws or
regulations of other governments. Approximately 61% of this amount is restricted for
affordable housing and committed to various projects, 21% is restricted per federal,
state and other grant regulations, and the remaining amount is restricted for the
Cemetery’s trust fund, debt service, development agreement terms, and other grant and
legislative constraints.
Unrestricted Net Position – ($72.6) million
This represents the balance of net position that is neither part of capital assets nor
restricted. Healthy capital and operating reserves of $71.2 million in the business-type
3.B
Packet Pg. 322
11 of 17
activities support rate stabilization and recovery strategies for the City’s many activities.
Governmental activities reported a negative unrestricted net position of $143.7 million,
primarily due to the economic effects of the COVID-19 pandemic and related revenue
loss, legal settlement costs, and an increase in the employee benefit liability. The City
has already managed its financial challenges by reorganizing the City’s departments
and reducing its workforce, focusing on essential services, scaling back or eliminating
capital projects, and increasing employees’ cost sharing of benefits. These strategies,
recovering revenues, state and Federal government subsidies and lowered expenses
should help rebuild the City’s unrestricted net position balance. Additionally, while the
City utilized operating cash to fund the City Yards Modernization Project, subsequent to
year end, the City issued lease revenue bonds to fund the project. If the bonds had
been issued before year end, the governmental activities unrestricted net position would
have increased by $42.6 million, the amount of operating cash used to date.
Long Term Debt
The primary source of long-term debt is in the form of bonds issued by the City. At the
end of the current fiscal year, the City’s total long-term debt outstanding (excluding
issuance premiums) was $176.0 million, a $14.1 million increase from the previous
year.
The City refunded the Santa Monica Public Financing Authority Lease Revenue Bonds
Series 2011 A for the Parking Structure 6 project and issued $19.7 million of Lease
Revenue Refunding Bonds Series 2021 A&B bearing interest from 0.30% to 4.00%.
This refunding resulted in an economic gain of $4.2 million.
On September 21, 2017, the City entered into a Construction Installment Sale
agreement with the State Water Resources Control Board (SWRCB) to fund certain
water recycling and conservation projects. The original agreement provided funding in
the amount of $56.9 million payable with interest at 1.8% over a period of 30 years. On
May 27, 2020, to fund additional eligible projects, the SWRCB and the City modified the
agreement to increase the loan amount to $75.9 million. In FY 2020-21, the City drew
$22.5 million of the available loan for a cumulative total of $28.1 million as of June 30,
3.B
Packet Pg. 323
12 of 17
2021. More information on Long Term Debt can be found in Note 9, page 57 of the
ACFR.
Pension Liability
As noted in the Statement of Net Position on page 1 of the ACFR, the City’s largest
liability is the unfunded actuarial pension liability, which was $481.2 million as of June
30, 2021, an increase of $15.5 million from the $465.7 million as of June 30, 2020.
Total net pension liability, or unfunded liability, is based on projected future benefit
payments attributed to the current and past employees’ service, less the assets
accumulated to pay those liabilities. This is the difference between a total pension
liability of approximately $2.05 billion and current plan assets of approximately $1.57
billion, making the City’s three pension plans approximately 77% funded. The City’s
annual required contributions include a portion to fund currently earned benefits as well
as an amount to pay down the unfunded liability.
Annual actuarial valuations provide the City with the amount of the contribution that
must be paid annually into the plan to ensure that the current unfunded liability is paid
off. In 2014, after allocating resources to address the City’s unfunded pension liability
from year end savings, Council adopted a policy that provided that when there are
sufficient funds, the annual budget would include a minimum set-aside of $1.0 million in
the General Fund, and commensurate set-aside amounts in all other funds, to be used
to address the City’s unfunded pension liability. Based on the availability of additional
funds, staff would annually assess the set-aside of additional CalPERS payments
against other unfunded needs and present the Council with a recommendation. This
policy has now been replaced by the Principles for Pension Funding policy, as
developed by the ad hoc Pension Advisory Committee and adopted by Council in 2019.
This policy, incorporated into the City’s Fiscal Policy, accelerated the paydown of the
unfunded liability at the time to 13 years, with an alternative 15-year timeline in case of
fiscal emergency. Due to the economic crisis the City is currently experiencing, Council
changed the schedule of the accelerated paydowns per the emergency provisions of the
3.B
Packet Pg. 324
13 of 17
policy, to shift to a 15-year paydown schedule. The next additional discretionary
payment is budgeted to be made in FY 2022-23.
The City has enacted a number of initiatives to mitigate the impact of pensions on the
City’s budget:
• 49% of current employees receive a reduced level of pension benefits based on
those mandated by the Public Employee Pension Reform Act (PEPRA) or the
City’s own “Tier 2” levels. Tier 2 was established on July 1, 2012, six months
before the enactment of PEPRA, for employees who entered the City during
those six months as new Miscellaneous bargaining group (non-sworn)
employees.
• Employees in all bargaining groups hired after January 1, 2013 receive lower
benefits per PEPRA.
• All employee groups have eliminated the employer paid member contribution
(EPMC) benefit and the employee-paid portion of the pension cost is deducted
from employees’ paychecks and paid directly to PERS. The City’s Coalition of
Miscellaneous Employees (Coalition) eliminated the EPMC benefit in March
2020, and it was anticipated that this change would result in a $35 million
decrease in the City’s unfunded pension liability.
• In addition to paying the employee portion of the contribution, Public Safety
employee bargaining groups reimburse the City for a portion of the employer
cost. Both Police and Fire Classic (non-covered by PEPRA) sworn employees
(those hired before PEPRA benefits were established) pay over a quarter of the
annual pension contribution cost, while Miscellaneous Classic employees, who
have a lower level of benefits and therefore a lower cost contribution, pay
approximately 23% of the annual cost.
Since FY 2010-11, the City has made $88.1 million in payments towards unfunded
pension liability beyond the actuarially required contribution determined by CalPERS.
Yet another cost-saving measure is the City’s prepayment of its annual employer
contributions to CalPERS since FY 2007-08. The City continued this practice in FY
3.B
Packet Pg. 325
14 of 17
2021-22. Discounts received from such prepayments are used for paydowns of the net
pension liability.
Despite the mitigating steps taken by the City, CalPERS has made a number of
changes to actuarial assumptions that have increased the City’s pension contribution
rates, including, but not limited to:
• Decreasing the discount rate from 7.5% to 7.0%, and most recently to 6.8%;
• Shortened the period over which future actuarial gains and losses are amortized
from 30 years to 20 years; and
• Removed the phasing of new costs associated with assumption changes, and
gains and losses.
These changes mitigate further increases in unfunded liability but have the effect of
increasing contributions in the short term. In FY 2020-21, a 21.3% net return on the
CalPERS investment portfolio triggered a reduction in the discount rate from 7.0% to
6.8% per CalPERS’ Funding Risk Mitigation Policy. The lower discount rate change,
the high returns, and the elimination of the EPMC for miscellaneous employees will be
reflected in the FY 2023-24 contribution rates. A detailed explanation of the Employee
Benefits Programs including detailed pension information by plan is included in Note 16
(pages 80 through 89) and the Required Supplementary Information (pages 110
through 115).
Other Postemployment Benefits (OPEB)
Employees of the Executive Pay Plan group and management employees of the Rent
Control Board are eligible for a City paid post-employment 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 the 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
3.B
Packet Pg. 326
15 of 17
benefits for public safety employees provided by the City’s contract with its healthcare
provider CalPERS.
The City’s annual contribution is based on an actuarially determined contribution (ADC).
Prior to FY 2019-20, the City annually prefunded its OPEB obligations into a 115 trust,
CERBT, administered by CalPERS. In response to the global pandemic and the
devastating effects on the economy, Council authorized the suspension of the ADC
payments to the trust up to June 30, 2023 and the City did not make contributions in FY
2019-20 or FY 2020-21. As a result, the discount rate used by the actuaries to
determine the unfunded liability in the FY 2020-21 ACFR is blended and lowered to
reflect the 2 years without payment to the trust. Staff has budgeted a resumption of the
OPEB prefunding payment in the FY 2021-22 budget and expects to resume ADC
payments to the trust. A detailed explanation of OPEB is included in Note 16 (pages 89
through 94) and the Required Supplementary Information (pages 116 through 117).
Pollution Remediation
During FY 2020-21, the City increased its pollution remediation liability estimate for both
the Charnock and Olympic Well Field restoration projects to incorporate the most
current information available. The remediation liability for the Olympic Well Field
increased to reflect a refinement of the remediation process and related operating costs
based on updated engineering estimates provided by the City’s consultants that are
currently constructing the remediation system, where both the capital and operating
costs of the remediation system are now higher than determined in the 2017 pollution
remediation evaluation. The remediation liability for the Charnock Well Field increased
due to longer periods of remediation than determined in the previous evaluation in 2017.
The City believes it has sufficient funds from the Gillette/Boeing settlement to fund
current and future estimated remediation costs. To estimate the potential remediation
liability, the City applied an expected cash flow and present value to the anticipated cost
of remediation, both construction and operating costs, as required under the
remediation agreements and included a 10% contingency for unforeseen costs.
3.B
Packet Pg. 327
16 of 17
The balance of the pollution remediation liability is $2.0 million in the governmental
activities of which $0.3 million is due within one year and $54.7 million in the business-
type activities, of which $20.4 million is due within one year. More information on
Pollution Remediation is found in Note 4, page 33 of the ACFR.
Cash and Investments
The ACFR also includes detailed information on the City’s cash and investments. As of
June 30, 2021, the City had $694 million in total cash and investments, all of which are
in the form of investments authorized by the California Government Code and the City’s
investment policy or in compliance with bond indenture agreements. More information
on cash and investments is found in Note 5, page 35 of the ACFR.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the
recommended action to receive and file this annual report.
Prepared By: Stephanie Manglaras, Financial Operations Manager
Attachments:
A. Annual Comprehensive Financial Report
B. Independent Auditors’ Report on Internal Control Over Financial Reporting and on
Compliance with Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
C. Auditors’ Letter to Council
3.B
Packet Pg. 328
17 of 17
Prepared By: Gigi Decavalles-Hughes, Director
Approved
Forwarded to Council
Attachments:
A. Annual Comprehensive Financial Report
B. Attachment B Independent Auditors' Report on Internal Control
C. Attachment C City of Santa Monica Audit Communication Letter
3.B
Packet Pg. 329
Annual Comprehensive Financial Report
for the Year Ended June 30, 2021
City of Santa Monica California
3.B.a
Packet Pg. 330 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
City of Santa Monica
California
Annual Comprehensive Financial Report
Year ended June 30, 2021
Prepared by the Finance Department
Gigi Decavalles-Hughes Director of Finance/City Treasurer
Stephanie Manglaras Financial Operations Manager
Robert Garcia Supervising Accountant
Randy Chow Financial Reporting Administrator
Amelia Dawson Senior Grants Analyst
Jason Duvall Accountant II
Jane Lim Accountant II
Lisa Nakamine Accountant II
Thomas Hoang Accountant I
Swen Yang Accountant I
3.B.a
Packet Pg. 331 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Annual Comprehensive Financial Report
For the fiscal year ended June 30, 2021
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal .......................................................................................................................... i
Officials of the City of Santa Monica ................................................................................................ xi
Organizational Chart – City of Santa Monica ................................................................................... xii
GFOA Certificate of Achievement for Excellence in Financial Reporting ....................................... xiii
FINANCIAL SECTION
Independent Auditor's Report ........................................................................................................... xiv
Management’s Discussion and Analysis (Required Supplementary Information) ............................ xvii
BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Position ............................................................................................................ 1
Statement of Activities ................................................................................................................ 2
Fund Financial Statements:
Balance Sheet – Governmental Funds ........................................................................................ 4
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide
Statement of Net Position ........................................................................................................ 5
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ................................................................................................................ 6
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances to the Government-Wide Statement of Activities ......................... 7
Statement of Net Position – Proprietary Funds ........................................................................... 9
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ....... 10
Statement of Cash Flows – Proprietary Funds ............................................................................ 11
Statement of Fiduciary Net Position – Fiduciary Funds ............................................................. 14
Statement of Changes in Fiduciary Net Position – Fiduciary Funds .......................................... 15
Notes to Basic Financial Statements:
Note 1 – Summary of Significant Accounting Policies ............................................................ 16
Note 2 – Compensated Absences .............................................................................................. 29
Note 3 – Reconciliation of Fund Balance Sheet/Statement of Net Position to Government-
Wide Financial Statements ......................................................................................... 30
Note 4 – Pollution Remediation ................................................................................................ 33
Note 5 – Cash and Investments ................................................................................................. 35
Note 6 – Notes Receivable ........................................................................................................ 44
Note 7 – Capital Assets ............................................................................................................. 52
Note 8 – Unearned Revenue and Deferred Inflows of Resources ............................................. 54
Note 9 – Long-Term Debt ......................................................................................................... 57
Note 10 – Fund Deficits .............................................................................................................. 62
Note 11 – Interfund Transactions ................................................................................................ 63
Note 12 – Restricted Net Position ............................................................................................... 66
Note 13 – Fund Balances ............................................................................................................ 68
Note 14 – Commitments and Contingencies ............................................................................... 73
Note 15 – Self-Insurance ............................................................................................................. 78
3.B.a
Packet Pg. 332 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Annual Comprehensive Financial Report
For the fiscal year ended June 30, 2021
Table of Contents, Continued
Page
Note 16 – Employee Benefit Programs ....................................................................................... 80
Note 17 – Successor Agency Trust Fund for Assets of Former Redevelopment Agency ............ 95
Note 18 – Pandemic ..................................................................................................................... 99
Note 19 – Special Item ................................................................................................................. 101
Note 20 – Prior Period Adjustments ............................................................................................ 102
Note 21 – Subsequent Events ....................................................................................................... 104
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
– General Fund ............................................................................................................................... 105
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
– Special Revenue Source Fund ..................................................................................................... 107
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
– Low and Moderate Income Housing Asset Fund ........................................................................ 108
Note to Required Supplementary Information ................................................................................... 109
Schedules of Changes in the Net Pension Liability and Related Ratios ........................................... 110
Schedules of Contributions – Pension Plans ...................................................................................... 113
Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................ 116
Schedules of Contributions – OPEB .................................................................................................. 117
SUPPLEMENTARY INFORMATION
NON-MAJOR FUNDS / OTHER FINANCIAL INFORMATION
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds ........................................................ 120
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
Nonmajor Governmental Funds .................................................................................................. 123
Schedule of Revenues, Expenditures and Changes in Fund Balance (Deficit) – Budget and
Actual – Major and Nonmajor Governmental Funds –
Special Revenue Funds:
Beach Recreation ..................................................................................................................... 126
Housing Authority ................................................................................................................... 127
Tenant Ownership Rights Charter Amendment (TORCA) ...................................................... 128
Citizens Option for Public Safety ............................................................................................ 129
Gas Tax ..................................................................................................................................... 130
Local Return ........................................................................................................................... 131
Community Development Block Grant (CDBG) ..................................................................... 132
Miscellaneous Grants ............................................................................................................... 133
South Coast Air Quality Management District (SCAQMD) ................................................... 134
Parks and Recreation .............................................................................................................. 135
Capital Projects Funds:
Clean Beaches and Ocean Parcel Tax ...................................................................................... 136
Combining Statement of Net Position – Nonmajor Enterprise Funds ............................................ 138
Combining Statement of Revenues, Expenses and Changes in Fund Net Position –
Nonmajor Enterprise Funds ........................................................................................................ 139
Combining Statement of Cash Flows – Nonmajor Enterprise Funds ............................................. 140
3.B.a
Packet Pg. 333 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Annual Comprehensive Financial Report
For the fiscal year ended June 30, 2021
Table of Contents, Continued
Page
Combining Statement of Net Position – Internal Service Funds .................................................... 143
Combining Statement of Revenues, Expenses and Changes in Fund Net Position –
Internal Service Funds ................................................................................................................ 144
Combining Statement of Cash Flows – Internal Service Funds ..................................................... 145
STATISTICAL SECTION (Unaudited)
Financial Trends Information
Net Position by Component – Last Ten Fiscal Years ........................................................... 1 148
Changes in Net Position – Last Ten Fiscal Years ................................................................. 2 149
Fund Balance of Governmental Funds – Last Ten Fiscal Years .......................................... 3 152
Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ........................ 4 153
General Fund Tax Revenues by Source – Last Ten Fiscal Years ......................................... 5 155
Revenue Capacity Information
Assessed Value and Actual Value of Taxable Property – Last Ten Fiscal Years ................ 6 156
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years .................................. 7 157
Principal Property Tax Payers – Current Fiscal Year and Nine Years Ago ......................... 8 158
Property Tax Levies and Collections – Last Ten Fiscal Years ............................................. 9 159
Taxable Transactions by Type of Business – Last Ten Calendar Years ............................... 10 160
Debt Capacity Information
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............................................. 11 161
Ratios of General Bonded Debt – Last Ten Fiscal Years ..................................................... 12 162
Direct and Overlapping Governmental Activities Debt........................................................ 13 163
Computation of Legal Debt Margin – Last Ten Fiscal Years ............................................... 14 164
Wastewater Enterprise Revenue Bonds Coverage – Last Ten Fiscal Years ......................... 15 165
Demographic and Economic Information
Demographic and Economic Statistics – Last Ten Calendar Years ..................................... 16 166
Principal Employers – Current Year and Nine Years Ago ................................................... 17 167
Operating Information
Full-time Equivalent City Government Employees by Function/Program –
Last Ten Fiscal Years ........................................................................................................ 18 168
Operating Indicators by Function/Program – Last Ten Fiscal Years ................................... 19 169
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ................................ 20 170
3.B.a
Packet Pg. 334 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
City of Santa Monica, California
Year Ended June 30, 2021
INTRODUCTORY SECTION
3.B.a
Packet Pg. 335 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
Finance Department
1685 Main Street, Mail Stop 09 | Santa Monica, CA 90401 | www.smgov.net
tel: 310 458-8281 ● fax: 310-394-0644
i
January 21, 2022
Dear Honorable Mayor and Members of the City Council, City Manager, and Citizens of Santa Monica:
Attached is the Annual Comprehensive Financial Report (ACFR) for the City of Santa Monica (City) for
the fiscal year ended June 30, 2021 (FY 2020-21).
The ACFR 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 ACFR has been compiled in a manner designed to fairly set forth the financial positions and results
of operations of the City. The ACFR 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.
Lance, Soll & Lunghard LLP has issued an unmodified opinion on the City of Santa Monica’s basic
financial statements for FY 2020-21. 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 92,968 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.
3.B.a
Packet Pg. 336 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
ii
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.
Santa Monica’s level and breadth of services surpass those of other cities of comparable size. The City
provides a full range of services, including police and fire protection, water and wastewater, street
maintenance, public landscaping, a regional transit system that serves 6.5 million riders each year,
parking, parks and recreation including 245 acres of beaches, five public libraries, planning, building and
safety, the iconic Santa Monica Pier, an airport, a cemetery, and a high level of support for social services,
cultural programs and public education. 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 and telephone services are provided by private utility companies, while power is
purchased through the Clean Power Alliance, a joint powers authority made up of public agencies across
Los Angeles and Ventura counties working together to bring clean, renewable power to Southern
California, and delivered by a private utility company.
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
As a AAA rated city, Santa Monica has long relied on prudent fiscal planning to prepare for the future
with two-year operating budgets, five-year fiscal forecasts and capital plans, and continuous review and
refinement of fiscal policies and processes. This careful planning allowed the City to quickly reposition
itself in response to the COVID-19 pandemic that devastated economies at all levels around the world.
Cities like Santa Monica, with strong tourism, retail and entertainment amenities, were hit the hardest.
The federal stimulus funds Santa Monica received totaled less than 15% of the projected revenue loss
from the beginning of the pandemic-related closures in March 2020 through June 30, 2022. The FY 2020-
21 budget reflected a 20% decrease in General Fund operating expenditures and a 50% decrease in the
annual capital program. Despite these reductions, the General Fund budget was supported by the use of
one-time funds that were diverted from capital projects, additional discretionary liability paydowns,
discretionary affordable housing contributions and economic uncertainty and contingency reserves to
meet the immediate and longer-lasting effects of the COVID-19 pandemic. A portion of these funds were
assigned as a $20 million Shutdown Reserve acting as an extra layer of protection to maintain essential
services in the event of shutdowns from additional surges.
A strong housing market, exceptionally vigorous consumer activity once shelter in place restrictions were
lifted in Spring 2021, and revenues generated from a recently passed measure increasing the Real Property
Transfer Tax on properties selling for $5 million and up helped to lift the local economy and the City’s
General Fund revenues despite extended closures in the winter months. As a result, the Shutdown Reserve
continues to remain intact. Looking to the future and further recovery, City General Fund revenues are
projected to increase by over 18% in FY 2021-22 and continue to grow, but not exceed pre-pandemic
levels until FY 2024-25. The challenges surrounding the pandemic have required a focused allocation of
incremental revenues, whether from federal stimulus aid or revenue recovery, to address three priorities-
Clean and Safe Neighborhoods and Open Spaces, Addressing Homelessness, and Inclusive and Equitable
Economic Recovery for All. Economic recovery investments will increase the resilience of the local
economy and consequently strengthen the City’s finances; resources have been allocated to rent relief for
the City’s small business tenants, assistance for the broader small business community, assistance for the
City’s most vulnerable community members and to create a faster and simpler process for small
businesses seeking building permits.
3.B.a
Packet Pg. 337 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
iii
City programs and services are operating at varying levels as compared to pre-COVID operations, and
COVID-19 infections continue. Public health restrictions remain to protect public health and mitigate the
spread of COVID-19. Many programs are still operating at reduced levels, with restricted services, hours
of operation, or lower capacity due to lower staffing levels. Like the nation as a whole, Santa Monica is
experiencing a labor shortage that is also impacting the City’s ability to offer some programs.
The economy is expected to rebound in FY 2021-22 and FY 2022-23 as the COVID-19 restrictions are
lifted and vaccinations are available to the broad population. The national economy is rebounding from
the COVID-19 recession that severely hampered economic activity through much of 2020. Economic
growth, as measured by GDP, is expected to be 5.6% in 2021 and 3.8% in 2022 after a contraction of 3.4%
in 2020. Economic output is expected to reach pre-pandemic levels by early 2022, helped in part by
Federal stimulus spending. Despite the positive trends, there are still concerns over current and further
surges of the virus and new variants, inflation, supply chain disruption and the recent labor shortage.
California’s economic recovery began later than the overall national recovery due to the State’s heavy
reliance on tourism, but ultimately the State recovery will be faster as demand for new technology results
in a faster recovery in the State’s strongly represented technical, information systems, scientific, and
professional sectors. Recent reports project that the State will have a $45.7 billion surplus on June 30,
2022.
Santa Monica is heavily dependent on international tourism, which still faces significant COVID-19
related challenges, and group travel related to business or special events, which requires significant lead
times to plan. These sectors are beginning to recover in FY 2021-22, with an additional 1 to 2 years before
reaching pre-COVID 2019 volume levels. Although revenues for transient occupancy taxes (TOT) are
projected to more than double in FY 2021-22 and continue to increase in FY 2022-23, they are still
anticipated to be below pre-pandemic levels.
A similar pattern is projected for parking revenues, which are beginning to recover in FY 2021-22 as
COVID-19 restrictions ease and visitation increases, resulting in a projected 33.2% increase, followed by
an additional 12% increase in FY 2022-23. However, the pandemic accelerated many trends, including
online shopping and teleworking, that will likely impact visitor behavior and decrease parking demand in
future years. Staff anticipates that demand for parking will continue to flatten or decline as consumers
adopt alternative transportation methods, including Uber and Lyft, Metro Light Rail, bicycles and
scooters.
Sales Taxes are also expected to rebound in FY 2021-22, while business license taxes, which are based
on 2020 calendar year gross receipts, will see a decrease over FY 2020-21 revenues before recovering in
future years. FY 2021-22 utility users taxes (UUT) are also projected to see increases.
Looking ahead, as revenues recover, the City will resume prefunding its other post-employment benefits
liability in FY 2021-22 and the accelerated paydown of the unfunded pension liability in FY 2022-23.
The General Fund five year forecast also includes payments, over three years, of the deferred allocation
of Transaction and Use Tax revenues to affordable housing beginning in FY 2023-24, and a rebuilding of
the City’s capital improvement program allocation to a level that allows for preventive maintenance but
also lower cost pay as you go capital investments. Also included in the forecast is the gradual rebuilding
of the City’s contingency reserve balance to 15% from the current 12.5%, reaching its goal by FY 2026-
27. Finally, the forecast also includes a set aside of funds in the General Fund reserves to be used to
mitigate the impact of liabilities on the City’s services.
3.B.a
Packet Pg. 338 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
iv
CITYWIDE BUDGET
Beginning in mid-March 2020, the public health emergency changed how, and whether, the City could
operate programs and facilities and in May 2020, Council approved a City restructuring plan and
associated modifications to the FY 2020-21 Budget that took into consideration the operational and
economic impacts of the COVID-19 pandemic. Santa Monica’s economy, with its high dependence on
sales and hotel occupancy taxes, suffered deep revenue losses resulting from COVID-19-related closures
and restrictions. The pandemic also limited the operations of most other businesses and continues to affect
other key City revenue sources such as parking, utility users taxes, and business license taxes. Staff
initially projected revenue losses of approximately $224 million over the three years spanning fiscal years
2019-20 through FY 2021-22, when compared to pre-COVID revenue projections for these years. The
projections of General Fund revenue declines have been updated to approximately $188 million.
The FY 2020-21 Adopted Budget was approximately $192.3 million less than the FY 2019-20 Revised
Budget and had 298.8 fewer full-time equivalent permanent positions and 122.3 fewer full-time equivalent
as-needed positions. The majority of the reduction was in the General Fund budget. The FY 2020-21
General Fund budget reflected a 20% decrease in operating expenditures and a 50% decrease in capital
funding from the prior year. The difference from the prior year’s budget was $111.8 million, with 234.1
fewer full-time equivalent permanent positions and 103.3 fewer full-time equivalent as-needed positions.
Despite these reductions, an additional $117 million in one-time funds, including capital project funds
that were deferred, reduced or cancelled, economic uncertainty, contingency and other reserve funds, were
either appropriated or set aside to balance the FY 2019-20 Revised and FY 2020-21 Adopted General
Fund budgets. Council also authorized staff to retain $6.3 million in FY 2020-21 Measure GSH transaction
and use tax revenue in the General Fund that would have otherwise been transferred to the Housing Trust
Fund for affordable housing uses per a November 2016 voter-approved advisory measure, and a two-year
suspension of additional (beyond the annual required contribution) discretionary paydowns of unfunded
pension liabilities. These measures enabled the City to maintain essential and emergency operations
during the pandemic while preserving the City’s financial resilience to the greatest extent possible.
On January 26, 2021, Council held its review of the FY 2020-21 Budget. Updated revenue projections
showed that, to balance its budget in FY 2020-21, the City would require the use of a $20 million
Shutdown Reserve, set aside as part of the $117 million in one-time funds, to make up for the additional
revenue declines suffered as a result of the protracted second surge shutdown. In May 2021, the City
received $14.3 million of a total $28.6 million allocation of American Rescue Plan Act (ARPA)
Coronavirus State and Local Fiscal Recovery Funds (CSLFRF). These funds represented only 15% of the
City’s then-estimated $200 million revenue loss resulting from the pandemic through FY 2021-22, not
counting the continued reduction in revenues as the City’s economy gradually recovers and contends with
the effects of new variants. However, ARPA funds allowed the City to fund, on a one-time basis, critical
service needs in the areas of emergency response, clean and safe spaces and services, and economic
recovery, to restore some services, and to maintain support for affordable housing.
As of June 30, 2021, actual revenues exceeded projections by approximately $20 million, reflecting the
strong housing market; exceptionally vigorous consumer activity once shelter-in-place restrictions were
lifted that resulted in higher than anticipated sales, hotel tax and parking receipts; and the positive impact
of the recently passed Measure SM Real Property Transfer Tax increase. As a result, the City will not be
required to use the $20 million Shutdown Reserve to balance the budget, as had been anticipated. General
Fund expenditure savings included ARPA federal stimulus funds that were unspent due to their receipt at
the end of the fiscal year and are reappropriated to be spent in FY 2021-22.
The FY 2021-23 Biennial Budget was adopted by Council on June 22, 2021. The budget restored certain
priority services going forward, mainly furthering the three Council-adopted community priorities of
addressing homelessness, providing clean and safe neighborhood and open spaces, and making progress
3.B.a
Packet Pg. 339 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
v
on an inclusive and equitable economic recovery. The Citywide Adopted FY 2021-22 Budget is $707.8
million, $351.7 million within the General Fund. The FY 2021-22 Adopted Budget includes an increase
of 23.6 full-time equivalent permanent positions (9.6 in the General Fund) and 39.7 full-time equivalent
as-needed positions (34.1 in the General Fund) as compared to the FY 2020-21 Adopted Budget. In the
next three years, staff will continue to evaluate revenue recovery and community needs and determine the
best approach to balance the operating budget, restore services and ensure that capital improvement needs
are met. In FY 2021-22, staff will reallocate $1 million in capital project savings to further enhance clean
and safe service delivery.
An extraordinary amount of uncertainty surrounding both the duration of the pandemic and its
ramifications on economic recovery remains. This high level of uncertainty, both about the future of the
COVID-19 pandemic and the economy, means the City must continue to exercise extreme caution in the
management of its finances for the foreseeable future.
POLICIES, RESERVES AND TRANSPARENCY
Over the years, the City has worked to add policies and reserves to affirm its commitment to safeguarding
public funds through transparent and careful fiscal management. For more than ten years, the City kept
an economic uncertainty reserve of $9.7 million in addition to its General Fund contingency reserve
totaling 15% of annual expenditure budget. Strong reserves allowed the use of contingency and economic
uncertainty funds during the severe economic downturn that resulted from the pandemic, while the City
retained a stable reserve level of 12.5% of ongoing expenditures in the event of a new emergency.
In addition to a comprehensive set of fiscal policies, the Council has approved a Fiscal Sustainability
Philosophy, a Compensation Philosophy, and Guiding Principles to Handle Pension Liability. The
Compensation Philosophy, adopted on July 24, 2018, established a consistent methodology for
determining if the City’s processes to recruit and retain highly qualified staff continue to be in line with
the City’s overarching goal of being an “employer of choice” while continuing to be fiscally responsible
with a goal of this being evaluated every five years.
On June 25, 2019, the Council adopted a Fiscal Sustainability Philosophy included in the City’s Fiscal
Policy. The philosophy commits the City to a long-term view of financial planning that addresses
economic and fiscal risks to ensure the City lives within its means and has the resources to invest in its
infrastructure, facilities, equipment, training and workforce to preserve and enhance community
wellbeing.
The Audit Subcommittee of the City Council, made up of three Council members and two residents with
financial backgrounds, meets a minimum of four times per year to review the work and reports of the
City's internal and external auditors and the progress made on internal controls and departmental
efficiency process improvements recommended by the City’s internal auditor.
The City ended the fiscal year with a positive operating balance and a General Fund fund balance of
$180,847,822 million which includes nonspendable, restricted, committed, assigned, and unassigned fund
balances, each with varying constraints that control how amounts can be spent.
MANAGING FISCAL CHALLENGES
In addition to the extraordinary fiscal challenges the City is facing during and in the aftermath of the
pandemic, longstanding areas of pressure on our finances continue to be considered in our fiscal
management. In recent years, the City has had to program steep increases in pension costs reflecting the
3.B.a
Packet Pg. 340 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
vi
phasing in of the California Public Employees’ Retirement System (CalPERS) discount rate decrease from
7.5% to 7.0% and additional changes to the methods by which liability is amortized, all of which have the
effect of stabilizing the pension fund but resulting in higher contribution rates for employers. In addition
to pension costs, the City has forecasted steady increases in workers’ compensation costs and healthcare
costs, all of which were anticipated to outpace revenue growth before building in the effects of the
pandemic.
The City has enacted a number of initiatives to mitigate the pressure of these cost drivers on the budget.
49% of current employees receive a reduced level of pension benefits based on Public Employee Pension
Reform Act (PEPRA) levels or the City’s own “Tier 2” levels established on July 1, 2012, six months
before the enactment of PEPRA, for employees who entered the City during those six months as new
Miscellaneous bargaining group (non-sworn) employees. Employees in all bargaining groups hired after
January 1, 2013 receive lower benefits as well. All employee groups have eliminated the employer paid
member contribution (EPMC) benefit and the employee-paid portion of the pension cost is deducted from
employees’ paychecks and paid directly to PERS. In March 2020, the City’s Coalition of Miscellaneous
employees agreed to eliminate the employer paid member contribution (EPMC) benefit that was projected
to result in a further $35 million decrease in the City’s unfunded pension liability; this resulted in a
reduction in benefit levels for “Classic” Miscellaneous employees. Classic employees are those
employees who were hired prior to July 1, 2012 for Miscellaneous employees and prior to January 1, 2013
for Public Safety employees. In addition to paying the employee portion of the contribution, Classic
members of public safety employee bargaining groups reimburse the City for a portion of the employer
cost. Both Police and Fire Classic sworn employees (those hired before PEPRA benefits were established)
pay over a quarter of the annual pension contribution cost, while Miscellaneous Classic employees, who
have a lower level of benefits and therefore a lower cost contribution, pay approximately 23% of the
annual cost.
Another cost-saving measure is the series of payments made to CalPERS beyond the actuarially
determined contribution. These additional discretionary payments reduce the City's net pension liability.
In 2014, after a series of pay downs funded from year-end savings, Council adopted a policy that, provided
there are sufficient funds, the annual budget would include a minimum set-aside of $1.0 million in the
General Fund, and commensurate set-aside amounts in all other funds, to be used towards the pay down
of the City’s unfunded pension liability under CalPERS. Based on the availability of additional funds,
staff would annually assess the set-aside of additional CalPERS payments against other unfunded needs
and present the Council with a recommendation. In June 2017, responding to the prospect of additional
significant pension contribution rate increases beginning in FY 2018-19, Council approved a $45 million
pay down of the City’s pension unfunded liability.
In FY 2018-19, in light of continuing pension challenges, and following resident interest in the City’s plan
to manage pensions, the City Manager established an ad hoc Pension Advisory Committee (PAC) made
up of residents and City employees. The Committee’s purpose was to work with an independent actuary
to study the issue and develop recommendations for the City Manager to consider in the development of
the proposed budget. The PAC unanimously recommended an accelerated plan to pay down the City’s
current pension unfunded liability over 13 years, to conclude in 2032-33. This accelerated paydown plan
was adopted by Council and incorporated into the FY 2019-20 budget as part of the Guiding Principles to
Handle Pension Liability. It was projected that the accelerated 13-year repayment would save more than
$100 million in interest costs over 30 years ($41 million Present Value). This pay down plan superseded
the previous annual pay down plan described above. The first accelerated payment in the amount of $9.3
million was made on October 31, 2019. With the latest payment, the City has made a total of $88.1 million
in pay downs beyond the annual actuarially determined contribution. Due to the economic crisis the City
is currently experiencing, Council has changed the schedule of the accelerated paydowns, per the
emergency provision of the policy, to shift to a 15-year paydown schedule and suspend payments for up
to the next two years. The next additional discretionary payment is budgeted to be made in FY 2022-23.
3.B.a
Packet Pg. 341 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
vii
Yet another cost-saving measure is the City’s prepayment of its annual employer contributions to
CalPERS since FY 2007-08. The City continued this practice in FY 2020-21. Discounts received from
such prepayments are used for pay downs of the net pension liability.
Despite the steps taken by the City outlined above, CalPERS has made a number of changes to actuarial
assumptions that have increased contribution rates. In addition to the phase in of the half percent discount
rate decrease, CalPERS has shortened the period over which future actuarial gains and losses are
amortized from 30 years to 20 years with the payments computed using a level dollar amount. In addition,
the new policy removes the 5-year ramp-up and ramp-down on unfunded actuarial liability bases
attributable to assumption changes and non-investment gains and losses and removes the 5-year ramp-
down on investment gains and losses. These changes apply to new unfunded liability bases and are
reflected in FY 2021-22 contribution rates. In FY 2020-21, a 21.3% net return on the CalPERS investment
portfolio triggered a reduction in the discount rate from 7.0% to 6.8%, per CalPERS’ Funding Risk
Mitigation Policy. The lower discount rate increases the likelihood that CalPERS can reach its investment
target over the longer term. The impact of the discount rate change, the high returns, and the elimination
of the EPMC for miscellaneous employees will be reflected in the FY 2023-24 contribution rates.
In 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 administered through the California
Employees’ Retirement Benefit Trust (CERBT), an affiliate of CalPERS. The City has paid the equivalent
of its annual actuarially determined OPEB contribution into the irrevocable trust each year. This has
allowed the City to benefit from a higher discount rate used in calculating its OPEB unfunded liability.
Due to the economic crisis the City is currently experiencing, the Council has authorized the suspension
of these prefunding payments to the OPEB trust up to June 30, 2023. As a result, the discount rate used to
determine the unfunded liability in the FY 2020-21 financial statements is blended and lowered to reflect
that no payment was made in FY 2020-21. Staff has budgeted a resumption of the OPEB prefunding
payment in the FY 2021-22 budget.
To counter the trend of health insurance cost increases, all members from the City’s collective bargaining
groups contribute to health insurance premiums. Miscellaneous employees increased their contribution
towards healthcare premiums by 1 percent in the most recent labor agreement approved in March 2020.
The City’s current contract with its insurance provider provides fixed rates through calendar year 2022.
Risk Management is implementing and managing a variety of measures to help control workers’
compensation costs. Within the Department of Transportation, the Big Blue Bus (BBB), which provides
local and regional bus service, has extended a pilot program in which claims administration
responsibilities for all BBB claims are administered by a private claims administrator. Through
September 30, 2021, the pilot program has resulted in total program liabilities decreasing from $7.44
million to $6.37 million.
Since March 2020, the City has entered into settlement agreements totaling $107.325 million with 104
claimants in suits filed against the City and SM-PAL alleging abuse by Eric Uller and one claimant
alleging abuse by another individual performing community service at SM-PAL. Six other plaintiffs have
recently sued the City and SM-PAL and counsel for another 13 individuals have indicated their clients’
intent to sue the City and SM-PAL based on similar allegations of abuse by Uller.
MAJOR CAPITAL PROJECTS
With the projected impacts of COVID-19 and the assumed absence of meaningful stabilization funds from
the federal government, the FY 2020-21 Adopted Capital Improvement Plan (CIP) Budget for the General
3.B.a
Packet Pg. 342 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
viii
Fund reflected a 50% decrease in capital funding. Similarly, a very limited number of new projects were
adopted in the FY 2021-22 CIP Budget. These projects continue to represent the City’s critical
infrastructure needs, projects that cannot be deferred without compromising essential operations or public
health and safety, and projects that generate revenue. In addition, efforts were made to continue to
advance projects that address the community priorities as established and adopted by Council on March
13, 2021: Addressing Homelessness, Clean and Safe Santa Monica, and Equitable and Inclusive
Economic Recovery. As a result of limited resources and low-cost financing, alternative funding sources
and capital financing solutions were also employed to provide additional resources for large projects. In
FY 2021-22 the City issued $78 million in Water Revenue Bonds to finance Water System capital
improvements undertaken as part of the Sustainable Water Master Plan and also issued $70 million in
Lease Revenue Bonds to finance certain capital improvements at the City Yards undertaken as part of the
City Yards Modernization Project. More detail on these projects is included below. Additionally, in the
upcoming months City staff expects to apply for up to $30 million in grants from various agencies
including the Economic Development Administration and Department of Water Resources to assist in the
funding of capital projects.
The City Yards Modernization project is a phased major renovation of the existing 14.7-acre facility
located at 2500 Michigan Avenue. The project will retrofit and address long standing functional and space
needs of the City’s corporation yards. The current facility accommodates more staff than originally
intended when it was built in the 1950s, and the buildings are beyond their useful life. The City Yards
houses a majority of the Public Works Department’s field operations equipment and staff; site uses include
resource recycling and recovery, water and wastewater operations, fleet maintenance, shop buildings and
fire training space. Only Phases 1 and 2 of the project are funded at this time. Phase 1 of the project
includes a new Fleet Building and fueling system, and a new non-potable water main extending through
the City Yards from Michigan Avenue to Stewart Street. This phase is complete and was delivered for
staff occupancy in May 2021. Phase 2 of the project includes an Operations Center that is already
underway with construction to be completed in early 2023. Additionally, in April 2021, construction of a
new 10,000 square foot permanent Fire Training Facility was approved and construction will run
concurrent with Phase 2. This project, funded with dedicated Fire facility lease revenue bonds issued in
2018, is scheduled for completion in early 2023.
In 2018, Council adopted the Sustainable Water Master Plan, which outlines several infrastructure projects
that will enable the City to achieve water self-sufficiency by 2023. In order to achieve these ambitious
goals, the City issued $78 million in Water Revenue Bonds to finance Water System capital improvements
undertaken as part of the Sustainable Water Master Plan, procured a $75.9 million loan from the Water
State Revolving Fund loan, and plans to apply for $15 million in grants from Department of Water
Resources to fund replacement groundwater production wells and two new groundwater injection wells.
Water projects underway include:
The Olympic Well Field Restoration project will maximize local groundwater resources by
constructing a new well head advanced water treatment facility (the “Olympic AWTF”), two new
groundwater production wells (SM-8 and SM-9), and a new Olympic Pipeline to restore the
Olympic Well Field to full production capacity (Olympic is one of three well fields serving the
Arcadia Water Treatment Plant). The Olympic AWTF component of this project is funded
through funds received from a negotiated settlement agreement. As described in the Official
Statement, these groundwater wells and pipelines will be partially funded by proceeds of Series
2021 Bonds, and the treatment portion to restore the well field is funded through settlement funds
on hand. The Series 2021 Bonds will fund a small portion of the Olympic Well Field Equipping
3.B.a
Packet Pg. 343 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
ix
($1.6 million) and the Olympic Pipeline ($3.9 million) and the project is scheduled to be
completed in summer of 2023.
The Arcadia Water Treatment Plant (WTP) Expansion project will expand the hydraulic treatment
capacity of the existing Arcadia WTP to treat additional groundwater available in the local
groundwater basin while maintaining sustainable yield levels. Various ancillary facilities (e.g.
new pumps, cartridge filters, mechanical piping upgrades, chemical feed systems, air stripping
tower, and brine tank and pump station) will be added or expanded to increase the Arcadia WTP
treatment capacity from 10 million gallons per day (“mgd”) to 13 mgd and allow the City to
operate all four reverse osmosis (“RO”) skids at the same time instead of three on duty and one
standby (current arrangement). In addition to the capacity expansion, the existing RO system will
be upgraded with a new high recovery technology, Flow Reversal Reverse Osmosis, to increase
its production efficiency from 80% to 90% or greater. The Production Efficiency Enhancement
Project would produce additional drinking water (approximately 1,200 acre-feet per year or
“AFY”) without the need to extract additional groundwater. The increase in production of local
groundwater supplies will help the City achieve its water self-sufficiency goal and reduce
purchase of imported water from The Metropolitan Water District of Southern California. The
Production Efficiency Enhancement Project is partially funded by grant funds through the
California Department of Water Resources’ Water Desalination Grant Program. The Arcadia
WTP Expansion funded by the Series 2021 Bonds totals $48 million and is scheduled to be
completed in summer of 2023.
The Groundwater Resiliency Enhancement at the Charnock Well Field, the City’s largest
groundwater well field consisting of five wells, seeks to maintain resiliency and production of the
City’s groundwater supply by replacing two aging wells (Charnock 13 and 18) as they are near
the end of their asset life and have lost significant pumping capacity over time. Charnock 13 and
18 have been in service since the 1980s and account for approximately 35% of the total
groundwater supply for the City. Replacement of these two aging wells will help maintain local
groundwater pumping. The well replacement cost of $8.7 million for Charnock 13 and 18 will
be funded through the Series 2021 Bonds and the project is scheduled to be completed by the end
of 2023.
AMI Upgrade project is a City-wide retrofit and deployment of AMI smart water meters to replace
aging meters, minimize water waste/loss, and increase water use efficiency to support the City’s
overall water supply sustainability goals. The AMI smart water meters would provide real time
water consumption readings, increase billing efficiency, and improve accuracy in water meter
reads. The entire $15 million for the AMI Project will be funded through Series 2021 Bonds and
is expected to be completed by the end of 2023.
The Sustainable Water Infrastructure Project (SWIP) improves drought resiliency, increases water
supply, and reduces stormwater discharges into the Santa Monica Bay. The project consists of
three elements. Element 1 is a modular reverse osmosis (RO) unit at the Santa Monica Urban
Runoff Recycling Facility (SMURRF) and new solar panels that will help offset the energy
required for the new RO. Element 2 is a below grade stormwater and sewer treatment facility
with 1 million gallons per day (MGD) capacity. Element 3 is a new stormwater harvesting tank
with 1.5 million gallon (MG) capacity. The project is funded using the City’s Wastewater,
Stormwater, and Clean Beaches and Ocean Parcel Tax Funds with financing from Clean Water
State Revolving Fund loan. All elements are being implemented in one phase. Design of all
3.B.a
Packet Pg. 344 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
x
elements is 100% complete. Construction phase is 80% complete. The advanced treated recycled
water from SWIP will also be used to replenish local groundwater supplies through direct
injection via the SWIP Injection Well (SM-10i) and help maintain groundwater pumping in the
Olympic Well Field. These projects are scheduled to be completed in late 2022.
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
ACFR for the fiscal year ended June 30, 2020. The Certificate of Achievement is a prestigious national
award, recognizing conformance with the highest standards for preparation of State and local government
ACFR. In order to be awarded a Certificate of Achievement, a government unit must publish an easily
readable and efficiently organized ACFR 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-seven years. We believe our current ACFR also
conforms to the Certificate of Achievement program requirements.
A copy of this ACFR can be viewed by appointment in the City Clerk’s Office. Electronic copies have
been provided to City Council and Audit Subcommittee members, 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. Physical copies can be provided upon request to the City’s
Finance Department.
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
3.B.a
Packet Pg. 345 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
OFFICIALS OF THE CITY OF SANTA MONICA
As of January 21, 2022
City Council
Sue Himmelrich, Mayor
Kristin McCowan, Mayor Pro Tempore
Phil Brock
Gleam Davis
Oscar De La Torre
Lana Negrete
Christine Parra
Administration and Department Heads
City Manager David White
Assistant City Manager Susan Cline
Deputy City Manager Anuj Gupta
Interim City Attorney Joseph Lawrence
City Clerk (Director of Records and Election Services) Denise Anderson-Warren
Director of Finance/City Treasurer Gigi Decavalles-Hughes
Director of Human Resources Lori Gentles
Chief Information Officer Joseph Cevetello
Chief of Police Ramon Batista
Interim Fire Chief Wolfgang Knabe
Director of Community Development David Martin
Interim City Librarian Erica Cuyugan
Director of Transit Services Edward F. King
Director of Community Services Andy Agle
Director of Public Works Rick Valte
xi
3.B.a
Packet Pg. 346 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
ORGANIZATION OF THE
CITY OF SANTA MONICA
DVRIJanuary 2122
CITIZENS
CITY COUNCIL
City Clerk City Attorney
Assistant City Manager
Community Development Community Services
Transportation Finance
Fire Human Resources
Police
Library
Public Works
Information Services
City Manager
Deputy City Manager
xii
3.B.a
Packet Pg. 347 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Santa Monica
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
xiii
3.B.a
Packet Pg. 348 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
City of Santa Monica, California
Year Ended June 30, 2021
FINANCIAL SECTION
3.B.a
Packet Pg. 349 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
Report on the Financial Statements
Opinions
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 year ended June 30, 2021, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
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, 2021, and the respective changes
in financial position and, where applicable, cash flows thereof for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We are required to be independent of the City and to
meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our
audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Responsibilities of Management 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; and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a
going concern for twelve months beyond the date of the financial statements.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
xiv
3.B.a
Packet Pg. 350 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit.
•Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
Other Reporting Responsibilities
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management’s
discussion and analysis on pages xvii–xxxv and the budgetary, pension, and other post-employment
benefits schedules on pages 105–117, as listed in the table of contents, be presented to supplement the
basic financial statements. Such information is the responsibility of management and, 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.
xv
3.B.a
Packet Pg. 351 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The combining and individual fund financial statements and
schedules on pages 120–145, as listed in the table of contents (supplementary information) are presented
for purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the financial statements. The 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 supplementary information is fairly stated, in all material
respects in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory section and statistical section but does not include the basic financial statements
and our auditor’s report thereon. Our opinions on the financial statements does not cover the other
information, and we do not express an opinion or any form of assurance thereon. In connection with our
audit of the financial statements, our responsibility is to read the other information and consider whether a
material inconsistency exists between the other information and the financial statements, or the other
information otherwise appears to be materially misstated. If, based on the work performed, we conclude
that an uncorrected material misstatement of the other information exists, we are required to describe it in
our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 21, 2022 on our consideration of the City’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the City’s
internal control over financial reporting and compliance.
Brea, California
January 21, 2022
xvi
3.B.a
Packet Pg. 352 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xvii
As management of the City of Santa Monica, California (City), we offer readers of the City’s Annual
Comprehensive Financial Report (ACFR) this narrative overview and analysis of the financial activities
of the City for the fiscal year ended June 30, 2021. 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 ACFR transmittal letter in the
preceding Introductory Section.
FINANCIAL HIGHLIGHTS
Total assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources, also known as net position, by $1,386.1 million as of June 30, 2021. Of this
amount, $1,206.9 million represents net investment in capital assets, $251.8 million represents net
position restricted for specific purposes, and ($72.6) million represents unrestricted net position.
Governmental activities and business-type activities reported unrestricted net positions of
($143.8) and $71.2 million as restated which is a reduction of $85.5 and $51.6 million
respectively. The decrease in governmental activities and business-type activities unrestricted net
position is primarily due to a COVID-19 pandemic related decline in revenues and additional
related expenses, legal settlement costs and increased employee benefit and pollution remediation
liabilities. Also note that the City funded the City Yards Modernization Project with $42.6 million
in operating cash. Lease revenue bonds to fund the project were subsequently issued in August
2021. Had these bonds been issued before year end, the Governmental Activities unrestricted net
position would have increased by $42.6 million. $859.4 million represents net position for
governmental activities and $526.7 million represents net position for business-type activities.
For the fiscal year ended June 30, 2021, the City’s total net position decreased by $134.0 million,
to $1,386.1 million at June 30, 2021 from $1,520.1 million at June 30, 2020, as restated. This
decrease was due to declines in governmental activities net position of $66.9 million and business-
type activities net position of $67.1 million during FY 2020-21.
At the end of the current fiscal year, the City’s governmental funds reported total ending fund
balances of $510.9 million, compared to $549.1 million at the end of the prior fiscal year as
restated, which is a decrease of $38.2 million or 7.0%.
The General Fund reported an ending fund balance of $180.9 million as of June 30, 2021,
compared to $224.9 million as of June 30, 2020 as restated, which represents a decrease of $44.0
million or 19.6%. The main reasons for the overall decrease in fund balance was continued capital
project spending on the City Yards Modernization and the City Services Building and declines in
revenue, primarily Transient Occupancy Taxes, parking revenues, and investment income.
Additionally, the General Fund contributed an extra $9.8 million to the General Liability Self-
Insurance Fund to pay for a legal settlement and incurred additional expenditures related to the
COVID-19 pandemic. Note that the City issued bonds to fund the construction of the City Yards
after year end netting $70.0 million. Had these bonds been issued prior to June 30, 2021, the
General Fund fund balance would have been $70.0 million higher.
The City’s net capital assets increased by $34.5 million, or 2.5%, to $1,389.0 million as of June
30, 2021 from $1,354.5 million as of June 30, 2020.
3.B.a
Packet Pg. 353 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xviii
The City’s long-term debt (excluding unamortized issuance premiums) increased by $14.1 million
or 8.7% to $176.0 million as of June 30, 2021 from $161.9 million as of June 30, 2020. The
increase is due to continued draws on a loan for water infrastructure offset by annual debt service
payments made during FY 2020-21.
The City’s net pension liability increased from $465.7 million at June 30, 2020 to $481.2 million
at June 30, 2021; an increase of $15.5 million or 3.3%. The increase in the liability was primarily
due to the lower than projected CalPERS investment portfolio returns (4.7%) in FY 2019-20.
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, community services and community development. The
business-type activities of the City include water, wastewater, stormwater, resource recovery and
recycling, pier, airport, cemetery, transit services, community broadband, and parking.
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, the Housing Authority of the City of Santa Monica, and the Santa Monica Redevelopment
Successor Agency.
The government-wide financial statements can be found on pages 1 and 2 of this report.
3.B.a
Packet Pg. 354 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xix
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, Special Revenue Source Fund,
and Low and Moderate Income Housing Asset Fund which are considered to be major funds. Data for
the other 16 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
information section of this report.
The City Council adopts an annual appropriated budget for its General Fund and twelve of the special
revenue funds (no budget is adopted for the Rent Control Fund and Asset Seizure Fund) and one capital
project fund (the Clean Beaches and Ocean Parcel Tax Fund). The City Council does not adopt budgets
for the two permanent funds (the cemetery and mausoleum perpetual care funds) or the one debt service
fund. A comparison schedule has been provided for the General Fund, Special Revenue Source Fund
and Low and Moderate Income Housing Asset Fund in the required supplementary information to the
basic financial statements.
The governmental funds financial statements can be found on pages 4 through 7 of this report.
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-
3.B.a
Packet Pg. 355 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
xx
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
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 9 through 11 of this report.
Fiduciary funds. Fiduciary funds consist of a private-purpose trust fund and a custodial fund. A private-
purpose trust fund was created in 2012 and is used to pay enforceable obligations of the former
Redevelopment Agency (Former Agency). The City’s sole custodial fund is the General Trust Fund,
used to account for resources held by the City 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 14 through 15 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 19 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 on the next page, the largest portion of the City’s net position, $1.2 billion or 87.1%, reflects
the City’s investment in capital assets less any related outstanding debt and associated deferred
outflows/inflows 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/inflows
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, $251.8 million or 18.2%, represents resources that are
subject to external restrictions on how they may be used. At the end of the current fiscal year, the City
reports positive balances in net investment in capital assets and restricted net assets for governmental
activities and all three categories of net position for business-type activities, however the City reported
negative unrestricted assets in governmental activities. The City reported negative unrestricted assets
primarily due to the economic effect of the COVID-19 pandemic, legal settlements costs, and increased
employee benefit and pollution remediation liabilities. The City managed its financial challenges by
reorganizing the City’s departments and reducing its workforce, focusing on essential services, scaling
back or eliminating capital projects, and increasing employees’ cost sharing of benefits. Additionally,
the City utilized operating cash to fund the City Yards Modernization Project. Subsequent to year end,
the City issued lease revenue bonds to fund the project and if the bonds had been issued before year end,
it would have increased governmental activities unrestricted net position by $42.6 million, the amount
of operating cash used to date. Recovering revenues, State and Federal government subsidies and
lowered expenses should help rebuild the City’s unrestricted net position balance.
3.B.a
Packet Pg. 356 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxi
A summary of the government-wide statement of net position follows:
6/30/21 6/30/20 6/30/21 6/30/20 6/30/21 6/30/20
(as restated) (as restated) (as restated)
Current and other assets 678.2$ 725.7 282.6 298.7 960.8 1,024.4
Capital assets 916.1 890.3 472.9 464.2 1,389.0 1,354.5
Total assets 1,594.3 1,616.0 755.5 762.9 2,349.8 2,378.9
Deferred outflows of resources 80.4 89.7 16.6 20.1 97.0 109.8
Current and other liabilities 67.6 71.4 55.4 50.6 123.0 122.0
Long-term liabilities 737.1 688.0 186.7 141.7 923.8 829.7
Total liabilities 804.7 759.4 242.1 192.3 1,046.8 951.7
Deferred inflows of resources 10.6 20.0 3.4 5.3 14.0 25.3
Net position:
Net investment in capital assets 764.4 756.3 442.5 454.0 1,206.9 1,210.3
Restricted 238.8 228.2 13.0 17.0 251.8 245.2
Unrestricted (143.8) (58.2) 71.2 122.8 (72.6) 64.6
Total net position 859.4$ 926.3 526.7 593.8 1,386.1 1,520.1
CITY OF SANTA MONICA
Summary of Net Position
(in millions)
Governmental activities Business-type activities Total
Total current and other assets decreased $63.6 million or 6.2% from the prior fiscal year. Governmental
activities decreased by $47.5 million and business-type activities decreased by $16.1 million.
Total deferred outflows of resources decreased $12.8 million or 11.7% from the prior fiscal year.
Governmental activities decreased by $9.3 million and business-type activities decreased by $3.5
million. GASB 68 and 75 require that certain differences between expected and actual net liability
components are reported on the Statement of Net Position as deferred outflows of resources in the fiscal
period they arise and are subsequently amortized. The amounts vary from year-to-year dependent on
the difference between the expected and actual amounts. The decrease is primarily due to the
amortization of these past deferred items.
Total current and other liabilities increased $1.0 million or 0.8% from the prior fiscal year.
Governmental activities decreased by $3.8 million and business-type activities increased by $4.8 million
primarily from changes in unearned revenue.
Total long-term liabilities increased $94.1 million or 11.3% from the prior fiscal year. The increase in
this category is primarily due to the $34.4 million increase in claims payable due to several legal
settlements, a $20.9 million increase to pollution remediation liability, an increase in loans and bonds
payable of $15.8 million due to draws on the State Water Resources Control Board loan, and a $22.8
million increase in employee benefits liabilities due to the lower than projected CalPERS investment
portfolio returns in FY 2019-20.
3.B.a
Packet Pg. 357 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxii
A summary of the government-wide statement of changes in net position follows:
2020-21 2019-20 2020-21 2019-20 2020-21 2019-20
Revenues
Program revenues:
Charges for services 106.4$ 126.3 105.6 119.2 212.0 245.5
Operating grants and contributions 58.5 41.4 63.9 59.8 122.4 101.2
Capital grants and contributions 0.6 1.5 4.6 10.1 5.2 11.6
General revenues:
Sales and use taxes 64.3 64.7 — — 64.3 64.7
Business license taxes 33.7 33.9 — — 33.7 33.9
Property taxes 75.3 67.8 — — 75.3 67.8
Transient occupancy taxes 20.7 48.6 — — 20.7 48.6
Utility users taxes 27.8 28.0 — — 27.8 28.0
Real property transfer taxes 9.3 6.9 — — 9.3 6.9
Parking facility taxes 7.4 11.1 — — 7.4 11.1
Other taxes 3.5 3.4 — — 3.5 3.4
Investment income 3.3 14.4 0.3 7.8 3.6 22.2
Other revenue 7.2 9.3 3.2 7.1 10.4 16.4
Total revenues 418.0 457.3 177.6 204.0 595.6 661.3
Expenses
General government 100.0 83.7 — — 100.0 83.7
Public safety 168.6 171.5 — — 168.6 171.5
General services 98.8 95.6 — — 98.8 95.6
Community services 80.8 75.3 — — 80.8 75.3
Library 9.4 15.0 — — 9.4 15.0
Community development 39.6 67.3 — — 39.6 67.3
Interest on long-term debt 5.1 5.2 — — 5.1 5.2
Water — — 50.2 21.6 50.2 21.6
Resource recovery and recycling — — 28.7 29.3 28.7 29.3
Community broadband — — 3.2 3.1 3.2 3.1
Pier — — 7.6 8.5 7.6 8.5
Wastewater — — 19.8 17.8 19.8 17.8
Airport — — 9.8 12.5 9.8 12.5
Stormwater management — — 0.4 1.2 0.4 1.2
Cemetery — — 2.6 2.3 2.6 2.3
Big Blue Bus — — 93.5 100.3 93.5 100.3
Parking Authority — — 1.7 0.1 1.7 0.1
Total expenses 502.3 513.6 217.5 196.7 719.8 710.3
Excess (deficiency) of revenues
over expenses before special items
and transfers (84.3) (56.3) (39.9) 7.3 (124.2) (49.0)
Special items (9.8) (34.2) — (1.4) (9.8) (35.6)
Transfers 27.2 46.7 (27.2) (46.7) — —
Change in net position (66.9) (43.8) (67.1) (40.8) (134.0) (84.6)
Beginning net position, as restated 926.3 971.7 593.8 630.4 1,520.1 1,602.1
Ending net position 859.4$ 927.9 526.7 589.6 1,386.1 1,517.5
Governmental activities Business-type activities Total
CITY OF SANTA MONICA
Summary of Changes in Net Position
(in millions)
3.B.a
Packet Pg. 358 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxiii
Charges for services
25.5%
Operating grants and
contributions
14.0%
Capital grants and
contributions
0.1%Sales and use taxes
15.4%
Business license
taxes
8.1%
Property taxes
18.0%
Transient occupancy
taxes
5.0%
Utility users taxes
6.7%
Real property
transfer taxes
2.2%
Parking facility taxes
1.8%Other taxes
0.8%
Investment income
0.8%Other general
revenues
1.6%
Sources of Revenue Governmental Activities
Governmental Activities. The City’s governmental activities net position decreased by $66.9 million,
or 7.2%. Analysis of revenues and expenses are discussed below and on the following pages.
Revenue Sources: Governmental Activities. As shown in the chart below, the largest category of revenue
for governmental activities is charges for services, which represents 25.5% of total governmental
activities revenue. The category totaled $106.4 million in FY 2020-21, compared to $126.3 million in
FY 2019-20, which is a decrease of $19.9 million or 15.8% due to continued depressed parking and
parking citations revenue as a result of the COVID-19 pandemic. The second largest category is property
taxes, which represent 18.0% of total governmental activities revenue. Property taxes increased $7.5
million or 11.1% from the prior fiscal year. The increase was primarily due to a continued strong rise
in City’s property tax assessed valuation. The third largest category is sales and use taxes, which
decreased $0.4 million or 0.6% from the prior fiscal year as the economy began showing signs of
recovery in the second half of the fiscal year. Additionally, increased revenues from on-line sales helped
offset some of the losses from “brick and mortar” sources during the COVID-19 pandemic. Also of note,
Transient Occupancy Taxes decreased $27.9 million from $48.6 million to $20.7 million or 57.4% due
to lower hotel occupancy caused by the COVID-19 pandemic shutdowns and the subsequent slow
recovery of tourism. However, as with sales taxes, this sector began showing signs of recovery in the
second half of the fiscal year. Finally, Governmental Activities reported $1.1 million in Coronavirus
Aid, Relief, and Economic Security (CARES) Act Coronavirus Relief Funds (CRF) revenue passed
through the State of California, a credit of $1.7 million against the City’s State Unemployment Insurance
payment, the Department of Housing and Urban Development awarded the Housing Authority $0.4
million to be spent on administrative expenses associated with the Housing Choice Voucher program,
and $14.3 million in American Rescue Plan Act revenue.
3.B.a
Packet Pg. 359 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxiv
Functional Expenses: Governmental Activities. As displayed in the chart below, general government,
public safety, general services, community services, and community development accounted for 97.1%
of total governmental activities expenses.
During FY 2020-21, the City reorganized three existing departments to create two new departments
which are:
• The Community Development Department, consisting of the Building & Safety, Code Enforcement,
Economic Development, Planning, and Mobility Divisions; and
•The Community Services Department, consisting of the Community Recreation, Cultural Affairs
and Housing and Human Services Divisions.
Reconfiguring departments in this manner enhances focus on economic recovery across the
organization, while also preventing duplication of administrative functions. This consolidation
eliminated several senior positions, including one Department Head. The plan also reduced the size of
the City Manager’s Office and focuses its resources on prioritizing, aligning, supporting, and advancing
the work of Departments across the City. The Office of Civic Wellbeing and Office of Performance
Management were eliminated. The Office of Communications was reduced in scope and size to support
a streamlined City Manager’s Office.
General government
19.8%
Public safety
33.6%
General services
19.7%
Community services
16.1%
Library
1.9%
Community
development
7.9%
Interest on long-term
debt
1.0%
Functional Expenses
Governmental Activities
3.B.a
Packet Pg. 360 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxv
As such, governmental activities functional expenses have also changed with Community Development
and Community Services replacing Housing and Community Development and Cultural and Recreation
respectively.
Total governmental activities expenses decreased $11.3 million or 2.2% from the prior fiscal year. The
three categories with the largest variance from the prior year were general government, community
services, and community development. General government expenses increased $16.3 million or 19.6%.
Community services increased $5.5 million or 7.3%. Community development decreased $27.7 million
or 41.2%. The increase in General Government expenses was primarily due to a $54.9 million legal
settlement offset by a decrease in personnel expenses due to reductions in force that took place at the
end of FY 2019-20. The decrease in community development was related to the City’s reorganization
which moved the activities of the Housing Division from community development to community
services. The increase in community services was related to the inclusion of the Housing Division offset
by reductions in personnel costs and professional services.
3.B.a
Packet Pg. 361 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxvi
Program Expenses: Governmental Activities. The following chart compares program revenues and
expenses for governmental activities (excluding interest on long-term debt):
The comparison of direct expenses and program revenues identifies the extent to which each function is
self-financing or draws from the general revenues of the City. A higher percentage of program revenues
to direct expenses indicates that a function is generally self-financed through program revenues
generated by activities within that function. In contrast, a lower percentage of program revenues to
direct expenses indicates that a function is primarily financed through general revenues.
The function with the highest percentage of program revenues to direct expenses in FY 2020-21 is
community development, which had expenses of $39.6 million and program revenues of $33.2 million,
which is a ratio of 84%. This high percentage indicates that most of the expenses in this category are
financed by revenues generated by activities within the community development category including
promissory note repayments.
The function with the lowest percentage of program revenues to direct expenses in FY 2020-21 is the
Library, which had expenses of $9.4 million and program revenues of $0.1 million, a ratio of 1.0%. This
low percentage indicates that most of the expenses in this category are financed by the general revenues
of the City.
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
General
government
Public safety General services Community
services
Library Community
development
Expenses and Program Revenues
Governmental Activities
(millions)
Expenses Revenues
3.B.a
Packet Pg. 362 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxvii
Business-type Activities. The City’s business-type activities net position decreased $67.1 million or
11.3% from the prior fiscal year.
Revenue Sources: Business-type activities. The chart below displays the key sources of revenue for
business-type activities as a percentage of total revenues. The top three sources of revenue for business-
type activities are charges for services, operating grants and contributions, and capital grants and
contributions like those for the Big Blue Bus which includes both Federal and Local Grants. These three
categories account for 98.1% of the total business-type activities revenues of $174.1 million.
Charges for services
59.5%
Capital grants and
contributions
2.6%
Operating grants and
contributions
36.0%
Other general
revenues
1.8%
Investment income
0.1%
Sources of Revenue
Business-type Activities
3.B.a
Packet Pg. 363 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxviii
Expenses: Business-type Activities. The chart below displays individual business-type activities as a
percentage of total business-type activity expenses. The Big Blue Bus, Water, Resource Recovery and
Recycling, and Wastewater activities accounted for 88.4% of total business-type activity expenses.
Other business-type activities of the City include the Airport, Pier, Cemetery, Stormwater Management,
Parking Authority, and Community Broadband.
Water
23.1%
Resource Recovery
and Recycling
13.2%
Pier
3.5%
Wastewater
9.1%Airport
4.5%
Stormwater
Management
0.2%
Cemetery
1.2%
Big Blue Bus
43.0%
Parking Authority
0.8%
Community
Broadband
1.4%
Business-type Activities Expenses
3.B.a
Packet Pg. 364 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxix
Program Revenues and Expenses: Business-type Activities. The following chart compares program
revenues and expenses for business-type activities:
For discussion and analysis of key points of business-type activities, see the following section on the
City’s major proprietary funds.
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.
The City’s governmental funds total fund balance decreased $38.2 million, or 7.0% from the prior fiscal
year. The primary reasons for the decrease are discussed on the following pages.
General Fund
The General Fund is the chief operating fund of the City. Total fund balance in the General Fund
decreased $44.0 million or 19.6% from the prior fiscal year.
$0
$20
$40
$60
$80
$100
Expenses and Program Revenues
Business-type Activities
(in millions)
Expenses Revenues
3.B.a
Packet Pg. 365 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxx
Key factors in changes in revenues and expenditures from the prior year are as follows:
1.Total General Fund revenues decreased $52.3 million or 13.9% from the prior fiscal year. The
largest revenue source in the General Fund is property taxes, which increased $7.5 million or
11.1%. The second largest revenue source in the General Fund is sales and use taxes, which
decreased $0.4 million or 0.6%. The third largest revenue source is transient occupancy taxes,
which decreased $27.9 million or 57.4%. Combined, these three categories represented 49.3%
of total General Fund revenues for FY 2020-21. Sales and use taxes have remained comparable
to the prior year despite the COVID-19 pandemic and related government shutdowns in both
Santa Monica and on the national and international level reflecting a resilient consumer base.
Property taxes increased primarily due to continued strong increases in City assessed valuation.
Transient occupancy taxes also decreased due to the COVID-19 pandemic and related travel
restrictions and shutdowns that resulted in a severe decline in the hospitality sector. Licenses
and permits decreased by $12.5 million or 32.4% from COVID-19 related declines in parking
revenue and investment income decreased by $8.9 million or 95.4% due in part to $3.1 million
in unrealized losses on the City’s investments because of increasing interest rates versus a $1.6
million unrealized gain in the prior year offset by $5.7 million in interest income from a one-
time Successor Agency payment on a promissory note partially offset investment income losses.
2.Total General Fund expenditures decreased $107.4 million or 22.8% from the prior fiscal year.
This decrease was due primarily to a decrease in general government expenditures of $71.3
million or 54.0% and a decrease in public safety expenditures of $21.0 million or 12.2%. These
two expenditure line items represent the largest expenditure categories of the General Fund
which account for 58.4% of all General Fund expenditures for FY 2020-21. General
Government decreased due to several large capital projects winding down in FY 2020-21
including the City Services Building and the City Yards Modernization plus lower personnel
costs from the prior year’s reduction in force. Additionally, other decreases in expenditures were
related to the City temporarily suspending its discretionary accelerated paydown of its unfunded
pension liability and OPEB contributions. Public Safety decreased primarily due to the
completion of Fire Station 1.
3.The General Fund made an additional $9.8 million payment to the General Liability Self-
Insurance Fund to pay for a settlement. This was reported as a special item.
Special Revenue Source Fund
Total fund balance in the Special Revenue Source Fund increased $12.3 million or 6.8% from the prior
fiscal year primarily due to transfers in related to promissory note repayments and other affordable
housing funds. Total revenues decreased $4.6 million or 49.9%. The decrease in revenues was primarily
due to a $4.2 million decrease in developer fees.
Low and Moderate Income Housing Asset Fund
Total fund balance in the Low and Moderate Income Housing Asset Fund increased $3.0 million or
4.7% from the prior fiscal year. The principal reason for the increase in fund balance was transfers in
of $3.7 million which represent the Fund’s required 20% share in the repayment of Successor Agency
loans under SB107. The amount of the loan repayment is based on a formula primarily driven by
property tax in the former redevelopment project areas. As of June 30, 2021, all the loans have been
repaid so no more transfers will occur.
3.B.a
Packet Pg. 366 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxxi
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 of all the City’s enterprise funds decreased $68.4 million, or 12.2% from the prior
fiscal year.
Water Fund
The total net position of the Water Fund decreased $23.0 million, or 27.8% from the prior fiscal year.
Revenues reflect a $1.8 million increases in water service charges primarily from a 20% water rate
increase offset by a decrease in customer water usage. The primary reason for the decrease in net
position was a revision to the pollution remediation liability of $25.0 million based on a refinement of
the remediation process and related operating costs for the Olympic Wellfield based on updated
engineering estimates from the City’s consultants and a longer period of remediation expected for the
Charnock Well Field. Both projects are funded by settlement proceeds and the City believes it has
sufficient settlement funds to pay current and future remediation costs.
Wastewater Fund
The total net position of the Wastewater Fund decreased $17.2 million, or 8.1% from the prior fiscal
year. The primary reason for the decrease was the transfer of $15.5 million to the Clean Beaches Fund
to pay for the Wastewater Fund’s portion of the City’s Clean Water Projects. Contractual services
increased by $1.9 million primarily due to increases in the City of Los Angeles’ sewer disposal fees and
a $2.0 million true up payment made in FY 2020-21 based on a reconciliation of FY 2019-20
amalgamated system operating and maintenance costs. Finally, charges for services decreased $1.0
million due to decreases in customer usage.
Resource Recovery and Recycling Fund
The total net position of the Resource Recovery and Recycling Fund decreased $1.8 million or 26.5%
before a prior period adjustment of $4.2 million.
The decrease was primarily related to a decrease in processing commodity due to the pandemic resulting
in a decrease in charges for services of $0.8 million and a decrease in investment income of $0.8 million
due to accounting for unrealized losses.
Big Blue Bus Fund
The total net position of the Big Blue Bus Fund decreased $18.4 million, or 9.9% from the prior fiscal
year. The primary reason was the reduction in charges for services of $9.0 million due to the suspension
of fares from March 2020 to February 2021, a $19.1 reduction in shared sales tax proceeds recognized,
offset by $24.4 million in American Rescue Plan Act funds and a reduction of capital contributions of
$5.4 million due to reduced mileage which in turn didn’t necessitate the same level of vehicle
maintenance.
3.B.a
Packet Pg. 367 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxxii
General Fund Budgetary Variances
Revenue Original Budget to Final Amended Budget. The final revenue budget of $305.7 million for
the General Fund was $14.7 million (4.6%) less than the original budget of $320.4 million. Revenue
budget changes are approved by the City Council. The primary components of the variance were
reduced budgets for licenses and permits reflecting less parking revenues ($10 million), transient
occupancy taxes ($6.5 million), charges for services ($4.1 million), fines and forfeitures ($3.2 million),
and parking facility taxes ($2.0 million). Partially offsetting are budget increases for sales and use taxes
($2.8 million), property taxes ($2.2 million), other local taxes ($5.3 million), and investment income
($1.1 million).
Revenue Final Amended Budget to Actuals. Actual General Fund revenues of $325.4 million were
$19.7 million (6.4%) more than the final budget of $305.7 as economic activity began to recover faster
and stronger than anticipated. The primary components of the variance were sales and use taxes with
actual revenues exceeding the final budgeted amount by $6.9 million or 12% and greater than anticipated
revenues from property taxes ($2.5 million), other local taxes $4.8 million, and licenses and permits,
primarily from parking revenues ($3.8 million).
Expenditure Original Budget to Final Amended Budget. The final General Fund expenditure budget
is greater than the original budget by $74.8 million, or 21.3%. 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 over to the current fiscal year in
order to complete those projects. Funds are reported as Assigned Fund Balance Continuing Capital
Projects to cover these costs. The final budget includes both newly adopted and rolled over amounts.
Significant projects that were rolled over include Fire Training Facility, City Yards Improvements and
the City Services Building at $6.4 million, $24.8 million and $2.2 million, respectively.
Expenditure Final Amended Budget to Actuals. Actual expenditures (budgetary basis) for the
General Fund totaled $399.1 million, while the final budget totaled $426.4 million, a variance of $27.3
million or 6.4%. Almost all the variance is due to capital improvement expenditures, which had actual
expenditures of $61.9 million, compared to the final budget of $81.0 million, a variance of $19.1
million. Many capital projects are constructed over numerous fiscal periods and the variance in this
category is due to the timing between the establishment of the budget at the beginning of the project and
actual capital improvement project spending. Unexpended capital budget will be reappropriated into
FY 2021-22 to continue work on projects that have not yet been completed. Actual operating
expenditures totaled $337.3 million, compared to the final budget of $354.2 million, which is a variance
of $16.9 million or 4.8%. This small variance due in part to initiatives taking longer to complete, in
which case funds were reappropriated to the following year to allow completion, and to the City’s
continued active management of expenditures in the face of pandemic-related revenue losses
(suspending or eliminating non-essential services while maintaining essential services and operations)
and the savings achieved as a result of those changes.
3.B.a
Packet Pg. 368 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxxiii
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. The City’s capital assets (net of accumulated depreciation) as of June 30, 2021
amounted to $1,389.0 million, an increase of $34.5 million from the prior fiscal year. The increase was
primarily due to the continued construction of large projects such as various clean water projects, Fire
Station 1, the City Services Building and the City Yards Modernization.
This investment in a broad range of capital assets, including land, infrastructure, buildings and
improvements, equipment, and construction in progress, is detailed as follows:
6/30/21 6/30/20 6/30/21 6/30/20 6/30/21 6/30/20
Land 200.3$ 200.3 53.4 53.4 253.7 253.7
Land held under easement 72.4 72.2 — — 72.4 72.2
Construction in progress 81.1 161.9 54.7 27.9 135.8 189.8
Buildings 454.2 340.4 150.1 148.3 604.3 488.7
Improvements other than buildings 218.4 197.4 29.8 28.9 248.2 226.3
Machinery and equipment 60.2 59.3 225.0 227.4 285.2 286.7
Infrastructure 376.6 376.6 254.4 249.7 631.0 626.3
Utility systems 1.8 1.8 — — 1.8 1.8
Intangibles 0.7 0.7 116.8 113.8 117.5 114.5
Less accumulated depreciation (549.6) (520.3) (411.3) (385.2) (960.9) (905.5)
Capital assets, net 916.1$ 890.3 472.9 464.2 1,389.0 1,354.5
CITY OF SANTA MONICA
Capital Assets
(in millions)
Governmental activities Business-type activities Total
Some of the City’s major capital asset events in FY 2020-21 were:
Governmental Activities:
1.Major projects included $20.7 million for Water Infrastructure Projects, $5.5 million for the
construction of the new City Services Building and $10.2 million for the design and construction
for City Yards Modernization.
2.The amount in construction in progress decreased as there are several major projects that were
finished and recorded as a completed asset such as Fire Station 1, City Hall South and the City
Services Building. The remaining major projects include the Governmental Activities
contribution to fund Water Infrastructure Projects and the City Yards Modernization, with
ending balances as of June 30, 2021 of $26.1 million and $39.4 million, respectively.
3.B.a
Packet Pg. 369 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxxiv
Business-Type Activities:
1.Major projects included $16.1 million for Water Infrastructure Projects, $8.4 million for Phase
1 of the City Yards Modernization Project and $3.0 million for the replacement of water mains.
Also included are a $3.0 million payment for wastewater improvements including a payment to
the City of Los Angeles for capital improvements to the Amalgamated Sewer System.
Additional information on the City’s capital assets can be found in note 7 to the basic financial
statements.
As of June 30, 2021, the City had $20.6 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
(excluding issuance premiums) was $176.0 million, an increase from the prior year of $14.1 million or
8.7%. This increase was due to issuance of debt of $19.7 million, payments of $26.9 million in revenue
bonds and $1.1 million in general obligation bonds offset by draws on the State Water Resources Control
Board loans of $22.5 million.
6/30/21 6/30/20 6/30/21 6/30/20 6/30/21 6/30/20
General obligation bonds
(backed by the City) 2.1$ 3.2 — — 2.1 3.2
Revenue bonds
(backed by specific tax, fee 143.5 148.5 2.3 4.6 145.8 153.1
and lease revenues)
Notes and loans - - 28.1 5.6 28.1 5.6
Total 145.6$ 151.7 30.4 10.2 176.0 161.9
CITY OF SANTA MONICA
Outstanding Debt
(in millions)
Governmental activities Business-type activities Total
On May 5, 2021, the Santa Monica Public Financing Authority issued $19,700,000 of Santa Monica
Public Financing Authority Lease Revenue Refunding Bonds (Parking Structure 6 Project) Series
2021A&B bearing interest from 0.30% to 4.00% with a final maturity of July 1, 2031. The bonds were
issued to refund the Santa Monica Public Financing Authority Lease Revenue Bonds (Parking Structure
6 Project) Series 2011A.
The City of Santa Monica maintains a “AAA” rating from both Standard and Poor’s and Fitch, and a
“Aaa” rating from Moody’s. There were no changes to any bond ratings during FY 2020-21.
Additional information on the City’s long-term debt can be found in note 9 to the basic financial
statements.
3.B.a
Packet Pg. 370 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Management’s Discussion and Analysis, Continued
For the fiscal year ended June 30, 2021
(Unaudited)
xxxv
ECONOMIC FACTORS AND BIENNIAL BUDGET
The City’s adopted General Fund budget for FY 2021-22 supports the basic responsibilities of local
government, the policy interests of the City Council members and diverse concerns of residents. The
ongoing COVID-19 pandemic and related economic fallout required significant adjustments in the
budget compared to pre-pandemic years. As such, management made difficult decisions to assure long
term financial stability of the City and feels that, in the long term, there are adequate resources available
to fund the proposed expenditures.
In preparing the budget for FY 2021-22, many factors were taken into consideration:
Community priorities:
o Addressing Homelessness
o Clean and Safe Santa Monica
o Equitable and Inclusive Economic Recovery
Overall fiscal challenges precipitated by the COVID-19 pandemic.
Streamlining operations to provide core services on which the community relies.
Additional revenues from Measure SM, a revenue measure that protects essential services by
increasing the one-time real estate transfer tax on sales of property of $5 million or more.
Establishment of the SaMo Small Business Recovery Grant Program to support the City’s
smallest local businesses.
The newly established We Are Santa Monica Fund which supports efforts ranging from the new
Virginia Avenue Park food pantry to racial equity initiatives across the community.
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.
3.B.a
Packet Pg. 371 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
City of Santa Monica, California
Year Ended June 30, 2021
BASIC FINANCIAL STATEMENTS
3.B.a
Packet Pg. 372 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
June 30, 2021
GovernmentalActivities Business-TypeActivities Total
ASSETSCash and investments (note 5)$372,466,951 186,037,689 558,504,640Receivables (net of allowances for uncollectibles):
Accounts 9,327,997 23,614,840 32,942,837Interest776,183 432,401 1,208,584Taxes17,522,356 -17,522,356
Notes (note 6)201,864,672 -201,864,672Other governments 14,012,892 10,709,924 24,722,816Internal balances 8,086,348 (8,086,348)-Inventory -3,423,560 3,423,560Deposits3,257 -3,257Prepaids56,592 12,313 68,905Restricted cash and investments (note 5)20,394,629 66,413,736 86,808,365Restricted cash and investments with fiscal agent (note 5)33,702,686 2 33,702,688Capital assets (note 7):Capital assets not being depreciated:Land 200,323,024 53,380,750 253,703,774Land held under easement 72,384,923 -72,384,923Construction in progress 81,135,414 54,740,909 135,876,323Capital assets being depreciated:Buildings 454,186,102 150,067,491 604,253,593Improvements other than buildings 218,377,457 29,857,989 248,235,446Utility systems 1,742,913 -1,742,913
Machinery and equipment 60,233,213 225,061,611 285,294,824Infrastructure376,593,979 254,369,876 630,963,855Intangibles695,710 116,765,123 117,460,833
Less accumulated depreciation (549,593,896)(411,305,050)(960,898,946)
Total capital assets, net 916,078,839 472,938,699 1,389,017,538
TOTAL ASSETS 1,594,293,402 755,496,816 2,349,790,218
DEFERRED OUTFLOWS OF RESOURCESDeferred loss on refundings 5,018 38,132 43,150Deferred outflows from pensions (note 16)71,681,093 15,154,232 86,835,325Deferred outflows from OPEB (note 16)8,677,248 1,458,632 10,135,880
TOTAL DEFERRED OUTFLOWS OF RESOURCES 80,363,359 16,650,996 97,014,355
LIABILITIESAccounts payable 31,152,627 11,615,322 42,767,949
Accrued liabilities 6,391,614 2,830,369 9,221,983Accrued interest payable 1,950,097 429,795 2,379,892Contracts payable (retained percentage)3,515,160 1,846,566 5,361,726
Unearned revenue (note 8)23,874,243 20,846,514 44,720,757Deposits payable from restricted assets 765,559 17,811,927 18,577,486Long-term liabilities:
Compensated absences due within one year (note 2)6,985,614 2,325,850 9,311,464Compensated absences due in more than one year (note 2)7,665,136 1,303,179 8,968,315Claims payable due within one year (note 15)73,783,753 2,478,793 76,262,546Claims payable due in more than one year (note 15)57,122,759 1,890,701 59,013,460Loans and bonds payable due within one year (note 9)2,895,000 2,340,000 5,235,000Loans and bonds payable due in more than one year (note 9)158,726,447 28,129,655 186,856,102Pollution remediation obligation due within one year (note 4)342,183 20,352,242 20,694,425Pollution remediation obligation due in more than one year (note 4)1,658,468 34,343,458 36,001,926Net OPEB liability due in more than one year (note 16)34,443,401 5,789,879 40,233,280Net pension liability due in more than one year (note 16)393,418,759 87,746,207 481,164,966
TOTAL LIABILITIES 804,690,820 242,080,457 1,046,771,277
DEFERRED INFLOWS OF RESOURCESDeferred gain on refunding 634,900 -634,900Deferred inflows from pensions (note 16)8,664,628 3,136,013 11,800,641Deferred inflows from OPEB (note 16)1,310,449 220,286 1,530,735
TOTAL DEFERRED INFLOWS OF RESOURCES 10,609,977 3,356,299 13,966,276
NET POSITIONNet investment in capital assets 764,429,080 442,507,176 1,206,936,256
Restricted for (note 12):Community development 153,082,992 -153,082,992Community services 6,997,014 -6,997,014
Transportation 34,661,264 -34,661,264Clean beaches and ocean parcel tax 7,877,341 -7,877,341Debt service 5,622,302 2,298,946 7,921,248Miscellaneous12,949,246 -12,949,246Perpetual care - nonexpendable 17,468,033 -17,468,033Prop 1B -10,731,093 10,731,093Unrestricted(143,731,308)71,173,841 (72,557,467)
TOTAL NET POSITION $859,355,964 526,711,056 1,386,067,020
See accompanying notes to basic financial statements.
1
3.B.a
Packet Pg. 373 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Activities
For the fiscal year ended June 30, 2021
Program Revenues Net (Expense) Revenue and Change in Net Position
Functions/Programs Expenses Charges forServices Operating Grantsand Contributions Capital Grantsand Contributions GovernmentalActivities Business-TypeActivities Total
Governmental Activities:General government $ 100,049,699 19,883,077 3,178,947 48,640 (76,939,035)- (76,939,035)Public safety 168,577,199 17,035,556 15,333,287 26,540 (136,181,816)- (136,181,816)
General services 98,780,082 37,249,257 11,294,804 565,340 (49,670,681)- (49,670,681)Community services 80,831,581 5,019,411 22,579,744 - (53,232,426)- (53,232,426)Library 9,390,658 23,764 71,839 - (9,295,055)- (9,295,055)Community development 39,576,169 27,194,589 6,018,634 - (6,362,946)- (6,362,946)Interest on long-term debt 5,091,436 --- (5,091,436)- (5,091,436)
Total governmental activities 502,296,824 106,405,654 58,477,255 640,520 (336,773,395)-(336,773,395)Business-Type Activities:
Water 50,202,882 29,638,341 --- (20,564,541) (20,564,541)Resource recovery and recycling 28,722,152 26,842,779 --- (1,879,373) (1,879,373)Community broadband 3,215,379 3,299,401 ---84,022 84,022
Pier 7,596,392 3,164,586 --- (4,431,806) (4,431,806)Wastewater 19,841,075 17,330,719 --- (2,510,356) (2,510,356)Airport 9,820,280 15,946,198 --- 6,125,918 6,125,918Stormwater management 363,288 1,609,230 --- 1,245,942 1,245,942Cemetery2,546,151 2,443,201 --- (102,950) (102,950)Big Blue Bus 93,473,973 5,366,846 63,900,481 4,623,832 - (19,582,814) (19,582,814)Parking authority 1,724,894 ---- (1,724,894) (1,724,894)
Total business-type activities 217,506,466 105,641,301 63,900,481 4,623,832 -(43,340,852)(43,340,852)
Total Primary Government $ 719,803,290 212,046,955 122,377,736 5,264,352 (336,773,395) (43,340,852) (380,114,247)
General revenues: Taxes:Property 75,324,679 - 75,324,679Sales and use 64,301,901 - 64,301,901Transient occupancy 20,691,803 - 20,691,803Utility users 27,840,035 - 27,840,035Business license 33,644,559 - 33,644,559Parking facility 7,374,354 - 7,374,354Real property transfer 9,334,371 - 9,334,371Other3,512,898 - 3,512,898Other revenue 7,201,899 3,165,760 10,367,659 Investment income 3,268,921 280,080 3,549,001Special item (9,825,000)- (9,825,000)
Transfers 27,184,761 (27,184,761)-
Total general revenues, special item, and transfers 269,855,181 (23,738,921)246,116,260
Change in net position (66,918,214) (67,079,773) (133,997,987)
Net position at beginning of year, as restated (note 20)926,274,178 593,790,829 1,520,065,007
Net position at end of year $859,355,964 526,711,056 1,386,067,020
See accompanying notes to basic financial statements.
22
3.B.a
Packet Pg. 374 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
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. Low and Moderate Income Housing Asset Fund (Special Revenue Fund Type) – 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. Under SB107, 20% of all Successor Agency/City loan payments are distributed to this Fund.
3
3.B.a
Packet Pg. 375 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2021
Special Revenue Funds
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
ASSETSCash and investments (note 5)$161,072,514 81,986,381 14,015,370 28,506,744 285,581,009Restricted cash and investments (note 5)427,913 --19,966,716 20,394,629Receivables (net, where applicable, of allowances for uncollectibles):Accounts 5,969,488 39,947 -3,311,198 9,320,633Notes (note 6)-126,483,794 52,957,227 22,423,651 201,864,672Taxes17,456,483 --65,873 17,522,356Interest489,901 30,629 19,722 121,963 662,215Other governments 78,212 --13,934,680 14,012,892Due from other funds (note 11)9,707,670 ---9,707,670Deposits---3,257 3,257
Prepaids 12,076 --44,516 56,592Restricted cash and investments with fiscal agent (note 5)10,690,572 --23,012,114 33,702,686Advances to other funds (note 11)9,702,159 1,450,000 --11,152,159Total assets $215,606,988 209,990,751 66,992,319 111,390,712 603,980,770
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND
FUND BALANCES
LiabilitiesAccounts payable $21,686,851 744,620 25 8,033,533 30,465,029Accrued liabilities 6,037,464 --307,585 6,345,049Contracts payable (retained percentage)1,300,114 73,997 -2,135,438 3,509,549Due to other funds (note 11)---9,191,939 9,191,939
Unearned revenue (note 8)5,002,720 17,522,050 -1,349,473 23,874,243Deposits payable 568,732 150,000 -46,827 765,559Advances from other funds (note 11)---5,612,703 5,612,703
Total liabilities 34,595,881 18,490,667 25 26,677,498 79,764,071
Deferred inflows of resources (note 8)163,285 --13,189,312 13,352,597
Fund balances (note 13)Nonspendable 9,550,950 1,450,000 -17,512,549 28,513,499Restricted11,119,497 75,126,026 66,992,294 75,406,157 228,643,974Committed-114,924,058 --114,924,058Assigned114,285,898 ---114,285,898Unassigned45,891,477 --(21,394,804)24,496,673
Total fund balances 180,847,822 191,500,084 66,992,294 71,523,902 510,864,102
Total liabilities, deferred inflows of resources, and fund balances $215,606,988 209,990,751 66,992,319 111,390,712 603,980,770
See accompanying notes to basic financial statements.
4
3.B.a
Packet Pg. 376 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Reconciliation of the Governmental Funds Balance Sheet to the
Government-Wide Statement of Net Position
June 30, 2021
Fund balances - total governmental funds 510,864,102$
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.915,972,172
(2)Pension deferrals from reporting under GASB 68.62,723,630
(3)OPEB deferrals from reporting under GASB 75.7,364,214
(4)Deferred gain on refunding of debt is not a current financial resource and, therefore, is not reported in the balance sheet.(634,900)
(5)Deferred loss on refundings of debt is not a current financial resource and, therefore, is not reported in the balance sheet.5,018
(6)Long-term liabilities and accrued interest are not due and payable in the current period and therefore are not reported in the balance sheet.(605,780,058)
(7)Revenue earned, but unavailable to pay for current period expenditures, is reporting as deferred inflows in the balance sheet, but
recognized as revenue in the statement of activities.13,352,597
(8)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.(44,510,811)
Net position of governmental activities 859,355,964$
See accompanying notes to basic financial statements.
5
3.B.a
Packet Pg. 377 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the fiscal year ended June 30, 2021
Special Revenue Funds
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Revenues:
Property taxes $ 75,324,679 --- 75,324,679
Sales and use taxes 64,301,901 --- 64,301,901
Transient occupancy taxes 20,691,803 --- 20,691,803
Utility user taxes 27,840,035 --- 27,840,035
Business license taxes 33,644,559 --- 33,644,559
Other taxes 16,779,463 --3,442,160 20,221,623
Licenses and permits 26,089,017 --71,617 26,160,634
Intergovernmental 1,868,076 -- 56,748,511 58,616,587
Charges for services 36,668,251 1,000,828 - 16,647,783 54,316,862
Fines and forfeitures 7,779,862 ---7,779,862
Investment income 426,868 14,457 39,576 2,692,777 3,173,678
Interest from promissory note 5,399,246 ---5,399,246
Rental income 5,291,569 --841,816 6,133,385
Other revenue 3,256,754 3,634,790 377,624 1,022,858 8,292,026
Total revenues 325,362,083 4,650,075 417,200 81,467,522 411,896,880
Expenditures:
Current:
General government 60,792,690 --938,767 61,731,457
Public safety 151,310,128 81,593 -2,549,700 153,941,421
General services 73,816,581 2,040,851 - 40,656,811 116,514,243
Community services 49,942,741 3,738,426 - 30,303,728 83,984,895
Library 8,765,079 --41,271 8,806,350
Community development 18,497,539 259,474 1,104,778 13,147,107 33,008,898
Debt service expenditures:
Principal ---3,305,000 3,305,000
Interest ---6,054,223 6,054,223
Bond issuance costs 340,135 ---340,135
Total expenditures 363,464,893 6,120,344 1,104,778 96,996,607 467,686,622
Excess (deficiency) of revenues over (under) expenditures (38,102,810)(1,470,269)(687,578)(15,529,085)(55,789,742)
Other financing sources (uses):
Transfers in 27,568,149 15,789,590 3,697,398 28,553,874 75,609,011
Transfers out (24,015,038) (2,063,372)- (22,498,684) (48,577,094)
Bonds issued 19,700,000 --- 19,700,000
Premium on debt issued 3,711,635 ---3,711,635
Payment to refunded bond escrow agent (23,066,482)--- (23,066,482)
Total other financing sources (uses)3,898,264 13,726,218 3,697,398 6,055,190 27,377,070
Special item (note 18)(9,825,000)--- (9,825,000)
Net change in fund balances (44,029,546)12,255,949 3,009,820 (9,473,895)(38,237,672)
Fund balances at beginning of year, as restated (note 20)224,877,368 179,244,135 63,982,474 80,997,797 549,101,774
Fund balances at end of year $180,847,822 191,500,084 66,992,294 71,523,902 510,864,102
See accompanying notes to basic financial statements.
6
3.B.a
Packet Pg. 378 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
Net change in fund balances – total governmental funds $(38,237,672)
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.55,383,345 2)The cost of capital assets is allocated over their estimated useful lives and reported
as depreciation expense in the statement of activities.(29,412,848) 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.(202,556)
Measurement focus:
4)Change in accrued interest payable.141,319
5)Principal payments on long-term obligations use current financial resources
but have no effect on net position.3,305,000
6)Bond premiums are recorded as other financing sources in the fund statements but areamortized in the statement of activities.841,453
7)Deferred gain and loss on refunding is amortized in the statement of activities.(19,949)
8)Refunding bonds issued are recorded as other financing sources in the fund statements but are
not reported in the statement of activities.(19,700,000)
9)Premium on refunding bonds issued are recorded as other financing sources in the fund statements but are
not reported in the statement of activities.(3,711,635)
10)Payments to refunded bond escrow agent are reported as other financing uses in the fund
statements but are not reported in the statement of activities.23,066,482
11)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.(864,251)
12)Interest income related to successor agency advances previously recorded as revenue in the statement of activitieswere reported as interest income in the fund statements.(5,399,246)
13)Interest income related to airport advances are recorded as revenue in the statement of activities
but are reported as deferred inflows of resources in the fund statements.15,205
14)Grant revenue previously recognized in the statement of activities is recorded as revenue in the fund
statements.(1,955,807)
15)Grant revenue earned but not yet available being recorded on the statement of activities that are not recorded on
the fund statements.13,189,311 16)Pollution remediation expense activity was recorded in the fund statements and reduced the liability in the
statement of activities.332,216 17)GASB 75 OPEB reporting timing differences.(3,275,739)
18)GASB 68 pension reporting timing differences.(13,948,298)
Internal service funds:
19)Certain internal service funds are used by management to charge the costs of
information technology and risk management to individual funds.
The net revenue/(expense) of certain internal service funds is reported with
governmental activities.(46,464,544)
Change in net position (statement of activities, governmental activities)$(66,918,214)
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, 2021
7
3.B.a
Packet Pg. 379 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
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.
8
3.B.a
Packet Pg. 380 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2021
Business-Type Activities - Enterprise Funds
Water Wastewater
Resource
Recovery and
Recycling Big Blue Bus
Nonmajor
enterprise
funds
Total
enterprise
funds
Total internal
service funds
ASSETSCurrent assets:Cash and investments (note 5)$ 65,286,555 28,304,805 14,584,820 14,915,913 34,283,604 157,375,697 115,547,934Restricted cash and investments (note 5)355,474 2,298,946 - 38,458,961 9,465,621 50,579,002 -Receivables (net, where applicable, of allowances for uncollectibles):Accounts 7,306,317 4,519,225 6,326,040 403,218 4,916,722 23,471,522 150,652Interest144,617 74,827 44,921 59,354 65,645 389,364 157,005Due from other governments --- 10,688,814 21,110 10,709,924 -Inventory --- 3,416,607 - 3,416,607 6,952Prepaids628-- 11,685 - 12,313 -
Total current assets 73,093,591 35,197,803 20,955,781 67,954,552 48,752,702 245,954,429 115,862,543Noncurrent assets:Restricted cash and investments (note 5)474,574 2,604,498 12,755,662 -- 15,834,734 -Restricted cash with fiscal agent -2 ---2 -Capital assets (note 7):Land 21,006 3,189,132 - 48,807,900 1,362,712 53,380,750 -Construction in progress 14,120,767 34,667,800 -- 5,952,342 54,740,909 60,300Buildings1,532,511 251,447 314,223 131,621,863 16,347,447 150,067,491 -Improvements other than buildings 2,008,072 297,592 99,731 15,314,657 12,137,937 29,857,989 -Machinery and equipment 3,778,029 1,649,296 246,078 174,051,612 1,552,612 181,277,627 45,315,674Infrastructure64,167,842 162,079,622 -- 28,122,412 254,369,876 -Intangibles 3,575,000 113,190,123 --- 116,765,123 -Less: accumulated depreciation (35,334,663) (119,027,887) (556,513) (194,014,926) (36,950,568) (385,884,557) (26,905,816)Net capital assets 53,868,564 196,297,125 103,519 175,781,106 28,524,894 454,575,208 18,470,158
Total noncurrent assets 54,343,138 198,901,625 12,859,181 175,781,106 28,524,894 470,409,944 18,470,158
TOTAL ASSETS 127,436,729 234,099,428 33,814,962 243,735,658 77,277,596 716,364,373 134,332,701
DEFERRED OUTFLOWS OF RESOURCESDeferred loss on refunding - 38,132 --- 38,132 -Deferred outflows from pensions 1,406,191 520,425 2,016,954 9,394,652 1,144,314 14,482,536 1,040,943Deferred outflows from OPEB 129,654 26,038 386,259 673,236 178,363 1,393,550 68,127
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,535,845 584,595 2,403,213 10,067,888 1,322,677 15,914,218 1,109,070
LIABILITIESCurrent liabilities:Accounts payable 4,427,186 3,068,035 939,438 1,288,718 1,521,596 11,244,973 1,057,946Accrued liabilities 172,635 66,919 277,153 2,086,221 155,388 2,758,316 118,618Contracts payable (retained percentage)403,004 1,148,908 -5,257 289,397 1,846,566 5,611Compensated absences due within one year (note 2)196,090 72,465 347,027 1,472,694 161,206 2,249,482 115,169Claims payable due within one year (note 15)------ 76,262,546Unearned revenue (note 8)- 13,140 - 20,814,415 18,959 20,846,514 -Accrued interest payable - 429,795 --- 429,795 -Loans and bonds payable due within one year (note 9)- 2,340,000 --- 2,340,000 -Due to other funds (note 11)---- 515,731 515,731 -Liabilities payable from restricted assets - deposits 214,573 - 15,905,554 47,975 1,643,825 17,811,927 -Pollution remediation obligation due within one year (note 4) 20,352,242 ---- 20,352,242 -
Total current liabilities 25,765,730 7,139,262 17,469,172 25,715,280 4,306,102 80,395,546 77,559,890Long-term liabilities:Compensated absences due in more than one year (note 2)210,414 75,849 165,351 529,345 210,539 1,191,498 227,824Advances from other funds (note 11)---- 5,539,456 5,539,456 -Claims payable due in more than one year (note 15)------ 59,013,460Loans and bonds payable due in more than one year (note 9)- 28,129,655 --- 28,129,655 -Pollution remediation obligation due in more than one year(note 4)34,343,458 ---- 34,343,458 -Net OPEB liability due in more than one year (note 16)514,647 103,356 1,533,212 2,672,335 707,995 5,531,545 270,421Net pension liability due in more than one year (note 16)8,142,142 3,013,373 11,678,591 54,397,016 6,625,823 83,856,945 6,027,278
Total long-term liabilities 43,210,661 31,322,233 13,377,154 57,598,696 13,083,813 158,592,557 65,538,983
TOTAL LIABILITIES 68,976,391 38,461,495 30,846,326 83,313,976 17,389,915 238,988,103 143,098,873
DEFERRED INFLOWS OF RESOURCESDeferred inflows from pensions 290,997 107,697 417,388 1,944,126 236,804 2,997,012 215,413Deferred inflows from OPEB 19,581 3,932 58,334 101,673 26,937 210,457 10,289
TOTAL DEFERRED INFLOWS OF RESOURCES 310,578 111,629 475,722 2,045,799 263,741 3,207,469 225,702
NET POSITIONNet investment in capital assets 53,868,564 165,865,602 103,519 175,781,106 28,524,894 424,143,685 18,470,158Restricted for Prop 1B (note 12)--- 10,731,093 - 10,731,093 -Restricted for debt service - 2,298,946 --- 2,298,946 -Unrestricted 5,817,041 27,946,351 4,792,608 (18,068,428) 32,421,723 52,909,295 (26,352,962)
TOTAL NET POSITION $59,685,605 196,110,899 4,896,127 168,443,771 60,946,617 490,083,019 (7,882,804)
Net position, business-type activities - internal service funds 38,659,198
Net adjustment to reflect the allocation of the internal service funds net income (2,031,161)
Net position of business-type activities $526,711,056
See accompanying notes to basic financial statements.
9
3.B.a
Packet Pg. 381 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the fiscal year ended June 30, 2021
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 revenuesCharges for services $29,638,341 17,330,719 26,842,779 2,908,604 25,235,079 101,955,522 56,949,471
Total operating revenues 29,638,341 17,330,719 26,842,779 2,908,604 25,235,079 101,955,522 56,949,471
Operating expensesPersonnel services 7,649,552 2,734,795 11,881,232 54,650,197 6,002,873 82,918,649 4,694,722Administrative indirect 1,628,966 747,911 1,276,612 4,921,405 1,923,706 10,498,600 1,276,586Contractual services 2,064,876 5,986,177 4,114,154 2,723,568 2,717,574 17,606,349 926,320Repairs and maintenance 1,311,577 1,163,097 3,042,013 998,158 1,727,505 8,242,350 1,635,384Materials and supplies 27,389,589 640,037 7,022,005 6,344,135 6,264,492 47,660,258 4,786,837Utilities2,014,887 25,916 57,600 384,695 1,100,344 3,583,442 34,606Water purchases 6,800,115 ----6,800,115 -Casualty property and liability costs 485,904 335,883 487,582 5,441,429 1,043,288 7,794,086 224,168Claims expense net of claims reserve adjustment ------73,853,547Insurance and bonds ------7,893,397Miscellaneous fees and costs 21,625 --94,401 -116,026 1,933,791Depreciation and amortization 1,474,753 6,535,170 4,897 17,406,930 1,638,547 27,060,297 4,811,327Other964,064 1,198,810 836,057 509,055 2,794,169 6,302,155 318,864
Total operating expenses 51,805,908 19,367,796 28,722,152 93,473,973 25,212,498 218,582,327 102,389,549
Operating income (loss)(22,167,567)(2,037,077)(1,879,373)(90,565,369)22,581 (116,626,805)(45,440,078)
Nonoperating revenues (expenses)Operating grants ---24,360,412 -24,360,412 -
Shared sales tax proceeds ---39,666,655 -39,666,655 -Investment income (129,230)51,563 68,142 41,148 114,601 146,224 294,284Interest expense (907)(473,279)--(15,205)(489,391)-
Gain on disposal of capital assets ---75,824 -75,824 154,116Other nonoperating revenues 555,667 215,646 281,567 3,265,961 2,363,766 6,682,607 39,932
Total nonoperating revenues (expenses) net 425,530 (206,070)349,709 67,410,000 2,463,162 70,442,331 488,332
Income (loss) before capital contributions andtransfers (21,742,037)(2,243,147)(1,529,664)(23,155,369)2,485,743 (46,184,474)(44,951,746)
Capital contributions ---4,623,832 -4,623,832 -Transfers in (note 11)133,323 1,250,503 1,463 472,076 4,304,503 6,161,868 1,992,254Transfers out (note 11)(1,354,420)(16,197,991)(232,680)(366,041)(14,805,942)(32,957,074)(2,228,965)
Change in net position (22,963,134)(17,190,635)(1,760,881)(18,425,502)(8,015,696)(68,355,848)(45,188,457)
Net position at beginning of year, as restated (note 20)82,648,739 213,301,534 6,657,008 186,869,273 68,962,313 558,438,867 37,305,653
Net position at end of year $59,685,605 196,110,899 4,896,127 168,443,771 60,946,617 490,083,019 (7,882,804)
Change in net position $(68,355,848)
Net adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,276,075
Change in net position of business-type activities $(67,079,773)
See accompanying notes to basic financial statements.
10
3.B.a
Packet Pg. 382 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
Business-type activities - Enterprise Funds
Water Wastewater
Resource Recovery
and Recycling
Big Blue
Bus
Nonmajor
enterprise
funds
Total
enterprise
funds
Total internal
service funds
Cash flows from operating activities: Cash received from customers 26,726,187$ 15,583,920 26,563,514 3,486,747 23,845,102 96,205,470 77,204,298 Cash payments for materials and services (23,601,153) (11,182,253) (17,127,806) (22,064,715) (18,012,290) (91,988,217) (20,330,523) Cash payments to employees for services (6,571,445) (2,373,856) (10,529,988) (51,806,307) (5,521,802) (76,803,398) (4,709,170) Cash paid for claims and related services — — — — — — (39,455,519) Other revenue received 555,667 215,646 281,567 3,265,961 2,363,766 6,682,607 39,932
Net cash provided by (used in) operating activities (2,890,744) 2,243,457 (812,713) (67,118,314) 2,674,776 (65,903,538) 12,749,018
Cash flows from noncapital financing activities: Sales tax proceeds — — — 52,473,353 — 52,473,353 — Other operating grants — — — 24,360,412 — 24,360,412 — Repayment of advances to other funds — — — — (15,559) (15,559) — Advances from other funds — — — — 530,936 530,936 — Payment received from promissory note — — — — 259,400 259,400 — Transfers in 3,803,323 1,250,503 1,463 472,076 4,304,503 9,831,868 1,992,254 Transfers out (1,354,420) (16,197,991) (232,680) (366,041) (14,805,942) (32,957,074) (2,228,965)
Net cash provided by (used in) noncapital financing activities 2,448,903 (14,947,488) (231,217) 76,939,800 (9,726,662) 54,483,336 (236,711)
Cash flows from capital and related financing activities: Capital contributions received — — — 123,395 — 123,395 — Acquisition and construction of capital assets (12,765,072) (19,240,866) — (2,050,449) (2,134,104) (36,190,491) (649,626) Proceeds from sale of capital assets — — — 75,824 — 75,824 238,684 Proceeds from long-term obligations — 22,528,915 — — — 22,528,915 — Payments on long-term obligations — (2,275,000) — — — (2,275,000) — Interest paid on long-term obligations (907) (115,050) — — (15,205) (131,162) —
Net cash provided by (used in) capital and related financing activities (12,765,979) 897,999 — (1,851,230) (2,149,309) (15,868,519) (410,942)
Cash flows from investing activities Investments income 57,268 125,591 111,212 115,518 10,915,588 11,325,177 430,024
Net cash provided by investing activities 57,268 125,591 111,212 115,518 10,915,588 11,325,177 430,024
Net increase (decrease) in cash and cash equivalents (13,150,552) (11,680,441) (932,718) 8,085,774 1,714,393 (15,963,544) 12,531,389
Cash and cash equivalents at beginning of year 79,267,155 44,888,692 28,273,200 45,289,100 42,034,832 239,752,979 103,016,545
Cash and cash equivalents at end of year 66,116,603$ 33,208,251 27,340,482 53,374,874 43,749,225 223,789,435 115,547,934
Cash and investments 65,286,555$ 28,304,805 14,584,820 14,915,913 34,283,604 157,375,697 115,547,934
Restricted cash and investments 830,048 4,903,446 12,755,662 38,458,961 9,465,621 66,413,738 —
Total cash and cash equivalents 66,116,603$ 33,208,251 27,340,482 53,374,874 43,749,225 223,789,435 115,547,934
(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, 2021
11
3.B.a
Packet Pg. 383 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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)(22,167,567)$ (2,037,077) (1,879,373) (90,565,369) 22,581 (116,626,805) (45,440,078)
Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Add depreciation 1,474,753 6,535,170 4,897 17,406,930 1,638,547 27,060,297 4,811,327
Add allowance for doubtful accounts 262,058 84,775 183,250 403,368 1,332,983 2,266,434 — Other revenue received 555,667 215,646 281,567 3,265,961 2,363,766 6,682,607 39,932 Change in assets and liabilities and deferred outflows — and inflows of resources:— (Increase) decrease in accounts receivable (3,149,714) (1,831,574) (2,096,136) 218,764 (2,769,884) (9,628,544) (44,898) (Increase) in due from other governments — — — (194,818) — (194,818) —
Decrease in due from other funds — — — — — — 20,300,000 (Increase) decrease in prepaids 53,646 9,365 2,751 (11,410) 8,503 62,855 — (Increase) decrease in inventory — — — (104,497) — (104,497) 36,983 (Decrease) in accounts payable (1,346,535) (1,785,000) (294,534) (392,849) (516,464) (4,335,382) (1,343,164) Increase (decrease) in accrued liabilities (17,485) (26) 21,661 (139,185) (21,587) (156,622) (43,696) Increase (decrease) in contracts payable (147,847) 678,073 — (139,113) 66,749 457,862 5,611 Increase in unearned revenue — 13,140 — (7,732) 18,285 23,693 — Increase (decrease) in deposits payable from restricted assets (24,498) — 1,633,621 — 28,639 1,637,762 — Increase in compensated absences payable 43,375 13,340 68,776 14,123 42,130 181,744 21,520 Increase in claims payable — — — — — — 34,397,753 Increase in pollution remediation obligation 20,521,186 — — — — 20,521,186 —
Net OPEB liability and related changes in deferred
outflows and inflows of resources 112,289 6,359 121,800 186,298 82,306 509,052 (57,034) Net pension liability and related changes in deferred outflows and inflows of resources 939,928 341,266 1,139,007 2,941,215 378,222 5,739,638 64,762
Total adjustments 19,276,823 4,280,534 1,066,660 23,447,055 2,652,195 50,723,267 58,189,096
Net cash provided by (used in)
operating activities (2,890,744)$ 2,243,457 (812,713) (67,118,314) 2,674,776 (65,903,538) 12,749,018
Schedule of non-cash capital and related financing activities:
Capital assets acquired through accounts payable 1,395,899$ 2,167,026 — 35,420 207,663 3,806,008 —
See accompanying notes to basic financial statements
Proprietary Funds
For the fiscal year ended June 30, 2021
CITY OF SANTA MONICA, CALIFORNIA
Statement of Cash Flows
12
3.B.a
Packet Pg. 384 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Fiduciary Fund Financial Statements
Private-Purpose Trust Fund is fiduciary in nature and used to receive and distribute the Redevelopment Property Tax Trust Fund distributions and use them to extinguish enforceable obligations approved by the
Successor Agency Oversight Board and the California Department of Finance. The Redevelopment Agency of the City of Santa Monica was dissolved on February 1, 2012.
Custodial Fund is custodial in nature and accounts for assets held by the City as a trustee for individuals or other governmental units. The City’s sole custodial fund, the General Trust Fund, accounts for assets held by the City in a custodial capacity, such as fees collected on behalf of and remitted to other governmental agencies.
13
3.B.a
Packet Pg. 385 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
Total
Private-Purpose
Trust Fund
Total
Custodial
Fund
ASSETS
Restricted cash (note 5)$5,893,172 1,895,399
Money market funds with fiscal agent(note 5)7,105,022 -
Accounts receivable -56,782
Total assets 12,998,194 1,952,181
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding 1,322,213 -
--
LIABILITIES
Loans and bonds payable, due within one year (note 17)6,774,476 -
Loans and bonds payable, due in more than one year (note 17)126,471,428 -
Accrued interest payable, due in more than one year 3,301,074 -
Total liabilities 136,546,978 -
NET POSITION
Restricted for the dissolution of the Former Redevelopment Agency $(122,226,571)-
Restricted for other governments, organizations and individuals -1,952,181
See accompanying notes to basic financial statements.
14
3.B.a
Packet Pg. 386 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Statement of Changes in
Fiduciary Net Position
Fiduciary Funds
For the fiscal year ended June 30, 2021
Private-purpose
Trust Fund Custodial Fund
Additions:Property tax distribution $14,557,251 -
Investment income 1,055 -Held for others -140,780Other revenue 7,111 -
Fees collected for other governments -2,171,653
Total additions 14,565,417 2,312,433
Deductions:Project expenses 407,190 -
Interest expense 6,816,368 -Payments to other governments -1,589,607Payments to organizations and individuals -449,014
Total deductions 7,223,558 2,038,621
Change in net position 7,341,859 273,812
Net position at beginning of year, as restated (note 20)(129,568,430)1,678,369
Net position at end of year $(122,226,571)1,952,181
See accompanying notes to basic financial statements.
15
3.B.a
Packet Pg. 387 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(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 (Parking 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 the City 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.
16
3.B.a
Packet Pg. 388 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 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. The Pier Corporation is not
presented in the basic financial statements because the economic resources received or held by the
individual organization are not significant to the primary government. Separate financial statements
for this organization can be obtained from the City’s Director of Finance.
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, community services, library and community development. The business-type
activities of the City include water, wastewater, stormwater, resource recovery and recycling, pier,
17
3.B.a
Packet Pg. 389 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
airport, cemetery, community broadband, Big Blue Bus, and parking authority.
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, 2021, the City implemented the provisions of Governmental Accounting
Standards Board (GASB) Statement No. 84, “Fiduciary Activities” and Statement No. 98, “The Annual
Comprehensive Financial Report”.
Statement No. 84 establishes criteria for identifying fiduciary activities for accounting and financial
reporting purposes. As a result, the City’s fiduciary fund financial statements have been modified to
reflect the implementation of this new guidance, including reclassifying activities previously reported
in agency funds to custodial or governmental funds, as applicable.
Statement No. 98 establishes the term Annual Comprehensive Financial Report and its acronym ACFR.
The new term and its acronym will replace instances of comprehensive annual financial report and its
acronym in the City’s financial reports.
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.
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
18
3.B.a
Packet Pg. 390 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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.
In governmental funds, 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. 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. 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 Low and Moderate Income Housing Asset Fund under Senate Bill 341, requires that housing
assets transferred to the City’s Housing Successor Agency, together with any funds generated from
housing assets, 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, for program monitoring and preserving the long-term
affordability of units subject to affordability restrictions, homeless prevention and rapid rehousing
services, and the development of affordable housing for lower income households.
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.
19
3.B.a
Packet Pg. 391 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 Custodial 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 Successor Agency’s creditors for enforceable obligations. The Custodial Fund accounts for assets
held by the City as a trustee for individuals or other government units. The Custodial fund is used
to report amounts the City has custody of. This fund accounts for assets held by the City for fees
collected on behalf of other governmental agencies or other assets held by the City in a
custodial 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.
20
3.B.a
Packet Pg. 392 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 the average month-end balances for the prior three months 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.
Changes in fair value are allocated to each participating fund on an annual basis.
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. LAIF is not reported
at fair value.
For purposes of the statement of cash flows, the City has defined cash and cash equivalents to be equity
in the City's cash and investment pool as well as petty cash.
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
21
3.B.a
Packet Pg. 393 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
appropriate fund balance classification, rather than nonspendable fund balance.
All trade receivables are shown net of an allowance for uncollectible accounts and estimated refunds
due. As of June 30, 2021, the allowance for uncollectible accounts for governmental and business-type
activities is $1,189,127 and $2,266,434 respectively.
Unbilled service receivables are accrued 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 the prior 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, the assessed
value may be 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.
22
3.B.a
Packet Pg. 394 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Restricted cash represents amounts restricted under agreements with grantors, trustees, developers,
customers and lessees. Additionally, restricted cash in the Successor Agency is restricted by
redevelopment dissolution legislation.
Capital Assets
Capital assets, which include land, buildings and improvements, machinery and equipment, intangibles,
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 capital expense 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 acquisition value at
the date of donation and capital assets received in a service concession arrangement are reported at
acquisition value. The cost of normal maintenance and repairs that do not add to the value of the asset
or materially extend assets lives are expensed when incurred.
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.
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:
Assets Years
Buildings 5 to 85
Improvements other than buildings 5 to 50
Infrastructure 15 to 75
Utility systems 20 to 100
Intangibles 20 to 100
Machinery and equipment 2 to 30
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.
23
3.B.a
Packet Pg. 395 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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.
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 – Transportation Division 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. Bonds payable are reported net of the unamortized portion of applicable
premium or discount. Deferred amounts on refunding are reported as deferred outflows or inflows 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,
24
3.B.a
Packet Pg. 396 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
are reported as debt service expenditures. Interest and principal payments are reported as debt service
expenditures.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position, governmental fund balance sheet, proprietary
statement of net position, and statement of fiduciary net position will sometimes report a separate section
for deferred outflows of resources. The deferred outflows of resources is a separate financial statement
element that represents a consumption of net position or fund balance that applies to a future period(s)
and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position and governmental fund balance sheet will
sometimes report a separate section for deferred inflows of resources. The deferred inflows of resources
is a separate financial statement element that represents an acquisition of net position or fund balance
that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until
that time.
The City reports the following items as deferred outflows of resources:
Deferred outflows from pensions
Deferred outflows from OPEB
Deferred loss on refundings
The City reports the following items as deferred inflows of resources:
Deferred inflows from pensions
Deferred inflows from OPEB
Deferred gain on refunding
Deferred outflows from pensions and OPEB include contributions made subsequent to the measurement
date. Deferred outflows and inflows relating to pensions and OPEB are the result of differences between
the expected and actual experience, changes in assumptions, and difference between projected and actual
earnings on investments. See note 16 for a detailed discussion of deferred outflows and inflows related
to pensions and OPEB.
The deferred gain and loss on refunding is attributable to the unamortized portion of the gain or loss on
refunding of debt.
Finally, on the governmental funds balance sheet, when an asset is recorded but the revenue is not
available, a deferred inflow of resources is reported for unavailable revenue until such time as the
revenue becomes available.
25
3.B.a
Packet Pg. 397 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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, 2021, 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. Amounts that can only be used for specific purpose pursuant to
constraints imposed by the government’s highest level of decision making authority, the City Council,
are reported as committed fund balance. The City Council can create committed fund balance through
ordinance, resolution or other council action that is equally binding. 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. 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
26
3.B.a
Packet Pg. 398 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 expended 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.
Other Postemployment Benefits (OPEB)
For the purposes of measuring the net OPEB liability, the deferred inflows of resources related to
OPEB, and the OPEB expense, information about the fiduciary net position of the City’s OPEB Plan
and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined using
the same actuarial methods and assumptions. For this purpose, benefit payments are recognized when
currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
27
3.B.a
Packet Pg. 399 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Generally accepted accounting principles require that the reported results must pertain to liability and
asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period June 30, 2019 to June 30, 2020
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.
28
3.B.a
Packet Pg. 400 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Required Supplementary Information
For the fiscal year ended June 30, 2021
(2)COMPENSATED ABSENCES
City employees earn vacation leave at varying amounts based on length of service. All employees may
accrue up to the amount earned for a three-year period. In the event of termination of employee, death, or
retirement, employees (or their estates) are paid for unused vacation.
Balnce at
July 1, 2020 Additions Reductions
Balance at
June 30, 2021
Due within
one year
Governmental activities (1)13,771,193 7,449,436 6,569,879 14,650,750 6,985,614
Business-type activities 3,441,073 2,407,921 2,219,965 3,629,029 2,325,850
Total 17,212,266$ 9,857,357 8,789,844 18,279,779 9,311,464
(1)Compensated absences for Governmental activities are predominately liquidated by General Fund resources.
29
3.B.a
Packet Pg. 401 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(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
Statement of net
position totals
Cash and investments 285,581,009$ — 86,885,942 — 372,466,951
Restricted cash and investments 20,394,629 — — — 20,394,629
Receivables (net, where applicable,
of allowances for uncollectibles):
Accounts 9,320,633 — 7,364 — 9,327,997
Notes 201,864,672 — — — 201,864,672
Taxes 17,522,356 — — — 17,522,356
Interest 662,215 — 113,968 — 776,183
Other governments 14,012,892 — — — 14,012,892
Internal balances — — 2,031,161 6,055,187 8,086,348
Due from other funds 9,707,670 — (9,707,670) —
Deposits 3,257 — — — 3,257
Prepaids 56,592 — - — 56,592
Restricted cash and investments with fiscal agent 33,702,686 — — — 33,702,686
Advances to other funds 11,152,159 — — (11,152,159) —
Notes Receivable Successor Agency - — — — -
Capital assets, net — 915,972,172 106,667 — 916,078,839
Total assets 603,980,770 915,972,172 89,145,102 (14,804,642) 1,594,293,402
Deferred Outflows of Resources
Deferred loss on refundings — 5,018 — — 5,018
Deferred outflows from pensions — 71,311,846 369,247 — 71,681,093
Deferred outflows from OPEB — 8,674,203 3,045 — 8,677,248
Total deferred outflow of resources — 79,991,067 372,292 — 80,363,359
Liabilities, Deferred Inflows of Resources and
Fund Balances/Net Position
Liabilities:
Accounts payable 30,465,029 — 687,598 — 31,152,627
Accrued liabilities 6,345,049 — 46,565 — 6,391,614
Accrued interest payable — 1,950,097 — — 1,950,097
Contracts payable (retained percentage)3,509,549 — 5,611 — 3,515,160
Due to other funds 9,191,939 — — (9,191,939) —
Unearned revenue 23,874,243 — — — 23,874,243
Deposits payable from restricted assets 765,559 — — — 765,559
Advances from other funds 5,612,703 — — (5,612,703) —
Compensated absences due within one year — 6,946,813 38,801 — 6,985,614
Compensated absences due in more than
one year — 7,548,993 116,143 — 7,665,136
Claims payable due within one year — — 73,783,753 — 73,783,753
Claims payable due in more than one year — — 57,122,759 — 57,122,759
Loans and bonds payable due within one year — 2,895,000 — — 2,895,000
Loans and bonds payable due in more than one year — 158,726,447 — — 158,726,447
Pollution remediation obligation due within one year — 342,183 — — 342,183
Pollution remediation obligation due in more than one year — 1,658,468 — — 1,658,468
Net OPEB liability — 34,431,314 12,087 — 34,443,401
Net pension liability — 391,280,743 2,138,016 — 393,418,759
Total liabilities 79,764,071 605,780,058 133,951,333 (14,804,642) 804,690,820
Deferred Inflows of Resources
Unavailable revenue 13,352,597 — — (13,352,597) -
Deferred gain on refunding — 634,900 — — 634,900
Deferred inflows from pensions — 8,588,216 76,412 — 8,664,628
Deferred inflows from OPEB — 1,309,989 460 — 1,310,449
Total deferred inflows of resources 13,352,597 10,533,105 76,872 (13,352,597) 10,609,977
Total fund balances/net position 510,864,102$ 379,650,076 (44,510,811) 13,352,597 859,355,964
30
3.B.a
Packet Pg. 402 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
1) Capital assets used in governmental activities are not current financialresources
and, therefore, are not reported in the balance sheet. Capital assets of internal
service funds of $106,667 net of accumulated depreciation, are not included in
this amount.1,464,080,745$
Less accumulated depreciation/amortization (548,108,573)
915,972,172$
Deferred outflows on refunding 5,018
Deferred inflows on refunding (634,900)
(629,882)$
Deferred outflows from pension 71,311,846
Deferred inflows from pension (8,588,216)
62,723,630$
Deferred outflows from OPEB 8,674,203
Deferred inflows from OPEB (1,309,989)
7,364,214$
General obligation bonds (2,135,000)
Revenue bonds (143,495,000)
Accrued interest on long-term debt (1,950,097)
Unamortized premium on long-term debt (15,991,447)
Employee compensated absences (14,495,806)
Accrued pollution remediation costs (2,000,651)
Net OPEB liability (34,431,314)
Net pension liability (391,280,743)
Total long-term liabilities (605,780,058)$
2)
(46,541,972)$
2,031,161
(44,510,811)$
Long-termliabilities 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 individualfunds. The assets
and liabilities of these internal service funds are included in the governmental
activities on the statement of net position.
Adjustments for InternalService 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.
31
3.B.a
Packet Pg. 403 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 $157,375,697 28,661,992 — 186,037,689
Receivables (net, where applicable,
of allowances for uncollectibles):
Accounts 23,471,522 143,318 — 23,614,840
Interest 389,364 43,037 — 432,401
Notes receivable Successor Agency - — — -
Settlement - — — -
Due from other governments 10,709,924 — — 10,709,924
Internal balances — — (8,086,348) (8,086,348)
Inventory 3,416,607 6,953 — 3,423,560
Prepaids 12,313 — — 12,313
Restricted cash and investments 66,413,736 — — 66,413,736
Restricted cash and investments with fiscal agent 2 — — 2
Capital assets, net 454,575,208 18,363,491 — 472,938,699
Total assets 716,364,373 47,218,791 (8,086,348) 755,496,816
Deferred loss on refunding 38,132 — — 38,132
Deferred outflows from pensions 14,482,536 671,696 — 15,154,232
Deferred outflows from OPEB 1,393,550 65,082 — 1,458,632
Total deferred outflows of resources 15,914,218 736,778 — 16,650,996
Accounts payable 11,244,973 370,349 — 11,615,322
Accrued liabilities 2,758,316 72,053 — 2,830,369
Accrued interest payable 429,795 — — 429,795
Contracts payable (retained percentage)1,846,566 — — 1,846,566
Internal balances 6,055,187 2,031,161 (8,086,348) —
Unearned revenue 20,846,514 — — 20,846,514
Liabilities payable from restricted assets 17,811,927 — — 17,811,927
Compensated absences due within one year 2,249,482 76,368 — 2,325,850
Compensated absences due in more than one year 1,191,498 111,681 — 1,303,179
Claims payable due within one year — 2,478,793 — 2,478,793
Claims payable due in more than one year — 1,890,701 — 1,890,701
Loans and bonds payable due within one year 2,340,000 — — 2,340,000
Loans and bonds payable due in more than one year 28,129,655 — — 28,129,655
Pollution remediation obligation due within one year 20,352,242 — — 20,352,242
Pollution remediation obligation due in more than one year 34,343,458 — — 34,343,458
Net OPEB liability due in more than one year 5,531,545 258,334 — 5,789,879
Net pension liability due in more than one year 83,856,945 3,889,262 — 87,746,207
Total liabilities 238,988,103 11,178,702 (8,086,348) 242,080,457
Deferred inflows from pensions 2,997,012 139,001 — 3,136,013
Deferred inflows from OPEB 210,457 9,829 — 220,286
Total deferred inflows of resources 3,207,469 148,830 — 3,356,299
$490,083,019 36,628,037 — 526,711,056
1)
38,659,198$
(2,031,161)$
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.
Deferred Inflows of Resources
Assets
Liabilities
Deferred Outflows of Resources
Total Net Position
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.
32
3.B.a
Packet Pg. 404 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(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 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 2003 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 $122.1 million also related to MTBE contamination
of the City's Charnock Well Field. Of this amount, $18.0 million was deposited into an escrow account
specifically to be used for the design and building of a remediation plant. The account was to be replenished
by the consortium of oil companies once exhausted until the remediation construction was complete. The
City has received all 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 groundwater contamination of the
City’s Olympic Well Field. The Olympic Well Field is used to supply drinking water to the City. The
agreement called for Gillette to make payments to the City ranging from $150,000 to $11,183,175 annually,
totaling $64.8 million over 30 years which included the City receiving title to property valued at $3.2 million.
Under the agreement, the City agreed to construct and operate facilities for treatment of certain contaminants
and treat to applicable drinking water standards any water that it produces from the Olympic Well Field. At
the end of FY 2016-17, the City had received cash payments of $42,895,400. During FY 2017-18, the City
and Gillette agreed to modify their agreement whereby a lump sum payment of $10,415,000 was made by
Gillette in exchange for a release from any and all future liabilities.
On May 15, 2012, the City entered into a settlement and release agreement with The Boeing Company
(Boeing) also in relation to groundwater contamination of the City’s Olympic Well Field. The agreement
called for Boeing to make payments to the City ranging from $150,000 to $5,000,000 annually 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 agreed to construct and operate facilities for treatment of certain contaminants
and treat to applicable drinking water standards any water that it produces from the Olympic Well Field.
33
3.B.a
Packet Pg. 405 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
During FY 2020-21, the City revised its pollution remediation liability estimate for both the Charnock and
Olympic Well Field restoration projects based on the most current information available. The primary reason
for the increase was the refinement of the remediation process and related operating costs for the Olympic
Well Field based on updated engineering estimates from the City’s consultants that are currently
constructing the remediation system, where the capital and operating costs of the remediation system are
higher than determined in the 2017 evaluation. The Charnock Well Field remediation liability increased
due to longer periods of remediation than determined in the previous evaluation in 2017. The City believes
it has sufficient funds from the Gillette/Boeing settlement to fund current and future estimated remediation
costs. To estimate the potential remediation liability, the City utilized expected cash flow and present value
to the anticipated cost of remediation, both construction and operating costs, as required under the
remediation agreements and included a 10% contingency for unforeseen costs. This increased the business
type activities liability from $34,174,514 as of June 30, 2020 to $54,695,700 as of June 30, 2021 but the
governmental activities liability decreased from $2,332,867 as of June 30, 2020 to $2,000,651 as of June 30,
2021.
Additionally, the City engages in an ongoing program of pollution remediation related to its various
properties. Currently the City Yards are undergoing remediation in the form of vaporous contaminant
removal. By State law these occurrences are required to be reported to California Department of Health
Services.
The balance of the pollution remediation liability is $2,000,651 in the governmental activities of which
$342,183 is due within one year and $54,695,700 in the business-type activities, of which $20,352,242 is
due within one year. These liabilities are reported in the business-type and governmental activities in the
Statement of Net Position.
34
3.B.a
Packet Pg. 406 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(5) CASH AND INVESTMENTS
Cash and investments as of June 30, 2021 are classified in the accompanying financial statements as
follows:
Statement of net position:
Cash and investments 558,504,640$
Restricted cash and investments 86,808,365
Restricted cash with fiscal agent 33,702,688
Fiduciary funds:
Restricted cash and investments 7,788,571
Restricted cash with fiscal agent 7,105,022
Total cash and investments 693,909,286$
Cash and investments as of June 30, 2021 consist of the following:
Cash on hand 27,348$
Deposits with financial institutions 100,145,242
Investments 593,736,696
Total cash and investments 693,909,286$
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 $1,116,350 has been included as interest income in the General Fund.
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
35
3.B.a
Packet Pg. 407 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Authorized *Maximum *Maximum
Investment types by investment *Maximum percentage Investment
authorized by state law policy maturity of portfolio in one issuer
Banker's acceptances Yes 180 days 40% 10%
Commercial paper-Pooled funds Yes 270 days 25% 10%
Commercial paper-Non-pooled funds Yes 270 days 25% 10%
Negotiable certificates of deposit Yes 5 years 30% 10%
CD/Deposit Placement services Yes 5 years 50% 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.
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.
However, in most cases, the bond agreements generally conform to the City’s 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
36
3.B.a
Packet Pg. 408 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Maximum Maximum
Authorized Maximum percentage Investment
investment type maturity allowed in one issuer
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
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 the amount invested in equities to 60% of the total portfolio with the balance to be
invested primarily in fixed income securities. The timing of market value changes as well as the timing
of investment transactions may on occasion result in the percentage of equities exceeding 60% for a short
period of time until the portfolio can be rebalanced. 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/Municipal 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 dates, the likelihood that a bond
will be called and reinvested at a lower interest rate increases. The City’s portfolio also includes certain
37
3.B.a
Packet Pg. 409 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
callable structured investments for which the coupon interest rate changes if the investments are not called
on or before certain pre-determined dates. The fair value of these investments, which primarily falls into
the Federal agency security and Supranational categories, 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 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 and others) 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 below,
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 N/A
Held by City:
Federal agency securities 273,923,593$ 34,872,980 30,967,820 208,082,793 — —
Treasury Bills — — — — — —
Corporate medium term notes 111,959,640 37,982,665 27,819,958 46,157,017 — —
Municipal bonds 58,571,690 10,112,944 10,528,214 37,930,532 — —
Commercial Paper 2,499,426 2,499,426 — — — —
Supranationals 32,425,799 — 4,123,240 28,302,559 — —
State investment pool 74,666,539 74,666,539 — — — —
Held by others:
Treasury notes/bonds 3,239,351 — 689,686 341,305 2,208,360 —
Corporate medium term notes 3,388,918 — 288,771 2,484,741 615,406 —
Municipal Bonds 130,878 — 130,878 — — —
Common stock 10,470,006 — — — — 10,470,006
Money market funds 22,460,856 22,460,856 — — — —
Total 593,736,696$ 182,595,410 74,548,567 323,298,947 2,823,766 10,470,006
Remaining maturity (in months)
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
The City’s investments as of June 30, 2021 (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.
38
3.B.a
Packet Pg. 410 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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.
39
3.B.a
Packet Pg. 411 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements For the fiscal year ended June 30, 2021 MinimumlegalInvestment typeAmountrating**AAA/A+1AA+AAAA-A+AA-BBB+BBBBBB-Not ratedHeld by City:Corporate medium term notes 111,959,640$ A 13,971,289 12,324,359 — 17,606,438 31,654,084 20,623,995 10,684,025 5,095,450 — — — Municipal bonds58,571,690 N/A8,178,147 13,867,328 8,366,058 19,475,970 5,253,860 3,430,327 — — — — — Commercial Paper2,499,426 A+1 2,499,426 — — — — — — — — — — Supranationals 32,425,799 AA 32,425,799 — — — — — — — — — — State investment pool 74,666,539 N / A — — — — — — — — — — 74,666,539 280,123,094 Held by others:Municipal Bonds130,878 N / A— 130,878 — — — — — — — — — Corporate medium term notes 3,388,918 N / A 120,098 — — — — 175,335 141,794 592,439 1,407,153 952,099 — Common stock10,470,006 — — — — — — — — — — 10,470,006 Money market funds 22,460,856 *22,300,198 — — — — — — — — — 160,658 316,573,752$ 79,494,957 26,322,565 8,366,058 37,082,408 36,907,944 24,229,657 10,825,819 5,687,889 1,407,153 952,099 85,297,203 Actual ratings - Standard & Poor's*** *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. ** For purposes of categorization, the “minimum legal rating” applies to the entire rating category. For example, rating category “A” includes ratings of A+, A, and A-. The minimum rating applies as to the time of purchase. *** For bonds not rated by Standard and Poor’s but rated by Fitch Ratings and/or Moody’s, the rating from either Fitch or Moody’s is used. 403.B.aPacket Pg. 412Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
As of June 30, 2021, all investments were in compliance with State law and the City’s Investment Policy
at the time of purchase. State law requires that any investment subject to a credit downgrade subsequent
to the time of purchase shall be reviewed for possible sale within a reasonable amount of time after the
downgrade. Detail on bonds that were downgraded after the time of purchase are discussed in detail
below:
The portfolio holds one Starbucks bond (book value of $5,103,335 or about 0.9% of total invested
funds) that was downgraded by S&P from A to A- in November 2017 and further downgraded to
BBB+ in June 2018. Staff reviewed the reason for the most recent downgrade as well as analyzed
the financial status of the company over the remaining life of the bonds. The remaining maturity
life of the bond is a little over one year and the estimated probability of default of the bond is very
low (less than 0.01%). Staff concluded that holding the bond is the appropriate course of action
at this time.
The portfolio holds one bond issued by Merck Corp with a book value of $3,189,316 (about 0.6%
of total invested funds) that were downgraded by S&P from AA- to A+ in June 2021. The bond
has a relatively short remaining maturity and a default risk of less than 0.01%. Given this and the
fact that it is likely a loss of approximately $54,000 would be realized if the bond was sold, it will
continue to be held at this time.
The portfolio holds one Pfizer Inc bond (book value of $6,413,280 or about 1.2% of total invested
funds) that was downgraded by S&P from AA- to A+ in November 2020. The bond has a very
low default risk (about .02%), and the City would likely realize a loss of over $106,000 if the
bond were sold. The bond will continue to be held at this time.
The portfolio holds four bonds issued by Toyota Motor Credit Corp with a book value of
$13,057,351 (about 2.4% of total invested funds). One of the bonds was rated AA- by S&P at the
time of purchase but was downgraded to A+ in May 2020. The net market value of the bonds is
about $228,000 less than the book value. The default risk ranges from about 0.3% for bonds with
shorter maturities to about 1.3% for a four and a half-year maturity bond. The default risk for
the longer-term bond relatively low, and the bonds will continue to be held at this time.
The portfolio holds two bonds issued by IBM Corp with a book value of $8,768,301 (about 1.6%
of total invested funds) that were downgraded by S&P from A to A- in May 2021. Both bonds
have a remaining maturity of less than one year and a default risk of less than .01%. Given this
and the fact that it is likely a $102,000 loss would be realized if the bonds were sold, the bonds
will continue to be held at this time.
Concentration of Credit Risk
In regards to limitations on the amount that can be invested in any one issuer, the City’s investment policy
generally follows stipulations by the California Government Code. However, the City’s policy adds an
additional stipulation that no more than 50% of the portfolio may be invested in a single issuer.
Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment
pools) that represent 5% or more of total City investments (excluding investments held by others) are as
follows:
41
3.B.a
Packet Pg. 413 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Issuer Investment type Reported amount
FNMA (Fannie Mae)Federal agency securities 59,147,505$ 10.0 %
Federal Farm Credit Bank Federal agency securities 34,810,340 5.9
FHLMC (Freddie Mac)Federal agency securities 58,804,570 9.9
Federal Home Loan Bank Federal agency securities 67,772,280 11.4
Federal Agricultural Mortgage Assoc. Federal agency securities 49,294,990 8.3
% 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, 2021.
As of June 30, 2021, 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 selects the investment under the terms of the applicable 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, 2021, $74,665,666 was invested in the City’s account and $873 was invested in
the SA account. The total amount invested by all public agencies in LAIF at that date was $37.1 billion.
The LAIF is part of the State’s Pooled Money Investment Account (PMIA). As of June 30, 2021, the
investments in the PMIA totaled $193.3 billion (exclusive of demand bank account balances), nearly all
of which is invested in non-derivative financial products. The weighted average of PMIA investments
42
3.B.a
Packet Pg. 414 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
was 291 days as of June 30, 2021. LAIF is not rated. LAIF does not impose limits or restrictions on
participant withdrawals (other than the number of withdrawals per month and 24-hour notice required for
withdrawals of $10 million and over), and the entire balance of the City's investment in the portfolio is
available for withdrawal at any time. LAIF is not registered with the Securities and Exchange
Commission. Deposits and withdrawals in LAIF are made on the basis of $1 and not fair value.
Accordingly, the City's investment in this pool is measured on uncategorized inputs not defined as Level
1, 2, or 3.
Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has
the following recurring fair value measurements as of June 30, 2021:
Deposits and securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in
active markets for those securities. Federal Agency Securities, Municipal Bonds, Corporate Medium Term
Notes, and Supranationals are classified in Level 2 of the fair value hierarchy and are valued using
information provided by the firm FT Interactive Data using institutional bond quotes.
Totals 1 2 3 Uncategorized
Federal agency securities 273,923,593$ — 273,923,593 — —
Treasury bills — — — — —
Corporate medium term notes 111,959,640 — 111,959,640 — —
Municipal bonds 58,571,690 — 58,571,690 — —
Supranationals 32,425,799 — 32,425,799 — —
Commercial Paper 2,499,426 — 2,499,426 — —
Local Agency Investment Fund 74,666,539 — — — 74,666,539
Held by Others:
Treasury notes/bonds 3,239,351 3,239,351 — — —
Corporate medium term notes 3,388,918 — 3,388,918 — —
Municipal bonds 130,878 — 130,878 — —
Common stock 10,470,006 10,470,006 — — —
Money market mutual funds 22,460,856 - - — 22,460,856
Investments at Fair Value 593,736,696$ 13,709,357 482,899,944 — 97,127,395
Level
Investment Type
43
3.B.a
Packet Pg. 415 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
(6)NOTES RECEIVABLE
Notes receivable related to governmental activities total $201,864,672 as follows:
Balance at Balance at
June 30, 2020 Transfers Increases Decreases June 30, 2021
Special Revenue Source Fund
Community Corporation of Santa Monica (a)448,280$ - - - 448,280
Community Corporation of Santa Monica (b)7,114,401 - - - 7,114,401
Community Corporation of Santa Monica (c)4,420,698 - - - 4,420,698
FAME Santa Monica Senior Apartments (d)7,416,347 - - - 7,416,347
Step Up (e)2,029,437 - - - 2,029,437
Santa Monica Housing Partners (f)19,400,000 - - - 19,400,000
Mountain View Mobile Home Park resident (g)87,830 - - - 87,830
Community Corporation of Santa Monica (h)3,350,000 - - - 3,350,000
Community Corporation of Santa Monica (i)6,774,763 - - - 6,774,763
Community Corporation of Santa Monica (j)10,570,940 - - - 10,570,940
EAH, Inc (k)6,738,114 - 4,661,886 - 11,400,000
Community Corporation of Santa Monica (l)377,773 - 52,192 - 429,965
Community Corporation of Santa Monica (m)8,131,592 - 1,416,064 - 9,547,656
Community Corporation of Santa Monica (n)8,679,178 - 2,507,670 - 11,186,848
Community Corporation of Santa Monica (o)12,404,964 - 4,354,895 - 16,759,859
EAH, Inc (p)1,645,205 - -- 1,645,205
Community Corporation of Santa Monica (q)13,820,136 - 81,429 - 13,901,565
Total Special Revenue Source Fund 113,409,658 - 13,074,136 - 126,483,794
Low and Moderate Income Housing Asset Fund
Community Corporation of Santa Monica (r)7,979,656 - - - 7,979,656
Community Corporation of Santa Monica (s)2,738,277 - - - 2,738,277
Community Corporation of Santa Monica (t)4,437,001 - - - 4,437,001
FAME Santa Monica Senior Apartments (u)4,058,652 - - - 4,058,652
Step Up (v)3,011,818 - - - 3,011,818
Community Corporation of Santa Monica (w)4,234,506 - - - 4,234,506
Community Corporation of Santa Monica (x)2,900,000 - - - 2,900,000
Community Corporation of Santa Monica (y)5,408,035 - - - 5,408,035
Step Up (z)5,870,000 - - - 5,870,000
Santa Monica Housing Partners (aa)5,684,455 - - - 5,684,455
Community Corporation of Santa Monica (bb)685,738 - - - 685,738
EAH, Inc (cc)5,354,795 - 594,294 - 5,949,089
Total Low and Moderate Income Housing Asset Fund 52,362,933 - 594,294 - 52,957,227
Other Nonmajor Governmental Funds
Ocean Park Community Center (dd)400,000 - - - 400,000
Community Corporation of Santa Monica (ee)6,345,807 - - - 6,345,807
Community Corporation of Santa Monica (ff)841,600 - - - 841,600
Community Corporation of Santa Monica (gg)1,691,965 - - - 1,691,965
Ocean Park Community Center (hh)800,000 - - - 800,000
Step Up (ii)1,300,000 - - - 1,300,000
Community Corporation of Santa Monica (jj)669,456 - - - 669,456
Low- and moderate-income housing (kk)719,619 - - 42,900 676,719
MERL Program (ll)5,786,839 - - 98,940 5,687,899
MERL Program (mm)4,079,370 - - 69,165 4,010,205
Total nonmajor governmental funds 22,634,656 - - 211,005 22,423,651
Total notes receivable 188,407,247$ - 13,668,430 211,005 201,864,672
44
3.B.a
Packet Pg. 416 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
Special Revenue Source Fund
a.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, 2021, $448,280 had been disbursed to the
borrower. See item “r” below for the amount disbursed from the Low and Moderate Income Housing
Asset Fund.
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, 2021, $7,114,401 had been disbursed to the
borrower. See item “s” below for amounts disbursed from Low and Moderate Income Housing Asset
Fund.
c.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, 2021, $4,420,698 had been disbursed to
the borrower. See item “t” below for the amount disbursed from the Low and Moderate Income Housing
Asset Fund.
d.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 a 0% interest loan
for 55 years. As of June 30, 2021, $7,416,347 had been disbursed to the borrower. See item “u” below
for the amount disbursed from the Low and Moderate Income Housing Asset Fund.
e.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. As of June 30, 2021, $2,029,437
had been disbursed to the borrower. See item “v” below for the amount disbursed from the Low and
Moderate Income Housing Asset Fund.
f.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 the 55-year anniversary of conversion to permanent financing. As of June 30, 2021, $19,400,000
had been disbursed to the borrower.
45
3.B.a
Packet Pg. 417 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
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 at 1930 Stewart Street. This is a
55-year loan with a 0% interest rate. As of June 30, 2021, $87,830 had been loaned to the borrower.
h.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, 2021, $3,350,000
had been disbursed to the borrower. See item “x” below for the amount disbursed from the Low and
Moderate Income Housing Asset Fund.
i.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, 2021, $6,774,763 had been disbursed to the borrower.
j.A revised promissory note dated March 12, 2019 in the amount of $10,570,940 was executed with
Community Corporation of Santa Monica for an affordable housing project located at 1820 & 1826 14th
Street. This was a 3% interest loan with a fifty-five-year term from the date the project is completed but
not later than December 31, 2075. As of June 30, 2021, $10,570,940 had been disbursed to the borrower.
k.A promissory note dated March 12, 2020 in the amount of $11,400,000 was executed with Magnolia
Villas EAH, LLC for the acquisition and predevelopment expenses for an affordable housing project
located at 1445-1453 10th Street. This was a 3% interest loan with a fifty-five-year term. Payments are
deferred during construction of the project and then payments of residual receipts are due annually once
the construction has been completed. The loan is due and payable at the end of the loan term. As of June
30, 2021, $11,400,000 had been disbursed to the borrower.
l.A promissory note dated December 27, 2017 in the amount of $467,735 was executed with Community
Corporation of Santa Monica for an affordable housing project located at 1342 Berkeley Street. This is a
0% interest loan with a two-year term and option to extend for additional two and one-half years.
Payments are deferred during loan term including any extensions. The loan is due and payable at the end
of the loan term. As of June 30, 2021, $429,965 had been disbursed to the borrower.
m.A promissory note dated April 2, 2020 in the amount of $9,745,656 was executed with Community
Corporation of Santa Monica for an affordable housing project located at 2120 Lincoln Boulevard. This
is 3% interest loan with a fifty-five-year term. Payments are deferred construction of the project and then
payments of residual receipts are due annually once the construction has been completed. The loan is due
and payable at the end of the loan term. As of June 30, 2021, $9,547,656 had been disbursed to the
borrower.
n.A promissory note dated March 18, 2021 in the amount of $13,348,057 was executed with Community
Corporation of Santa Monica for an affordable housing project located at 1819 Pico Boulevard et al. This
46
3.B.a
Packet Pg. 418 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
is a 2% interest loan with a fifty-five-year term from the date the project is completed but not later than
December 31, 2077. Payments are deferred during loan term including any extensions. The loan is due
and payable at the end of the loan term. As of June 30, 2021, $11,186,848 had been disbursed to the
borrower.
o.A promissory note dated November 24, 2020 in the amount of $20,650,000 was executed with
Community Corporation of Santa Monica for an affordable housing project located at 1834-48 14th
Street. This is a 3% interest loan with a fifty-five-year term from the date the project is completed but not
later than December 31, 2077. Payments are deferred during loan term including any extensions. The loan
is due and payable at the end of the loan term. As of June 30, 2021, $16,759,859 had been disbursed to
the borrower.
p.A promissory note dated May 29, 2019 in the amount of $8,300,000 was executed with Laurel EAH NC,
LLC for the acquisition and predevelopment expenses for an affordable housing project located at 1413
Michigan Avenue. This is a 0% interest loan with a two-year term and option to extend for additional two
and one-half years. Payments are deferred during loan term including any extensions. The loan is due and
payable at the end of the loan term. As of June 30, 2021, $1,645,205 had been disbursed to the borrower.
A part of the loan balance in this fund was transferred to the Low and Moderate Income Housing Asset
Fund. See item "cc" below.
q.A promissory note dated January 14, 2020 in the amount of $15,183,670 was executed with Community
Corporation of Santa Monica for an affordable housing project located at 2033-2101 Virginia Ave.
Payments are deferred during loan term including any extensions. The loan is due and payable in full
twenty-four (24) months from the date of the Note. This is a 0% interest loan with an eighteen (18) month
term and option to extend for an additional twelve (12) months. As of June 30, 2021, $13,901,565 had
been disbursed to the borrower.
Low and Moderate Income Housing Asset Fund
r.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, 2021, the outstanding balance is
$7,979,656. See item “a” above for the amount disbursed from the Special Revenue Source Fund.
s.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, 2021, $2,738,277 had been disbursed to the
borrower. See item “b” above for amounts disbursed from the Special Revenue Source Fund.
t.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
47
3.B.a
Packet Pg. 419 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
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, 2021, the outstanding balance is
$4,437,001. See item “c” above for the amount disbursed from the Special Revenue Source Fund.
u.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 a 0% interest loan
for 55 years. As of June 30, 2021, $4,058,652 had been disbursed to the borrower. See item “d” above
for the amount disbursed from the Special Revenue Source Fund.
v.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 year. As of June 30, 2021, $3,011,818
had been disbursed to the borrower. See item “e” above for the amount disbursed from the Special
Revenue Source Fund.
w.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 was 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, 2021, $4,234,506 had been disbursed to the borrower.
x.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, 2021, $2,900,000
had been disbursed to the borrower. See item “h” above for the amount disbursed from the Special
Revenue Source Fund.
y.Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount of
$4,458,035, $1,691,965 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 were 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, 2021, $5,408,035 had been disbursed to the borrower.
This was disbursed from the Low and Moderate Income Housing Asset Fund. See item “gg” below for
the amount disbursed from the CDBG Fund.
z.Two promissory notes dated February 13, 2007, one in the amount of $5,870,000 and one for $1,300,000
for a total of $7,170,000 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, 2021, $5,870,000 had been disbursed to the borrower. This was disbursed from the Low
48
3.B.a
Packet Pg. 420 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
and Moderate Income Housing Asset Fund. See item “ii” below for the amount disbursed from the
Miscellaneous Grants Fund.
aa. 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, 2021, the outstanding
balance is $5,684,455.
bb. 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, 2021, $685,738 had been disbursed to
the borrower.
cc.A promissory note dated May 29, 2019 in the amount of $8,300,000 was executed with Laurel EAH NC,
LLC for the acquisition and predevelopment expenses for an affordable housing project located at 1413
Michigan Avenue. This is a 0% interest loan with a two-year term and option to extend for additional two
and one-half years. Payments are deferred during loan term including any extensions. The loan is due and
payable at the end of the loan term. As of June 30, 2021, $5,949,089 had been disbursed to the borrower.
A part of this balance was transferred from the Special Revenue Source Fund. See item "p" above.
Other Nonmajor Governmental Funds
dd.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, 2021, $400,000 had been disbursed to the borrower. This was
disbursed from the TORCA Fund. See item “hh” below for the amount disbursed from the Miscellaneous
Grants Fund.
ee. 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 was for the acquisition, predevelopment expenses and construction of 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, 2021, $6,345,807 had been disbursed
to the borrower. This was disbursed from the TORCA Fund.
ff. 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, 2021, $841,600
had been disbursed to the borrower. This was disbursed from the CDBG Fund.
49
3.B.a
Packet Pg. 421 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
gg. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount of
$4,458,035, $1,691,965 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 were 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, 2021, $1,691,965 had been disbursed to
the borrower. This was disbursed from the CDBG Fund. See item “y” above for the amount disbursed
from the Low and Moderate Income Housing Asset Fund.
hh. 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, 2021, $800,000 had been disbursed to the borrower. This was
disbursed from the Miscellaneous Grants Fund. See item “dd” above for the amount disbursed from the
TORCA Fund.
ii.Two promissory notes dated February 13, 2007, one in the amount of $5,870,000 and one for $1,300,000
for a total of $7,170,000 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, 2021, $1,300,000 had been disbursed to the borrower. This was disbursed from the
Miscellaneous Grants Fund. See item “z” above for the amount disbursed from the Low and Moderate
Income Housing Asset Fund.
jj. 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, 2021, the outstanding balance is $669,456.
kk. 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, 2021, the
outstanding balances of such loans total $676,719.
ll.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
50
3.B.a
Packet Pg. 422 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
Presidential Contingency Fund, and $25,000,000 – CDBG Program Emergency Supplemental Fund.
Loans were made between 1995 and 2001. As of June 30, 2021, the CDBG Program Emergency
Supplemental Fund outstanding balance is $5,687,899. See item “mm” below for the amount disbursed
from the Miscellaneous Grants Fund.
mm.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, 2021, the Miscellaneous Grants Fund
outstanding balance is $4,010,205. See item “ll” above for the amount disbursed from the CDBG fund.
51
3.B.a
Packet Pg. 423 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(7)CAPITAL ASSETS
Capital assets activity for the primary government for fiscal year ended June 30, 2021 is as follows:
Balance at
July 1, 2020 Increases Decreases Transfers
Balance at
June 30, 2021
Governmental activities:
Capital assets, not being depreciated:
Land 200,323,024$ — — — 200,323,024
Land held under easement 72,237,823 147,100 — — 72,384,923
Construction in progress 161,943,715 55,191,634 (188,219) (135,811,716) 81,135,414
Total capital assets, not being depreciated 434,504,562 55,338,734 (188,219) (135,811,716) 353,843,361
Capital assets, being depreciated:
Buildings 340,429,097 — (26,544) 113,783,549 454,186,102
Improvements other than buildings 197,362,735 — — 21,014,722 218,377,457
Utility systems 1,742,913 — — — 1,742,913
Machinery and equipment 59,306,980 104,911 (192,123) 1,013,445 60,233,213
Infrastructure 376,593,979 — — — 376,593,979
Intangibles 695,710 — — — 695,710
Total capital assets being depreciated 976,131,414 104,911 (218,667) 135,811,716 1,111,829,374
Less accumulated depreciation for:
Buildings (134,431,796) (8,844,378) 24,317 — (143,251,857)
Improvements other than buildings (97,606,806) (8,595,573) — — (106,202,379)
Utility systems (1,577,970) (164,947) — — (1,742,917)
Machinery and equipment (36,179,511) (3,018,271) 180,015 — (39,017,767)
Infrastructure (250,254,245) (8,840,972) — — (259,095,217)
Intangibles (242,317) (41,442) — — (283,759)
Total accumulated depreciation (520,292,645) (29,505,583) 204,332 — (549,593,896)
Total capital assets, being depreciated, net 455,838,769 (29,400,672) (14,335) 135,811,716 562,235,478
Subtotal governmental activities 890,343,331 25,938,062 (202,554) — 916,078,839
Business-type activities:
Capital assets, not being depreciated:
Land 53,380,750 — — — 53,380,750
Construction in progress 27,972,800 31,756,631 — (4,988,522) 54,740,909 Total capital assets, not being depreciated 81,353,550 31,756,631 — (4,988,522) 108,121,659
Capital assets, being depreciated:
Buildings 148,326,983 — — 1,740,508 150,067,491
Improvements other than buildings 28,865,015 — — 992,974 29,857,989
Machinery and equipment 227,404,898 2,356,551 (5,754,673) 1,054,835 225,061,611
Infrastructure 249,653,154 3,516,517 — 1,200,205 254,369,876
Intangibles 113,808,997 2,956,126 — — 116,765,123
Total capital assets being depreciated 768,059,047 8,829,194 (5,754,673) 4,988,522 776,122,090
Less accumulated depreciation for:
Buildings (71,287,219) (4,361,612) — — (75,648,831)
Improvements other than buildings (18,777,645) (1,193,079) — — (19,970,724)
Machinery and equipment (142,797,085) (17,701,829) 5,670,105 — (154,828,809)
Infrastructure (111,194,639) (5,585,080) — — (116,779,719)
Intangibles (41,139,678) (2,937,289) — — (44,076,967)
Total accumulated depreciation (385,196,266) (31,778,889) 5,670,105 — (411,305,050) Total capital assets, being depreciated, net 382,862,781 (22,949,695) (84,568) 4,988,522 364,817,040
Subtotal business-type activities 464,216,331 8,806,936 (84,568) — 472,938,699
Total 1,354,559,662$ 34,744,998 (287,122) — 1,389,017,538
52
3.B.a
Packet Pg. 424 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Depreciation and amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government 605,915$
Public safety 3,598,061
General services 15,080,046
Community services 4,362,325
Library 1,298,948
Community development 4,467,553
Capital assets held by the government's internal service funds are
charged to the various functions based on their assets' usage 92,735
Total depreciation and amortization expense - governmental activities 29,505,583$
Business-type activities:
Water 1,474,753$
Resource Recovery and Recycling 4,897
Broadband 10,459
Pier 907,215
Wastewater 6,535,170
Airport 335,690
Stormwater management 324,607
Cemetery 44,313
Big Blue Bus 17,406,930
Parking authority 16,263
Capital assets held by the government's internal service funds are
charged to the various programs based on their assets' usage 4,718,592
Total depreciation and amortization expense - business-type activities 31,778,889$
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.
53
3.B.a
Packet Pg. 425 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(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 report a liability 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 represents interest on advances to the Successor
Agency and the nonmajor enterprise funds and is recognized in the government-wide financial statements.
This interest is earned and included in promissory note balances at year-end. GASB Statement No. 34
requires the City to recognize and present interfund activity between governmental and business-type funds
on the government-wide financial statements.
54
3.B.a
Packet Pg. 426 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
The components of unearned revenue are as follows:
Governmental funds:
General Fund:
Unearned user fees 2,079,559$
Unearned rent 166,555
Business license tax 2,756,606
Total General Fund 5,002,720
Special Revenue Source Fund:
Civic Center Village advanced lease
payments 17,522,050
Total Special Revenue Source Fund 17,522,050
Nonmajor governmental funds:
Grants received prior to meeting all
eligibility requirements 815,174
Unearned user fees 534,299
Total nonmajor governmental funds:1,349,473
Total governmental funds 23,874,243
Enterprise funds:
Big Blue Bus Fund:
Unearned developer fees 185,000
Unearned rent 527
Grant and other funds received prior to
meeting all eligibility requirements 20,628,888
Total Big Blue Bus Fund 20,814,415
Wastewater Fund:
Business license tax 13,140
Total Wastewater Fund 13,140
Nonmajor enterprise funds:
Unearned rent 18,959
Total nonmajor enterprise funds:18,959
Total enterprise funds 20,846,514
Total unearned revenue 44,720,757$
55
3.B.a
Packet Pg. 427 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
The components of deferred inflows of resources for unavailable revenue are as follows:
Fund financial
statements
Recognized in
government-
wide financials
Government-
wide financial
statements
Governmental funds:
General Fund:
Interest on advances 163,285$ (163,285) —
Total General Fund 163,285 (163,285) —
Nonmajor governmental funds:
Grants receivable 13,189,312 (13,189,312) —
Total Nonmajor governmental funds 13,189,312 (13,189,312) —
Total deferred inflows of resources 13,352,597$ (13,352,597) —
56
3.B.a
Packet Pg. 428 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(9)LONG-TERM DEBT
Changes in long-term debt:
Long-term debt activity for the fiscal year ended June 30, 2021, was as follows:
Balance at
July 1, 2020 Additions Reductions
Balance at
June 30, 2021
Due within
one year
Due beyond one
year
Governmental Activities:
Lease Revenue bonds 148,455,000 19,700,000 24,660,000 143,495,000 1,820,000 141,675,000
General obligation bonds 3,230,000 — 1,095,000 2,135,000 1,075,000 1,060,000
Plus deferred amounts:
For issuance premiums 14,326,015 3,711,636 2,046,204 15,991,447 — 15,991,447
Total loans and bonds
payable 166,011,015 23,411,636 27,801,204 161,621,447 2,895,000 158,726,447
Business-type activities:
Loans payable
from direct borrowings 5,550,789 22,528,915 — 28,079,704 — 28,079,704
Revenue bonds 4,615,000 — 2,275,000 2,340,000 2,340,000 —
Plus deferred amounts:
For issuance premiums 149,846 — 99,895 49,951 — 49,951
Total loans and bonds
payable 10,315,635 22,528,915 2,374,895 30,469,655 2,340,000 28,129,655
Total 176,326,650$ 45,940,551 30,176,099 192,091,102 5,235,000 186,856,102
57
3.B.a
Packet Pg. 429 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
A summary of long-term debt outstanding at year-end is as follows:
Date of issue Original issue
Final
maturity
date
Interest
rate
Balance at
June 30, 2021
Governmental activities:
Lease Revenue bonds (1):
Public Finance Authority Refunding 2021 (Series A) May 5, 2021 17,860,000$ July 1, 2031 4.00%17,860,000$
Public Finance Authority Refunding 2021 (Series B) May 5, 2021 1,840,000 July 1, 2023 0.30%1,840,000
Public Finance Authority Refunding 2015 Jul 9, 2015 26,360,000 July 1, 2033 3.00-5.00%21,010,000
Public Finance Authority 2017 Sep 14, 2017 68,565,000 July 1, 2047 3.00-5.00%68,565,000
Public Finance Authority 2018 Jun 6, 2018 34,220,000 July 1, 2048 3.625-5.000%34,220,000
Subtotal lease revenue bonds -
governmental activities 143,495,000
General obligation bonds (1):
Main Library Improvements 2012 May 30, 2012 11,325,000 July 1, 2022 0.20-4.00%2,135,000
Subtotal general obligation
bonds - governmental
activities 2,135,000
Subtotal governmental activities 145,630,000
Business-type activities (2):
Revenue bonds:
Hyperion Project Revenue Refunding 2012 May 30, 2012 8,955,000 Feb 1, 2022 2.00-4.00%2,340,000
Subtotal revenue bonds -
business-type activities 2,340,000
Loans payable from direct borrowings (1):
State Water Resources Control
Board Construction Installment Sale Agreement Sep 21, 2017 75,885,903 Dec 31, 2052 1.80%28,079,704
Subtotal business-type activities 30,419,704
Total 176,049,704$
(1)For construction of City facilities.
(2)To fund capital contribution towards wastewater treatment facility.
Management believes it is in compliance with all debt covenants. See Note 17.
58
3.B.a
Packet Pg. 430 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA Notes to Basic Financial Statements For the fiscal year ended June 30, 2021 Annual debt service requirements to maturity are as follows: Fiscal yearendingJune 30, Principal Interest Principal Interest Principal Interest2022 1,820,000$ 5,795,629 1,075,000 63,900 2,895,000 5,859,529 20233,330,000 5,914,852 1,060,000 21,200 4,390,000 5,936,052 20245,340,000 5,741,342 — — 5,340,000 5,741,342 20255,600,000 5,536,332 — — 5,600,000 5,536,332 20265,845,000 5,285,532 — — 5,845,000 5,285,532 2027-2031 33,430,000 22,249,795 — — 33,430,000 22,249,795 2032-2036 25,530,000 15,626,070 — — 25,530,000 15,626,070 2037-2041 21,330,000 11,128,188 — — 21,330,000 11,128,188 2042-2046 26,855,000 5,578,263 — — 26,855,000 5,578,263 2047-2050 14,415,000 671,225 — — 14,415,000 671,225 143,495,000$ 83,527,228 2,135,000 85,100 145,630,000 83,612,328Fiscal yearendingJune 30, Principal Interest Principal Interest Principal Interest2022 2,340,000$ 46,800 — — 2,340,000 46,800 2023— — — — — — 2024— — 1,828,161 1,293,946 1,828,161 1,293,946 2025— — 1,861,068 1,261,039 1,861,068 1,261,039 2026— — 1,894,568 1,227,540 1,894,568 1,227,540 2027-2031— — 9,996,815 5,613,724 9,996,815 5,613,724 2032-203610,929,506 4,681,033 10,929,506 4,681,033 2037-20411,569,586 816,764 1,569,586 816,764 2,340,000$ 46,800 28,079,704 14,894,046 30,419,704 9,443,049Governmental ActivitiesLease Revenue bondsBusiness-type activitiesTotalLoan payable from direct borrowingsGeneral obligation bondsTotalRevenue bonds593.B.aPacket Pg. 431Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
The City’s outstanding balance of a construction installment sale agreement from direct borrowings related
to business type activities of $28,079,704 contains a provision that if the agreement were terminated, the
City would, upon demand, be required to pay the State Water Board an amount equal to Project Funds
disbursed, accrued interest, penalty assessments and additional payments.
The City’s outstanding bonds of $2,340,000 of Hyperion refunding bonds related to business type
activities contain a provision in the indenture that in the event of default the majority of the bond holders
can declare the principal balance plus any accrued interest be immediately payable.
Pledged Revenue
The City has a number of debt issues that involve the pledging of revenues. The amounts and terms of the
remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized
are indicated in the summary of long-term bonds and loans and notes outstanding at year-end presented in
this note. For the current year, debt service payments as a percentage of the pledged gross revenue (net of
certain expenses where so specified in debt covenants) are indicated in the table below. These percentages
also approximate the relationship of debt service to pledged revenue for the remainder of the term of the
commitment.
Annual amount
of pledged
revenue (net of
expenses, where
required)
Annual debt
service
payments (of all
debt secured by
this revenue)
Debt service as
a percentage of
pledged revenue
Future amount
of pledged
revenue
Description of pledged revenue/debt:
Base rental payments
1,060,000$ 1,060,000 100% -
Public Finance Authority Refunding 2021 533,166 533,166 100% 24,613,228
Public Finance Authority Refunding 2015 2,048,194 2,048,194 100% 24,627,788
Public Finance Authority 2017 2,991,600 2,991,600 100% 115,307,100
Public Finance Authority 2018 1,554,387 1,554,387 100% 57,970,020
Library bond tax revenue
Main Library Improvements Refunding 2012 1,160,400 1,160,400 100% 1,102,400
Wastewater charges for services
Hyperion Project Revenue Refunding 2012 2,505,100 2,505,100 100% 2,386,800
* bonds were refunded in May of 2021
Public Finance Authority Refunding 2011*
Refunding
On May 5, 2021, the Santa Monica Public Financing Authority issued $19,700,000 of Santa Monica Public
Financing Authority Lease Revenue Refunding Bonds (Parking Structure 6 Project) Series 2021A&B
bearing interest from 0.30% to 4.00% with a final maturity of July 1, 2031. The bonds were issued to refund
the Santa Monica Public Financing Authority Lease Revenue Bonds (Parking Structure 6 Project) Series
60
3.B.a
Packet Pg. 432 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
2011A. The aggregate difference in debt service between the refunding debt and the refunded debt is
$4,206,176 and resulted in an economic gain of $4,197,861. The reacquisition price exceeded the net carry
value of the old debt by $588,305. The amount is being added to the new debt and amortized over the
remaining life of the new debt, which is equal to the life of the refunded debt. The bonds due in 2022 were
advanced refunded and the principal amount of those bonds is $1,605,000.
Construction Installment Sale Agreement
On September 21, 2017, the City entered into a Construction Installment Sale agreement with the State
Water Resources Control Board (SWRCB) to fund certain water recycling and conservation projects. The
original agreement provides funding in the amount of $56.9 million and is payable with interest at 1.8%
over a period of 30 years with the first installment due after all disbursements have been paid and
construction of the project has been completed. The agreement called for the forgiveness of $4,000,000 of
principal contingent on the City’s performance of its obligations under the agreement. On May 27, 2020,
in order to fund additional eligible projects, the SWRCB and the City modified the agreement to increase
the loan amount to $75.9 million. Amortization of the loan is expected to begin December 31, 2023 with
the final payment being due on December 31, 2052. The City has drawn $28,079,704 on the loan as of June
30, 2021.
Defeasance
In FY 2017-18, $3,535,000 par value of Public Financing Authority 2009 Lease Revenue Bonds were
defeased. The total remaining principal balance of the bonds is $930,000 as of June 30, 2021.
61
3.B.a
Packet Pg. 433 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(10)FUND DEFICITS
Governmental Funds
A negative fund balance of $3,208,872 exists in the Beach Recreation Fund primarily due to beach parking revenue declines as a result of the global pandemic and expenditures for large capital projects such as the beach bike path. It is anticipated that the fund deficit will be eliminated through increased future revenues and a reduction in future capital project expenditures.
A negative fund balance of $1,522,393 exists in the Miscellaneous Grants Fund primarily due to grant reimbursements receivables from other governments that have not been recognized as revenue based on the City’s revenue recognition policy. Once the funds have been received the negative fund balance will be eliminated.
Enterprise Funds
A net deficit of $117,597 exists in the Community Broadband Fund primarily due to investment of $1.3 million in a 5G wireless network system. Future revenues from the new system are expected to relieve the deficit.
Internal Service Funds
A net deficit of $59,403,838 exists in the Self-Insurance General Liability Fund primarily due the current and prior year’s settlement of claims related to the Santa Monica Police Activities League and the adverse
development of new and existing claims. Management intends to eliminate the deficit in FY 2021-22 through increased annual contributions and a one-time $54.9 million contribution to the Fund.
62
3.B.a
Packet Pg. 434 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
(11) INTERFUND TRANSACTIONS
The following tables summarize the due to/from other funds, interfund advances to/from, and transfers
in/out as of and for the fiscal year ended June 30, 2021.
Advances to/from
Advances to/from other funds at June 30, 2021 are as follows:
Advances to Advances from
(receivable fund)(payable fund)Amount
General Fund Nonmajor governmental funds 4,162,703$
Nonmajor enterprise funds 5,539,456
Total General Fund 9,702,159
Special Revenue Source Fund Nonmajor governmental funds 1,450,000
Total Special Revenue Source Fund 1,450,000
Total advances to/from 11,152,159$
Advances represent loans made to cover operating shortfalls or to provide financing resources for capital
projects. These amounts are expected to be repaid in future years, subject to the various loan terms.
Due from/to
Balances due to/from other funds at June 30, 2021 are as follows:
Due From Due to
(receivable fund)(payable fund)Amount
General Fund Nonmajor governmental funds 9,191,939$
Nonmajor enterprise funds 515,731
Total due to/from 9,707,670$
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.
63
3.B.a
Packet Pg. 435 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Transfers
Transfers to/from other funds for the fiscal year ended June 30, 2021 are as follows:
Transfer in
(receivable fund)Amount
General Fund Special Revenue Source Fund 1,904,422$ (1)
Nonmajor governmental funds 20,365,330 (2)
Water Fund 1,344,955 (3)
Big Blue Bus Fund 366,041 (4)
Wastewater Fund 670,339 (5)
Resource Recovery and Recycling Fund 232,680 (6)
Nonmajor enterprise funds 2,447,671 (7)
Internal service funds 236,711 (8)
Total General Fund 27,568,149
Special Revenue Source Fund General Fund 6,990,474 (9)
Nonmajor enterprise funds 8,799,116 (9)
Total Special Revenue Source Fund 15,789,590
Low/Moderate Housing Fund General Fund 1,497,619 (9)
Nonmajor enterprise funds 2,199,779 (9)
Total Low/Moderate Housing Fund 3,697,398
Nonmajor governmental funds General Fund 12,599,129 (10)
Special Revenue Source Fund 158,950 (11)
Nonmajor governmental funds 203,989 (12)
Wastewater Fund 15,527,652 (13)
Nonmajor enterprise funds 64,154 (14)
Total nonmajor governmental funds 28,553,874
Water Fund General Fund 133,323 (15)
Total Water Fund 133,323
Resource Recover and Recycling Fund Non-major governmental funds 1,463 (6)
Total Resource Recovery and Recycling Fund 1,463
Wastewater Fund General Fund 39,721 (15)
Nonmajor enterprise funds 1,210,782 (16)
Total Wastewater Fund 1,250,503
Big Blue Bus Fund Nonmajor governmental funds 472,076 (17)
Total Big Blue Bus Fund 472,076
Nonmajor enterprise funds General Fund 2,754,772 (18)
Nonmajor governmental funds 1,455,826 (19)
Water Fund 9,465 (20)
Nonmajor enterprise funds 84,440 (21)
Total nonmajor enterprise funds 4,304,503
Internal service funds Internal service funds 1,992,254 (22)
Total Internal service funds 1,992,254
Total transfers 83,763,133$
Transfer out
(payable fund)
64
3.B.a
Packet Pg. 436 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
1) Transfer of monies to subsidize administrative, cultural arts, community recreation, inclusionary and affordable
housing, transportation management, and litigation expenditures and payments for property used in CityTV
operations.
2) Transfer of monies to subsidize administrative, literacy, watershed management, planning, transportation and street
infrastructure expenditures and ARPA and CARES Act related expenditures.
3) Transfer of monies to subsidize infrastructure improvements, environmental program, and engineering expenditures.
4) Transfer of monies to subsidize finance, human resources, police and transit mall maintenance expenditures.
5) Transfer of monies to subsidize engineering and environmental programs and infrastructure improvement
expenditures.
6) Transfer of monies to subsidize environmental programs.
7) Transfer of monies to subsidize the Network Operations Center, infrastructure improvements and environmental,
administrative, and economic development program expenditures.
8) Transfer of monies to subsidize risk management program, administrative, and youth program expenditures.
9) Transfer of monies to subsidize affordable housing program expenditures.
10) Transfer of monies for payment of debt service and to subsidize beach operations and community recreation
programs.
11) Transfer of monies to subsidize infrastructure improvements and transportation program expenditures.
12) Transfer of monies to subsidize infrastructure improvements and transportation program and administrative
expenditures.
13) Transfer of monies to subsidize Sustainable Water Infrastructure Project (SWIP) expenditures.
14) Transfer of monies to subsidize maintenance programs.
15) Transfer of monies to subsidize utility rates for low-income families.
16) Transfer of monies to subsidize operating and maintenance expenditures associated with the Santa Monica Urban
Runoff Recycling Facility.
17) Transfer of monies to subsidize transportation program and infrastructure expenditures.
18) Transfer of monies to subsidize Clean and Safe Beaches program, pier and police operations.
19) Transfer of monies to subsidize operating and maintenance expenditures associated with the Santa Monica Urban
Runoff Recycling Facility, cemetery operation and maintenance and administrative expenditures.
20) Transfer of monies received from Metropolitan Water District Recycled Water Rebate program.
21) Transfer of monies to subsidize administrative expenditures.
22) Transfer of monies to subsidize risk management program and administrative expenditures.
65
3.B.a
Packet Pg. 437 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(12) RESTRICTED NET POSITION
In the government-wide financial statements and proprietary fund financial statements, restricted net
position is reported when constraints on the use of resources are either externally imposed by creditors
(such as through debt covenants), grantors, contributors, or laws or regulations or other governments, or
imposed by law through constitutional provisions or enabling legislation. See note 1 for a detailed
explanation of the City’s net position policies.
Restricted net position for governmental activities at June 30, 2021 is as follows:
Community development
Low and moderate income housing funds 66,992,294$
Special revenue source funds 44,976,922
Tenant Ownership Rights Charter Amendment (TORCA) funds 13,123,456
Community Development Block Grant (CDBG) funds 8,953,089
Miscellaneous grant funds 16,663,539
Rent control funds 1,802,110
Housing authority funds 571,582
Total Community development 153,082,992
Community services
Special revenue source funds 6,952,909
Parks and recreation funds 44,105
Total Community services 6,997,014
Transportation
Special revenue source funds - traffic 2,789,586
Special revenue source funds - parking 1,144,006
Special revenue source funds - roads 44,853
Special revenue source funds - transit 12,010,846
Local return funds 14,394,152
Gas tax funds 4,277,821
Total transportation 34,661,264
Clean beaches and ocean parcel tax 7,877,341
Debt service 5,622,302
Miscellaneous 12,949,246
Perpetual care - nonexpendable 17,468,033
Total governmental restricted net position 238,658,192$
66
3.B.a
Packet Pg. 438 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Restricted net position for business-type activities at June 30, 2021 is as follows:
Prop 1B 10,731,093$
Debt service 2,298,946
Total business-type restricted net position 13,030,039$
67
3.B.a
Packet Pg. 439 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(13)FUND BALANCES
In the fund financial statements fund balance is displayed in categories that describe the nature and extent
of constraints on resources that the City is bound to observe. See note 1 for a detailed explanation of the
City’s fund balance policies.
Fund balance reported on the governmental funds balance sheet as of June 30, 2021 includes the following:
Nonspendable fund balance
Nonspendable fund balance includes amounts that are not in a spendable form, such as prepaid and advances
to other funds, or are required to be maintained intact, such as funds held by the City associated with the
perpetual care of the City's cemetery and mausoleum.
Nonspendable fund balances are presented as a component of fund balances as follows:
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Nonspendable
Prepaids 12,076$ — — 44,516 56,592
Advances to Airport 5,376,171 — — — 5,376,171
Advances to Beach 3,842,973 1,450,000 — — 5,292,973
Advances to Rent Control 319,730 — — — 319,730
Perpetual care — — — 17,468,033 17,468,033
Total nonspendable 9,550,950$ 1,450,000 — 17,512,549 28,513,499
Restricted fund balance
Restricted fund balance represents amounts that can only be spent for the specific purposes stipulated by
either external resource providers or by enabling legislation that created the revenue source and restricted
its use. These restrictions may be changed or lifted only with the consent of the resource providers.
The largest component of restricted fund balance is affordable housing, which represents funds received
from grants, taxes, and fees that are all dedicated to ensuring the affordability of housing in the City. Most
affordable housing funds are already obligated or loaned to affordable housing developers for eligible
projects. The 2017 CSB Bonds and FS1 Bonds represent the unspent portion of lease revenue bond
proceeds that were issued to finance these large-scale capital projects. Other significant categories include
transportation funds, traffic, roads, and parking, which are all dedicated to improving the City’s
transportation systems for its citizens and visitors. Another noteworthy category is cultural and recreation
services, which includes funds restricted for beach recreation activities, the upgrade and/or expansion of
parks and recreation facilities, and funds that support public art programs. Childcare programs are designed
to assist eligible residents with childcare needs, as well as for the construction of new childcare facilities.
Finally, debt service represents amounts held by trustees for the future repayment of outstanding City
obligations.
68
3.B.a
Packet Pg. 440 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Restricted fund balances are presented as a component of fund balances as follows:
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Restricted
2017 CSB Bonds $ 2,296,683 — — — 2,296,683
2018 FS1 Bonds 6,256,435 — — — 6,256,435
Affordable housing — 44,976,922 66,992,294 40,014,473 151,983,689
Childcare programs — 1,489,342 — 44,105 1,533,447
Clean beaches and ocean parcel tax — — — 7,877,341 7,877,341
Consumer protection 2,233,552 — — — 2,233,552
Cultural and recreation services — 6,952,909 — — 6,952,909
Debt service — — — 5,622,302 5,622,302
Disability 332,827 — — — 332,827
Miscellaneous — 2,413,920 — 3,175,963 5,589,883
Overnight accommodations — 3,303,642 — — 3,303,642
Parking — 1,144,006 — — 1,144,006
Roads — 44,853 — 4,277,821 4,322,674
Traffic — 2,789,586 — — 2,789,586
Transit — 12,010,846 — 14,394,152 26,404,998
Total restricted 11,119,497$ 75,126,026 66,992,294 75,406,157 228,643,974
Committed fund balance
Committed fund balance represents amounts that can only be used for the specific purposes determined by
a formal action of the City Council. Commitments may be changed or lifted only by the City Council taking
the same formal action that originally imposed the constraint.
Committed fund balance includes affordable housing funds received from settlement proceeds, the sale of
City-owned properties, the Successor Agency, and one quarter of the City’s Transaction and Use Tax
revenue which are committed to ensuring the affordability of housing in the City. Most affordable housing
funds are already obligated or loaned to affordable housing developers for eligible projects.
69
3.B.a
Packet Pg. 441 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Committed fund balances are presented as a component of fund balances as follows:
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Committed
Affordable housing $ — 114,924,058 — — 114,924,058
Total committed $ — 114,924,058 — — 114,924,058
Assigned fund balance
Assigned fund balance represents amounts intended to be used by the City for specific purposes expressed
by the City Council or by an official to which the City Council has delegated the authority.
The largest component of assigned fund balance is for encumbrances and reappropriation of open contracts
and purchase orders. Self-insurance supplemental payment funds are set aside to pay for potential increases
in General Fund contributions to the City’s liability self-insurance program. Other purposes funds represent
one-time funds set aside to cushion the General Fund budget from the impacts of pension contribution rate
adjustments reflecting pension plan losses in FY 2019-20 and also due to the City’s FY 2020-21 staff
reductions, other post employment benefit (OPEB) liability paydown, unanticipated deferred maintenance
costs arising out of the temporary reduction of the City’s ongoing capital improvement program investments
as a result of COVID-19-related revenue losses, and potential litigation costs. The Shutdown Reserve,
created per Council direction, is kept intact to allow a cushion to fund the continuation of essential General
Fund operations in the face of continued COVID-19-related revenue losses. ARPA funds reflect funds
made available for economic recovery and operations programing through June 30, 2023 as a result of the
use of American Rescue Plan Act (ARPA) funds to supplement General Fund revenues. Funds for
continuing capital projects represent funds that are dedicated to completing previously budgeted but as yet
unencumbered capital improvement projects throughout the City. Other funds are assigned for
compensated absences and other key initiatives required for the health and safety of the City and its assets.
A portion of Yearend CIP savings will be used in FY 2021-22 for immediate one-time clean and safe
enhancements.
70
3.B.a
Packet Pg. 442 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Assigned fund balances are presented as a component of fund balances as follows:
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Assigned
Encumbrances and reappropriations 34,166,462$ — — — 34,166,462
Self insurance fund supplemantal payments 8,000,000 — — — 8,000,000
Other purposes 14,355,418 — — — 14,355,418
Shutdown reserve 20,000,000 — — — 20,000,000
ARPA 9,338,689 — — — 9,338,689
Compensated absences 13,864,743 — — — 13,864,743
Continuing capital projects 11,502,786 — — — 11,502,786
Economic recovery fund 461,570 — — — 461,570
Racial justice fund 183,750 — — — 183,750
Yearend CIP savings 2,412,480 — — — 2,412,480
Total assigned 114,285,898$ — — — 114,285,898
Unassigned fund balance
Unassigned fund balance is the residual classification for the General Fund and includes all amounts not
contained in other classifications. Other governmental funds may report negative unassigned fund balance
if expenditures incurred for a specific purpose exceed the resources that are restricted, committed, or
assigned to that purpose. This occurs when reimbursements are received after expenditures are incurred
and the deficit will be eliminated as reimbursements for eligible grant expenditures are received from
grantors.
The largest component of unassigned fund balance is the emergency operating and ongoing capital program
contingency, which represents funds for emergency events and circumstances. These reserves are
maintained to safeguard the credit rating and basic operations of the City in the event of an economic or
natural emergency or disaster. The City lowered its contingency reserves from 15% to 12.5% of the
following year’s operating and ongoing capital budget in order to make more one-time funds available to
withstand the severe revenue decreases resulting from the COVID-19 pandemic. It is anticipated that the
City will begin to increase the contingency reserve in FY 2023-24. The unrealized loss represents the
portion of fund balance related to investments that is not available for appropriation. Negative unassigned
fund balance for nonmajor governmental funds is due to the timing of expenditures being incurred prior to
reimbursement from grant and other revenue sources. The deficits will be eliminated as future revenues
are received.
71
3.B.a
Packet Pg. 443 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Unassigned fund balances are presented as a component of fund balances as follows:
General Fund
Special Revenue
Source Fund
Low and
Moderate
Income Housing
Asset Fund
Nonmajor
governmental
funds
Total
governmental
funds
Unassigned
Contingency 46,874,440$ — — — 46,874,440
Unrealized loss (982,963) — — — (982,963)
Other unassigned — — — (21,394,804) (21,394,804)
Total unassigned 45,891,477$ — — (21,394,804) 24,496,673
Subsequent to year end the City issued Lease Revenue Bonds in order to fund the remodel and construction
of the City Yards. The total net proceeds of the bonds available for construction costs was $70 million.
Once the bonds were issued, the City reimbursed previously incurred construction costs of $42.6 million.
Had the bonds been issued in FY 2020-21, the General Fund fund balance would have been increased by
$70 million.
72
3.B.a
Packet Pg. 444 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(14) COMMITMENTS AND CONTINGENCIES
Litigation
(a) Pico Neighborhood Association, et al. v. City of Santa Monica. In this case, on February 13, 2019,
the trial court issued its judgment in favor of plaintiffs and against the City of Santa Monica, holding that the
City’s at-large method of electing its City Council violated the California Voting Rights Act (“CVRA”) and
the Equal Protection Clause of the California Constitution. Plaintiffs’ counsel then filed motions seeking
approximately $950,000 in costs and, under a provision of the CVRA, $23 million in attorneys’ fees. The City
appealed on February 22, 2019, and on July 9, 2020, the Court of Appeal reversed the trial court, awarded
costs to the City, and directed the trial court to enter judgment for the City. Plaintiffs filed a petition for
rehearing on July 24, 2020, which the Court of Appeal denied on August 5, 2020. On August 18, 2020 the
plaintiffs requested review by the California Supreme Court, and on October 21, 2020 the California Supreme
Court granted the petition for review and ordered the parties to brief the following issue: “What must a plaintiff
prove in order to establish vote dilution under the California Voting Rights Act?” The Supreme Court also
ordered the Court of Appeal’s opinion depublished. Plaintiffs’ requests for costs and attorneys’ fees remain
pending in the trial court awaiting the final outcome of the Supreme Court proceedings and any subsequent
proceedings in the Court of Appeal.
(b) Litigation arising from allegations of sexual abuse of minors. On October 22, 2018, the Los Angeles
County District Attorney's Office charged City employee Eric Uller with five counts of sexual crimes against
four minors. The criminal charges related to alleged incidents dating back to 1989 that were alleged to have
occurred while Uller was volunteering and/or working as a City employee at the Santa Monica Police
Activities League (“SM-PAL”). On November 5, 2018, Uller pled not guilty to the charges against him; on
November 7, Uller bailed out of custody. On the morning of November 15, 2018, the date of his next scheduled
court appearance, Uller was found dead in his residence of an apparent suicide.
Following Uller's arrest and subsequent suicide, a total of 23 individuals (all young boys at the time of the
alleged abuse) filed suit against the City and SM-PAL alleging abuse by Uller between the late 1980s and
early 2000s while he was associated with SM-PAL and one individual (a young girl at the time of the alleged
abuse) alleging abuse by another individual within this same time period while he allegedly was a probationer
performing community service at SM-PAL. In early 2020, the City reached settlements, fully executed and
effective April 7, 2020, with the 24 plaintiffs for a total of $42.6 million payable in two installments. As of
October 10, 2020, the City has fully paid these settlements.
After the original March 2020 settlements, an additional 20 plaintiffs sued the City and SM-PAL alleging
abuse by Uller between the 1980s and early 2000s while he was associated with SM-PAL. The City reached
settlements with all 20 plaintiffs as follows: (a) $9.5 million to be paid to 19 of the plaintiffs in three
installments; $4 million 45 days after the effective date of the settlement, $2.4 million on or before July 30,
2021, and $3.1 million on or before July 30, 2022; and (b) $325,000 to be paid to one plaintiff in two
installments; $162,500 45 days after the effective date of the settlement and $162,500 on or before October
13, 2021. The City paid two of these settlement payments on November 25, 2020 ($162,500) and December
1, 2020 ($4 million), leaving an outstanding balance as of June 30, 2021 of $5,662,500. This amount has been
accrued in these financial statements. On July 30, 2021 ($2.4 million) and October 7, 2021 ($162,500) the
City made additional settlement payments and as of December 31, 2021 only $3,100,000 remains outstanding.
73
3.B.a
Packet Pg. 445 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
The City also reached a settlement with a total of 61 additional claimants totaling $54.9 million. The settlement
moneys were paid into a qualified settlement fund on December 22, 2021. This amount has been accrued in
these financial statements.
Six other plaintiffs have recently sued the City and SM-PAL alleging abuse by Uller. In addition, counsel for
another 13 individuals have indicated their clients’ intent to sue the City and SM-PAL based on similar
allegations of abuse by Uller.
The City and SM-PAL have insurance coverage via several insurance carriers covering some of the time when
the alleged abuse occurred. Despite numerous and ongoing demands to these carriers by the City, the only
monetary contributions to the aforementioned settlements have been $11,000,000 from ACCEL (in exchange
for a release) and $163,679.48 from one SM-PAL insurer, Riverstone, to reimburse select defense costs. After
deducting Santa Monica’s required contributions to ACCEL to cover its share of this $11 million, the net
recovery from ACCEL was approximately $8,766,089.
On September 30, 2021, the City initiated a Coverage Action, alleging breach of contract and bad faith against
six of the City’s insurers, as well as contractual and equitable indemnification against SM-PAL. This litigation
has only recently commenced and may result in the recovery of at least some and potentially a substantial
portion of the settlement funds paid by the City.
Airport
On October 31, 2013, the City filed suit against the Federal Aviation Administration (FAA) regarding the
City’s desire to get a judicial determination as to whether its ownership and control of the Santa Monica
Airport, including its right to close the Airport if desired, is subject to limitations imposed by federal law.
In dispute was whether a reverter clause in an Instrument of Transfer from 1948 obligated the City to use the
land as an airport in perpetuity and if the City attempted to change its use, the land would revert to the federal
government.
Additionally, in 1994 the City had accepted several federal grants to fund capital improvements at the Airport.
Outside aviation interests contended that an amendment to an existing grant that was executed in 2003
obligated the City to operate the Airport until 2023, which is the twenty-year federal obligation period for the
acceptance of grant funds. The City disputed this and instead contended that the 2003 amendment was not a
new grant and that the twenty-year obligation period ended in 2014. This dispute also resulted in a federal
court lawsuit.
On January 28, 2017, the City reached an agreement with the FAA, implemented through a consent decree
from the court, that settled all legal disputes between the City and the federal government regarding the Airport
and included the following:
City may close the Airport to all aeronautical use forever after December 31, 2028; until that date, the
City must continue to operate the Airport subject to FAA rules and requirements, including
requirements imposed by certain specified federal grant assurance provisions;
City may reduce the operational runway length to 3,500 feet;
City has the right to establish its own proprietary fixed base operation services.
The City completed the shortening of the runway through markings and lights in FY 17-18, and completed
the removal of runway and taxiway pavement rendered unnecessary by the shortening in FY 18-19.
74
3.B.a
Packet Pg. 446 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
On November 18, 2019, the Federal Aviation Administration issued a “Director’s Determination” in Mark
Smith, et al., v. City of Santa Monica, FAA Docket No. 16-16-02, an administrative action brought pursuant
to 15 C.F.R. Part 16 against the City as the operator of the Santa Monica Airport. Among other things, the
Director’s Determination finds that certain loans made by the City’s General Fund to the Airport Fund were
“insufficiently and improperly documented as such and fail to satisfy the requirements of loans” under the
FAA’s Revenue Use Policy. As a result, the Director’s Determination finds: “Improper interest payments
charged to the Airport Fund made after February 5, 2010 totaling $454,292 and $383,173 and the principal
overpayment of $188,873 must be credited back to the Airport Fund, plus interest from the date of the improper
withdrawals or payments.” The Director’s Determination also requires the City to reduce the interest rate on
other loans made by the City to the Airport to no more than “the rate which the City received for other
investments” when the loans were issued. The City appealed the Director’s Determination on January 23,
2020. If the City is not successful in its appeal, the City’s General Fund has the ability to credit back the
required amounts to the Airport Fund, and the City does not expect the required reduction in interest charged
on the loans to have a material effect on General Fund revenues. Currently, the City and the FAA are engaged
in settlement discussions to resolve the issues raised in the Director’s Determination. The discussions are
ongoing.
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, 2020 in accordance with the Uniform Guidance requirements issued by the U.S. Office of Management
and Budget, 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 segregated at year-end as an unavailable fund balance. Approximately $20.6 million will be payable
upon future performance under these contracts.
Other Commitments
In 1999 the City entered into a thirty-year agreement with the City of Los Angeles for the conveyance,
treatment, and disposal of wastewater. The Amalgamated System Sewerage System Charge (ASSSC) from
this agreement is based on the City of Los Angeles’ estimated costs and actual flows and strengths of
wastewater in 2019-20. Per the City of Los Angeles, as of June 30, 2021 $6.49 million will be due under this
agreement for fiscal year 2021-22. This agreement may be renegotiated by either party after the initial 10
years of the agreement.
On June 29, 2018, the City transferred ownership of the Mountain View Mobile Home Park to the Caritas
Corporation (Caritas), a 501(c)3 non-profit, for $1. As part of the terms of the sale, Caritas agreed to maintain
affordability and resident protections and the City will provide a loan commitment up to $500,000 to cover
operating expense overages for the next five years at $100,000 per year. As of June 30, 2021, $341,420
remains to be disbursed.
75
3.B.a
Packet Pg. 447 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Encumbrances
The City uses “encumbrances” to control expenditure commitments for the year. Encumbrances represent
commitments related to contracts not yet performed and purchase orders not yet filled. Commitments for such
expenditures are encumbered to reserve applicable appropriations. As of June 30, 2021, total encumbrances
for the governmental funds are reported as follows:
Operating Lease Revenue/Expenses
The City has entered into operating lease arrangements as lessor for property. The following schedule is an
analysis of the City’s investment in property under operating leases by major classes as of June 30, 2021:
Land 102,952,014$
Buildings 34,890,734
Improvements other than buildings 4,811,845
Machinery and equipment 1,782,774
Infrastructure 8,213,438
152,650,805
Less: Accumulated depreciation (38,083,467)
Total 114,567,338$
General Fund 35,605,046$
Special Revenue Fund 2,796,672
Low and Moderate Income Housing Asset Fund —
Nonmajor governmental funds 17,471,451
Total 55,873,169$
76
3.B.a
Packet Pg. 448 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
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 remaining
noncancelable lease terms in excess of one year as of June 30, 2021:
Fiscal year ending June 30 Rental revenue Lease payments
2022 15,903,469$ 20,649
2023 11,387,466 -
2024 10,330,291 -
2025 8,960,733 -
2026 8,263,483 -
2027 - 2031 32,558,643 -
2032 - 2036 8,821,049 -
2037 - 2041 7,152,536 -
2042 - 2046 7,152,068 -
2047 - 2051 6,922,568 -
2052 - 2056 4,663,247 -
2057 - 2061 3,887,959 -
2062 - 2066 3,331,651 -
2067 - 2071 179,235 -
2072 - 2076 177,316 -
2077 - 2081 52,200 -
Total 129,743,914$ 20,649
The total long-term lease annual rental revenues and expenditures/expenses for the year ended June 30, 2021,
were $17,215195 and $1,254,231 respectively.
City staff formerly located in leased facilities have been relocated to City Hall and City Hall East (City
Services Building), thereby eliminating the City’s long term lease commitments beginning in FY 2022-23.
77
3.B.a
Packet Pg. 449 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(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 thirteen medium-size California
municipalities. ACCEL is a member of PRISM (Public Risk Innovation, Solutions, and Management)
Excess Insurance Authority for the purpose of providing access to excess workers’ compensation coverage
for major employee injury risks through a program 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 $55,000,000.
The City retains self-insurance up to $1,000,000 for workers’ compensation. PRISM Excess Insurance
Authority covers up to an additional $4,000,000 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, 2021 audited financial statements, the City’s proportionate share of ACCEL’s net
reserves and incurred but not reported (IBNR) amounts related to the City was ($1,785,319) meaning the
City’s reserves and IBNR exceeded premiums and interest earned. Accel’s total net reserves and IBNR was
($1,291,579). Total assets of ACCEL at June 30, 2021 were $53,055,767. 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, 2021, based on a
2.0% interest rate. 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. Non-incremental claims
expenses have not been included as part of the liability for claims.
On August 30, 2021, the City entered into a $54.9 million settlement agreement with 61 alleged victims of
sexual abuse of minors. The payment will be made to a qualified settlement fund by December 31, 2021.
This amount has been accrued in these financial statements.
78
3.B.a
Packet Pg. 450 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Changes in the liability for claims during the past two fiscal years for the self-insurance funds follow:
Fund (by fiscal year)
Beginning of
year
Current-year
claims and
changes in
estimates
Claims
payments (net) End of year
Due within one
year
June 30, 2020:
Governmental activities:
General Liability and Automobile 12,180,972$ 40,900,719 (12,968,669) 40,113,022 28,526,923
Workers' Compensation 51,228,115 14,663,182 (10,296,744) 55,594,553 10,675,633
Total Governmental activities 63,409,087$ 55,563,901 (23,265,413) 95,707,575 39,202,556
Business-type activities:
Bus 7,095,747$ 600,008 (2,525,077) 5,170,678 2,514,041
Total Business-type activities 7,095,747$ 600,008 (2,525,077) 5,170,678 2,514,041
June 30, 2021:
Governmental activities:
General Liability and Automobile 40,113,022$ 59,798,269 (26,609,407) 73,301,884 62,610,214
Workers' Compensation 55,594,553 11,845,381 (9,835,306) 57,604,628 11,173,539
95,707,575$ 71,643,650 (36,444,713) 130,906,512 73,783,753
Business-type activities:
Bus 5,170,678$ 1,648,825 (2,450,009) 4,369,494 2,478,793
Total Business-type activities 5,170,678$ 1,648,825 (2,450,009) 4,369,494 2,478,793
79
3.B.a
Packet Pg. 451 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
(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 annual comprehensive financial
report available from the CalPERS Executive Office, 400 Q Street, Sacramento, California 95811.
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 2.0% to 2.7% 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%6.75%
Required employer contribution rate 25.19%25.19%25.19%
Miscellaneous
80
3.B.a
Packet Pg. 452 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
As of June 30, 2021, the City had 1,900 active members of which 1,083 were considered “classic” members
(hired prior to 12/31/2012) and 817 fall under the decreased benefits as prescribed in the Public Employees
Pension Reform Act of 2012 (PEPRA). As noted in the tables above, Safety PEPRA members pay a higher
employee contribution which, by law, cannot be paid by the employer. Additionally, PEPRA employees have
a higher eligible retirement age and a lower benefit formula.
For FY 2017-18, CalPERS changed payment for the employer paid amortization of the unfunded pension
liability from using a level percentage of pay to a flat dollar amount. In FY 2020-21, the City paid CalPERS
$22,094,006, $10,867,817 and $5,144,742 for the employer paid amortization of the unfunded liability for the
miscellaneous, police and fire plans respectively. Because of the financial constraints caused by revenue losses
due to the pandemic, the City elected to temporarily suspend its policy of making additional payment towards
the unfunded liability. The City intends to reestablish these additional payments beginning FY 2022-23.
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% 10.00%
Required employer contribution rate 45.84% 45.84%
Fire
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% 13.00%
Required employer contribution rate 58.96% 58.96%
Police
81
3.B.a
Packet Pg. 453 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
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 6.75% to 8.00% (for miscellaneous employees),
9.00% to 13.00% (for Police safety employees), and 9.00% to 10.00% (for Fire safety employees), of their
annual covered salary. 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 amortize the
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.
Beginning July 1, 2020, all plan members pay 100% of their employee contributions. In addition, Fire safety
members hired before December 31, 2012 reimburse the City an additional 6.0% and Police safety members
hired before December 31, 2012 reimburse the City for an additional 8.5%.
Employees’ share of pension costs totaled $17,693,360 for FY 2020-21.
Employees Covered
At June 30, 2019, the following employees were covered by the benefit terms for each Plan:
Employees Miscellaneous Police Fire
Inactive employees or their beneficiaries currently receiving
benefits 1,407 332 148
Inactive employees entitled to but not yet receiving benefits 159 6 1
Active members 1,905 220 117
Total 3,471 558 266
Note: Information derived from 2019 CalPERS Census Data
Public Safety
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, 2020, using
an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update
procedures. A summary of principal assumptions and methods used to determine the net pension liability is
shown below.
82
3.B.a
Packet Pg. 454 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
For the measurement period ending June 30, 2020 (the measurement date), the total pension liability was
determined using the following actuarial methods and assumptions:
Discount Rate
The discount rate used to measure the total pension liability was 7.15% for each Plan. The projection of cash
flows used to determine the discount rate assumed that contributions from all plan members will be made at
current member contribution rates and that contributions from employers will be made at statutorily required
rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to
be available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on plan investments was applied to all periods of projected benefits to determine total
pension liability.
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which expected future real rates of return (expected returns net of pension plan investment expense
and inflation) are developed for each major asset class.
Miscellaneous Safety - Police Safety - Fire
Valuation date June 30, 2019 June 30, 2019 June 30, 2019
Measurement date June 30, 2020 June 30, 2020 June 30, 2020
Actuarial cost method
Actuarial assumptions:
Discount rate 7.15% 7.15% 7.15%
Inflation 2.50% 2.50% 2.50%
Projected salary increase
Investment rate of return 1 7.15%7.15%7.15%
Mortality 2 Derived using CalPERS' membership data for all funds
Post retirement benefit increase The lesser of contract COLA up to 2.50% until Purchasing Power
Protections Allowance Floor on Purchasing Power applies,
2.50% thereafter
1 Net of pension plan investment expenses, including inflation. 7.0% after 0.15% administrative costs.
2 The mortality table used was developed based on CalPERS-sepcific data. The probabilites of mortality
are based on the 2017 CalPERS experience study for the period from 1997 to 2015. Pre-retirement and
Post-retirement mortality rates includes 15 years of projected mortality improvement using 90% of
Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the
CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can
be found on the CalPERS website.
Entry-Age Normal
Varies by entry age and service
83
3.B.a
Packet Pg. 455 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
In determining the long-term expected rate of return, CalPERS took into account both the short- and long-term
market return expectations as well as the expected pension fund cash flows. Using historical returns of all the
funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10
years) and the long-term (11+ 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 rounded 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 adjusted to account for
the assumed administrative expenses. The expected real rates of return by asset class are as followed:
Asset Class 1
Assumed asset
allocation
Real Return %
Years 1 - 10 2
Real Return %
Years 11+3
Global equity 50.00 4.80 5.98
Fixed income 28.00 1.00 2.62
Inflation assets - 0.77 1.81
Private equity 8.00 6.30 7.23
Real assets 13.00 3.75 4.93
Liquidity 1.00 - (0.92)
1 In the System's financial statmenets, Fixed Income is included in the Global Debt Securities; Liquidity is included in
Short-term investments; Inflation assets are inlcuded in both Global
Equity and Securities and Global Debt Securities.
2 An expected inflation rate of 2.00% is used for this period
3 An expected inflation rate of 2.92% is used for this period
Amortization of Deferred Outflows and Inflows of Resources
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are
recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The
remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions
and are to be recognized in future pension expense.
84
3.B.a
Packet Pg. 456 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
The amortization period differs depending on the source of the gain or loss:
Net Difference between projected and 5 year straight-line amortization
actual earnings on pension plan investments
All other amounts Straight-line amortization over the expected average remaining
service lives (EARSL) of all members that are provided
benefits (active, inactive, and retired) as of the beginning of
the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service
years by the total number of plan participants (active, inactive, and retired). Note that inactive employees and
retirees have remaining service lifetimes equal to zero. Also note that total future service is based on members’
probability of decrementing due to an event other than receiving a cash refund.
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:
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
(a) (b) (c)=(a)-(b)
Balance at 6/30/2019 (Valuation Date) 1,206,549,260$ 945,750,453 260,798,807
Changes recognized for the measurement period
Service cost 26,940,522 — 26,940,522
Interest on total pension liability 84,780,608 — 84,780,608
Differences between expected and actual experience (7,677,266) — (7,677,266)
Contribution - employer — 39,789,326 (39,789,326)
Contribution - employee — 11,287,483 (11,287,483)
Net investment income — 48,650,608 (48,650,608)
Benefit payments, includes employee contribution refunds (53,198,960) (53,198,960)—
Administrative expense — (1,333,279) 1,333,279
Net changes 50,844,904 45,195,178 5,649,726
Balance at 6/30/2020 (Measurement Date) 1,257,394,164$ 990,945,631 266,448,533
Increase (Decrease)
85
3.B.a
Packet Pg. 457 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Public Safety - Police:
Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
(a) (b) (c)=(a)-(b)
Balance at 6/30/2019 (Valuation Date) 499,688,158$ 373,559,650 126,128,508
Changes recognized for the measurement period
Service cost 11,086,298 — 11,086,298
Interest on total pension liability 35,384,916 — 35,384,916
Differences between expected and actual experience 2,033,685 — 2,033,685
Contribution - employer — 19,904,356 (19,904,356)
Contribution - employee — 3,493,416 (3,493,416)
Net investment income — 18,812,931 (18,812,931)
Benefit payments, includes employee contribution refunds (24,742,085) (24,742,085) -
Administrative expense — (526,627) 526,627
Net changes 23,762,814 16,941,991 6,820,823
Balance at 6/30/2020 (Measurement Date)523,450,972$ 390,501,641 132,949,331
Increase (Decrease)
Public Safety - Fire:
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
(a) (b) (c)=(a)-(b)
Balance at 6/30/2019 (Valuation Date) 259,802,551$ 181,050,855 78,751,696
Changes recognized for the measurement period
Service cost 5,050,337 — 5,050,337
Interest on total pension liability 18,311,217 — 18,311,217
Differences between expected and actual experience 923,359 — 923,359
Contribution - employer — 10,703,394 (10,703,394)
Contribution - employee — 1,752,804 (1,752,804)
Net investment income — 9,068,546 (9,068,546)
Benefit payments, includes employee contribution refunds (14,300,274) (14,300,274) —
Administrative expense — (255,237) 255,237
Net changes 9,984,639 6,969,233 3,015,406
Balance at 6/30/2020 (Measurement Date) 269,787,190$ 188,020,088 81,767,102
Increase (Decrease)
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 7.15% (7.0% after 0.15% administrative costs), as well as the net pension liability if it were
calculated using a discount rate that is 1 percentage-point lower (6.15%) or 1 percentage-point higher (8.15%)
than the current rate (all rates are gross of 0.15% administrative cost):
86
3.B.a
Packet Pg. 458 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Discount Rate
Miscellaneous Safety - Police Safety - Fire
1% Decrease 6.15% 6.15% 6.15%
Net Pension Liability 435,258,935$ 204,131,890 117,492,245
Current Discount Rate 7.15%7.15%7.15%
Net Pension Liability 266,448,533$ 132,949,331 81,767,102
1% Increase 8.15%8.15%8.15%
Net Pension Liability 126,745,255$ 74,534,290 52,269,422
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, 2021, the City recognized pension expense as follows:
Plan Pension
Expense
Miscellaneous 48,051,709$
Safety - Police 22,644,916
Safety - Fire 12,273,967
Total 82,970,592$
As of June 30, 2021, the City had 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
Changes of assumptions — $ (2,386,839) — (304,146) 3,776,708 (622,915)
Difference between expected and
actual experience 3,239,815 (7,135,916) 1,552,639 (722,812) 3,113,077 (628,013)
Net difference between projected and
actual earnings on pension plan
investments 7,318,783 — 3,206,463 — 1,412,871 —
Employer contributions subsequent
to the measurement date 35,458,470 — 19,119,799 — 8,636,700 —
Total 46,017,068$ (9,522,755) 23,878,901 (1,026,958) 16,939,356 (1,250,928)
Miscellaneous Safety - Police Safety - Fire
87
3.B.a
Packet Pg. 459 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
The amounts above are net of outflows and inflows recognized in the pension expense for the fiscal year ended
June 30, 2021.
Contributions of $63,214,969 that were made City subsequent to the measurement date but before the end of
the reporting period are reported as deferred outflows of resources and will be recognized as a reduction of the
net pension liability in the subsequent fiscal year ended June 30, 2022 rather than in the current fiscal year.
Other amounts reported as deferred outflows and inflows of resources will be recognized in future pension
expense as follows:
Measurement Periods
ended June 30 Miscellaneous Safety - Police Safety - Fire
2021 (7,451,549)$ (1,487,224) 1,651,918
2022 1,673,071 1,360,454 2,367,071
2023 3,063,366 2,297,652 1,503,310
2024 3,750,955 1,561,262 1,311,059
2025 — — 188,588
Thereafter — — 29,782
Deferred Outflows / (Inflows) of Resources
CalPERS Funding Risk Mitigation Policy
The Funding Risk Mitigation (“FRM”) Policy seeks to reduce CalPERS funding risk over time. It establishes
a mechanism whereby CalPERS investment performance that significantly outperforms the discount rate
triggers adjustments to the discount rate, expected investment return, and strategic asset allocation targets. The
Asset Liability Management (ALM) process is an integrated review of CalPERS assets and liabilities to inform
decisions designed to achieve a sound and sustainable fund.
The goal of the ALM process is to balance the expected cost of future pension payments with the expected
future investment returns. During the process, the CalPERS board reviews its overall risks, taking into
consideration the long-term sustainability of the system.
This formal process runs on a four-year cycle and includes a review of CalPERS’ investment portfolios and
retirement plan liabilities. Capital Market Assumptions are primarily based on expectations of future
investment returns. Liability projections are based on demographic and economic factors and trends, including
membership dynamics, future salary and payroll growth, retirement ages, inflation, and life expectancy.
The difference between the 21.3% investment returns for FY 2020-21 and the 7.0% expected discount rate
exceeded the 13.0% threshold as established in the FRM policy and resulted in an FRM event. This triggered
a 0.2% reduction in the discount rate from 7.0% to 6.8% to help mitigate future investment return risk. This
change will result in a higher contribution rate in future years compared to the rate that would have been used
prior to the adoption of the FRM.
As part of the ALM, on November 5, 2021, the CalPERS Board of Administration selected a new asset
allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time
88
3.B.a
Packet Pg. 460 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
retaining the 6.8% target rate of return. The Board also approved adding 5% leverage to increase investment
diversification. The new asset allocation takes effect July 1, 2022.
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. For the fiscal year ended June 30, 2021 the total employee
contributions were $12,278,351.
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, 2021 the total employee contributions were $942,083.
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, 2021 the combined employee/employer contributions
were $80,505.
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 healthcare
provider CalPERS. The City pays for OPEB through employer only contributions to a qualified OPEB trust,
with no contribution required from employees. The Plan does not issue a stand-alone financial statement.
89
3.B.a
Packet Pg. 461 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Employees Covered
As of the June 30, 2019 actuarial valuation date, the following current and former employees were covered by
the benefit terms under the OPEB plan:
Active employees 2,150
Inactive employees or beneficiaries receiving benefits 232
Inactive employees entitled to, but not receiving benefits 127
Total 2,509
Contributions
The OPEB Plan and its contribution requirements are established by Memorandum of Understanding with the
applicable employee bargaining units and may be amended by agreements between the City and these
bargaining units. The annual contribution is based on the actuarially determined contribution.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate
the net OPEB liability was determined by actuarial valuation dated June 30, 2019 based on the following
assumptions:
Actuarial Assumptions:
Discount rate 2.85%
Inflation 2.75%
Salary increases
Investment rate of return 6.20%
Mortality rate
Pre-retirement Turnover
Healthcare Trend Rate 6.50% decreasing to 4.90%
Mortality rates used were those published the
CalPERS 2017 experience study, adjusted to back out
15 years of Scale MP 2016, then projected using the
MacLeod Watts Scale 2020 from 2015 forward.
Assumed rates of termination vary based on the
current age, service and employee type (fire, police
or miscellaneous) as developed by CalPERS and
published in their 2017 Experience Study Report.
3.25% per year, used only to allocate the costs
between service years.
90
3.B.a
Packet Pg. 462 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
The long-term expected rate of return on OPEB plan investments was determined using a building block
method in which future real rates of return (expected returns, net of OPEB plan investment expense and
inflation) are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighing the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates
for each major asset class are summarized in the following table:
Asset Class
Target
Allocation
Real Return %
Years 1-10
Real Return %
Years 11+
Global equity 40% 4.80% 5.98%
Fixed Income 43%1.10%2.62%
Global real estate 8%3.20%5.00%
Treasury Inflation
Protected Securities 5%0.25%1.46%
Commodities 4%1.50%2.87%
Discount Rate
The discount rate used to measure the OPEB liability was 2.85%. This discount rate was determined based on
the results of analysis described in GASB 75. Plan benefits for all current and future retirees are projected from
year to year from the results of the valuation. Future employer contributions are projected based on levels over
the last 5 years and certain assumptions about the benefit costs of future employees. Trust assets are projected
based on the projected future contributions and the assumed return on assets. Where the trust is expected to
have sufficient assets to pay all retiree benefits in a particular year, the assumed trust rate of return is applied;
once that trust is no longer expected to be able to pay plan benefits, the municipal bond rate is applied for the
remainder of the projection period.
The Council authorized the suspension of pre-funding payments to the CERBT trust for FY 2019-20 and
potentially through FY 2021-22 pending the reemergence of revenues which suffered a downturn caused by
the COVID-19 pandemic. Because the City did not contribute to the plan for FY 2020-21 the discount rate was
reduced from 3.73% to 2.85% which increased the OPEB liability by $4,391,134. It is anticipated that once
the City restarts annual contributions to the trust then a higher discount will be used, and the liability will be
reduced.
91
3.B.a
Packet Pg. 463 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Changes in OPEB liability
The changes in the net OPEB liability for the Plan are as follows:
Total OPEB
Liability
Fiduciary Net
Position Net OPEB Liability
(a) (b) (c)=(a)-(b)
Balance at 6/30/2019 (valuation date) 40,906,328$ 7,899,459 33,006,869
Changes recognized for the measurement period
Service cost 1,707,389 — 1,707,389
Interest on total OPEB liability 1,555,940 — 1,555,940
Changes of assumptions 4,391,134 — 4,391,134
Net investment income — 432,025 (432,025)
Benefit payments (1,798,994) (1,798,994) —
Administrative expense — (3,973) 3,973
Net changes 5,855,469 (1,370,942) 7,226,411
Balance at 6/30/2020 (measurement date) 46,761,797$ 6,528,517 40,233,280
Increase (Decrease)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one
percentage point lower or one percentage point higher than the current rate, for the measurement period ended
June 30, 2020:
1% Decrease
(1.85%)
Current
Discount Rate
(2.85%)
1% Increase
(3.85%)
Net OPEB Liability 46,098,172$ 40,233,280 35,292,321
Sensitivity of the Net OPEB Liability to Changes in Health Care Cost Trend Rates
The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates
that are one percentage point lower or one percentage point higher than the current rate, for measurement
period ended June 30, 2020.
1% Decrease
(5.5% decreasing
to 3.0%)
Current
Healthcare Cost
Trend Rates
(6.5% decreasing
to 4.0%)
1% Increase
(7.5% decreasing
to 5.0%)
Net OPEB Liability 34,669,821$ 40,233,280 47,027,459
92
3.B.a
Packet Pg. 464 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
OPEB Plan Fiduciary Net Position
CalPERS issues publicly available financial statement for the California Employers’ Retiree Benefit Trust that
may be obtained from CalPERS, 400 Q Street, Sacramento, CA 95811 or at www.calpers.ca.gov.
Recognition of Deferred Outflows and Deferred Inflows of Resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB
expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts
are categorized as deferred outflows and deferred inflows of resources related to OPEB and are recognized in
future OPEB expense.
The recognition period differs depending on the source of gain or loss:
Net difference between projected and 5 year straight-line amortization
actual earnings on investments
All other amounts Straight-line amortization over the expected average remaining
service lives of all members that are provided benefits
(active, inactive, and retired) as of the beginning of the
measurement period (10.28 years for June 30, 2019)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2021 the City recognized OPEB expense of $3,727,758. As of fiscal year
ended June 30, 2021, the City reported deferred outflows/inflows of resources related to OPEB from the
following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Changes in assumption $ 10,135,880 178,471
Differences between expected
and actual experience - 1,112,502
Net difference between projected and
actual earnings on investments - 239,762
$ 10,135,880 1,530,735
93
3.B.a
Packet Pg. 465 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
Other amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as
follows:
Measurement
Year Ending
June 30
Recognized
Deferred
Outflows(Inflows)
of Resources
2021 894,333$
2022 916,389
2023 935,347
2024 995,772
2025 995,397
Thereafter 3,867,907
In prior years, pension and OPEB liabilities have been extinguished primarily by the general fund.
Medical Trusts
The City contributes, consistent with bargaining unit agreements, monies to medical trusts, a 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, 2021 the City contributed $3,112,905 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.
94
3.B.a
Packet Pg. 466 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
(17)SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENTAGENCY
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 as a blended component unit.
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 onDecember 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased tooperate as a legal entity as of February 1, 2012. The assets and activities of the dissolved redevelopmentagency 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, 2021 are classified in the accompanying financial statements asfollows:
Statement of Fiduciary Net Position:
Restricted cash and investments $5,893,172
Restricted cash and investments with fiscal agent 7,105,022
Total cash and investments $12,998,194
Investments of the Successor Agency are governed by Government Code Section 53601 and the City’s
Investment Policy, which restrict the term and types of investments that can be made. For fair value, authorized investments, disclosures relating to interest rate and credit risk and other information see Cash and Investments Note 5.
95
3.B.a
Packet Pg. 467 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
SUCCESSOR AGENCY LONG-TERM LIABILITIES
Changes in long-term liabilities:
Long-term liability activity for the fiscal year ended June 30, 2021 was as follows:
Balance at
June 30, 2020 Additions Reductions
Balance at
June 30, 2021
Due within
one year
Due beyond
one year
Loans and notes payable
from direct borrowings 37,840,254$ — 720,078 37,120,176 769,173 36,351,003
Term loan from direct borrowings 25,757,567 — 3,030,306 22,727,261 3,030,303 19,696,958
Tax allocation bonds 76,045,000 — 2,855,000 73,190,000 2,975,000 70,215,000
Notes payable to the City of
Santa Monica (1)2,348,247 — 2,348,247 — — — — —
Less deferred amounts:
For issuance discounts (72,750) — (8,085) (64,665) — (64,665) For issuance premiums 286,788 — 13,656 273,132 — 273,132
Total loans, notes and bonds payable 142,205,106$ — 8,959,202 133,245,904 6,774,476 126,471,428
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, 2021
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 27, 2006 64,720,000 July 1, 2029 4.00-5.50%32,140,000
Subtotal tax allocation bonds 73,190,000
Loans and notes from direct borrowings:
Bank of America Term Loan (1) *May 1, 2008 50,000,000 July 15, 2028 LIBOR plus 1.25%22,727,261
Promissory notes payable to others(2)* Nov 1, 2010 42,500,000 Jan 1, 2042 6.82%37,120,176
Subtotal loans and notes 59,847,437
Total 133,037,437$
*Final and conclusive determination received from the Department of Finance
(1)To fund low moderate income housing projects (2)For purchase of real estate
96
3.B.a
Packet Pg. 468 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Annual debt service requirements to maturity are as follows:
Fiscal Year Ending
June 30,Principal Interest Principal Interest Principal Interest
2022 2,975,000$ 3,669,720 3,799,476 2,984,214 6,774,476 6,653,934
2023 3,110,000 3,534,295 3,851,917 2,869,218 6,961,917 6,403,513
2024 3,245,000 3,391,308 3,907,935 2,750,647 7,152,935 6,141,955
2025 3,390,000 3,242,020 3,967,771 2,629,029 7,357,771 5,871,049
2026 3,545,000 3,085,983 4,031,687 2,501,788 7,576,687 5,587,771
2027-2031 18,130,000 12,702,018 13,911,587 10,598,445 32,041,587 23,300,463
2032-2036 13,145,000 9,167,103 9,383,970 7,816,029 22,528,970 16,983,132
2037-2041 17,315,000 4,772,038 10,467,784 3,632,215 27,782,784 8,404,253
2042-2043 8,335,000 463,653 6,525,310 674,671 14,860,310 1,138,324
73,190,000$ 44,028,138 59,847,437 36,456,256 133,037,437 80,484,394
Loans and notes payable from direct borrowings TotalTax allocation bonds
The Successor Agency’s outstanding loan of $22,727,261 from a direct borrowing from Bank of America contains a provision that, upon default, increases the interest rate by 2.0% with the total interest rate not to exceed 12.0%.
The Successor Agency’s $73,190,000 of outstanding tax allocation bonds agreements contain provisions
that in the event of default the majority of the bondholders can declare the principal balance plus any accrued interest be immediately payable.
The Successor Agency’s outstanding loan of $37,120,176 from a direct borrowing contains a provision that, upon default, the lender may, at its option, increase the interest rate by 5% over the rates otherwise
provided for in the agreement, but in no event shall that the rate exceed 12.0% per annum. Additionally, upon default, the agreement allows the lender, at its option, to take one more action including the requirement for the entire amount due to be paid immediately and without prior notice.
Pledged Revenue
The Former Redevelopment Agency had a number of debt issues that were assumed by the Successor Agency that involve the pledging of revenues. The amounts and terms of the remainder of these commitments and the purposes for which the proceeds of the debt issuances are utilized are indicated in the
summary of long-term bonds and loans and notes outstanding at year-end presented in this note. AB1X26 only allows sufficient tax revenues to be allocated to the Successor Agency in an amount equal to pay debt service that is deemed to be an enforceable obligation and debt service payments as a percentage of the
pledged gross revenue (net of certain expenses where so specified in debt covenants) will always be 100%. These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment.
97
3.B.a
Packet Pg. 469 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements
For the fiscal year ended June 30, 2021
Annual amount of
pledged revenue (net
of expenses, where
required)
Annual debt service
payments (of all
debt secured by this
revenue)
Debt service as a
percentage of
pledged revenue
Future amount
of pledged
revenue
Description of pledged revenue/debt:
Tax increment
Earthquake Recovery Project Refunding 2006 4,447,758$ 4,447,758 100% 35,584,495$
Earthquake Recovery Project 2011 2,262,413 2,262,413 100% 76,791,056
Note Payable to Others 3,300,000 3,300,000 100% 71,700,000
Bank of America Term Loan 3,396,422 3,396,422 100% 22,855,917
98
3.B.a
Packet Pg. 470 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
(18)COVID-19 PANDEMIC
On March 13, 2020, the City issued an emergency declaration in response to the novel coronavirus
(COVID-19) public health emergency to enhance the City’s ability to access federal and statedollars for COVID-19 response.
Since then, various emergency orders have been issued and through various State, County and Local orders,various businesses were required to temporarily cease or curtail operations. This affected the City’soperations as well.
On March 27, 2020 the $2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES Act) wassigned into law.
The CARES Act provides that payments from the fund may only be used to cover costs that:
•Are necessary expenditures incurred due to the public health emergency with respect to theCoronavirus Disease 2019 (COVID-19)
•Were not accounted for in the budget most recently approved as of March 27, 2020
•Were incurred during the period that begins on March 1, 2020 and ends on December 31, 2020.
In May of 2020, the Department of Housing and Urban Development (HUD) awarded the Housing Authority $244,968 and in August of 2020 HUD awarded an additional allocation of $357,550 for a total of $602,518 to be spent before December 31, 2021 on administrative expenses associated with the Housing Choice Voucher program.
On July 10, 2020, the City completed certification to become eligible for CARES Act allocations of which the City received an allocation of $1,140,344 which was recognized as revenue in FY 2020-21. Also, in FY
2020-21, the City was provided a credit of $1,655,357 against its State Unemployment Insurance payment.
The Big Blue Bus received a total of $24,360,412 of CARES Act funding to pay for operating expenses which was recognized as revenue in FY 2020-21.
Additionally, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) includes $14 billion to be allocated to support the transit industry during the COVID-19 public health
emergency. The Big Blue Bus was awarded but has not received $22,247,777 in Coronavirus Response and
Relief Supplemental Appropriations Act funds.
On March 11, 2021, Congress passed the American Rescue Plan Act of 2021 (ARPA). Included in the act
were approximately $350 billion for eligible state, local, territorial, and Tribal governments to respond to the COVID-19 emergency and bring back jobs.
The funding objectives are:
•Support urgent COVID-19 response efforts to continue to decrease spread of the virus and bringthe pandemic under control
•Replace lost revenue for eligible state, local, territorial, and Tribal governments to strengthensupport for vital public services and help retain jobs
•Support immediate economic stabilization for households and businesses
99
3.B.a
Packet Pg. 471 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
•Address systemic public health and economic challenges that have contributed to the inequalimpact of the pandemic
The City, in applying for the funds, calculated lost revenues as defined under the ARPA rules in order to qualify for recognition of the ARPA grant revenue. The estimated revenue loss incurred by the City was determined to be approximately $139 million as of the twelve months ended December 31, 2020 which consisted primarily of losses in transient occupancy taxes, parking charges and taxes, sales and use taxes and various utility charges for services such as solid waste pickup and water/wastewater commodities.
The City’s total allocation of ARPA funds is $28,570,125 of which the first tranche of $14,285,063 has been received and recognized as revenue in FY 2020-21. The second tranche of remaining funds is expected
to be received in FY 2021-22. The US Treasury’s Interim Final Rule allows recipients to use funds for the provision of government services incurred after March 3, 2021 to the extent of the reduction in revenue and the City elected to allocate the revenue replacement funds to salaries for public safety staff.
100
3.B.a
Packet Pg. 472 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements For the fiscal year ended June 30, 2021
(19)SPECIAL ITEM
Special items are unusual and infrequent in nature but within the control of management.
The following transaction is reported as a special item:
•The City settled additional legal claims related to an alleged incident of sexual assault of minors in theamount of $9.825 million paid by the City’s General Fund which is reported as a special item.
101
3.B.a
Packet Pg. 473 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements Year ended June 30, 2021
(20)PRIOR PERIOD ADJUSTMENTS
The accompanying financial statements reflect adjustments resulting from a restatement of fund balanceand net position as of June 30, 2021 as follows:
Restatements on Government-wide Statements:
GovernmentalActivities
Beginning Net Position, as previously reported 927,940,863$ Restatements:
Cable franchise fees incorrectly recognized (1,666,685)
Beginning Net Position, as restated 926,274,178$
Business-Type
Activities
Beginning Net Position, as previously reported 589,623,918$ Restatements:
Recycling revenue not recognized in correct period 4,166,911
Beginning Net Position, as restated 593,790,829$
Restatement on Fund Statements, Governmental Funds:
GeneralFund
Beginning Fund Balance, as previously reported 226,544,053$ Restatements:
Cable franchise fees incorrectly recognized (1,666,685)
Beginning Fund Balance, as restated 224,877,368$
Advance cable television provider franchise fees were incorrectly recognized as revenue in FY 2019-20.
102
3.B.a
Packet Pg. 474 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements Year ended June 30, 2021
Restatement on Fund Statements, Enterprise Funds:
Resource,
Recovery and
RecyclingFund
Beginning Net Position, as previously reported 2,490,097$
Restatements:
Recycling revenue not recognized in correct period 4,166,911 Beginning Fund Balance, as restated 6,657,008$
Deposits forfeited were not recognized as revenue in prior years.
Restatement on Fund Statements, Fiduciary Funds:
CustodialFund
Beginning Net Position, as previously reported -$ Restatements:
Implementation of GASB 84 1,678,369
Beginning Fund Balance, as restated 1,678,369$
To establish a beginning Net Position for the Custodial Fund as required by GASB 84.
103
3.B.a
Packet Pg. 475 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Notes to Basic Financial Statements, Continued
For the fiscal year ended June 30, 2021
(21)SUBSEQUENT EVENTS
On August 4, 2021, the Santa Monica Public Financing Authority (Public Financing Authority) issued $64,780,000 (par value) in Lease Revenue Bonds, Series 2021 (City Yards Project Bonds) to fund remodel and construction of the City Yards. The bonds were sold at a premium of $7,714,767 with a final maturity
date in 2051.
On August 25, 2021, the City issued $70,525,000 (par value) in Water Enterprise Revenue Bonds, Series 2021 to fund certain water supply, storage, and distribution projects. The bonds were sold at a premium of $7,930,862 with a final maturity of 2051.
On August 30, 2021, the City entered into a $54.9 million settlement agreement with 61 alleged victims of sexual abuse of minors. The payment is to be made to a qualified settlement fund by December 31, 2021. This amount has been accrued in these financial statements.
104
3.B.a
Packet Pg. 476 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
City of Santa Monica, California
Year Ended June 30, 2021
REQUIRED SUPPLEMENTARY INFORMATION
3.B.a
Packet Pg. 477 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
General Fund
For the fiscal year ended June 30, 2021
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
Revenues:Property taxes $70,615,501 72,809,390 75,324,679 -75,324,679 2,515,289Sales and use taxes 54,575,000 57,400,000 64,301,901 -64,301,901 6,901,901Transient occupancy taxes 27,800,000 21,300,000 20,691,803 -20,691,803 (608,197)Utility user taxes 25,410,450 26,686,000 27,840,035 -27,840,035 1,154,035
Business license taxes 32,172,908 33,648,000 33,644,559 -33,644,559 (3,441)Other taxes 12,530,000 13,020,000 16,779,463 -16,779,463 3,759,463
Licenses and permits 32,136,520 22,173,413 26,089,017 -26,089,017 3,915,604Intergovernmental1,300,786 1,440,786 1,868,076 -1,868,076 427,290Charges for services 40,572,985 36,293,252 36,668,251 -36,668,251 374,999Fines and forfeitures 10,991,674 7,986,546 7,779,862 -7,779,862 (206,684)Investment income 3,000,000 4,100,000 426,868 -426,868 (3,673,132)Interest from promissory note --5,399,246 -5,399,246 5,399,246Rental income 5,695,206 5,145,850 5,291,569 -5,291,569 145,719Other revenue 3,548,303 3,700,527 3,256,754 -3,256,754 (443,773)
Total revenues 320,349,333 305,703,764 325,362,083 -325,362,083 19,658,319
Expenditures:General government:City council 760,166 1,072,763 794,460 -794,460 278,303City manager 4,290,939 4,800,880 4,160,537 18,700 4,179,237 621,643Record and election services 3,110,613 3,239,066 3,240,088 -3,240,088 (1,022)Finance 12,423,420 12,536,355 11,496,944 796,084 12,293,028 243,327City attorney 11,063,176 11,327,131 11,298,625 34,600 11,333,225 (6,094)Human resources 4,714,281 5,075,881 4,970,360 52,200 5,022,560 53,321
Information services 9,170,427 9,068,253 9,058,674 14,100 9,072,774 (4,521)Public Works 2,314,717 2,455,841 2,171,476 99,000 2,270,476 185,365
Other 6,346,222 7,797,299 3,139,512 53,458 3,192,970 4,604,329Capital improvement 53,500 18,274,653 10,462,014 3,716,962 14,178,976 4,095,677
Total general government 54,247,461 75,648,122 60,792,690 4,785,104 65,577,794 10,070,328
Public safety:City Manager 5,663,232 6,081,193 6,691,115 10,000 6,701,115 (619,922)Police 98,943,776 97,943,150 96,404,740 205,100 96,609,840 1,333,310Fire43,442,960 44,076,250 45,572,620 50,700 45,623,320 (1,547,070)Capital improvement 7,075,000 13,426,669 2,641,653 1,822,100 4,463,753 8,962,916
Total public safety 155,124,968 161,527,262 151,310,128 2,087,900 153,398,028 8,129,234
See accompanying notes to Required Supplementary Information. (Continued)
105
3.B.a
Packet Pg. 478 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
General Fund
For the fiscal year ended June 30, 2021
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
General services:Public works 42,018,303 42,187,643 39,558,231 382,100 39,940,331 2,247,312Mobility21,441,564 21,431,875 20,223,678 540,700 20,764,378 667,497Capital improvement 3,511,450 43,790,981 14,034,672 26,058,842 40,093,514 3,697,467
Total general services 66,971,317 107,410,499 73,816,581 26,981,642 100,798,223 6,612,276
Community services:
Community services 24,453,677 25,078,393 23,993,529 394,600 24,388,129 690,264Other23,020,144 23,020,144 23,961,853 -23,961,853 (941,709)Capital improvement 250,000 4,872,806 1,987,359 615,900 2,603,259 2,269,547
Total community services 47,723,821 52,971,343 49,942,741 1,010,500 50,953,241 2,018,102Library:Library 8,430,145 8,830,510 8,712,985 121,100 8,834,085 (3,575)Capital improvement -55,900 52,094 3,800 55,894 6
Total library 8,430,145 8,886,410 8,765,079 124,900 8,889,979 (3,569)Community development:
Community development 17,620,764 18,211,355 17,140,638 615,000 17,755,638 455,717Other959,173 1,131,680 839,760 -839,760 291,920Capital improvement 510,700 552,040 517,141 -517,141 34,899
Total community development 19,090,637 19,895,075 18,497,539 615,000 19,112,539 782,536
Bond issuance costs --340,135 -340,135 (340,135)
Total expenditures 351,588,349 426,338,711 363,464,893 35,605,046 399,069,939 27,268,772
Excess (deficiency) of revenues over (under) expenditures (31,239,016)(120,634,947)(38,102,810)(35,605,046)(73,707,856)46,927,091
Other financing sources (uses):Transfers in 13,907,313 29,532,663 27,568,149 -27,568,149 (1,964,514)Transfers out (21,201,872)(26,039,572)(24,015,038)-(24,015,038)2,024,534Bonds issued --19,700,000 -19,700,000 19,700,000Premium on debt issued --3,711,635 -3,711,635 3,711,635Payment to refunded bond escrow agent --(23,066,482)-(23,066,482)(23,066,482)
Total other financing sources (uses)(7,294,559)3,493,091 3,898,264 -3,898,264 405,173
Special item:Special item (note 18)-(9,825,000)(9,825,000)-(9,825,000)-
Total special item -(9,825,000)(9,825,000)-(9,825,000)-
Net change in fund balance (38,533,575)(126,966,856)(44,029,546)(35,605,046)(79,634,592)47,332,264
Fund balance at beginning of year, as restated 224,877,368 224,877,368 224,877,368 -224,877,368 -
Fund balance at end of year $186,343,793 97,910,512 180,847,822 (35,605,046)145,242,776 47,332,264
See accompanying notes to Required Supplementary Information
106
3.B.a
Packet Pg. 479 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Special Revenue Source Fund
For the fiscal year ended June 30, 2021
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
Revenues:Charges for services $675,107 668,107 1,000,828 -1,000,828 332,721Investment income 200,000 200,000 14,457 -14,457 (185,543)Other 2,072,554 2,082,235 3,634,790 -3,634,790 1,552,555
Total revenues 2,947,661 2,950,342 4,650,075 -4,650,075 1,699,733
Expenditures:General government:Capital improvement -130,000 ---130,000
Total general government -130,000 ---130,000Public safety:Police 4,187 605,013 32,025 -32,025 572,988Fire5,000 6,268 7,380 4,900 12,280 (6,012)Capital improvement 53,600 541,337 42,188 -42,188 499,149
Total public safety 62,787 1,152,618 81,593 4,900 86,493 1,066,125General services:Mobility 166,080 270,680 255,838 500 256,338 14,342Capital improvement 2,400,000 6,685,630 1,785,013 1,765,300 3,550,313 3,135,317
Total general services 2,566,080 6,956,310 2,040,851 1,765,800 3,806,651 3,149,659Community services:Community services 3,300,716 3,506,794 1,618,417 75,472 1,693,889 1,812,905Other--356,839 -356,839 (356,839)Capital improvement 1,222,000 3,322,594 1,763,170 950,500 2,713,670 608,924
Total community services 4,522,716 6,829,388 3,738,426 1,025,972 4,764,398 2,064,990
Library:Library -83,232 ---83,232
Total library -83,232 ---83,232
Community development:Community development -257,950 259,474 -259,474 (1,524)Capital improvement -255,000 ---255,000
Total community development -512,950 259,474 -259,474 253,476
Total expenditures 7,151,583 15,664,498 6,120,344 2,796,672 8,917,016 6,747,482Excess (deficiency) of revenues over (under) expenditures (4,203,922)(12,714,156)(1,470,269)(2,796,672)(4,266,941)8,447,215
Other financing sources (uses):Transfers in 15,789,591 15,789,591 15,789,590 -15,789,590 (1)Transfers out (2,381,883)(2,409,445)(2,063,372)-(2,063,372)346,073
Total other financing sources (uses)13,407,708 13,380,146 13,726,218 -13,726,218 346,072
Net change in fund balance 9,203,786 665,990 12,255,949 (2,796,672)9,459,277 8,793,287
Fund balance at beginning of year 179,244,135 179,244,135 179,244,135 -179,244,135 -
Fund balance at end of year $188,447,921 179,910,125 191,500,084 (2,796,672)188,703,412 8,793,287
See accompanying notes to Required Supplementary Information.
107
3.B.a
Packet Pg. 480 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Low and Moderate Income Housing Asset Special Revenue Fund
For the fiscal year ended June 30, 2021
Original
budget
Final
budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance with
final budget
Revenues:Investment income $100,000 100,000 39,576 -39,576 (60,424)Other 400,000 400,000 377,624 -377,624 (22,376)
Total revenues 500,000 500,000 417,200 -417,200 (82,800)
Expenditures:Community development:Other --1,104,778 -1,104,778 (1,104,778)
Community development --1,104,778 -1,104,778 (1,104,778)
Total expenditures --1,104,778 -1,104,778 (1,104,778)Excess (deficiency) of revenues over (under) expenditures 500,000 500,000 (687,578)-(687,578)(1,187,578)
Other financing sources (uses):Transfers in 3,697,398 3,697,398 3,697,398 -3,697,398 -
Total other financing sources (uses)3,697,398 3,697,398 3,697,398 -3,697,398 -
Net change in fund balance 4,197,398 4,197,398 3,009,820 -3,009,820 (1,187,578)
Fund balance at beginning of year 63,982,474 63,982,474 63,982,474 -63,982,474 -
Fund balance at end of year $68,179,872 68,179,872 66,992,294 -66,992,294 (1,187,578)
See accompanying notes to Required Supplementary Information.
108
3.B.a
Packet Pg. 481 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Note to Required Supplementary Information
For the fiscal year ended June 30, 2021
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. 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.
The actual results of operations on a budgetary basis compared to the appropriations adopted by the City
Council for budgeted major governmental funds are presented as required supplementary information. The
comparisons of actual results with the budget for nonmajor funds are presented as supplementary
information in the combining schedules.
For the fiscal year ended June 30, 2021, expenditures exceeded appropriations in the General Fund. Fire
Department staff logged higher than budgeted overtime to assist with wildfires as part of multiple mutual
aid strike team deployments, for which the City was fully reimbursed, and to provide COVID-19 pandemic
and Emergency Operations Center support (not reimbursed). Library, Record and election services and
City Attorney were overbudget due to unexpected COVID-19 pandemic expenditures.
109
3.B.a
Packet Pg. 482 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Changes in the Net Pension Liability and Related Ratios Miscellaneous PlanLast Seven Fiscal Years (Unaudited)Total Pension Liability2021202020192018201720162015Service Cost26,940,522$ 27,751,083 27,141,560 27,164,949 24,044,347 23,584,538 24,972,667 Interest on the total pension liability84,780,608 81,225,010 76,677,361 73,555,405 70,686,179 67,091,447 63,926,580 Changes in assumptions- - (8,896,401) 62,254,788 - (16,726,947) - Difference between expected and actual experience(7,677,266) 6,325,353 (5,319,485) (14,768,176) (7,701,743) (12,672,814) - Benefit payments, including refunds of employee contributions(53,198,960) (49,130,828) (44,560,263) (41,097,884) (36,967,774) (35,460,612) (32,834,279) Net change in total pension liability50,844,904 66,170,618 45,042,772 107,109,082 50,061,009 25,815,612 56,064,968 Total pension liability - beginning1,206,549,260 1,140,378,642 1,095,335,870 988,226,788 938,165,779 912,350,167 856,285,199 Total pension liability - ending (a)1,257,394,164$ 1,206,549,260 1,140,378,642 1,095,335,870 988,226,788 938,165,779 912,350,167 Plan fiduciary net positionContribution - employer39,789,326$ 32,912,163 29,338,109 56,350,053 28,154,218 28,349,184 27,433,064 Contribution - employee11,287,483 11,502,697 11,221,260 11,398,672 11,256,065 10,754,206 11,418,160 Net investment income48,650,608 58,848,094 70,094,677 82,395,628 3,759,440 15,956,734 104,724,175 Benefit payments(53,198,960) (49,130,828) (44,560,263) (41,097,884) (36,967,774) (35,460,612) (32,834,279) Plan to plan resource movement- (1,658) (2,066) (61,526) (767) (909) - Administrative expense(1,333,279) (636,732) (1,293,232) (1,065,974) (436,504) (806,463) - Other Miscellaneous Income (Expense)- 2,066 (2,455,869) - - - - Net change in plan fiduciary - net position45,195,178 53,495,802 62,342,616 107,918,969 5,764,678 18,792,140 110,741,120 Plan fiduciary net position - beginning945,750,453 892,254,651 829,912,035 721,993,066 716,228,388 697,436,244 586,695,124 Plan fiduciary net position - ending (b)990,945,631 945,750,453 892,254,651 829,912,035 721,993,066 716,228,384 697,436,244 Net pension liability - ending (a)-(b)266,448,533$ 260,798,807 248,123,991 265,423,835 266,233,722 221,937,395 214,913,922 Plan fiduciary net position as a percentage of the total pension liability78.81%78.38%78.24%75.77% 73.06% 76.34% 76.44%Covered payroll154,765,955$ 149,416,791 147,371,283 142,942,436 137,199,170 138,199,596 134,174,365 Net pension liability as a percentage of covered- payroll172.16%174.54%168.37%185.69% 194.05% 160.59% 160.18%Notes to Schedule:Benefit Changes: There were no changes in benefits.Changes of Assumptions: In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). 1103.B.aPacket Pg. 483Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Changes in the Net Pension Liability and Related Ratios Police Safety PlanLast Seven Fiscal Years (Unaudited)2021202020192018201720162015Total Pension LiabilityService Cost11,086,298$ 10,255,581 10,217,345 9,940,041 8,471,379 8,324,522 8,493,146 Interest on the total pension liability35,384,916 33,763,191 32,412,581 31,045,060 29,901,653 28,537,027 27,132,667 Changes in assumptions- - (2,129,031) 26,521,719 -(7,150,335)-Difference between expected and actual experience2,033,685 (1,686,562) 587,060 (3,121,761) (1,152,112) (501,077)-Benefit payments, including refunds of employee contributions(24,742,085) (22,830,569) (21,315,119) (19,596,092) (18,767,835) (17,121,429) (16,130,411) Net change in total pension liability23,762,814 19,501,641 19,772,836 44,788,967 18,453,085 12,088,708 19,495,402 Total pension liability - beginning499,688,158 480,186,517 460,413,681 415,624,714 397,171,629 385,082,921 365,587,519 Total pension liability - ending (a)523,450,972$ 499,688,158 480,186,517 460,413,681 415,624,714 397,171,629 385,082,921 Plan fiduciary net positionContribution - employer19,904,356$ 15,926,339 13,774,479 26,559,693 12,697,470 13,033,273 12,515,162 Contribution - employee3,493,416 3,118,363 3,021,783 2,827,317 2,753,594 2,695,506 3,372,358 Net investment income18,812,931 23,179,043 28,113,907 32,951,701 1,516,091 6,513,781 43,315,499 Benefit payments(24,742,085) (22,830,569) (21,315,119) (19,596,092) (18,767,835) (17,121,429) (16,130,411) Plan to plan resource movement- - (823) 61,526 767 --Administrative expense(526,627) (252,921) (517,855) (428,091) (177,915) (328,610) -Other Miscellaneous Income (Expense)- 823 (983,415) - ---Net change in plan fiduciary - net position16,941,991 19,141,078 22,092,957 42,376,054 (1,977,828) 4,792,521 43,072,608 Plan fiduciary net position - beginning373,559,650 354,418,572 332,325,615 289,949,561 291,927,389 287,134,868 244,062,260 Plan fiduciary net position - ending (b)390,501,641 373,559,650 354,418,572 332,325,615 289,949,561 291,927,389 287,134,868 Net pension liability - ending (a)-(b)132,949,331$ 126,128,508 125,767,945 128,088,066 125,675,153 105,244,240 97,948,053 Plan fiduciary net position as a percentage of the total pension liability74.60%74.76%73.81%72.18%69.76%73.50%74.56%Covered payroll31,286,093$ 31,769,364 30,592,273 29,176,438 28,791,622 28,470,873 27,641,624 Net pension liability as a percentage of covered- payroll424.95%397.01%411.11%439.01%436.50%369.66%354.35%Notes to Schedule:Benefit Changes: There were no changes in benefits.Changes of Assumptions: In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). 1113.B.aPacket Pg. 484Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Changes in the Net Pension Liability and Related Ratios Fire Safety PlanLast Seven Fiscal Years (Unaudited)2021 2020 2019 2018 2017 2016 2015Total Pension LiabilityService Cost5,050,337$ 4,994,560 4,738,879 4,623,044 3,778,677 3,766,398 3,975,757 Interest on the total pension liability18,311,217 17,610,724 16,808,267 16,174,733 15,730,320 15,338,448 14,735,448 Changes in assumptions- - (1,206,898) 13,218,472 - (3,653,466) - Difference between expected and actual experience923,359 2,419,289 1,380,602 (943,161) (2,919,523) (515,792) - Benefit payments, including refunds of employee contributions(14,300,274) (13,218,568) (12,523,618) (11,813,956) (11,409,171) (10,728,684) (10,085,994) Net change in total pension liability9,984,639 11,806,005 9,197,232 21,259,132 5,180,303 4,206,904 8,625,211 Total pension liability - beginning259,802,551 247,996,546 238,799,314 217,540,182 212,359,879 208,152,975 199,527,764 Total pension liability - ending (a)269,787,190$ 259,802,551 247,996,546 238,799,314 217,540,182 212,359,879 208,152,975 Plan fiduciary net positionContribution - employer 10,703,394$ 7,213,925 6,276,049 10,375,991 5,320,402 5,142,818 4,954,271 Contribution - employee 1,752,804 1,690,559 1,661,415 1,565,941 1,479,400 1,375,301 1,421,733 Net investment income 9,068,546 11,434,835 13,896,417 16,797,654 706,789 3,458,100 23,479,329 Benefit payments (14,300,274) (13,218,568) (12,523,618) (11,813,956) (11,409,171) (10,728,684) (10,085,994) Plan to plan resource movement - - (405) - - - - Administrative expense(255,237) (124,209) (257,882) (219,672) (93,112) (171,948) - Other Miscellaneous Income (Expense)- 405 (489,721) - - - - Net change in plan fiduciary - net position6,969,233 6,996,947 8,562,255 16,705,958 (3,995,692) (924,413) 19,769,339 Plan fiduciary net position - beginning181,050,855 174,053,908 165,491,653 148,785,695 152,781,387 153,705,800 133,936,461 Plan fiduciary net position - ending (b)188,020,088 181,050,855 174,053,908 165,491,653 148,785,695 152,781,387 153,705,800 Net pension liability - ending (a)-(b)81,767,102$ 78,751,696 73,942,638 73,307,661 68,754,487 59,578,492 54,447,175 Plan fiduciary net position as a percentage of the total pension liability 69.69% 69.69% 70.18% 69.30% 68.39% 71.94% 73.84%Covered payroll 18,795,618$ 17,748,610 16,861,345 15,701,959 15,565,558 15,733,733 15,275,469 Net pension liability as a percentage of covered- payroll 435.03% 443.71% 438.53% 466.87% 441.71% 378.67% 356.44%Notes to Schedule:Benefit Changes: There were no changes in benefits.Changes of Assumptions: In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). 1123.B.aPacket Pg. 485Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Contributions - Miscellaneous Pension PlanLast Seven Fiscal Years (Unaudited)202120202019201820172016201540,186,749$ 36,620,603 32,707,844 29,021,468 29,097,156 27,377,582 25,320,840 (35,458,470) (39,786,395) (32,912,563) (29,331,033) (56,352,251) (28,152,578) (28,349,184) 4,728,279$ (1)(3,165,792) (204,719) (309,565) (27,255,095) (774,996) (3,028,344) 121,619,165$ 152,120,397 154,765,955 149,416,791 147,371,283 142,942,436 137,199,170 29.16%26.15%21.27%19.63%38.24%19.70%20.66%Entry Age NormalLevel Percentage of PayrollMarket Value2.75%3.00%7.50%Actuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.Varies by entry age and serviceThe probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.(1) Because CalPERS bases the Acturially Determined Contribution(ADC) on historical payroll, and the City terminated more than 200employees on and around June of 2020, the ADC based on currentactual payroll would have been much lower. This resulted in theactual contributions appearing less than the ADC. The City has madeall payments required by CalPERS.Actuarially determined contribution Contributions in relation to actuarially determined contributionsContribution (excess) deficiencyCovered payrollContributions as a percentage of covered-payrollNotes to ScheduleValuation dateActuarial Cost MethodAmortization MethodAsset Valuation MethodInflationSalary increasesPayroll GrowthInvestments Rate of ReturnRetirement AgeMortality1133.B.aPacket Pg. 486Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Contributions - Safety Police Pension PlanLast Seven Fiscal Years (Unaudited)2021202020192018201720162015Actuarially determined contribution18,987,371$ 17,488,731 15,428,327 13,453,498 13,559,983 12,327,896 11,589,142 Contributions in relation to actuarially determined contributions(19,119,800) (19,904,358) (15,924,164) (13,773,882) (26,557,166) (12,697,470) (13,033,273) Contribution excess(132,429)$ (2,415,627) (495,837) (320,384) (12,997,183) (369,574) (1,444,131) Covered payroll 33,829,867$ 34,111,685 31,286,093 31,769,364 30,592,273 29,176,438 28,791,622 Contributions as a percentage of covered- 56.52% 58.35% 50.90% 43.36% 86.81% 43.52% 45.27%payrollNotes to ScheduleValuation dateActuarial Cost Method Entry Age NormalAmortization Method Level Percentage of PayrollAsset Valuation Method Market ValueInflation 2.75%Salary increasesPayroll Growth 3.00%Investments Rate of Return 7.50%Retirement AgeMortalityActuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.Varies by entry age and serviceThe probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.1143.B.aPacket Pg. 487Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIARequired Supplementary InformationSchedule of Contributions - Safety Fire Pension PlanLast Seven Fiscal Years (Unaudited)2021202020192018201720162015Actuarially determined contribution8,801,916$ 7,971,960 6,959,294 5,884,665 5,624,625 5,185,401 4,615,293 Contributions in relation to actuarially determined contributions(8,636,700) (10,703,395) (7,211,427) (6,276,048) (10,372,347) (5,320,402) (5,142,818) Contribution (excess) deficiency165,216$ (2,731,435) (252,133) (391,383) (4,747,722) (135,001) (527,525) Covered payroll18,953,091$ 19,108,351 18,795,618 17,748,610 16,861,345 15,701,959 15,565,558 Contributions as a percentage of covered45.57%56.01%38.37%35.36%61.52%33.88%33.04%payrollNotes to ScheduleValuation dateActuarial Cost MethodEntry Age NormalAmortization MethodLevel Percentage of PayrollAsset Valuation MethodMarket ValueInflation2.75%Salary increasesPayroll Growth3.00%Investments Rate of Return7.50%Retirement AgeMortalityActuarially determined contribution rates are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported.Varies by entry age and serviceThe probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries.1153.B.aPacket Pg. 488Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
Fiscal Yearend FYE 2021 FYE 2020 FYE 2019 FYE 2018
Measurement Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017
Total OPEB Liability
Service Cost 1,707,389$ 1,207,816 1,073,506 1,017,718
Interest on the total OPEB liability 1,555,940 2,125,930 2,064,073 2,063,748
Changes in assumptions 4,391,134 6,467,787 1,443,660 (321,247)
Difference between expected and actual experience - (577,838) - (1,164,748)
Benefit payments, including refunds of employee
contributions (1,798,994) (1,708,929) (1,571,807) (1,721,051)
Net change in total OPEB liability 5,855,469 7,514,766 3,009,432 (125,580)
Total OPEB liability - beginning 40,906,328 33,391,562 30,382,130 30,507,710 Total OPEB liability - ending (a)46,761,797$ 40,906,328 33,391,562 30,382,130
Plan fiduciary net position
Contribution - employer -$ 3,047,011 3,011,934 2,686,113
Net investment income 432,025 712,791 412,595 325,621
Benefit payments (1,798,994) (1,708,929) (1,571,807) (1,721,051)
Administrative expense (3,973) (1,772) (3,600) (2,680)
Other expenses - - (5,303) -
Net change in plan fiduciary - net position (1,370,942) 2,049,101 1,843,819 1,288,003
Plan fiduciary net position - beginning 7,899,459 5,850,358 4,006,539 2,718,536
Plan fiduciary net position - ending (b)6,528,517 7,899,459 5,850,358 4,006,539
Net OPEB liability - ending (a)-(b)40,233,280$ 33,006,869 27,541,204 26,375,591
Plan fiduciary net position as a percentage of the
total OPEB liability 13.96%19.31%17.52%13.19%
Covered employee payroll 236,995,540$ 232,059,089$ 216,623,938 206,778,649
Net OPEB liability as a percentage of covered
employee payroll 16.98%14.22%12.71%12.76%
Notes to Schedule:
Benefit Changes: There were no changes in benefits.
Changes of Assumptions: There were no changes of assumptions.
CITY OF SANTA MONICA, CALIFORNIA
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last Four Fiscal Years (Unaudited) 1
1Fiscal year 2018 was first year of implementation, therefore only four years are shown. Historical information is required only for measurement periods for which GASB 75 is applicable.
Future years' information will be displayed up to 10 years as information becomes available.
116
3.B.a
Packet Pg. 489 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
FYE 2021 FYE 2020 FYE 2019 FYE 2018
Actuarially determined contribution 2,664,115$ 2,452,877 2,727,622 2,645,395
Contributions in relation to actuarially
determined contributions - - 3,047,011 3,011,934
Contribution deficiency (excess)2,664,115$ 2,452,877 (319,389) (366,539)
Covered employee payroll 204,690,556$ 236,995,540 232,059,089 216,623,938
Contributions as a percentage of covered 0.00%0.00%1.31%1.39%
employee payroll
Notes to Schedule
Valuation Date Used to Determine ADC 6/30/2019
Discount Rate Used to Determine ADC 6.10%
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Asset Valuation Method Market Value
Inflation 2.50%
Salary increases
Retirement Age
Mortality
Mortality Improvement
Healthcare Cost Trend Rate 6.5% in 2021 to 4.0% in 2076
CalPERS 2017 Experience Study
MacLeod Watts Scale 2020 applied generationally
CITY OF SANTA MONICA, CALIFORNIA
Required Supplementary Information
Schedule of Contributions OPEB
Last Four Fiscal Year (Unaudited)
3.0% per year, used only to allocate the cost of benefits between
service years
50 to 75
117
3.B.a
Packet Pg. 490 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
City of Santa Monica, California Year
Ended June 30, 2021
SUPPLEMENTARY INFORMATION
3.B.a
Packet Pg. 491 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
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.
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.
Local Return Fund – To account for State Grant activities including Proposition A and C.
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 (Capital Projects Fund Type) – 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.
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.
118
3.B.a
Packet Pg. 492 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
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.
119
3.B.a
Packet Pg. 493 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Special Revenue Funds
Beach
Recreation
Housing
Authority TORCA Asset Seizure
Citizens Option
for Public Safety Rent Control
AssetsCash and investments $2,073,953 20,623 5,691,956 1,471,710 484,514 2,240,890Restricted cash and investments 47,368 1,176,539 ----Receivables (net, where applicable, of allowances for uncollectibles):Accounts 1,726,525 3,853 -9,810 -68,567Notes--7,422,526 ---Taxes ------Interest 14,449 192 10,451 2,251 856 7,469Other governments -907,549 ----Deposits ------Prepaids -----44,516
Restricted cash and investments with fiscal agent ------
Total assets $3,862,295 2,108,756 13,124,933 1,483,771 485,370 2,361,442
Liabilities, Deferred Inflows of Resources, and Fund Balances (deficit)
LiabilitiesAccounts payable $494,717 103,381 1,477 -19,930 34,675Accrued liabilities 117,692 36,380 ---140,215Contracts payable (retained percentage)604,856 -----Due to other funds -896,527 ----Unearned revenue 514,102 500,886 ---20,196Deposits payable 46,827 -----Advances from other funds 5,292,973 ----319,730
Total liabilities 7,071,167 1,537,174 1,477 -19,930 514,816
Deferred inflows of resources ------
Fund balances (deficit)Nonspendable -----44,516Restricted-571,582 13,123,456 1,483,771 465,440 1,802,110Unassigned(3,208,872)-----
Total fund balances (3,208,872)571,582 13,123,456 1,483,771 465,440 1,846,626
Total liabilities and fund balances $3,862,295 2,108,756 13,124,933 1,483,771 485,370 2,361,442
continued
120
3.B.a
Packet Pg. 494 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Special Revenue Funds
Gas Tax Local Return
Community
Development
Block Grant
Miscellaneous
Grants SCAQMD
Parks and
Recreation
AssetsCash and investments $5,194 ---1,163,465 43,952Restricted cash and investments 3,998,204 14,732,039 12,566 ---Receivables (net, where applicable, of allowances for uncollectibles):Accounts --4,728 1,455,232 30,925 -Notes --8,890,920 6,110,205 --Taxes ------Interest 5,101 20,086 75 359 1,697 153Other governments 312,005 -1,405,093 7,916,552 30,665 -Deposits --3,257 ---Prepaids ------
Restricted cash and investments with fiscal agent ------
Total assets $4,320,504 14,752,125 10,316,639 15,482,348 1,226,752 44,105
Liabilities, Deferred Inflows of Resources, and Fund Balances (deficit)
LiabilitiesAccounts payable $38,191 285,392 34,364 954,028 --Accrued liabilities ---13,298 --Contracts payable (retained percentage)4,492 72,581 3,821 25,886 --Due to other funds --1,325,365 6,970,047 --Unearned revenue ---314,289 --Deposits payable ------Advances from other funds ------
Total liabilities 42,683 357,973 1,363,550 8,277,548 --
Deferred inflows of resources --1,099,303 8,727,193 --
Fund balances (deficit)Nonspendable ------Restricted 4,277,821 14,394,152 7,853,786 16,663,539 1,226,752 44,105Unassigned---(18,185,932)--
Total fund balances 4,277,821 14,394,152 7,853,786 (1,522,393)1,226,752 44,105
Total liabilities and fund balances $4,320,504 14,752,125 10,316,639 15,482,348 1,226,752 44,105
continued
121
3.B.a
Packet Pg. 495 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Capital Projects
Fund
Debt Service
Fund Permanent Funds
Clean Beaches
and Ocean
Parcel Tax Debt Service
Cemetery
Perpetual Care
Mausoleum
Perpetual Care
Total nonmajor
governmental
funds
AssetsCash and investments $15,289,139 -19,463 1,885 28,506,744Restricted cash and investments ----19,966,716Receivables (net, where applicable, of allowances for uncollectibles):Accounts --11,558 -3,311,198Notes----22,423,651Taxes65,873 ---65,873Interest13,509 -40,307 5,008 121,963Other governments 3,362,816 ---13,934,680Deposits----3,257Prepaids----44,516
Restricted cash and investments with fiscal agent -5,622,302 15,516,904 1,872,908 23,012,114
Total assets $18,731,337 5,622,302 15,588,232 1,879,801 111,390,712
Liabilities, Deferred Inflows of Resources, and Fund Balances (deficit)
LiabilitiesAccounts payable $6,067,378 ---8,033,533Accrued liabilities ----307,585Contracts payable (retained percentage)1,423,802 ---2,135,438Due to other funds ----9,191,939Unearned revenue ----1,349,473Deposits payable ----46,827Advances from other funds ----5,612,703
Total liabilities 7,491,180 ---26,677,498
Deferred inflows of resources 3,362,816 ---13,189,312
Fund balances (deficit)Nonspendable --15,588,232 1,879,801 17,512,549Restricted7,877,341 5,622,302 --75,406,157Unassigned----(21,394,804)
Total fund balances 7,877,341 5,622,302 15,588,232 1,879,801 71,523,902
Total liabilities and fund balances $18,731,337 5,622,302 15,588,232 1,879,801 111,390,712
122
3.B.a
Packet Pg. 496 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the fiscal year ended June 30, 2021
Special Revenue Funds
Beach
Recreation
Housing
Authority TORCA Asset Seizure
Citizens Option
for Public Safety Rent Control
Revenues:Other taxes $--48,060 ---Licenses and permits 71,617 -----Intergovernmental 50,873 21,669,584 -154,473 220,760 -Charges for services 10,997,027 ----5,280,607Investment income (89,309)3,630 15,155 3,768 1,456 25,902Rental income 841,816 -----Other revenue 748,442 -268,794 --622Total revenues 12,620,466 21,673,214 332,009 158,241 222,216 5,307,131
Expenditures:Current:General government ------Public safety ---124,407 326,973 -General services 10,146,688 -----Community services 2,062,284 24,255,095 66,801 ---Library ------Community development 6,435,383 -1,483,635 --5,228,089Debt service expenditures:Principal ------
Interest ------
Total expenditures 18,644,355 24,255,095 1,550,436 124,407 326,973 5,228,089
Excess (deficiency) of revenues over (under) expenditures (6,023,889)(2,581,881)(1,218,427)33,834 (104,757)79,042
Other financing sources (uses)Transfers in 2,851,290 129,000 ----
Transfers out (166,984)-(51,645)--(83,740)
Total other financing sources (uses)2,684,306 129,000 (51,645)--(83,740)
Net change in fund balances (3,339,583)(2,452,881)(1,270,072)33,834 (104,757)(4,698)
Fund balances (deficit) at the beginning of year 130,711 3,024,463 14,393,528 1,449,937 570,197 1,851,324
Fund balances at end of year $(3,208,872)571,582 13,123,456 1,483,771 465,440 1,846,626
continued
123
3.B.a
Packet Pg. 497 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the fiscal year ended June 30, 2021
Special Revenue Funds
Gas Tax Local Return
Community
Development
Block Grant
Miscellaneous
Grants SCAQMD
Parks and
Recreation
Revenues:Other taxes $------Licenses and permits ------Intergovernmental 3,711,635 5,484,184 2,465,110 19,573,049 120,598 -Charges for services ------Investment income 9,581 42,496 (1,426)(3,704)3,821 (31)Rental income ------Other revenue ---5,000 --Total revenues 3,721,216 5,526,680 2,463,684 19,574,345 124,419 (31)
Expenditures:Current:General government 4,951 -45,853 880,646 7,317 -Public safety ---2,098,320 --General services 658,871 2,101,965 77,004 5,741,910 --Community services -325 3,280,212 610,170 -28,841Library---41,271 --Community development ------Debt service expenditures:Principal ------
Interest ------
Total expenditures 663,822 2,102,290 3,403,069 9,372,317 7,317 28,841
Excess (deficiency) of revenues over (under) expenditures 3,057,394 3,424,390 (939,385)10,202,028 117,102 (28,872)
Other financing sources (uses)Transfers in ---102,551 --
Transfers out (1,996,179)(550,700)(237,618) (17,259,096)--
Total other financing sources (uses)(1,996,179)(550,700)(237,618)(17,156,545)--
Net change in fund balances 1,061,215 2,873,690 (1,177,003) (6,954,517)117,102 (28,872)
Fund balances (deficit) at the beginning of year 3,216,606 11,520,462 9,030,789 5,432,124 1,109,650 72,977
Fund balances at end of year $4,277,821 14,394,152 7,853,786 (1,522,393)1,226,752 44,105
continued
124
3.B.a
Packet Pg. 498 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the fiscal year ended June 30, 2021
Capital Projects
Fund
Debt Service
Fund Permanent Funds
Clean Beaches
and Ocean
Parcel Tax Debt Service
Cemetery
Perpetual Care
Mausoleum
Perpetual Care
Total nonmajor
governmental
funds
Revenues:Other taxes $3,394,100 ---3,442,160Licenses and permits ----71,617Intergovernmental3,298,245 ---56,748,511Charges for services --336,355 33,794 16,647,783Investment income (7,648)59 2,400,938 288,089 2,692,777Rental income ----841,816Other revenue ----1,022,858Total revenues 6,684,697 59 2,737,293 321,883 81,467,522
Expenditures:Current:General government 21,390,468 ---22,329,235Public safety ----2,549,700General services 539,905 ---19,266,343Community services ----30,303,728Library----41,271Community development ----13,147,107Debt service expenditures:Principal -3,305,000 --3,305,000
Interest -6,054,223 --6,054,223
Total expenditures 21,930,373 9,359,223 --96,996,607
Excess (deficiency) of revenues over (under) expenditures (15,245,676)(9,359,164)2,737,293 321,883 (15,529,085)
Other financing sources (uses)Transfers in 15,527,652 9,943,381 --28,553,874
Transfers out (1,700,415)-(403,717)(48,590)(22,498,684)
Total other financing sources (uses)13,827,237 9,943,381 (403,717)(48,590)6,055,190
Net change in fund balances (1,418,439)584,217 2,333,576 273,293 (9,473,895)
Fund balances (deficit) at the beginning of year 9,295,780 5,038,085 13,254,656 1,606,508 80,997,797
Fund balances at end of year $7,877,341 5,622,302 15,588,232 1,879,801 71,523,902
125
3.B.a
Packet Pg. 499 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Beach Recreation Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Licenses and permits $20,000 71,617 -71,617 51,617Intergovernmental28,681 50,873 -50,873 22,192Charges for services 10,048,700 10,997,027 -10,997,027 948,327Investment income -(89,309)-(89,309)(89,309)
Rental income 820,189 841,816 -841,816 21,627Other revenue 543,000 748,442 -748,442 205,442
Total revenues 11,460,570 12,620,466 -12,620,466 1,159,896
Expenditures:General services:Public works 5,760,067 5,134,283 20,300 5,154,583 605,484Other24,333 12,232 -12,232 12,101Capital improvement 6,926,431 5,000,173 995,200 5,995,373 931,058
Total general services 12,710,831 10,146,688 1,015,500 11,162,188 1,548,643
Community services:Community services 2,222,592 2,029,522 56,900 2,086,422 136,170Capital improvement 319,346 32,762 11,900 44,662 274,684
Total Community services 2,541,938 2,062,284 68,800 2,131,084 410,854
Community development:Community development 6,860,356 6,435,383 -6,435,383 424,973
Total Community development 6,860,356 6,435,383 -6,435,383 424,973
Total expenditures 22,113,125 18,644,355 1,084,300 19,728,655 2,384,470
Excess (deficiency) of revenues over (under) expenditures (10,652,555)(6,023,889)(1,084,300)(7,108,189)3,544,366
Other financing sources (uses):
Transfers in 230,962 2,851,290 -2,851,290 2,620,328Transfers out (177,528)(166,984)-(166,984)10,544
Total other financing sources (uses)53,434 2,684,306 -2,684,306 2,630,872
Net change in fund balance (10,599,121)(3,339,583)(1,084,300)(4,423,883)6,175,238
Fund balance at beginning of year 130,711 130,711 -130,711 -
Fund balance at end of year $(10,468,410)(3,208,872)(1,084,300)(4,293,172)6,175,238
126
3.B.a
Packet Pg. 500 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Housing Authority Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $22,061,682 21,669,584 -21,669,584 (392,098)Investment income -3,630 -3,630 3,630
Total revenues 22,061,682 21,673,214 -21,673,214 (388,468)
Expenditures:Community services:Community services 23,192,155 24,242,724 3,400 24,246,124 (1,053,969)Capital improvement -12,371 -12,371 (12,371)
Total community services 23,192,155 24,255,095 3,400 24,258,495 (1,066,340)
Total expenditures 23,192,155 24,255,095 3,400 24,258,495 (1,066,340)Excess (deficiency) of revenues over (under) expenditures (1,130,473)(2,581,881)(3,400)(2,585,281)(1,454,808)
Other financing sources (uses):Transfers in 323,286 129,000 -129,000 (194,286)
Total other financing sources (uses)323,286 129,000 -129,000 (194,286)
Net change in fund balance (807,187)(2,452,881)(3,400)(2,456,281)(1,649,094)
Fund balance at beginning of year 3,024,463 3,024,463 -3,024,463 -
Fund balance at end of year $2,217,276 571,582 (3,400)568,182 (1,649,094)
127
3.B.a
Packet Pg. 501 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Tenant Ownership Rights Charter Amendment(TORCA) Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Other taxes $25,000 48,060 -48,060 23,060Investment income 110,000 15,155 -15,155 (94,845)Other revenue 50,000 268,794 -268,794 218,794
Total revenues 185,000 332,009 -332,009 147,009
Expenditures:
Community services:Community services 6,000 3,511 -3,511 2,489Other78,000 1,483,635 14,300 1,497,935 (1,419,935)Capital improvement 3,326,866 63,290 54,200 117,490 3,209,376
Total Community services 3,410,866 1,550,436 68,500 1,618,936 1,791,930
Total expenditures 3,410,866 1,550,436 68,500 1,618,936 1,791,930Excess (deficiency) of revenues over (under) expenditures (3,225,866)(1,218,427)(68,500)(1,286,927)1,938,939
Other financing sources (uses):Transfers out (45,000)(51,645)-(51,645)(6,645)
Total other financing sources (uses)(45,000)(51,645)-(51,645)(6,645)
Net change in fund balance (3,270,866)(1,270,072)(68,500)(1,338,572)1,932,294
Fund balance at beginning of year 14,393,528 14,393,528 -14,393,528 -
Fund balance at end of year $11,122,662 13,123,456 (68,500)13,054,956 1,932,294
128
3.B.a
Packet Pg. 502 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Citizens Option for Public Safety Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $200,000 220,760 -220,760 20,760Investment income 5,000 1,456 -1,456 (3,544)
Total revenues 205,000 222,216 -222,216 17,216
Expenditures:Public safety:Police 100,000 326,973 93,100 420,073 (320,073)
Total public safety 100,000 326,973 93,100 420,073 (320,073)
Total expenditures 100,000 326,973 93,100 420,073 (320,073)
Net change in fund balance 105,000 (104,757)(93,100)(197,857)(302,857)
Fund balance at beginning of year 570,197 570,197 -570,197 -
Fund balance at end of year $675,197 465,440 (93,100)372,340 (302,857)
129
3.B.a
Packet Pg. 503 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Gas Tax Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $3,207,862 3,711,635 -3,711,635 503,773Investment income 18,000 9,581 -9,581 (8,419)
Total revenues 3,225,862 3,721,216 -3,721,216 495,354
Expenditures:General government:Other 5,018 4,951 -4,951 67
Total general government 5,018 4,951 -4,951 67
General services:Capital improvement 4,398,973 658,871 1,860,400 2,519,271 1,879,702
Total general services 4,398,973 658,871 1,860,400 2,519,271 1,879,702
Total expenditures 4,403,991 663,822 1,860,400 2,524,222 1,879,769
Excess (deficiency) of revenues over (under) expenditures (1,178,129)3,057,394 (1,860,400)1,196,994 2,375,123
Other financing sources (uses):
Transfers out (1,594,312)(1,996,179)-(1,996,179)(401,867)
Total other financing sources (uses)(1,594,312)(1,996,179)-(1,996,179)(401,867)
Net change in fund balance (2,772,441)1,061,215 (1,860,400)(799,185)1,973,256
Fund balance at beginning of year 3,216,606 3,216,606 -3,216,606 -
Fund balance at end of year $444,165 4,277,821 (1,860,400)2,417,421 1,973,256
130
3.B.a
Packet Pg. 504 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Local Return Fund Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $7,807,965 5,484,184 -5,484,184 (2,323,781)Investment income 150,000 42,496 -42,496 (107,504)
Total revenues 7,957,965 5,526,680 -5,526,680 (2,431,285)
Expenditures:
General services:Mobility 547,538 272,239 -272,239 275,299Capital improvement 9,609,293 1,830,051 3,059,300 4,889,351 4,719,942
Total general services 10,156,831 2,102,290 3,059,300 5,161,590 4,995,241
Total expenditures 10,156,831 2,102,290 3,059,300 5,161,590 4,995,241
Excess (deficiency) of revenues over (under) expenditures (2,198,866)3,424,390 (3,059,300)365,090 2,563,956
Other financing sources (uses):
Transfers out (735,000)(550,700)-(550,700)184,300
Total other financing sources (uses)(735,000)(550,700)-(550,700)184,300
Net change in fund balance (2,933,866)2,873,690 (3,059,300)(185,610)2,748,256
Fund balance at beginning of year 11,520,462 11,520,462 -11,520,462 -
Fund balance at end of year $8,586,596 14,394,152 (3,059,300)11,334,852 2,748,256
131
3.B.a
Packet Pg. 505 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $3,234,420 2,465,110 -2,465,110 (769,310)Investment income 5,000 (1,426)-(1,426)(6,426)
Total revenues 3,239,420 2,463,684 -2,463,684 (775,736)
Expenditures:General government:Other 44,875 45,853 -45,853 (978)
Total general government 44,875 45,853 -45,853 (978)General services:Capital improvement 77,004 77,004 -77,004 -
Total general services 77,004 77,004 -77,004 -
Community services:Community services 3,406,581 3,280,212 126,400 3,406,612 (31)
Total community services 3,406,581 3,280,212 126,400 3,406,612 (31)
Total expenditures 3,528,460 3,403,069 126,400 3,529,469 (1,009)
Excess (deficiency) of revenues over (under) expenditures (289,040)(939,385)(126,400)(1,065,785)(776,745)
Other financing sources (uses):Transfers out (353,718)(237,618)-(237,618)116,100
Total other financing sources (uses)(353,718)(237,618)-(237,618)116,100
Net change in fund balance (642,758)(1,177,003)(126,400)(1,303,403)(660,645)
Fund balance at beginning of year 9,030,789 9,030,789 -9,030,789 -
Fund balance at end of year $8,388,031 7,853,786 (126,400)7,727,386 (660,645)
132
3.B.a
Packet Pg. 506 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Miscellaneous Grants Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $45,906,680 19,573,049 -19,573,049 (26,333,631)Investment income 20,000 (3,704)-(3,704)(23,704)Other revenue -5,000 -5,000 5,000
Total revenues 45,926,680 19,574,345 -19,574,345 (26,352,335)
Expenditures:General government:City manager 484,550 483,039 136,500 619,539 (134,989)Other 648,512 355,607 310,300 665,907 (17,395)
Total general government 1,133,062 838,646 446,800 1,285,446 (152,384)Public safety:Police 1,517,010 469,635 133,000 602,635 914,375Fire3,844,472 1,670,685 1,048,900 2,719,585 1,124,887
Total public safety 5,361,482 2,140,320 1,181,900 3,322,220 2,039,262
General services:Public works 9,216,881 5,252,583 7,300,300 12,552,883 (3,336,002)Capital improvement 18,965,789 481,111 615,100 1,096,211 17,869,578
Total general services 28,182,670 5,733,694 7,915,400 13,649,094 14,533,576
Community services:Community services 737,594 608,870 2,100 610,970 126,624Capital improvement 930,435 9,516 234,400 243,916 686,519
Total community services 1,668,029 618,386 236,500 854,886 813,143
Libraries:Library 80,427 41,271 -41,271 39,156
Total libraries 80,427 41,271 -41,271 39,156
Community development:
Community development -----
Total expenditures 36,425,670 9,372,317 9,780,600 19,152,917 17,272,753Excess (deficiency) of revenues over (under) expenditures 9,501,010 10,202,028 (9,780,600)421,428 (9,079,582)
Other financing sources (uses):Transfers in 27,562 102,551 -102,551 74,989Transfers out (17,607,244)(17,259,096)-(17,259,096)348,148
Total other financing sources (uses)(17,579,682)(17,156,545)-(17,156,545)423,137
Net change in fund balance (8,078,672)(6,954,517)(9,780,600)(16,735,117)(8,656,445)
Fund balance at beginning of year 5,432,124 5,432,124 -5,432,124 -
Fund balance at end of year $(2,646,548)(1,522,393)(9,780,600)(11,302,993)(8,656,445)
133
3.B.a
Packet Pg. 507 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
SCAQMD Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Intergovernmental $119,000 120,598 -120,598 1,598Investment income 10,000 3,821 -3,821 (6,179)
Total revenues 129,000 124,419 -124,419 (4,581)
Expenditures:General government:Other -7,317 -7,317 (7,317)Capital improvement 369,035 -369,000 369,000 35
Total general government 369,035 7,317 369,000 376,317 (7,282)
General services:Capital improvement 95,248 -41,800 41,800 53,448
Total general services 95,248 -41,800 41,800 53,448
Total expenditures 464,283 7,317 410,800 418,117 46,166
Net change in fund balance (335,283)117,102 (410,800)(293,698)41,585
Fund balance at beginning of year 1,109,650 1,109,650 -1,109,650 -
Fund balance at end of year $774,367 1,226,752 (410,800)815,952 41,585
134
3.B.a
Packet Pg. 508 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Parks and Recreation Special Revenue Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Investment income $3,000 (31)-(31)(3,031)
Total revenues 3,000 (31)-(31)(3,031)
Expenditures:
Capital improvement 330,125 28,841 28,100 56,941 273,184
Total expenditures 330,125 28,841 28,100 56,941 273,184
Net change in fund balance (327,125)(28,872)(28,100)(56,972)270,153
Fund balance at beginning of year 72,977 72,977 -72,977 -
Fund balance at end of year $(254,148)44,105 (28,100)16,005 270,153
135
3.B.a
Packet Pg. 509 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual
Clean Beaches and Ocean Parcel Tax Capital Projects Fund
For the fiscal year ended June 30, 2021
Budget
Actual,
GAAP basis Encumbrance
Actual,
budgetary
basis
Variance
with budget
Revenues:Other taxes $2,981,993 3,394,100 -3,394,100 412,107Intergovernmental3,315,465 3,298,245 -3,298,245 (17,220)Investment income 130,000 (7,648)-(7,648)(137,648)
Total revenues 6,427,458 6,684,697 -6,684,697 257,239
Expenditures:
General services:Public works 1,046,151 533,932 167,617 701,549 344,602Capital improvement 31,513,401 21,396,441 639,500 22,035,941 9,477,460
Total general services 32,559,552 21,930,373 807,117 22,737,490 9,822,062
Total expenditures 32,559,552 21,930,373 807,117 22,737,490 9,822,062
Excess (deficiency) of revenues over (under) expenditures (26,132,094)(15,245,676)(807,117)(16,052,793)10,079,301
Other financing sources (uses):Transfers in 15,527,651 15,527,652 -15,527,652 1Transfers out (1,569,158)(1,700,415)-(1,700,415)(131,257)
Total other financing sources (uses)13,958,493 13,827,237 -13,827,237 (131,256)
Net change in fund balance (12,173,601)(1,418,439)(807,117)(2,225,556)9,948,045
Fund balance at beginning of year 9,295,780 9,295,780 -9,295,780 -
Fund balance at end of year $(2,877,821)7,877,341 (807,117)7,070,224 9,948,045
136
3.B.a
Packet Pg. 510 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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).
Community Broadband Fund – To account for the activity of leasing the City’s dark and lit fiber networks known as “CityNet”.
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.
Parking Authority Fund – To account for acquisition of parking lots or contributing to the construction of parking structures by the City Parking Authority.
137
3.B.a
Packet Pg. 511 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIACombining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2021
Business-Type Activities - Enterprise Funds
Community
Broadband Airport Pier
Stormwater
Management Cemetery Parking Authority
Total nonmajor
enterprise funds
AssetsCurrent assets:Cash and investments $-27,055,803 4,771,375 -1,934,201 522,225 34,283,604Restricted cash and investments -1,278,418 285,623 7,748,441 153,139 -9,465,621Receivables (net, where applicable, of allowances for uncollectibles):Accounts 1,542,146 815,265 1,749,400 232,087 577,824 -4,916,722Interest1,080 38,157 10,297 10,769 1,981 3,361 65,645Due from other governments, restricted ---21,110 --21,110
Total current assets 1,543,226 29,187,643 6,816,695 8,012,407 2,667,145 525,586 48,752,702Noncurrent assets:Capital assets:Land -8 --4 1,362,700 1,362,712Construction in progress -273,366 2,744,256 2,934,720 --5,952,342Buildings-7,769,091 5,916,024 -1,716,090 946,242 16,347,447Improvements other than buildings -5,604,488 5,461,401 147,299 782,158 142,591 12,137,937Machinery and equipment 52,086 568,080 515,426 35,750 374,033 7,237 1,552,612Infrastructure--17,382,609 10,739,803 --28,122,412Less: accumulated depreciation (46,857)(10,676,517)(17,614,727)(5,736,032)(2,322,767)(553,668)(36,950,568)
Net capital assets 5,229 3,538,516 14,404,989 8,121,540 549,518 1,905,102 28,524,894
Total noncurrent assets 5,229 3,538,516 14,404,989 8,121,540 549,518 1,905,102 28,524,894
Total assets 1,548,455 32,726,159 21,221,684 16,133,947 3,216,663 2,430,688 77,277,596
DEFERRED OUTFLOWS OF RESOURCESDeferred outflows from pensions 181,930 312,781 472,779 -176,824 -1,144,314Deferred outflows from OPEB 13,894 31,726 82,932 -49,811 -178,363
TOTAL DEFERRED OUTFLOWS OF RESOURCES 195,824 344,507 555,711 -226,635 -1,322,677
LiabilitiesCurrent liabilities:Accounts payable 70,355 976,593 333,958 8 76,964 63,718 1,521,596Accrued liabilities 22,916 38,999 60,396 -33,077 -155,388Contracts payable (retained percentage)40,556 57,406 114,057 77,378 --289,397Compensated absences due within one year (note 2)22,558 61,944 49,200 -27,504 -161,206Unearned revenue (note 8)-18,285 674 ---18,959Due to other funds 515,731 -----515,731Liabilities payable from restricted assets - deposits -1,358,952 284,873 ---1,643,825
Total current liabilities 672,116 2,512,179 843,158 77,386 137,545 63,718 4,306,102Long-term liabilities:Compensated absences due in more than one year (note 2)41,452 27,723 120,591 -20,773 -210,539Advances from other funds -5,539,456 ----5,539,456Net OPEB liability due in more than one year (note 16)55,151 125,934 329,189 -197,721 -707,995Net pension liability due in more than one year (note 16)1,053,411 1,811,069 2,737,492 -1,023,851 -6,625,823
Total long-term liabilities 1,150,014 7,504,182 3,187,272 -1,242,345 -13,083,813
Total liabilities 1,822,130 10,016,361 4,030,430 77,386 1,379,890 63,718 17,389,915
DEFERRED INFLOWS OF RESOURCESDeferred inflows from pensions 37,648 64,727 97,837 -36,592 -236,804Deferred inflows from OPEB 2,098 4,791 12,525 -7,523 -26,937TOTAL DEFERRED INFLOWS OF RESOURCES 39,746 69,518 110,362 -44,115 -263,741
Net positionInvested in capital assets 5,229 3,538,516 14,404,989 8,121,540 549,518 1,905,102 28,524,894Unrestricted(122,826)19,446,271 3,231,614 7,935,021 1,469,775 461,868 32,421,723
Total net position $(117,597)22,984,787 17,636,603 16,056,561 2,019,293 2,366,970 60,946,617
138
3.B.a
Packet Pg. 512 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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, 2021
Business-Type Activities - Enterprise Funds
Community
Broadband Airport Pier
Stormwater
Management Cemetery
Parking
Authority
Total
nonmajor
enterprise funds
Operating revenuesCharges for services $ 3,299,401 14,951,713 2,931,534 1,609,230 2,443,201 - 25,235,079
Total operating revenues 3,299,401 14,951,713 2,931,534 1,609,230 2,443,201 -25,235,079
Operating expensesPersonnel services 996,721 1,305,682 2,534,288 -1,165,133 1,049 6,002,873Administrative indirect 121,003 923,091 612,697 -266,915 -1,923,706Contractual services 588,936 941,192 840,339 -347,107 -2,717,574Repairs and maintenance 111,697 918,311 643,619 -53,878 -1,727,505Materials and supplies 1,273,762 2,634,181 194,383 -454,584 1,707,582 6,264,492Utilities3,654 856,268 116,948 -123,474 -1,100,344Casualty property and liability costs 7,183 431,674 520,258 -84,173 -1,043,288Depreciation and amortization 10,459 335,690 907,215 324,607 44,313 16,263 1,638,547Other101,964 1,458,986 1,226,645 -6,574 -2,794,169
Total operating expenses 3,215,379 9,805,075 7,596,392 324,607 2,546,151 1,724,894 25,212,498
Operating income (loss)84,022 5,146,638 (4,664,858)1,284,623 (102,950)(1,724,894)22,581
Nonoperating revenues (expenses)Investment income (loss)(7,714)98,161 367 11,194 6,817 5,776 114,601Interest expense -(15,205)----(15,205)
Other nonoperating revenues -1,261,267 233,267 487,723 381,509 -2,363,766
Total nonoperating revenues (expenses) net (7,714)1,344,223 233,634 498,917 388,326 5,776 2,463,162
Income before transfers 76,308 6,490,861 (4,431,224) 1,783,540 285,376 (1,719,118) 2,485,743
Transfers in (note 11)--2,876,700 891,056 536,747 -4,304,503
Transfers out (note 11)(222,000) (1,873,492)(80,374) (1,631,181)- (10,998,895) (14,805,942)
Change in net position (145,692)4,617,369 (1,634,898)1,043,415 822,123 (12,718,013)(8,015,696)
Net position at beginning of year 28,095 18,367,418 19,271,501 15,013,146 1,197,170 15,084,983 68,962,313
Net position at end of year $(117,597)22,984,787 17,636,603 16,056,561 2,019,293 2,366,970 60,946,617
139
3.B.a
Packet Pg. 513 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
Community
Broadband Airport Pier
Stormwater
Management Cemetery
Parking
Authority
Total
nonmajor
enterprise
funds
Cash flows from operating activities:
Cash received from customers 2,081,642$ 14,683,260 3,483,566 1,394,658 2,201,976 — 23,845,102
Cash payments for materials and services (2,171,581) (8,269,561) (4,346,115) (241,013) (1,340,156) (1,643,864) (18,012,290)
Cash payments to employees for services (822,628) (1,407,142) (2,368,172) — (922,811) (1,049) (5,521,802)
Other revenue received — 1,261,267 233,267 487,723 381,509 — 2,363,766
Net cash provided by (used in)
operating activities (912,567) 6,267,824 (2,997,454) 1,641,368 320,518 (1,644,913) 2,674,776
Cash flows from noncapital financing activities:
Repayment of advances to other funds — — — (15,559) — — (15,559)
Advances from other funds 515,731 15,205 — — — — 530,936
Payment received from promissory note — — — — — 259,400 259,400
Other — — — — — — —
Transfers in — — 2,876,700 891,056 536,747 — 4,304,503
Transfers out (222,000) (1,873,492) (80,374) (1,631,181) — (10,998,895) (14,805,942)
Net cash provided by (used in)
noncapital financing activities 293,731 (1,858,287) 2,796,326 (755,684) 536,747 (10,739,495) (9,726,662)
Cash flows from capital and related financing activities:
Acquisition and construction of capital assets — (18,327) (2,115,777) — — — (2,134,104)
Reduction in long-term obligations — — — — — — —
Interest paid on long-term obligations — (15,205) — — — — (15,205)
Net cash used in capital and related
financing activities — (33,532) (2,115,777) — — — (2,149,309)
Cash flows from investing activities:
Investment income (loss) (4,739) 127,371 13,356 22,959 8,240 10,748,401 10,915,588
Net cash provided by (used in) investing activities (4,739) 127,371 13,356 22,959 8,240 10,748,401 10,915,588
Net increase (decrease) in cash
and cash equivalents (623,575) 4,503,376 (2,303,549) 908,643 865,505 (1,636,007) 1,714,393
Cash and cash equivalents at beginning of year 623,575 23,830,845 7,360,547 6,839,798 1,221,835 2,158,232 42,034,832
Cash and cash equivalents at end of year — 28,334,221 5,056,998 7,748,441 2,087,340 522,225 43,749,225
Cash and investments — 27,055,803 4,771,375 — 1,934,201 522,225 34,283,604
Restricted cash and investments — 1,278,418 285,623 7,748,441 153,139 — 9,465,621
Total cash and cash equivalents — 28,334,221 5,056,998 7,748,441 2,087,340 522,225 43,749,225
(Continued)
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the fiscal year ended June 30, 2021
Business-Type Activities - Enterprise Funds
1
140
3.B.a
Packet Pg. 514 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the fiscal year ended June 30, 2021
Business-Type Activities - Enterprise Funds
Community
Broadband Airport Pier
Stormwater
Management Cemetery
Parking
Authority
Total
nonmajor
enterprise
funds
Reconciliation of operating income (loss) to net
cash provided by (used in) operating activities:
Operating income (loss)84,022$ 5,146,638 (4,664,858) 1,284,623 (102,950) (1,724,894) 22,581
Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:
Add depreciation 10,459 335,690 907,215 324,607 44,313 16,263 1,638,547
Add allowance for doubtful accounts 10,654 527,044 753,457 1,524 40,304 — 1,332,983
Other revenue received — 1,261,267 233,267 487,723 381,509 — 2,363,766
Changes in assets and liabilities and deferred outflows
and inflows of resources:
(Increase) in accounts receivable (1,228,413) (842,421) (201,425) (216,096) (281,529) — (2,769,884)
Decrease in prepaids 8,463 40 — — — — 8,503
Increase (decrease) in accounts payable (350) (89,310) (206,701) (280,370) (3,451) 63,718 (516,464)
Increase in unearned revenue — 18,285 — — — — 18,285
Increase (decrease) in accrued liabilities (11,519) (13,196) (3,314) — 6,442 — (21,587)
Increase (decrease) in contracts payable 28,505 (16,588) 15,475 39,357 — — 66,749
Increase in deposits payable from restricted assets — 28,639 — — — — 28,639
Increase in compensated absences payable 16,297 6,745 8,305 — 10,783 — 42,130
Net OPEB liability and related changes in deferred
outflows and inflows of resources 16,354 29,709 19,864 — 16,379 — 82,306
Net pension liability and related changes in deferred
outflows and inflows of resources 152,961 (124,718) 141,261 — 208,718 — 378,222
Total adjustments (996,589) 1,121,186 1,667,404 356,745 423,468 79,981 2,652,195
Net cash provided by (used in)
operating activities (912,567)$ 6,267,824 (2,997,454) 1,641,368 320,518 (1,644,913) 2,674,776
Schedule of non-cash capital and related financing activities:
Capital assets acquired through accounts payable — — 207,663 — — — 207,663
1
141
3.B.a
Packet Pg. 515 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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. This fund predominately serves the City’s enterprise funds and is
reported as a business-type activity.
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. This fund predominately serves the City’s enterprise funds and is reported as a business-type activity.
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.
142
3.B.a
Packet Pg. 516 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
CITY OF SANTA MONICA, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2021
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 $22,266,173 2,205,421 14,080,317 6,395,819 2,335,093 68,265,111 115,547,934
Receivables:
Accounts 143,330 ---7,322 -150,652
Interest 35,347 5,680 11,954 7,690 -96,334 157,005
Inventory 6,952 -----6,952
Total current assets 22,451,802 2,211,101 14,092,271 6,403,509 2,342,415 68,361,445 115,862,543
Noncurrent assets:
Capital assets:
Construction in progress ----60,300 -60,300
Machinery and equipment 43,776,598 1,517,857 2,849 7,386 919 10,065 45,315,674
Less: accumulated depreciation (25,413,107)(1,471,490)(2,849)(7,386)(919)(10,065)(26,905,816)
Net capital assets 18,363,491 46,367 --60,300 -18,470,158
Total assets 40,815,293 2,257,468 14,092,271 6,403,509 2,402,715 68,361,445 134,332,701
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 671,696 ---369,247 -1,040,943
Deferred outflows from OPEB 65,082 ---3,045 -68,127
TOTAL DEFERRED OUTFLOWS OF RESOURCES 736,778 ---372,292 -1,109,070
Liabilities
Current liabilities:
Accounts payable 300,068 279,031 194,225 70,281 3,924 210,417 1,057,946
Accrued liabilities 72,053 ---46,565 -118,618
Contracts payable (retained percentage)-5,611 ----5,611
Compensated absences due within one year (note 2)76,368 ---38,801 -115,169
Claims payable due within one year (note 15)--62,610,214 2,478,793 -11,173,539 76,262,546
Total current liabilities 448,489 284,642 62,804,439 2,549,074 89,290 11,383,956 77,559,890
Long-term liabilities:
Compensated absences due in more than one year (note 2)111,681 ---116,143 -227,824
Claims payable due in more than one year (note 15)--10,691,670 1,890,701 -46,431,089 59,013,460
Net OPEB liability due in more than one year (note 16)258,334 ---12,087 -270,421
Net pension liability due in more than one year (note 16)3,889,262 ---2,138,016 -6,027,278
Total long-term liabilities 4,259,277 -10,691,670 1,890,701 2,266,246 46,431,089 65,538,983
Total liabilties 4,707,766 284,642 73,496,109 4,439,775 2,355,536 57,815,045 143,098,873
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 139,001 ---76,412 -215,413
Deferred inflows from OPEB 9,829 ---460 -10,289
TOTAL DEFERRED INFLOWS OF RESOURCES 148,830 ---76,872 -225,702
Net position
Invested in capital assets 18,363,491 46,367 --60,300 -18,470,158
Unrestricted 18,331,984 1,926,459 (59,403,838)1,963,734 282,299 10,546,400 (26,352,962)
Total net position $36,695,475 1,972,826 (59,403,838)1,963,734 342,599 10,546,400 (7,882,804)
143
3.B.a
Packet Pg. 517 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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, 2021
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 revenuesCharges for services $10,716,549 439,967 17,451,656 5,200,000 4,065,875 19,075,424 56,949,471
Total operating revenues 10,716,549 439,967 17,451,656 5,200,000 4,065,875 19,075,424 56,949,471
Operating expensesPersonnel services 3,329,505 ---1,365,217 -4,694,722Administrative indirect 937,158 ---339,428 -1,276,586Contractual services 70,384 -22,011 86,441 89,775 657,709 926,320Repairs and maintenance 1,515,843 -29,397 29,397 1,451 59,296 1,635,384Materials and supplies 2,543,936 2,208,237 --34,565 99 4,786,837Utilities33,239 ---1,367 -34,606Casualty property and liability costs 196,801 ---27,367 -224,168Claims expense net of claims reserve adjustment --60,359,341 1,648,825 -11,845,381 73,853,547Insurance and bonds --1,940,716 1,934,215 3,437,989 580,477 7,893,397Miscellaneous fees and costs --1,156,769 281,989 14,701 480,332 1,933,791Depreciation and amortization 4,718,592 92,735 ----4,811,327Other315,749 -183 21 55 2,856 318,864
Total operating expenses 13,661,207 2,300,972 63,508,417 3,980,888 5,311,915 13,626,150 102,389,549
Operating income (loss)(2,944,658)(1,861,005)(46,056,761)1,219,112 (1,246,040)5,449,274 (45,440,078)
Nonoperating revenuesInvestment income 53,626 8,425 20,186 7,270 -204,777 294,284Gain on disposal of capital assets 154,116 -----154,116Other nonoperating revenues 814 ----39,118 39,932
Total nonoperating revenues 208,556 8,425 20,186 7,270 -243,895 488,332
Income (loss) before transfers (2,736,102)(1,852,580)(46,036,575)1,226,382 (1,246,040)5,693,169 (44,951,746)
Transfers in (note 11)----1,992,254 -1,992,254Transfers out (note 11)(60,833)-(504,600)(328,722)-(1,334,810)(2,228,965)
Change in net position (2,796,935)(1,852,580)(46,541,175)897,660 746,214 4,358,359 (45,188,457)
Net position at beginning of year 39,492,410 3,825,406 (12,862,663)1,066,074 (403,615)6,188,041 37,305,653
Net position at end of year (note 10)$36,695,475 1,972,826 (59,403,838)1,963,734 342,599 10,546,400 (7,882,804)
144
3.B.a
Packet Pg. 518 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
VehicleManagement InformationTechnologyReplacementand ServicesSelf-InsuranceGeneral Liability/ Auto Self-Insurance BusSelf-InsuranceRisk ManagementAdministrationSelf-InsuranceWorkers'CompensationTotal internalservice fundsCash flows from operating activities: Cash received from customers 10,659,265$ 439,96737,751,6565,200,6664,077,32019,075,42477,204,298 Cash payments for materials and services(6,663,909)(2,043,095)(3,262,867)(2,271,116)(3,952,776)(2,136,760) (20,330,523) Cash payments to employees for services(3,169,690)— — — (1,539,480)— (4,709,170) Cash payments for claims and related expenses— — (27,170,479)(2,450,009)— (9,835,031) (39,455,519) Other revenue received814— — — — 39,11839,932Net cash provided by (used in) operating activities826,480(1,603,128)7,318,310479,541(1,414,936)7,142,75112,749,018Cash flows from noncapital financing activities: Transfers in— — — — 1,992,254— 1,992,254 Transfers out(60,833)— (504,600)(328,722)— (1,334,810)(2,228,965)Net cash provided by (used in) noncapital financing activities(60,833)— (504,600)(328,722)1,992,254(1,334,810)(236,711)Cash flows from capital and related financing activities: Acquisition and construction of capital assets(589,326)— — — (60,300)— (649,626) Proceeds from sale of capital assets238,684— — — — — 238,684Net cash used in capital and related financing activities (350,642)— — — (60,300)— (410,942)Cash flows from investing activities – investment income84,70913,03525,99017,523— 288,767430,024Net increase (decrease) in cash and cash equivalents499,714(1,590,093)6,839,700168,342517,0186,096,70812,531,389Cash and cash equivalents at beginning of year21,766,4593,795,5147,240,6176,227,4771,818,07562,168,403 103,016,545Cash and cash equivalents at end of year22,266,1732,205,42114,080,3176,395,8192,335,09368,265,111 115,547,934Reconciliation of operating income (loss) to net cash provided by (used in) operating income (loss): Operating income (loss)(2,944,658)$ (1,861,005)(46,056,761)1,219,112(1,246,040)5,449,274 (45,440,078) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Add depreciation4,718,59292,735— — — — 4,811,327 Other revenue received814— — — — 39,11839,932 Changes in assets and liabilities and deferred outflowsand inflows of resources:(Increase) decrease in accounts receivable(57,284)— — 66611,445275(44,898)Decrease in due from other funds— — 20,300,000— — — 20,300,000Decrease in inventory36,983— — — — — 36,983Increase (decrease) in accounts payable(1,087,782)159,531 (113,791)60,947(6,078)(355,991)(1,343,164)(Decrease) in accrued liabilities(17,467)— — — (26,229)— (43,696)Increase in compensated absences payable6,212— — — 15,308— 21,520Increase (decrease) in claims payable— — 33,188,862(801,184)— 2,010,07534,397,753Increase in contracts payable— 5,611 — — — — 5,611Net OPEB liability and related changes in deferred outflows and inflows of resources8,115— — — (65,149)— (57,034)Net pension liability and related changes in deferred outflows and inflows of resources162,955— — — (98,193)— 64,762Total adjustments3,771,138257,87753,375,071(739,571)(168,896)1,693,47758,189,096 Net cash provided by (used in) operating activities826,480$ (1,603,128)7,318,310479,541(1,414,936)7,142,75112,749,018Schedule of non-cash capital and related financing activities: Gain on disposal of capital assets154,116— — — — — 154,116 CITY OF SANTA MONICA, CALIFORNIACombining Statement of Cash FlowsInternal Service FundsFor the fiscal year ended June 30, 20211453.B.aPacket Pg. 519Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
City of Santa Monica, California
Year Ended June 30, 2021
STATISTICAL SECTION
3.B.a
Packet Pg. 520 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
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 148
2 Changes in Net Position - Last Ten Fiscal Years 149
3 Fund Balance of Governmental Funds - Last Ten Fiscal Years 152
4 Changes in Fund Balance of Governmental Funds - Last Ten Fiscal Years 153
Revenue Capacity Information
These schedules contain information to help the reader assess the government's most significant local
revenue source, the property tax.
5 General Fund Tax Revenues by Source - Last Ten Fiscal Years 155
6 Assessed Value and Actual Value of Taxable Property - Last Ten Fiscal Years 156
7 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 157
8 Principal Property Taxpayers - Current Fiscal Year and Nine Years Ago 158
9 Property Tax Levies and Collections - Last Ten Fiscal Years 159
10 Taxable Transactions by Type of Business - Last Ten Calendar Years 160
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 161
12 Ratios of General Bonded Debt - Last Ten Fiscal Years 162
13 Direct and Overlapping Governmental Activities Debt 163
14 Computation of Legal Debt Margin - Last Ten Fiscal Years 164
15 Wastewater Enterprise Revenue Bonds Coverage - Last Ten Fiscal Years 165
CITY OF SANTA MONICA, CALIFORNIA
For the fiscal year ended June 30, 2021
STATISTICAL SECTION (unaudited)
146
3.B.a
Packet Pg. 521 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
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 166
17 Principal Employers - Current Year and Nine Years Ago 167
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
168
19 Operating Indicators by Function/Program - Last Ten Fiscal Years 169
20 Capital Assets Statistics by Function/Program - Last Ten Fiscal Years 170
STATISTICAL SECTION (unaudited), continued
CITY OF SANTA MONICA, CALIFORNIA
For the fiscal year ended June 30, 2021
147
3.B.a
Packet Pg. 522 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 12020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 (1) 2013-14 2012-13 2011-12Governmental activitiesNet investment in capital assets $ 764,429,080 756,311,492 730,135,331 720,769,829 731,842,870 728,041,792 705,144,194 698,223,620 702,392,065 708,564,360Restricted238,658,192 228,300,303 226,867,281 209,428,190 198,720,012 196,524,874 178,624,757 136,510,661 126,827,943 171,964,389 Unrestricted(143,731,308) (56,670,932) 14,716,293 54,400,893 44,676,618 19,956,676 24,292,525 376,983,696 372,285,005 379,302,789 Total governmental activities net position859,355,964 927,940,863 971,718,905 984,598,912 975,239,500 944,523,342 908,061,476 1,211,717,977 1,201,505,013 1,259,831,538 Business-type activitiesNet investment in capital assets442,507,176 454,015,095 453,239,103 437,613,109 445,314,626 440,369,455 447,257,495 472,808,694 450,345,204 448,028,200 Restricted13,030,039 17,045,768 19,925,028 23,409,084 18,835,497 12,797,570 15,102,480 11,665,453 13,739,411 16,024,235 Unrestricted71,173,841 118,563,055 157,216,757 136,350,263 127,841,169 130,752,666 50,488,321 115,636,742 126,804,668 104,588,473 Total business-type activities net position526,711,056 589,623,918 630,380,888 597,372,456 591,991,292 583,919,691 512,848,296 600,110,889 590,889,283 568,640,908 Primary governmentNet investment in capital assets1,206,936,256 1,210,326,587 1,183,374,434 1,158,382,938 1,177,157,496 1,168,411,247 1,152,401,689 1,171,032,314 1,152,737,269 1,156,592,560 Restricted251,688,231 245,346,071 246,792,309 232,837,274 217,555,509 209,322,444 193,727,237 148,176,114 140,567,354 187,988,624 Unrestricted(72,557,467) 61,892,123 171,933,050 190,751,156 172,517,787 150,709,342 74,780,846 492,620,438 499,089,673 483,891,262 Total primary government net position$ 1,386,067,020 1,517,564,781 1,602,099,793 1,581,971,368 1,567,230,792 1,528,443,033 1,420,909,772 1,811,828,866 1,792,394,296 1,828,472,446(1) reduction in 2014-15 unrestricted net position due primarily to the implementation of GASB 68CITY OF SANTA MONICA, CALIFORNIANet Position by ComponentLast Ten Fiscal Years(Accrual Basis of Accounting)1483.B.aPacket Pg. 523Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 22020-212019-202018-192017-182016-172015-16 2014-15 2013-14 2012-13 2011-12ExpensesGovernmental activities:General government$ 131,655,331 83,627,840 87,251,208 94,164,749 69,476,662 56,728,329 74,025,357 73,188,788 56,319,178 65,640,271Public safety168,577,199 171,485,637 160,531,648 152,313,163 133,497,286 128,149,081 112,278,370 113,899,354 103,594,567 108,205,471General services67,174,450 95,598,940 85,528,797 85,543,024 84,190,176 84,178,175 71,906,263 69,637,595 64,654,131 55,341,929Community services (3)80,831,581 75,276,083 73,315,694 73,826,217 57,709,552 58,427,336 53,694,823 54,339,022 94,635,112 62,145,219Library9,390,658 15,023,233 14,985,755 14,802,469 12,945,988 14,338,093 12,678,896 13,286,929 16,179,779 11,899,948Community development (4)39,576,169 67,260,671 60,314,000 58,442,889 54,613,906 59,633,639 53,831,747 53,652,994 54,539,141 181,970,013Interest on long-term debt5,091,436 5,146,6636,187,3334,375,3242,490,698 2,668,433 3,521,630 3,915,313 3,898,325 6,585,618Total governmental activities502,296,824 513,419,067 488,114,435 483,467,835 414,924,268 404,123,086 381,937,086 381,919,995 393,820,233 491,788,469 Business-type activities:Water50,202,882 21,651,904 23,490,062 25,659,062 23,583,279 23,259,781 21,356,497 24,750,234 20,244,099 19,665,696Resource recovery and recycling28,722,152 29,322,186 27,292,721 26,293,628 25,512,992 25,419,861 23,819,237 24,115,496 22,743,427 25,065,338Community broadband3,215,379 3,065,9262,519,2981,926,1491,907,535— — — — — Pier7,596,392 8,448,0659,265,4937,880,1317,597,438 6,935,901 6,909,632 6,310,236 6,145,567 5,803,944Wastewater19,841,075 17,751,175 20,423,956 18,802,613 17,855,472 16,485,444 17,335,625 20,479,514 16,853,861 18,186,844Civic auditorium (1)— — — — — — — — 4,691,051 3,239,999Airport9,820,280 12,477,4369,627,471 12,912,8698,595,011 5,335,556 5,293,714 5,440,949 5,188,707 5,270,688Storm water management363,288 1,206,606380,752359,488347,197 2,447,698 2,172,116 651,361 406,721 411,985Cemetery2,546,151 2,273,1131,805,7032,071,6502,340,685 2,184,834 2,154,147 2,077,486 1,852,839 1,812,098Big Blue Bus93,473,973 100,300,186 100,093,505 95,349,727 93,652,844 90,560,535 83,106,447 79,215,680 79,238,668 79,835,156Parking authority1,724,89427,937422,090216,25316,17817,742 403,822 369,367 295,651 315,736Total business-type activities217,506,466 196,524,534 195,321,051 191,471,570 181,408,631 172,647,352 162,551,237 163,410,323 157,660,591 159,607,484Total primary governmental activities expenses $ 719,803,290 709,943,601 683,435,486 674,939,405 596,332,899 576,770,438 544,488,323 545,330,318 551,480,824 651,395,953Program revenuesGovernmental activities:Charges for services:General government$ 19,883,077 20,087,674 19,645,270 19,860,025 18,447,588 19,279,411 56,875,636 55,834,348 51,075,759 48,239,920Public safety17,035,556 17,918,929 21,765,362 24,701,782 22,452,698 24,285,947 22,601,990 22,736,167 21,329,504 22,033,156General services37,249,257 39,978,065 45,214,114 43,938,775 44,701,036 49,336,541 2,144,800 2,236,781 2,463,402 2,429,537Community services (3)5,019,411 19,145,932 23,412,204 25,508,247 20,835,717 22,466,168 21,359,942 20,448,165 17,921,711 16,083,451Library23,764260,503437,269390,306388,273 487,809 601,618 614,715 486,204 465,891Community development (4)27,194,589 28,859,612 25,710,747 26,517,764 29,898,563 42,858,129 26,957,697 19,276,227 28,217,736 16,712,921Operating grants and contributions58,477,255 41,367,622 32,835,027 28,012,480 27,933,580 24,647,506 26,332,256 27,773,525 25,798,880 26,739,187Capital grants and contributions640,520 1,506,0485,863,1925,378,2909,756,158 12,616,479 5,381,978 12,583,594 5,082,847 3,369,221Total governmental activities program revenues 165,523,429 169,124,385 174,883,185 174,307,669 174,413,613 195,977,990 162,255,917 161,503,522 152,376,043 136,073,284(continues next page)CITY OF SANTA MONICA, CALIFORNIAChanges in Net PositionLast Ten Fiscal Years1493.B.aPacket Pg. 524Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 22020-212019-202018-192017-182016-172015-16 2014-15 2013-14 2012-13 2011-12CITY OF SANTA MONICA, CALIFORNIAChanges in Net PositionLast Ten Fiscal Years(continues from previous page)Business-type activities:Charges for services:Water29,638,341 27,872,084 26,851,412 25,946,122 24,280,023 22,311,686 22,664,712 22,902,640 22,254,867 19,897,464Resource recovery and recycling26,842,779 27,630,068 27,444,457 26,393,055 25,953,777 26,831,010 24,425,879 23,271,775 23,526,423 22,253,758Community broadband3,299,401 3,301,5632,489,7162,200,7331,924,777— — — — — Pier3,164,586 8,547,9859,188,9248,453,6188,202,073 7,443,351 6,813,625 5,953,173 4,589,503 6,004,005Wastewater17,330,719 18,366,169 19,626,512 19,802,308 20,221,930 19,316,170 20,162,516 21,033,699 21,126,054 20,007,219Civic auditorium (1)— — — — — — — — 1,468,300 1,667,172Airport15,946,198 16,148,655 15,690,488 14,132,521 13,149,493 8,679,711 5,897,240 5,396,797 4,185,172 3,891,716Storm water management1,609,230 1,370,3111,515,8101,462,6831,869,476 1,500,877 1,458,352 1,395,628 1,439,522 1,419,980Cemetery2,443,201 1,789,7481,730,3512,043,1851,713,212 1,501,371 1,604,607 1,325,778 1,315,119 1,133,990Big Blue Bus5,366,846 14,194,438 16,313,026 25,552,378 19,202,854 19,895,338 16,664,916 17,060,923 16,869,809 16,614,711Parking authority— — — — — — — — — 161,504Operating grants and contributions 63,900,481 59,740,351 59,339,434 44,278,243 48,313,010 48,652,428 47,098,487 40,691,095 38,229,718 38,424,357Capital grants and contributions 4,623,832 10,047,937 23,851,525 17,959,046 23,062,625 23,924,743 10,333,281 28,431,734 21,489,216 25,609,158Business-type activities program revenues 174,165,614 189,009,309 204,041,655 188,223,892 187,893,250 180,056,685 157,123,615 167,463,242 156,493,703 157,085,034Total primary government program revenues 339,689,043 358,133,694 378,924,840 362,531,561 362,306,863 376,034,675 319,379,532 328,966,764 308,869,746 293,158,318Net (expense):Governmental activities (336,773,395) (344,294,682) (313,231,250) (309,160,166) (240,510,655) (208,145,096) (219,681,169) (220,416,473)(241,444,190) (355,715,185)Business-type activities (43,340,852) (7,515,225) 8,720,604 (3,247,678) 6,484,619 7,409,333 (5,427,622) 4,052,919 (1,166,888) (2,522,450)Total primary government net expense (380,114,247) (351,809,907) (304,510,646) (312,407,844) (234,026,036) (200,735,763) (225,108,791)(216,363,554) (242,611,078) (358,237,635)General revenues and other changesin net positionGovernmental activities:Taxes:Business 33,644,559 33,894,714 31,947,056 31,575,297 30,711,579 30,799,020 31,468,959 30,847,105 28,467,477 27,382,495Property75,324,679 67,791,186 62,615,270 56,954,925 56,423,891 50,452,377 52,771,401 47,729,105 43,477,118 59,161,313Transient occupancy (2)20,691,803 48,624,638 60,762,881 60,631,025 55,532,325 51,021,050— — — — Sales and use64,301,901 64,665,646 73,709,191 68,479,438 54,505,239 54,802,839 51,089,716 49,210,039 47,880,634 45,831,961Utility users (2)27,840,035 28,026,008 28,306,582 29,288,341 29,437,753 30,772,815— — — — Real property transfer (2)9,334,371 6,856,6639,808,0728,169,163 10,951,756 7,850,960— — — — Parking facility (2)7,374,354 11,072,445 12,699,044 11,557,811 11,231,324 10,718,156— — — — Other3,512,898 3,441,9083,275,9123,285,6703,256,799 3,111,764 101,677,478 95,604,341 91,384,006 84,935,499Settlement income— — — — — — — — 9,608,247 3,750,000Other revenues7,201,899 9,263,443 11,328,286 11,168,233 11,724,228 15,572,745 11,518,022 18,092,058 19,917,250 120,208,757Investment earnings3,268,921 14,397,259 21,569,4264,360,7993,105,772 7,049,816 4,084,621 6,613,322 1,431,317 5,791,811Special Item(9,825,000) (34,215,371)— 43,678,729(1,103,146) (11,893,876)— — — — Extraordinary gain (loss)— — — — — (12,620,539) (5,106,828) (19,149,679) (48,185,126) 261,255,080Transfers27,184,761 46,698,101 (15,670,477)1,381,4595,449,293 6,969,835 2,341,674 1,683,146 (10,863,258) (6,141,048)Total governmental activities269,855,181 300,516,640 300,351,243 330,530,890 271,226,813 244,606,962 249,845,043 230,629,437 183,117,665 602,175,868(continues next page)1503.B.aPacket Pg. 525Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 22020-212019-202018-192017-182016-172015-16 2014-15 2013-14 2012-13 2011-12CITY OF SANTA MONICA, CALIFORNIAChanges in Net PositionLast Ten Fiscal Years(continues from previous page)Business-type activities:Other revenues 3,165,760 7,068,596 3,049,645 4,580,112 4,312,287 3,723,521 6,230,537 5,207,445 12,540,746 5,310,643Investment earnings 280,080 7,810,542 7,051,704 1,573,331 1,620,842 3,489,865 1,408,083 1,644,388 11,259 1,125,241Special Item — (1,422,782) — 6,408,992 1,103,146 10,617,561 — — — — Extraordinary gain (loss) — — — — — 4,837,753 — — — — Transfers (27,184,761) (46,698,101) 15,670,477 (1,381,459) (5,449,293) (6,969,835) (2,341,674) (1,683,146) 10,863,258 6,141,048Total business-type activities (23,738,921) (33,241,745) 25,771,826 11,180,976 1,586,982 15,698,865 5,296,946 5,168,687 23,415,263 12,576,932Total primary government 246,116,260 267,274,895 326,123,069 341,711,866 272,813,795 260,305,827 255,141,989 235,798,124 206,532,928 614,752,800Changes in net positionGovernmental activities (66,918,214) (43,778,042) (12,880,007) 21,370,724 30,716,158 36,461,866 30,163,874 10,212,964 (58,326,525) 246,460,683Business-type activities (67,079,773) (40,756,970) 34,492,430 7,933,298 8,071,601 23,108,198 (130,676) 9,221,606 22,248,375 10,054,482Total primary government$ (133,997,987) (84,535,012) 21,612,423 29,304,022 38,787,759 59,570,064 30,033,198 19,434,570 (36,078,150) 256,515,165(1) Civic auditorium merged with General services in FY 13-14.(2) Included in "Other" in prior fiscal years.(3) Cultural and recreation services restructured to Community services in FY 20-21.(4) Housing and community development restructured to Community development in FY 20-21.1513.B.aPacket Pg. 526Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 3
2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
General Fund
Nonspendable $9,550,950 13,326,312 11,554,753 12,853,565 15,419,253 21,062,205 23,725,864 22,257,819 22,179,119 22,181,490
Restricted 11,119,497 21,447,581 69,975,839 97,740,458 1,976,576 18,330,042 17,951,299 12,371,619 23,808,940 43,056,449
Committed — 1,671,078 1,943,558 2,478,476 4,760,409 31,365 520,574 519,937 519,506 640,000Assigned114,285,898 143,176,947 182,199,922 256,273,855 256,059,633 280,303,334 218,630,183 212,669,876 220,409,168 233,153,471
Unassigned 45,891,477 46,922,135 75,004,708 66,464,774 68,082,651 67,347,773 114,196,108 118,192,052 117,324,362 117,225,871
Total General Fund 180,847,822 226,544,053 340,678,780 435,811,128 346,298,522 387,074,719 375,024,028 366,011,303 384,241,095 416,257,281
All other governmental funds
Nonspendable 18,962,549 14,914,052 13,864,136 12,752,261 12,149,082 11,618,768 11,463,849 30,932,430 31,524,610 23,331,591
Restricted 217,524,477 210,347,503 209,832,078 192,169,730 184,752,868 167,750,111 144,902,038 128,610,718 124,852,862 123,658,262
Committed 114,924,058 100,981,037 80,754,976 59,897,829 44,021,082 26,876,316 17,877,709 4,404,491 4,372,829 872,830Assigned— — — — 414,544 927,562 9,649,617 18,033,673 15,057,474 32,550,023
Unassigned (21,394,804)(2,018,186)(3,571,636)(2,111,163)(4,785,448)(7,279,890)(814,287)(966,157)(1,148,932)(187,396)
Total all other governmental funds $330,016,280 324,224,406 300,879,554 262,708,657 236,552,128 199,892,867 183,078,926 181,015,155 174,658,843 180,225,310
CITY OF SANTA MONICA, CALIFORNIA
Fund Balance of Governmental Funds
Last Ten Fiscal Years(Modified Accrual Basis of Accounting)
152
3.B.a
Packet Pg. 527 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 42020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12RevenuesProperty taxes 75,324,679$ 67,791,186 62,615,270 56,954,925 56,423,891 50,452,377 55,044,307 50,113,693 44,392,416 40,226,124Incremental property taxes (1) — — — — — — — — — 19,794,851Sales & use taxes 64,301,901 64,665,646 73,709,191 68,479,438 54,505,239 54,802,839 51,089,716 49,210,039 47,880,634 45,831,961Transient occupancy taxes (3) 20,691,803 48,624,638 60,762,881 60,631,025 55,532,325 51,021,050 — — — — Utility user taxes (3) 27,840,035 28,026,008 28,306,582 29,288,341 29,437,753 30,772,815 — — — — Business license taxes (3) 33,644,559 33,894,714 31,947,056 31,050,087 30,118,555 29,893,341 — — — — Other taxes 20,221,623 21,371,016 25,783,028 23,537,854 26,032,957 22,586,559 132,075,022 126,836,936 118,983,521 111,350,245License and permits 26,160,634 38,618,898 45,099,447 41,950,905 43,134,856 41,367,924 39,490,688 36,967,493 33,777,567 30,608,592Intergovernmental 58,616,587 43,236,083 38,315,887 37,496,608 39,612,637 39,612,770 31,013,327 33,068,906 26,420,260 28,277,049Charges for services 54,316,862 61,396,593 65,847,661 66,615,431 63,821,708 61,667,576 56,381,352 55,976,703 50,767,945 52,613,331Fines and forfeitures 7,779,862 10,357,155 14,877,572 16,362,857 15,461,662 15,904,736 16,287,290 16,253,546 15,303,990 15,651,820Investment earnings 3,173,678 12,759,040 20,487,980 3,406,372 2,835,151 6,721,207 4,002,879 6,697,552 1,519,576 4,989,972Interest from prmissory note 5,399,246 — — — — — — — — — Rental income 6,133,385 9,104,387 8,986,944 9,596,580 9,047,246 11,683,408 10,602,671 10,311,967 9,843,633 9,619,254Settlement income — — — 14,085,000 6,103,175 2,433,175 2,433,175 2,433,175 52,287,404 33,277,271Other 8,292,026 15,913,257 13,220,933 15,896,665 18,757,976 34,384,558 21,058,609 19,309,109 25,518,965 119,494,012Total revenue411,896,880 455,758,621 489,960,432 475,352,088 450,825,131 453,304,335 419,479,036 407,179,119 426,695,911 511,734,482 Expenditures CurrentGeneral government 93,337,089 137,222,743 105,337,602 89,671,970 70,164,311 61,354,272 74,741,301 68,308,134 62,250,475 63,819,021Public safety 153,941,421 173,587,760 168,292,252 144,607,883 136,266,910 132,629,455 117,186,887 111,737,328 104,466,191 106,215,553General services 84,908,611 78,127,241 83,416,269 87,758,312 83,912,385 88,130,346 71,370,399 57,755,687 58,014,505 77,196,770Community services 83,984,895 82,917,053 71,499,049 71,348,237 56,868,240 54,742,936 50,430,614 50,386,583 64,104,725 60,322,014Library 8,806,350 13,034,198 13,663,753 12,967,345 12,476,127 12,667,433 12,025,143 17,158,001 14,880,934 11,323,906Community development 33,008,898 62,374,714 56,563,679 56,248,372 53,807,030 67,085,802 53,711,340 72,037,131 107,699,039 197,257,796Debt servicePrincipal 3,305,000 4,755,000 4,630,000 9,039,900 6,255,000 8,788,463 6,075,000 5,920,000 3,365,000 13,180,714Interest 6,054,223 6,785,313 6,310,437 3,596,620 3,014,688 3,392,287 3,785,591 3,966,495 3,942,925 12,312,625Bond issuance costs 340,135 — 4,025 938,932 — 535,048 — — — 441,993Total expenditures 467,686,622 558,804,022 509,717,066 476,177,571 422,764,691 429,326,042 389,326,275 387,269,359 418,723,794 542,070,392 (continues next page)CITY OF SANTA MONICA, CALIFORNIAChanges in Fund Balance of Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)1533.B.aPacket Pg. 528Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 42020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12CITY OF SANTA MONICA, CALIFORNIAChanges in Fund Balance of Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)(continues from previous page)Excess (deficiency) of revenuesover (under) expenditures(55,789,742) (103,045,401) (19,756,634) (825,483) 28,060,440 23,978,293 30,152,761 19,909,760 7,972,117 (30,335,910)Other financing sources (uses)Transfers in 75,609,011 73,508,634 46,580,497 41,609,095 48,828,408 24,241,261 19,778,209 26,210,910 21,906,283 98,800,641Transfers out (48,577,094) (27,057,385) (83,785,317) (40,405,415) (43,585,095) (17,271,426) (17,289,889) (24,648,414) (32,010,088) (105,257,875)Long-term debt issued — — — — — — — — — 32,178,250Refunding bonds issued — — — — — 26,360,000 — — — 19,950,000Bonds issued 19,700,000 — — 102,785,000 — — — — — — Premium on bonds issued 3,711,635 — — 12,247,767 — 2,020,710 — — — 4,339,840Payments to refunded bond escrow agent (23,066,482) — — — — (27,826,666) — — — (22,289,654)Total other financing sources (uses) 27,377,070 46,451,249 (37,204,820) 116,236,447 5,243,313 7,523,879 2,488,320 1,562,496 (10,103,805)27,721,202Special item (9,825,000) (34,195,723) — — (37,420,689) (4,462,166) — — (21,254,908) — Extraordinary gain (loss) — — — — — 324,615 (21,564,585) (33,345,736) (14,196,057) 13,703,213Net change in fund balance(38,237,672)$ (90,789,875)$ (56,961,454)$ 115,410,964 (4,116,936) 27,364,621 11,076,496 (11,873,480) (37,582,653) 11,088,505 Debt service as a percentage of noncapitalexpenditures (2)2.27%2.49% 2.41% 2.91% 2.33% 3.16% 2.65% 2.76% 2.07% 5.23%(1) Incremental property tax was received by the redevelopment agency which was dissolved in FY 2011-12(2) Calculation includes only the principal and interest components of debt service expenditures when calculating this ratio for all years.(3) Included in "Other taxes" in prior fiscal years.1543.B.aPacket Pg. 529Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 5
2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
Sales and use taxes 64,302$ 64,666 73,709 68,480 54,505 54,803 51,090 49,210 47,881 45,832
Utility user taxes 27,840 28,026 28,307 29,288 29,438 30,773 32,066 32,817 31,450 31,296
Transient occupancy taxes 20,692 48,625 60,763 60,631 55,532 51,021 47,629 44,396 40,997 36,143
Property taxes (2)75,325 67,791 62,615 56,955 56,424 50,452 55,044 50,114 44,392 40,226
Business license taxes 33,645 33,895 31,947 31,575 30,712 30,799 30,354 29,783 27,518 26,325
Parking facility tax 7,374 11,072 12,699 11,558 11,231 10,718 11,072 10,598 9,954 9,394
Documentary Transfer Tax 9,334 6,857 9,808 8,169 10,952 7,851 7,903 6,273 6,027 5,192
Vehicle license fees 68 74 44 49 42 38 38 39 48 46
Condominium taxes 3 43 25 9 38 73 45 14 18 37
Total 238,583$ 261,049$ 279,917 266,714 248,874 236,528 235,241 223,244 208,285 194,491
(1)
(2)
Source: City of Santa Monica Finance Department
Source
CITY OF SANTA MONICA, CALIFORNIA
General Fund Tax Revenues by Source (1)
Last Ten Fiscal Years
(In Thousands)
Does not include Highway Users Taxes, which are recorded in the Gas Tax Fund, Unit Dwelling Taxes, which are recorded in the Parks and Recreation Facilities Fund, or TORCA Conversion Taxes, which are recorded in the TORCA Fund.
Includes ad valorem property taxes for purposes of paying debt service on general obligation bonds. Does not include tax increment received by redevelopment area.
155
3.B.a
Packet Pg. 530 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
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)
2020-21 $ 25,433,374 $ 17,124,652 $ 369,459 $-$ 42,927,485 $ 1,975,152 $ 40,952,333 $ 1,099,941 $ 42,052,274 1.00%
2019-20 23,887,232 16,243,029 84,504 - 40,214,765 1,699,358 38,515,407 1,005,939 39,521,346 1.00%
2018-19 22,406,863 15,268,820 428,740 - 38,104,423 1,628,684 36,475,739 1,002,111 37,477,850 1.00%
2017-18 20,799,168 14,235,956 124,391 - 35,159,515 1,656,924 33,502,591 925,241 34,427,832 1.00%
2016-17 19,308,450 13,550,065 48,643 - 32,907,158 653,548 32,253,610 906,371 33,159,981 1.00%
2015-16 17,890,583 12,932,934 472,362 - 31,295,879 1,042,924 30,252,955 902,502 31,155,457 1.00%
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%
(1) Excludes 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)
156
3.B.a
Packet Pg. 531 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 7
Fiscal City County School Miscellaneous
year General Fund General Fund districts special districts Total
2020-21 0.01$ 1.00$ 0.16$ — 1.17$
2019-20 0.01 1.00 0.17 — 1.18
2018-19 0.01 1.00 0.12 — 1.13
2017-18 0.01 1.00 0.14 — 1.15
2016-17 0.01 1.00 0.13 — 1.14
2015-16 0.01 1.00 0.13 — 1.14
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
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 arecollectedbytheCounty,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 $1.00 of the County General Fund amount.
Source:Los Angeles County Auditor-Controller
157
3.B.a
Packet Pg. 532 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 8
Taxable Taxable
assessed assessed
Taxpayer value Rank value Rank
SC Enterprises SMBP LLC 1,021,938,000$ 1 2.42 %265,000,000$ 5 1.12 %
Douglas Emmett Inc 810,585,027 2 1.92 303,472,566 3 1.28
California Colorado Center LLC 554,203,160 3 1.31 472,844,007 1 1.99
Water Garden Company 537,628,408 4 1.27 458,264,878 2 1.93
Office Block Investment LLC 390,100,060 5 0.92 — —
Macerich Company LLC 357,633,887 6 0.85 268,175,478 4 1.13
SM Campus LLC 327,930,000 7 0.78 — —
New Santa Monica Beach Hotel LLC 306,529,761 8 0.73 137,172,110 9 0.58
MDP SPE 1 LP ET AL 276,229,585 9 0.65 — —
Kite Pharma Inc 219,770,337 10 0.52 — —
CREP 2700 Holdings LLC — — 227,973,476 6 0.96
Ocean Avenue LLC — — 146,369,459 7 0.62
LUI2 LA Lantana LP — — 140,909,172 8 0.59
Rand Corporation — — 131,855,052 10 0.56
Total principal property taxpayers
assessed value 4,802,548,225$ 11.37 %2,552,036,198$ 10.76 %
Total City net taxable assessed value 42,272,100,207$ 100.00 %23,741,414,643$ 100.00 %
Source: City of Santa Monica Finance Department; Hdl, Coren and Cone; Los Angeles County Auditor-Controller
Percentage Percentage
CITY OF SANTA MONICA, CALIFORNIA
Principal Property Taxpayers
Current Fiscal Year and Nine Years Ago
2020-21 2011-12
value value
of total City of total City
taxable taxable
assessed assessed
158
3.B.a
Packet Pg. 533 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 9
Fiscal year
Total secured tax
levy
Current secured
tax collections
Delinquent
secured tax
collections (1)
Total tax
collections
Outstanding
delinquent taxes
(2)
2020-21 36,996,999$ 36,306,207$ 98.1 %613,376$ 36,919,583$ 99.8 %542,504$ 1.5 %
2019-20 34,710,721 33,896,039 97.7 540,988 34,437,027 99.2 452,675 1.3
2018-19 32,779,676 32,167,281 98.1 419,000 32,586,281 99.4 407,817 1.2
2017-18 30,578,295 30,099,534 98.4 479,245 30,578,779 100.0 379,776 1.2
2016-17 30,859,806 30,545,235 99.0 489,991 31,035,226 100.6 375,288 1.2
2015-16 25,198,360 27,662,256 109.8 512,080 28,174,336 111.8 358,568 1.4
2014-15 26,567,114 26,190,114 98.6 600,642 26,790,756 100.8 438,248 1.6
2013-14 25,173,273 24,689,372 98.1 570,037 25,259,409 100.3 512,940 2.0
2012-13 23,446,717 23,428,590 99.9 713,956 24,142,546 103.0 585,417 2.5
2011-12 23,211,627 22,641,826 97.5 645,927 23,287,753 100.3 661,315 2.8
(1)Exclusive of penalties and collections related to tax overrides for debt service on general obligation bonds.
(2)
Source: County of Los Angeles
Reflects City of Santa Monica proportionate share of county-wide outstanding delinquencies. The Los Angeles County property tax system does not provide City of Santa Monica specific statistics related to
delinquencies. Should the County change their system to include specific city data, the table will be updated to adjust delinquent taxes by year.
CITY OF SANTA MONICA, CALIFORNIA
Property Tax Levies and Collections
Last Ten Fiscal Years
Percent of levy
collected
Total secured tax
collections as
percent of total tax
levy
Outstanding
delinquent taxes as
percent of total
secured tax levy
159
3.B.a
Packet Pg. 534 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 10
Business 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Apparel stores 146,814$ 322,629 344,337 362,841 395,249 390,071 394,070 401,761 391,145 372,497
General merchandise 19,250 49,204 56,860 78,610 89,282 93,741 100,267 106,569 113,745 112,391
Food stores 94,365 97,024 91,803 87,888 88,196 87,729 86,615 82,367 79,495 76,420
Eating & drinking places 407,938 726,783 716,826 693,473 687,794 638,818 598,468 561,613 540,315 503,243
Building materials 122,302 124,030 114,802 112,587 110,186 113,405 114,156 102,818 88,761 88,391
Auto dealers & auto suppliers 783,207 874,780 854,723 766,512 770,658 757,333 739,833 697,249 653,869 632,489
Service stations 45,161 97,198 101,275 90,164 81,810 96,004 112,717 120,566 127,052 126,247
Other retail stores 562,235 627,046 665,606 695,449 657,236 692,105 677,744 657,413 664,771 659,166
Retail stores total 2,181,272 2,918,694 2,946,232 2,887,524 2,880,411 2,869,206 2,823,870 2,730,356 2,659,153 2,570,844
All other outlets 1,093,726 1,060,890 904,103 829,773 804,321 787,252 754,803 707,580 646,311 615,753
Total all outlets 3,274,998$ 3,979,584 3,850,335 3,717,297 3,684,732 3,656,458 3,578,673 3,437,936 3,305,464 3,186,597
(1) Prior years amounts have been revised to reflect the change of sales tax administration reporting from the State Board of Equalization to the Department of Taxes and Fees Administration;
Amounts do not include allocations from State or County Pools.
Source: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, The HdL Companies
CITY OF SANTA MONICA, CALIFORNIA
Taxable Transactions by Type of Business (1)
Last Ten Calendar Years
(In Thousands)
Calendar Year
160
3.B.a
Packet Pg. 535 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 11
Fiscal
year
General
obligation
bonds
Lease revenue
bonds
Term loans
payable (2)
Wastewater
bonds
Term loans
payable
Total primary
government
Percentage of
net assessed
valuation (1)Per capita
2020-21 2,273,237$ 159,348,210$ — $ 2,389,951$ 28,079,704$ 192,091,102 0.46%2,066
2019-20 3,506,472 162,504,543 — 4,764,846 5,550,789 176,326,650 0.45%1,909
2018-19 4,754,709 166,858,953 200,000 7,074,741 855,820 179,744,223 0.48%1,920
2017-18 6,012,945 171,078,364 400,000 9,304,636 661,765 187,457,710 0.54%2,028
2016-17 7,281,181 64,474,634 400,000 9,404,529 921,636 82,481,980 0.25%879
2015-16 8,554,417 69,944,367 400,000 9,504,426 1,213,411 89,616,621 0.29%957
2014-15 9,857,652 77,431,209 400,000 9,604,321 1,497,792 98,790,974 0.34%1,059
2013-14 11,205,890 82,503,548 400,000 9,704,216 1,774,966 105,588,620 0.38%1,145
2012-13 12,518,284 87,039,302 400,000 17,763,125 2,045,117 119,765,828 0.46%1,316
2011-12 12,650,793 90,574,837 400,000 19,319,815 2,308,422 125,253,867 0.51%1,388
Note:Details regarding the City's outstanding debt can be found in the Note 9 fo the Financial Statements.
All bonds amounts are updated to reflect net of related premiums, discounts, and adjustments.
(1) Net assessed property valuations have been used because personal income is not available. See Table 6 for net assessed valuations.
CITY OF SANTA MONICA, CALIFORNIA
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental activities Business-type activities
161
3.B.a
Packet Pg. 536 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 12
2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
General bonded debt outstanding
General obligation bonds 2,273,237$ 3,506,472 4,754,709 6,012,945 7,281,181 8,554,417 9,857,652 11,205,890 12,518,284 12,650,793
Less: Amounts Available in Debt 1,075,000 1,095,000 1,110,000 1,120,000 1,130,000 1,135,000 1,165,000 1,210,000 1,225,000 —
Service Fund (3)
Total 1,198,237$ 2,411,472 3,644,709 4,892,945 6,151,181 7,419,417 8,692,652 9,995,890 11,293,284 12,650,793
Assessed value (in thousands) (1)42,052,274$ 39,521,346 37,477,850 34,427,832 33,159,981 31,155,457 29,046,341 27,514,109 25,765,605 24,644,122
Percentage of assessed
Property value 0.00%0.01%0.01%0.01%0.02%0.02%0.03%0.04%0.04%0.05%
Population (2)92,968 92,357 93,593 92,416 93,834 93,640 93,283 92,185 91,040 90,223
Per capita 13$ 26 39 53 66 79 93 108 124 140
(1)See Table 6 for Assessed Value Data
(2)See Table 16 for Population Data
(3)This is the amount restricted for debt service principal payments.
All bonds amounts are net of related premiums, discounts, and adjustments.
CITY OF SANTA MONICA, CALIFORNIA
Ratios of General Bonded Debt
Last Ten Fiscal Years
162
3.B.a
Packet Pg. 537 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 13
Estimated Estimated share
Debt Percentage of Overlapping
Outstanding Applicable (1)Debt
Overlapping debt:
Los Angeles County General Fund Obligations 2,618,507,256$ 2.474%64,781,870$
Los Angeles County Superintendent of Schools Certificates of Participation 4,565,373 2.474%112,947
Metropolitan Water District 26,830,000 1.295%347,449
Santa Monica Community College District 602,706,799 67.001%403,819,582
Los Angeles Unified School District 10,864,555,000 0.0001%10,865
Santa Monica-Malibu Unified School District 556,386,656 67.058%373,101,764
Santa Monica-Malibu Unified School District School Facilities Improvement District 1 95,635,000 100.000%95,635,000
Los Angeles County Regional Park and Open Space Assessment District - 2.468%-
Santa Monica Community College District Certificates of Participation 10,254,607 67.001%6,870,689
Los Angeles Unified School District Certificates of Participation 130,970,000 0.0001%131
Los Angeles Community College District 4,409,250,000 0.0120%529,110
Santa Monica-Malibu Unified School District Certificates of Participation 27,911,162 67.058%18,716,667
Overlapping Tax Increment Debt (Successor Agency):73,190,000 100.000%73,190,000
Subtotal, overlapping debt 1,037,116,074
City direct governmental debt
City of Santa Monica General Obligation Bonds Main Library Improvements (2012)2,273,236
City of Santa Monica Civic Parking Structure Lease Revenue Bonds (2015)22,357,140
City of Santa Monica City Services Building Lease Revenue Bonds (2017)76,224,752
City of Santa Monica Fire Station 1 Lease Revenue Bonds (2018)37,354,684
City of Santa Monica Parking Structure 6 Lease Revenue Refunding Bonds (2021)23,411,635
Subtotal, direct debt (2)161,621,447
Total direct and overlapping governmental debt (3)1,198,737,521$
(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 for overlapping debt information: California Municipal Statistics, Inc.
CITY OF SANTA MONICA, CALIFORNIA
Direct and Overlapping Governmental Activities Debt
As of June 30, 2021
163
3.B.a
Packet Pg. 538 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 142020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12Total net debt applicable to limit 140,007,696$ 146,646,915 151,391,076 156,788,174 62,271,351 67,444,525 74,876,302 80,994,650 87,000,048 91,804,168 Debt limit 4,402,742,600 4,122,070,400 3,610,653,400 3,608,475,600 3,381,352,900 3,219,838,100 3,065,537,400 2,908,716,082 2,720,223,142 2,594,319,674Legal debt margin4,262,734,904 3,975,423,485 3,459,262,324 3,451,687,426 3,319,081,549 3,152,393,575 2,990,661,098 2,827,721,432 2,633,223,094 2,502,515,506 Total net debt applicable to the limitas a percentage of debt limit 3.18% 3.56% 4.19% 4.34% 1.84% 2.09% 2.44% 2.78% 3.20% 3.54%Net assessed value 42,052,274,000 Add: exempt property1,975,152,000 Total gross assessed value 44,027,426,000$ Debt limit - 10% of total assessed value (1)4,402,742,600 Amount of debt applicable to debt limit:Total bonded debt 145,630,000 Less:Assets in debt service fundsavailable for payment of bonds 5,622,304 Total amount of debt applicable to debt limit 140,007,696 Legal debt margin4,262,734,904$ (1) Per Section 607 of the City Charter, bonded indebtedness of the City may not exceed 10% of total assessed valuation of property within the City, exclusive of any indebtedness incurred for the purpose of water supply or sewers or storm drains.Source: City of Santa Monica Finance DepartmentCITY OF SANTA MONICA, CALIFORNIAComputation of Legal Debt MarginLast Ten Fiscal Years1643.B.aPacket Pg. 539Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 15
Direct Net revenue
Gross operating available for
revenues expense (1) debt service Principal Interest Total Coverage (2)
17,276,706$ 11,173,664$ 6,103,042$ 2,390,050$ 115,050$ 2,505,100$ 2.44
20,590,697 8,997,824 11,592,873 2,210,000 181,350 2,391,350 4.85
21,231,440 11,337,168 9,894,272 2,130,000 266,550 2,396,550 4.13
19,791,873 9,313,707 10,478,165 — 266,550 266,550 39.31
20,069,691 8,779,235 11,290,456 — 266,550 266,550 42.36
19,680,491 9,573,340 10,107,151 — 266,550 266,550 37.92
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
(1)
(2)
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.
2014-15
CITY OF SANTA MONICA, CALIFORNIA
Wastewater Enterprise Revenue Bonds Coverage
Last Ten Fiscal Years
Fiscal Debt service requirement
year
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 InvestorsService,Inc. and A+from Standard & Poor's Corporation. Debt service began in FY 1992-93.These bonds were refunded by the issuance of insured WastewaterEnterpriseRevenueBonds, 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.
OnOctober 13, 2005 the City issued $20,305,000 of Wastewater Enterprise Refunding Revenue Bonds bearing interestfrom3.00%to 5.00%to defease$21,535,000 of the
outstanding 1993 WastewaterEnterprise Revenue Bonds, 1993Refunding 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 theunderlying 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
2020-21
2013-14
2012-13
2011-12
CUSIP 802475
2019-20
2018-19
2017-18
2016-17
2015-16
165
3.B.a
Packet Pg. 540 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 16
Calendar
year
2021 92,968 $*$*6.3 %
2020 **92,995 881,215 66,684 11.6
2019 92,480 **846,486 **63,886 4.2
2018 92,416 806,547 60,649 4.8
2017 93,834 760,829 57,160 3.4
2016 93,640 727,377 54,526 3.6
2015 93,283 673,074 50,751 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
Note:Data shown is the Metropolitan Statistical Area of Los Angeles-Long Beach-Santa Ana, CA.
Data by City is not available.
*No data is available for 2021 as of publication date of AFR
**Data revised per source
Source:(1) California Department of Finance
(2) and (3) Bureau of Economic Analysis
(4) State of California, Employment Development Department, Labor Market
Information Division
Population (1)(millions)personal income (3)rate (4)
CITY OF SANTA MONICA, CALIFORNIA
Demographic and Economic Statistics
Last Ten Calendar Years
Personal income (2)Per capita Unemployment
166
3.B.a
Packet Pg. 541 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 17
Employers
Number of
employees Rank
Number of
employees Rank
UCLA Medical Center, Santa Monica 1,965 1 2.15 %2,084 2 2.62 %
City of Santa Monica 1,848 2 2.03 2,521 1 3.17
Santa Monica College 1,787 3 1.96 2,030 3 2.56
Santa Monica-Malibu Unified School District 1,697 4 1.86 1,468 5 1.85
Providence Saint John's Health Center 1,518 5 1.66 1,601 4 2.02
Hulu 1,394 6 1.53 — —
SNAP Inc 1,384 7 1.52 — —
Activision Publishing 1,231 8 1.35 692 8 0.87
(Includes Beachhead Studios, Treyarch Corp)
Oracle 974 9 1.07 — —
Universal Music Group 957 10 1.05 720 7 0.91
RAND Corporation — — 881 6 1.11
ET Whitehall, Inc.— — 589 9 0.74
(Casa del Mar, Shutters on the Beach)
MTV Networks — — 510 10 0.64
Total jobs provided by principal employers 14,755 13,096
Average total jobs in Santa Monica 91,235 79,444
Principal employers as percent of total jobs 16.17%16.48%
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
2020-21 2011-12
167
3.B.a
Packet Pg. 542 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
TABLE 18
2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
General government 250.3 273.5 276.7 277.6 269.7 281.5 265.7 232.9 230.7 238.6
Public safety
Police
Sworn 223.0 229.0 227.0 224.0 224.0 221.0 221.0 216.0 216.0 209.0
Non-sworn 165.8 203.4 203.4 201.4 202.4 202.4 197.4 217.4 220.4 225.4
Fire
Sworn 120.0 120.0 120.0 120.0 120.0 114.0 114.0 108.0 108.0 108.0
Non-sworn 14.0 16.0 16.0 17.0 16.0 15.8 15.8 21.0 21.0 21.0
General services 210.0 270.5 282.0 281.0 281.6 257.3 257.3 256.1 184.3 184.3
Community services 98.2 150.3 152.7 152.7 152.7 153.0 153.7 151.9 231.1 231.1
Library 47.8 112.0 113.5 113.5 112.5 111.0 111.0 114.8 106.1 106.1
Community development 88.5 174.3 164.8 163.2 161.5 159.5 149.8 138.8 144.4 144.4
Beach recreation 35.5 53.3 52.6 52.6 50.5 50.3 48.9 49.9 46.6 46.6
Water 51.0 47.0 47.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0
Resource Recovery & Recycling 81.0 88.3 91.3 92.3 90.7 89.7 87.7 86.7 75.2 84.2
Pier 16.9 21.9 21.9 21.9 20.3 19.3 17.8 17.8 17.2 15.8
Wastewater 21.0 21.0 21.0 22.0 22.2 22.2 22.2 22.2 22.2 22.2
Civic Auditorium — — — — — — — — 11.0 30.3
Airport 14.0 15.9 20.9 27.9 37.9 12.9 12.4 12.5 12.2 4.0
Cemetery 7.0 7.0 7.0 8.0 8.1 7.1 7.1 7.1 12.1 12.1
Big Blue Bus 410.8 450.0 463.0 464.0 462.9 464.5 436.0 435.5 419.0 419.0
Vehicle management 21.0 29.3 29.3 29.3 29.0 29.0 28.0 28.0 28.0 28.0
Self insurance - workers' compensation 10.0 13.0 13.0 13.0 13.0 13.0 12.0 12.0 14.0 14.0
Community Broadband 4.0 3.0 3.0 4.0 4.0 — — — — —
Total all funds 1,889.8 2,298.7 2,326.1 2,331.4 2,325.0 2,269.5 2,203.8 2,174.6 2,165.5 2,190.1
Note: Includes permanent and temporary employees (2,080 hours = 1 full-time position).
Source: City of Santa Monica Budget
CITY OF SANTA MONICA, CALIFORNIA
Full-Time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
Function/Program
168
3.B.a
Packet Pg. 543 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 19
Function / program 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
General government:Electronic requests for government information 9,236,685 10,679,005 11,784,998 12,465,631 13,811,858 12,558,833 13,410,283 12,420,770 12,175,143 16,000,000Hours of live public meeting coverage 257 187 230 210 220 275 319 284 330 300Public safety:Number of emergency response incidents 15,257 15,802 17,355 17,199 16,384 15,963 14,629 13,637 13,540 12,842Number of inspections 2,221 6,150 8,201 8,795 10,592 10,202 8,119 9,031 8,706 9,549Calls to Police Department for service 95,441 111,310 128,992 134,192 129,524 130,016 133,516 128,323 120,320 105,642Police reports issued 10,932 12,468 16,043 16,298 14,467 14,358 13,984 13,983 13,708 13,086Number of crimes recorded 7,569 8,301 10,369 10,008 8,988 8,774 8,500 8,744 8,986 8,579General services:Number of square feet of sidewalks repaired 123,991 161,924 219,871 126,959 99,907 14,001 10,359 6,025 3,279 40,000Number of graffiti removals performed 448 (1)33,359 40,156 45,729 43,535 38,311 37,940 37,948 34,289 20,000Feet of sewer mains cleaned 2,247,313 2,372,320 2,072,933 2,093,410 1,988,287 1,985,816 2,200,810 1,933,560 2,328,874 2,316,757Cultural and recreation services:Number of cars parked in beach lots 1,670,062 1,655,820 2,190,104 2,553,233 2,829,771 2,580,752 2,580,225 2,568,733 2,163,186 1,500,000Senior services meals served 183,652 141,568 118,875 104,472 64,406 52,917 48,253 43,020 64,711 56,232Number of low income persons receiving primary health care 3,516 4,336 4,460 4,711 4,458 4,137 3,089 3,519 3,568 4,164Number of youth regularly attending homework assistance programs 261 617 687 597 641 745 624 583 469 466Library:Library visitors 88,974 740,009 1,131,524 1,221,015 1,257,746 1,184,130 1,262,708 1,265,286 1,373,663 1,500,000Materials used 622,006 1,563,205 1,688,615 1,707,798 1,882,878 1,888,473 1,998,869 2,021,936 2,225,571 2,100,000Public access computer sessions 21,961 95,630 159,705 175,485 173,702 164,318 182,655 215,907 271,680 300,000Housing and community development:Building and Safety plan checks completed 3,936 4,587 4,389 4,412 4,749 2,823 3,080 2,366 1,998 1,500Building inspections performed 18,429 21,860 23,342 24,009 24,080 23,858 20,690 20,732 21,576 16,000Rounds of transportation plan check & entitlement application review completed 678 793 530 323 640 632 748 839 465 500Resident parking passes sold 32,511 47,161 57,993 53,118 51,325 48,962 56,356 51,674 76,000 73,000Number of traffic signs installed, replaced, repaired, or removed 200 739 2,951 3,024 2,858 1,659 2,079 2,417 2,859 5,600Number of parking meters installed, replaced, repaired, or removed 18,822 22,780 21,650 18,605 14,843 13,844 5,875 5,874 6,100 23,000Water:Number of direct customer accounts 18,439 18,342 18,342 18,061 17,976 17,842 17,798 17,760 17,705 17,902Water sold to direct customers in whole acre feet 10,605 10,988 11,265 11,718 11,552 11,242 12,323 13,344 15,147 11,996Airport:Number of tenant aircraft 196 195 256 278 310 309 325 274 420 420Noise ordinance violations issued 38 33 38 130 148 162 118 153 160 142Big Blue Bus:Revenue Miles 3,700,401 4,643,786 4,978,667 5,024,447 4,969,546 4,862,782 4,734,209 4,870,655 5,019,965 5,278,856Farebox revenue (in millions)1.99 8.97 11.41 11.72 11.80 12.84 13.36 13.68 14.09 11.86Total passenger trips (in millions)5.03 10.29 12.54 13.18 13.30 16.50 18.70 18.80 19.31 21.96Number of customer relations phone calls 23,768 38,445 51,952 30,730 37,187 38,705 56,995 64,525 69,075 73,586Total number of charters 0 0 0 0 0 0 0 3 3 90
(1) Due to restructuring, only graffiti removal requested by the public and submitted to the 311 system are
tracked and included in the stat. Additional graffiti removal, not currently tracked by City Staff,
continues to be performed. Staff has not seen a reduction in quantity of graffiti in our City, however
the response time to remove graffiti has increased due to the restructuring.
Sources: Various City departments.
CITY OF SANTA MONICA, CALIFORNIAOperating Indicators by Function/ProgramLast Ten Fiscal Years
169
3.B.a
Packet Pg. 544 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
TABLE 20
2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
Public safety:Number of police vehicles 244 245 237 243 235 (1)232 220 223 241 239Number of fire vehicles 70 71 71 67 67 71 68 64 56 52Number of fire stations 5 5 5 5 (6)4 4 4 4 5 5Number of police substations including Public Safety Facility 4 3 3 3 3 3 3 3 4 4General services:Square footage of asphalt paved streets 30,191,740 30,191,740 30,191,740 30,170,740 30,170,740 30,170,740 30,403,785 30,403,785 30,403,785 30,403,785Square footage of concrete paved streets 1,183,981 1,183,981 1,183,981 1,177,981 1,177,981 1,177,981 1,128,034 1,128,034 1,106,834 1,106,834Square footage of sidewalks 8,620,831 8,620,831 8,451,871 8,451,871 8,451,871 8,451,871 8,403,428 8,403,428 8,386,998 8,386,998Square footage of curbs and gutters 1,938,820 1,938,820 1,938,820 1,938,420 1,938,420 (2)1,938,420 1,930,214 1,930,214 1,927,564 1,917,714Cultural and recreation services:Number of beach parking lots 16 16 16 16 16 (3)16 16 17 17 17Number of parks 31 31 31 31 30 29 29 29 29 27Number of swim centers 2 2 2 2 2 2 2 2 2 2Library:Number of facilities: main and branches 5 5 5 5 5 5 5 5 4 4Housing and community development:
Downtown structure visitors 2,740,785 4,104,583 (8)5,171,173 5,339,806 5,753,204 (4)6,722,688 6,405,636 6,455,602 6,790,058 6,659,246Water:Number of feet of new water main installed 10,822 10,822 (9)4,825 4,500 (7)2,269 (5)2,495 10,465 9,510 9,510 12,384Water main system (in miles)211 205 205 205 205 205 205 205 205 205Reclaimed water main system (in miles)6 5 5 5 5 5 5 5 4 4Wastewater:City sewage flow in million gallons/day 12 14 14 13.8 14.2 13.9 13.9 12.2 11.4 11.4Sewer main system (in miles)155 152 152 151 151 151 151 151 151 151Stormwater:Daily gallons treated for recycling by SMURRF 171,746 193,250 186,732 180,699 159,740 160,059 170,000 108,000 123,000 122,890Storm drain system (in miles)59 59 59 59 59 59 59 59 59 59Airport:Aircraft operations (departures and arrivals)63,870 67,205 74,511 74,130 83,471 89,217 84,633 85,052 102,109 105,026Big Blue Bus:Number of buses 178 189 195 199 200 200 188 201 192 200
(1) Includes police patrol boat, Mobile Command Center, and SUVs (to eventually replace old Crown Victorias).
(2) Per Engineers, curbs and gutters are in linear feet. Thus, use approximate factor of 2 to convert from linear feet to square feet.(3) 1650 Appian is residental parking only and has been removed from count.(4) 2017 Downtown Community Plan (DCP) Downtown perimeter: Wilshire Blvd (north), Lincoln Blvd (east), I-10 Freeway (south), Ocean Avenue (west).- includes Parking Structures 1-8, Main Library Parking Structure, Ken Edwards Center- excludes Parking Structure 9, Civic Center Parking Lot, Civic Center Parking Structure
- includes transient (“daily”) visitor parking and does not include monthly permit parkers(5) Per Engineers, this total is lower compared to prior years because no water main CIP was started this year.(6) Per Fire, there were 4 permanent and 1 temporary station @ Station #4 for FY17/18.(7) Total updated per Engineering.(8) Per PCD this count now includes monthly permit parkers.(9) Per Engineers, Water department doubled linear feet on new projects as part of self sufficiency goal.
Sources: Various City departments.
CITY OF SANTA MONICA, CALIFORNIA
Capital Asset Statistics by Function/ProgramLast Ten Fiscal Years
Function / program
170
3.B.a
Packet Pg. 545 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial
3.B.a
Packet Pg. 546 Attachment: Annual Comprehensive Financial Report (5028 : Present Annual Comprehensive Financial Report for Year Ended June 30, 2021)
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Santa Monica, California (the “City”), as of and for the year ended June 30, 2021, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated January 21, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not
express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity’s
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
financial statements. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
3.B.b
Packet Pg. 547 Attachment: Attachment B Independent Auditors' Report on Internal Control (5028 : Present Annual Comprehensive Financial Report for Year
To the Honorable Mayor and Members of the City Council
City of Santa Monica, California
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control
or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Brea, California
January 21, 2022
3.B.b
Packet Pg. 548 Attachment: Attachment B Independent Auditors' Report on Internal Control (5028 : Present Annual Comprehensive Financial Report for Year
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
January 21, 2022 To the Honorable Mayor and Members of the 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, California (the “City”) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated July 22, 2021. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings and Other Issues
Qualitative Aspects of Significant 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 the notes to the financial statements. As described in Notes 1 and 20 to the financial statements, the City changed accounting policies related to accounting for fiduciary activities by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in the fiscal year ended June 30, 2021. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Changes in Fiduciary Net
Position. 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’, business-type activities’, and proprietary funds’ respective financial statements were: Management’s estimates of its net pension liability, net other post-employment benefits (OPEB) liability, and self-insurance liability are based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability, net OPEB liability, and self-insurance liability to determine that they are reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: The disclosure of Commitments and Contingencies in Note 14 to the financial statements identifies the litigation of the City regarding allegations of sexual abuse of minors and the settlement reached by the City with the plaintiffs in the amount of $60.6 million, as well as insurance recoveries attempting to be made by the City with its insurance providers.
3.B.c
Packet Pg. 549 Attachment: Attachment C City of Santa Monica Audit Communication Letter (5028 : Present Annual Comprehensive Financial Report for Year
To the Honorable Mayor and Members of the City Council City of Santa Monica, California The disclosure regarding the COVID-19 Pandemic in Note 18 to the financial statements describes the ongoing effect the pandemic is having on the City and the Federal coronavirus emergency acts funding the City has received in response to mitigate the challenges posed by the ongoing pandemic. The financial statement disclosures are neutral, consistent, and clear.
Significant Unusual Transactions Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.
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 trivial, and communicate them to the appropriate level of management. No misstatements were found.
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.
Circumstances that Affect the Form and Content of the Auditor’s Report
New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the
Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information
in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.
Management Representations We have requested certain representations from management that are included in the management representation letter dated January 21, 2022.
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.
3.B.c
Packet Pg. 550 Attachment: Attachment C City of Santa Monica Audit Communication Letter (5028 : Present Annual Comprehensive Financial Report for Year
To the Honorable Mayor and Members of the City Council City of Santa Monica, California
Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters We applied certain limited procedures to Management’s Discussion and Analysis; the Schedules of
Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual for the General Fund, Special Revenue Source Fund, and Low and Moderate Income Housing Fund; the Schedules of Changes in the
Net Pension Liability and Related Ratios; the Schedules of Contributions for the Pension Plans and OPEB; and the Schedule of Changes in the Net OPEB Liability and Related Ratios 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 or Statistical Sections of the Annual Comprehensive Financial Report, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities.
GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14
and 61.
GASB Statement No. 98, the Annual Comprehensive Financial Report.
The following GASB pronouncements are effective in the following fiscal years’ audits and should be reviewed for proper implementation by management:
Fiscal year 2022
GASB Statement No. 87, Leases.
3.B.c
Packet Pg. 551 Attachment: Attachment C City of Santa Monica Audit Communication Letter (5028 : Present Annual Comprehensive Financial Report for Year
To the Honorable Mayor and Members of the City Council City of Santa Monica, California GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction
Period.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting
for Internal Revenue Code Section 457 Deferred Compensation Plans.
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment
Arrangement. GASB Statement No. 96, Subscription-Based Information Technology Arrangements.
Restriction on Use This information is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours,
Brea, California
3.B.c
Packet Pg. 552 Attachment: Attachment C City of Santa Monica Audit Communication Letter (5028 : Present Annual Comprehensive Financial Report for Year