omprehensive Annual Financial Report · Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Lompoc for the fiscal year ended June

Fiscal Year 2015Fiscal Year 2015--1616

City of Lompoc, CaliforniaCity of Lompoc, California Fiscal Year Ended June 30, 2016Fiscal Year Ended June 30, 2016

ComprehensiveComprehensive

AnnualAnnual

FinancialFinancial

ReportReport

Comprehensive Annual Financial Report

City of Lompoc, California

FISCAL YEAR ENDED JUNE 30, 2016

Prepared by the Finance Division of

Management Service Department

Brad Wilkie, Management Services Director

Fiscal Year 2015-16 Comprehensive Annual Financial Report 3

Letter of Transmittal ......................................................................................................... 8

Organizational Chart ......................................................................................................... 13

Directory of Officials ......................................................................................................... 14

City Council ...................................................................................................................... 15

Independent Auditors’ Report ......................................................................................... 18

Management’s Discussion and Analysis............................................................................. 22

Basic Financial Statements

Government-Wide Financial Statements:

Statement of Net Position .......................................................................... 48

Statement of Activities ............................................................................... 50

Governmental Funds:

Balance Sheet ........................................................................................... 52

Reconciliation of Governmental Funds Balance Sheet to the Statement of

Net Position ............................................................................................. 54

Statement of Revenues, Expenditures, and Changes in Fund Balance ................. 55

Reconciliation of the Statement of Revenues, Expenditures, and Change in Fund

Balance to the Statement of Activities ............................................................... 56

Proprietary Funds:

Statement of Net Position ................................................................................. 58

Statement of Revenues, Expenditures, and Changes in Fund Net Position ............ 62

Statement of Cash Flows ................................................................................... 64

Fiduciary Funds:

Statement of Net Position ................................................................................. 68

Statement of Changes in Net Position ................................................................ 69

Notes to the Basic Financial Statements ............................................................................ 71

Introductory Section

Table of Contents

Financial Section

4 Fiscal Year 2015-16 Comprehensive Annual Financial Report

Required Supplementary Information

Budgetary Comparison Schedule – General Fund ................................................................................... 124

Schedule of Funding Progress for OPEB Obligation ................................................................................. 125

Schedule of Change in the Net Position Liability and Related Ratios – Miscellaneous Agent

Multiple Employer Plan............................................................................................................................ 126

Schedule of Plan Contributions – Miscellaneous Agent Multiple – Employer Plan ................................. 127

Schedule of Change in the Net Position Liability – Safety Cost Sharing

Plans ......................................................................................................................................................... 128

Schedules of the City Contributions – Safety Cost Sharing Plans ............................................................ 129

Notes to Required Supplementary Information ...................................................................................... 130

Other Supplementary Information:

Other Governmental Funds

Combined Balance Sheet ........................................................................................................... 136

Combining Statement of Revenues, Expenditures, and Changes in Fund Balance (Deficit) ..... 142

Other Enterprise Funds

Combining Statement of Net Position (Deficit) ......................................................................... 148

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position (Deficit) ..... 152

Combining Statement of Cash Flows ......................................................................................... 154

Internal Service Funds

Combining Statement of Net Position ....................................................................................... 160

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position .................. 164

Combining Statement of Cash Flows ......................................................................................... 166

Financial Trends

Statement of Net Position ....................................................................................................................... 172

Changes in Net Position ........................................................................................................................... 173

Fund Balances of Governmental Funds (General Fund) .......................................................................... 175

Fund Balances of Governmental Funds (All Other Governmental Funds) ............................................... 176

Changes in Fund Balance of Governmental Funds (General Fund) ......................................................... 177

Table of Contents (Continued)

Statistical Section (Not covered by Independent Auditors’ Report)


Revenue Capacity

Governmental Activities Tax Revenues by Source ......................................................................... 178

Assessed of Taxable Property ......................................................................................................... 179

Principal Secured Property Owners ................................................................................................ 180

Secured Property Tax Roll Levies and Collections........................................................................... 181

Property Tax Rates - Direct and Overlapping Governments ........................................................... 182

Sales and Use Tax Historical of Rates .............................................................................................. 183

Taxable Sales by Business Type....................................................................................................... 184

Debt Capacity

Ratio of Outstanding Debt by Type ................................................................................................. 185

Ratio of General Bonded Debt Outstanding ................................................................................... 186

Direct and Overlapping Debt .......................................................................................................... 187

Legal Debt Margin ........................................................................................................................... 188

Revenue Bond Coverage (Water) ................................................................................................... 189

Revenue Bond Coverage (Wastewater) .......................................................................................... 190

Demographics and Economic Information

Principal Employers......................................................................................................................... 191

Demographic and Economic Statistics ............................................................................................ 192

Operating Information

Full Time Equivalent City Government Employees by Function ..................................................... 193

Capital Assets Statistics by Function/Program ................................................................................ 194

Operating Indicators by Function/Program .................................................................................... 195

Table of Contents (Continued)

6

Introductory Section

7

The Introductory Section of the Comprehensive Annual Financial Report

provides general information of the City of Lompoc, California’s structure,

its personnel , and information useful in assessing the City’s financial con-

dition. This section includes the:

Letter of Transmittal

City’s Organizational Chart

Directory of Officials

City Council

8 Fiscal Year 2015-16 Comprehensive Annual Financial Report - Introductory Section

Lompoc

100 Civic Center Plaza, Lompoc, CA 93436


December 22, 2016

Honorable Mayor, Members of the City Council Lompoc, California 93436 Honorable Members: It is our pleasure to submit the Comprehensive Annual Financial Report (CAFR) of the City of Lompoc for the fiscal year ending June 30, 2016, which has been prepared by the City’s Management Services Department. State law requires that all general-purpose local governments publish within six months of the close of the fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (US GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a licensed certified public accountant(s). Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Lompoc for the fiscal year ended June 30, 2016. This report consists of management’s representations concerning the finances of the City of Lompoc. Consequently, management assumes full responsibility for the completeness and reliability of all information presented in this report. To provide a reasonable basis for making these representations, management of the City of Lompoc has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Lompoc’s financial statements in conformity with US GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Lompoc’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. US GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditors’ report.

Fiscal Year 2015-16 Comprehensive Annual Financial Report - Introductory Section 9

City of Lompoc Profile


Glenn Burdette Attest Corporation, has audited the City of Lompoc’s financial statements. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Lompoc for the fiscal year ended June 30, 2016 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Lompoc’s financial statements for the fiscal year ended June 30, 2016 are fairly presented in conformity with US GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

The City of Lompoc is a general law city, incorporated under the laws of the State of California in 1888. The City has the council-manager form of government with a five-member council with four council members being elected for four-year overlapping terms and the mayor being elected for a two-year term. The position of City Manager is filled by appointment of the Council to serve as manager of the staff and to carry out the policies of the Council. Lompoc is a full service City with 391.75 budgeted full-time employees. Services include public safety (police and fire), public works (highways and streets, public improvements, and engineering), planning and zoning, building inspections, municipal airport, public transit, library, parks and recreation, utilities (water, electric, wastewater, refuse collection, and landfill), and general administrative services.

The City enjoys a mild climate. Average temperatures range from 64 degrees in the winter to 72 degrees in the summer, with an average of over 300 clear or partly cloudy days per year. Precipitation averages 16 inches per year, with most rainfall occurring from December through March.

Lompoc is located in northern Santa Barbara County, approximately ten miles inland from the Pacific Ocean. The City is 150 miles northwest of Los Angeles and 290 miles southeast of San Francisco. The City has an estimated population of 44,116 at January 1, 2016, and its boundaries encompass 10.5 square miles. Lompoc also has two neighboring areas Vandenberg Village/Mission Hills and the Vandenberg Air Force Base with an estimated population 9,835 at January 1, 2016, and within 10 miles of the city.


The Local Economy


The City of Lompoc currently enjoys a favorable but modest economic environment and local indicators point to continued stability. The City has a diversified economy based on commerce, agriculture, and natural resources industries. The key economic areas vital to the City’s tax base are: general consumer goods, auto sales and transportation, restaurants and hotels, and fuel and service stations. Additionally, government activities at Vandenberg Air Force Base and the Federal Correction Facility are an important factor with regards to the economic well-being. The Air Force Base employs approximately 6,878 military, civilian, and contract personnel and the correctional facility employs 513 personnel.

Employment

The County of Santa Barbara (which includes the City of Lompoc) has an employed labor force of 223,500 as of June 30, 2016. Labor market conditions in Santa Barbara County, also known as the Santa Barbara-Santa Maria Metropolitan Statistical Area, have been steadily improving over the last 7 years. The City continues to record job growth and declining unemployment rates. The unemployment rate in the Santa Barbara County was 4.9 percent at June 30, 2016. This compares with the unemployment rate of 5.7 percent for California and 4.9 percent for the nation during the same period. The City of Lompoc has an employed labor force of 18,500 with an unemployment rate of 6.4 percent. Following is the unemployment rate noted for the City of Lompoc from June 2010 through June 2016.

Fiscal Year 2015-16 Comprehensive Annual Financial Report - Introductory Section 11

Cash Management


Budgetary Control

Long-Term Financial Planning

The annual budget serves as the foundation for the City’s financial planning and control. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Budgetary control is maintained at the department level. The City Manager may transfer funds between departments within any fund; however, any revision that requires new appropriations in any fund by more than one thousand dollars must be approved by the City Council. The City also utilizes the encumbrance accounting system as a management control technique to assist in controlling expenditures.

Cash resources of the individual funds are combined to form a pool of cash and investments for the purpose of increasing the opportunity for income through investment activities. Cash temporarily idle during the year was invested in obligations of the U.S. Government or its agencies, certificates of deposit, passbook savings demand deposits, corporate notes, and the Local Agency Investment Fund, consistent with the City Council Investment Policy. The City’s investment policy is designed to maximize the productive use of assets entrusted to its care and to invest and manage those funds wisely and prudently. Criteria for selecting investments and the order of priority are: (1) safety, (2) liquidity, and (3) yield. The basic premise underlying the City’s investment policy is to ensure that money is always available when needed while at the same time reaping the greatest return. Accordingly, deposits were either insured by federal depository insurance or collateralized.

The City of Lompoc implemented a 10-year General Fund Long Range Financial Forecast during the 2015-17 Biennial Budget process. This is a comprehensive review of the long term revenues and expense trends and address challenges such as long term retirement and health care cost. The forecast is designed to help policymakers address funding needs and set priorities by being proactive in the City’s financial planning. The City intends to adopt a six-year Capital Improvement Program (CIP) during the Biennial Budget 2017-19 processes which will serve as a planning tool to coordinate and schedule major projects undertaken by the City. The Capital Improvement Program will be revised every budget cycle to address changing needs, priorities, and future financial conditions.

Budgetary Control



Awards and Acknowledgements

The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the Finance Department. Each member of the department has my sincere appreciation for the contribution made in the generation of this report. We would also like to thank the Mayor, the City Council, and the City Manager for their support of the financial operations of the City. Respectfully submitted, ______________________ Brad Wilkie Management Services Director

Major Initiatives

On June 10, 2015, the City sent out a Request for Proposal (RFP) to provide and implement a new enterprise wide Financial Management System. This replacement project is scheduled to be a multiple year project, and will help provide a fully integrated accounting software solution upon successful implantation. This will also help to provide utility customers with access to their account information and more convenient methods to pay their bills.



EXECUTIVE MANAGEMENT

City Manager ............................................................................................................ Patrick Wiemiller

Economic Development Director/Assistant City Manager ........................................ Teresa Gallavan

City Attorney ............................................................................................................. Joseph Pannone

City Clerk ...................................................................................................................... Stacey Hadden

Police Chief........................................................................................................................... Pat Walsh

Fire Chief ......................................................................................................................... Kurt Latipow

Management Services Director ........................................................................................ Brad Wilkie

Public Utilities Director ....................................................................................................... Larry Bean

Public Works Director ................................................................................................... Kevin McCune

Library Director .................................................................................................................. Sarah Bleyl

Directory of Officials


City Council

Mayor Bob Lingl

Councilmember Councilmember

Dirk Starbuck DeWayne Holmdahl

Councilmember Councilmember

Victor Vega Jim Mosby

16

Financial Section

17

The Financial Section of the Comprehensive Annual Financial Report

contains the following:

Independent Auditors’ Report

Management’s Discussion and analysis (MD&A)

(Required Supplementary Information - Unaudited)

City’s basic financial statement, which includes the following:

The Government-wide Financial Statements

Fund Financial Statements

Notes to the Financial Statements


Other Supplementary Information

Other Governmental Funds

Other Enterprise Funds

Internal Services Funds

18

19

20


Management’s Discussion and Analysis (MD&A)

The MD&A contains the following:

Executive Summary - Financial Highlights

Overview of the Basic Financial Statements

Financial Analysis of the City as a Whole

Financial Analysis of the City’s Funds

Capital Asset and Debt Administration

Significant Accomplishments

Economic Factors and Next Year’s Budget and Rates

Request for Information


Management’s Discussion and Analysis

The information in this section is not covered by the Independent Auditors’ Report, but is presented as required supplementary information for the benefit of the readers of the Comprehensive Annual Financial Report (CAFR). As management of the City of Lompoc (the City), we offer readers of the City’s financial statements this discussion and analysis of the financial activities of the City for the fiscal year ended June 30, 2016. We encourage readers to consider the information presented here in conjunction with the accompanying Basic Financial Statements, which immediately follow this section. All dollar amounts are expressed in thousands unless otherwise stated. EXECUTIVE SUMMARY – FINANCIAL HIGHLIGHTS The presentation of the financial activity for the fiscal year ended June 30, 2016 provides for the second year of implementation of the Government Accounting Standards Board’s (GASB) Pronouncement No. 68 (GASB 68) related to pension reporting. Implementation of GASB 68 requires the recognition of pension liabilities in the Basic Financial Statements rather than reporting pension liabilities only in the notes of the Basic Financial Statements. The second year’s presentation is reflected throughout the Basic Financial Statements and allows for comparative analysis of results due to the implementation of GASB 68 for the first time beginning below in the summary of financial highlights: Government-wide:

City total assets and deferred outflows increased by $6.9 million (1.9%) to $379.7 million compared with the prior year, of which $150.0 million represented governmental assets and deferred outflows and $229.7 million represented business‐type assets and deferred outflows.

City total liabilities and deferred inflows decreased by $2.0 million (1.0%) to $195.2 million compared with the prior year, of which $71.5 million were governmental liabilities and deferred inflows and $123.7 million, were business‐type liabilities and deferred inflows.

The City’s total net position increased by $8.8 million (5.0%) to $184.5 million compared with the prior year. Of this amount, a negative $29.6 million represents unrestricted government wide net position. Implementation of GASB 68 for the fiscal year ended June 30, 2015 accounts for a significant portion of the negative balance of unrestricted net position.

City‐wide revenues were $97.5 million, an increase of less than $0.1 million (.1%) compared with the prior year, of which $32.0 million were generated by governmental activities and $65.5 million were generated by business‐type activities.

City‐wide expenses were $88.6 million, an increase of $2.4 million (2.8%) compared with the prior year, of which $32.2 million were incurred by governmental activities and $56.4 million were incurred by business‐type activities.

Pension expense was $2.6 million (2.95%) of the total $88.6 million of City-wide expenses compared with the prior year in which $2.5 million (2.89%) of the total $86.3 million of City-wide expenses was related to pension expense.


Management’s Discussion and Analysis (Continued)

Fund Level:

Total governmental fund balances decreased $2.1 million (7%) to $27.4 million compared with the prior year. Of this amount, $4.5 million, or 16.4%, was unassigned fund balance and available for spending at the City’s discretion.

Total governmental fund revenues decreased by $1.5 million (4.5%) to $31.9 million compared with the prior year.

Total governmental fund expenditures increased by $0.6 million (1.7%) to $35.7 million compared with the prior year.

Total enterprise fund net position increased by $7.3 million (7.4%) to $106.0 million compared with the prior year. Of this amount, $9.0 million, or 8.5% was unrestricted net position and available for spending at the City’s discretion.

Total enterprise fund operating revenues increased $2.7 million (4.4%) to $64.7 million compared with the prior year.

Total enterprise fund operating expenses increased $1.7 million (3.3%) to $53.8 million compared with the prior year.

Total enterprise fund pension expense was $0.9 million (1.6%) of the total $53.8 million of operating expenses.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This annual report consists of four parts:

1. Management’s discussion and analysis (this section), 2. The Basic Financial Statements, 3. Required supplementary information, and 4. Supplementary information.

The Basic Financial Statements include two kinds of statements that present different views of the City.

The government-wide financial statements provide both long-term and short-term information about the City’s overall financial status.

Fund financial statements focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements.

Governmental funds statements tell how general government services such as police, fire, and public works were financed in the short term as well as what remains for future spending.

Proprietary fund statements offer short-term and long-term financial information about the activities the City operates like businesses, such as utility services.

Fiduciary fund statements provide information about the financial relationships in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources belong.

The Basic Financial Statements also include notes that explain some of the information in the financial statements and provide more detailed data. The notes provide additional information that is essential to



a full understanding of the data provided in the government-wide and fund financial statements. In the supplementary information section, we have opted to include combining and individual statements that provide details about our nonmajor governmental funds, nonmajor enterprise funds, and internal service funds, each of which is presented in a column in the Basic Financial Statements. Government-Wide Financial Statements The Government-wide financial statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The Statement of net position (the Unrestricted Net Position) is designed to be similar to a bottom line for the City and its governmental and business-type activities. The Statement of net position presents information on all the City’s Assets and Deferred outflows of resources and Liabilities and Deferred inflows of resources with the difference reported as Net position. Net Position = (Assets + Deferred outflows of resources) - (Liabilities + Deferred inflows of resources) 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. This statement combines and consolidates governmental fund’s current financial resources (short-term spendable resources) with capital assets and long-term obligations. The statement of activities presents information showing how the government’s net position changed during the 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 the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The government-wide financial statements of the City are divided as follows:

Governmental activities – Most of the City’s basic services are included here, such as general government, public safety, highways and streets, parks and recreation, and community development. Taxes, state and federal grants, and intergovernmental revenues finance most of these activities.

Business-type activities – Certain services provided by the City are intended to recover all or a significant portion of their costs through user fees and charges. Among these are electric distribution, water, sewer, solid waste services, transit, recreation, airport services, aquatic center, broadband, and community center.

Component Units – The City currently has no discretely presented component units.



Fund Financial Statements The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds – Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at fiscal year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in reconciliations to the fund financial statements. Proprietary funds – 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. The City uses enterprise funds to account for its Water, Electric, Wastewater, Airport, Aquatic Center, Broadband, Solid Waste, Transit, Recreation, River Park Campground, and the Dick DeWees Community and Senior Center. The City uses internal service funds to report activities that provide supplies and services for the City’s other programs and activities and to account for its fleet of vehicles, insurance, communications, and central stores. The internal service funds predominantly provide services to governmental activity functions and therefore are included within the governmental activities of the government-wide financial statements. Proprietary funds are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Fiduciary funds – Fiduciary funds are used to account for resources held by the City as a trustee on behalf of other agencies or individuals outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. A relatively new fiduciary fund of the City is the Private Purpose Trust Fund used to account for assets and liabilities held in trust for the Successor Agency to the former Lompoc Redevelopment Agency. The accounting method used for fiduciary funds is also the full accrual basis of accounting.



FINANCIAL ANALYSIS OF THE CITY AS A WHOLE As previously noted, net positions 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 $184.5 million as of June 30, 2016. The largest portion of the City’s net positions (99%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City uses its 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, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. During the current fiscal year, the City’s governmental activities net position increased by $1.5 million (2.0%) compared with the previous year. The City’s business-type activities net position increased by $7.3 million (7.4%) compared with the previous year. The total City-wide increase in net position was $8.8 million (5.0%) compared with the previous year. The City’s increase in net position is primarily attributable to the net income of enterprise fund’s activities and the reduction in operating expenses of governmental fund’s activities.

Unrestricted net position represents the amount that may be used to meet the City’s ongoing obligations to citizens and creditors. Due to the implementation of GASB 68 for the fiscal year ended June 30, 2015, which provides for recording net pension liabilities to the government wide financial statements, the City’s unrestricted net position is ($29.6) million at June 30, 2016. While positive unrestricted net positions represent amounts that may be used to meet the City’s ongoing obligations to citizens and creditors, the majority of the City’s negative unrestricted net position is primarily attributed to $60.7 million of unfunded pension obligations. Net pension liabilities, while they are obligations, will likely not be liquidated for several decades.

2015 2016 2015 2016 2015 2016

Current and other assets $ 44,716,208 $ 44,671,645 $ 45,954,234 $ 52,172,415 $ 90,670,442 $ 96,844,060

Capita l assets 98,448,439 97,136,328 178,263,657 173,538,850 276,712,096 270,675,178

Total assets 143,164,647 141,807,973 224,217,891 225,711,265 367,382,538 367,519,238

Deferred outflow of resources 3,864,143 8,161,224 1,581,202 4,038,523 5,445,345 12,199,747

Current l iabi l i ties 6,292,444 9,724,996 12,087,629 11,048,813 18,380,073 20,773,809

Long-term l iabi l i ties 54,724,080 54,228,773 111,377,383 108,582,011 166,101,463 162,810,784

Total liabilities 61,016,524 63,953,769 123,465,012 119,630,824 184,481,536 183,584,593

Deferred Inflow of resources 9,037,766 7,510,749 3,689,922 4,151,461 12,727,688 11,662,210

Invested in capita l assets ,

net of related debt 91,890,332 98,929,131 83,329,642 83,710,916 175,219,974 182,640,047

Restricted

Low income hous ing 5,149,098 4,948,164 5,149,098 4,948,164

Capita l projects 13,006,578 12,524,012 760,485 759,287 13,767,063 13,283,299

Debt service 119,232 117,735 6,828,934 6,768,022 6,948,166 6,885,757

Other purposes 518,483 605,908 2,632,766 5,745,616 3,151,249 6,351,524

Unrestricted (33,709,223) (38,620,271) 5,092,332 8,983,662 (28,616,891) (29,636,609)

Total net position $ 76,974,500 $ 78,504,679 $ 98,644,159 $ 105,967,503 $ 175,618,659 $ 184,472,182

- - - - - -

Total

Governmental Business-Type

Activities Activities



As of June 30, 2016, the City is able to report positive balances in all categories of net position for the government as a whole except for unrestricted net position in governmental activities due to the implementation of GASB 68 in the fiscal year ended June 30, 2015. The condensed summary of activities, which follows, shows total net position increased by $8.8 million or 5.0%.

Revenues: 2015 2016 2015 2016 2015 2016

Program revenues:

Charges for services 9,345,451$ 9,719,415$ 56,493,071$ 57,684,635$ 65,838,522$ 67,404,050$

Operating grants and contributions 2,652,691 1,987,428 5,466,163 7,024,097 8,118,854 9,011,525

Capital grants and contributions 1,350,973 974,445 1,258,830 342,978 2,609,803 1,317,423

General revenues:

Property taxes 4,060,146 4,156,536 8,667 8,667 4,068,813 4,165,203

Sales taxes 6,607,276 6,841,524 6,607,276 6,841,524

Other taxes 8,093,416 6,711,276 29,591 29,539 8,123,007 6,740,815

Grants and contributions not

restricted to specific programs 500,729 607,534 500,729 607,534

Unrestricted investment earnings 301,711 376,324 129,399 285,959 431,110 662,283

Other revenue 1,091,818 650,430 62,118 79,046 1,153,936 729,476

Total revenues 34,004,211 32,024,912 63,447,839 65,454,921 97,452,050 97,479,833

Expenses:

Governmental activities:

General government 5,984,524 5,380,272 5,984,524 5,380,272

Police protection 8,702,237 8,949,193 8,702,237 8,949,193

Fire protection 4,071,912 4,759,981 4,071,912 4,759,981

Engineering/streets 5,880,184 5,209,658 5,880,184 5,209,658

Building 465,675 457,452 465,675 457,452

Community Development 1,563,334 1,986,913 1,563,334 1,986,913

Parks and recreation 3,499,231 3,880,341 3,499,231 3,880,341

Nondepartmental 1,133,765 1,482,048 1,133,765 1,482,048

Interest on long-term debt 123,368 119,943 123,368 119,943

Business-type activities:

Water 9,767,339 9,948,010 9,767,339 9,948,010

Electric 19,928,723 19,490,681 19,928,723 19,490,681

Wastewater 12,957,872 13,541,408 12,957,872 13,541,408

Solid Waste 6,640,369 8,436,331 6,640,369 8,436,331

Aquatic Center 805,121 732,336 805,121 732,336

Airport 588,760 544,138 588,760 544,138

Transit 2,933,664 2,909,249 2,933,664 2,909,249

Recreation 353,701 358,568 353,701 358,568

River Park 128,945 142,872 128,945 142,872

Lompoc Valley Community Center 184,959 134,513 184,959 134,513

Broadband 537,928 162,403 537,928 162,403

Total expenses 31,424,230 32,225,801 54,827,381 56,400,509 86,251,611 88,626,310 Increase (decrease) in net 2,374,699

assets before transfers 2,579,981 (200,889) 8,620,458 9,054,412 11,200,439 8,853,523

Transfers (2,723,739) 1,731,068 2,723,739 (1,731,068) - -

Special Item 1,201,752 - 1,201,752 -

Increase (decrease) in net position 1,057,994 1,530,179 11,344,197 7,323,344 12,402,191 8,853,523

- -

Beginning net position 123,690,616 76,974,500 107,939,510 98,644,159 231,630,126 175,618,659

Prior year restatements (47,774,110) - (20,639,548) - (68,413,658) -

Ending net position 76,974,500$ 78,504,679$ 98,644,159$ 105,967,503$ 175,618,659$ 184,472,182$

Total

CHANGES IN CITY OF LOMPOC'S NET POSITIONBusiness-Type

Activities

Governmental

Activities



As shown above, the City’s revenues for fiscal year 2016 totaled approximately $97.5 million, with the majority of it (69.1%) generated from charges for services. Revenues decreased less than $0.1 million or 0.1% for the year as compared with the previous year. Increases in revenues occurred in all categories except the following: Capital grants and contributions, other taxes, and other revenues. The combined total decrease for the three previously mentioned revenue sources is approximately $3.1 million, while the largest revenue increase is charges for services of $1.6 million or 50.0% of the overall revenue increase. The single most significant factor of the charges for services increase was attributable to increase in charges for services in the water, wastewater and solid waste enterprise funds associated with the implementation of rate increases in those funds. Expenses of the City’s governmental activities increased compared to the previous fiscal year. Total government activities’ expenses for the year ending June 30, 2016 were approximately $32.2 million, which was an increase of $.8 million or 2.6% compared with the previous year. The increase was mainly attributed to public safety and community development which increased 1.4 million or (65.1%) of the total increase. Total business-type activities’ expenses for the year ending June 30, 2016 were approximately $56.4 million, which was an increase of $1.6 million or 2.9% compared with the previous year. While total business-type activities’ expenses increased $1.6 million or 2.9% compared with the previous year, increases occurred in the Water, Wastewater, Solid Waste, Recreation, and the River Park campground enterprises totaling $2.6 million compared with the previous year with Solid Waste making up 69.6% of the total. Decreases occurred in the Electric, Aquatic Center, Airport, Transit, Dick DeWees and Community Center, and Broadband enterprises totaling $1.0 million compared with the previous year with Electric making up 43.6% of the total. Governmental Activities As summarized above, during the current fiscal year, the City’s governmental activities’ net position increased by $1.5 million or 2.0% to $78.5 million compared with the previous year. Following are comparatives of revenues and expenditures for governmental activities with the prior year: Total revenues for the City’s governmental activities were $32.0 million for the year ended June 30, 2016. Of this total, $17.7 million or 55.3% of total revenues was derived from taxes. Traditional services provided by a city such as public safety, parks, recreation, and public works are primarily funded from property, sales, transient occupancy, motor vehicle, and other local taxes. Approximately $9.7 million or 30.3% of total revenues was derived from charges for services, representing fees charged for various services, including planning, engineering, and recreation. The total revenues for governmental activities decreased by less than $0.1 million or 0.09% compared with the previous year. Decreases in revenues occurred in the operating and capital grants and contributions in the amount of $1.0 million, gas taxes in the amount of $1.6 million, and other revenues in the amount of $0.4 million compared with the previous year. The decrease in capital grants and contribution was main attributed to the donation in 2015 for the Bike Skills Park ($569,347) with the $1.6 million decrease in gas tax attributed to a SBCAG1 change in policy to restrict Transit Development Act (TDA) funding solely to Transit services and eliminating the funding as a resource for use on maintenance of Streets and Roads (an eligible use of TDA funds). Increases in revenues occurred in all other categories as follows: Charges for services increased $0.4 million, grants and contributions not restricted to specific programs increased $0.1 million, all taxes (other than TDA funding) increased $0.3 million, and unrestricted investment earnings increased less than $0.1 million, all compared with the previous year.

1 SBCAG is an acronym for the Santa Barbara County Association of Governments.



Total expenses for governmental activities were $32.2 million for the year ended June 30, 2016, which is a $.8 million or 2.6% increase compared with the previous year. The largest component of total expenses was for public safety (police and fire) at $13.7 million, which represented 42.5% of the total governmental activities’ expenses. The next largest component of total expenses was for engineering/streets at $5.2 million, or 16.2%, of total expenses in the governmental activities. Following are graphical displays of governmental activities. The first shows revenues and expenses by functions and programs while the second shows revenues by source.



Business-Type Activities

During the current fiscal year, the City’s business-type activities’ net position increased by $7.3 million or 7.4% to $106 million compared with the previous year. Following are comparatives of revenues and expenditures for business-type activities with the prior year: Total revenues for the City’s business-type activities were $65.5 million for the year ended June 30, 2016, an increase of $2.0 million or 3.2% compared with the previous year. Of this total, $57.7 million (88.1% of total revenues) was derived from charges for services. As mentioned previously, business-type activities include enterprise fund operations such as Water, Wastewater, Electric, and Solid Waste funds, all of which recover their costs through user fees and charges. Other significant revenues are from operating grants and contributions of $7.0 million (10.7% of total revenues) and capital grants and contributions of $0.3 million (0.5% of total revenues). Total expenses for business-type activities were $56.4 million for the year ended June 30, 2016, an increase of $1.6 million or 2.9% compared with the previous year. The Electric utility is the largest individual category of business-type activities’ expenses, representing $19.5 million or 34.6% of the total business-type activities’ expenses. The Wastewater utility’s expenses are $13.5 million or 24% of total business-type activities’ expenses while the Water and Solid Waste utilities combined account for $18.4 million or 32.6% of total business-type activities’ expense. Following are graphical displays of business-type activities. The first shows revenues and expenses by individual major fund and non-major funds in total while the second shows revenues by source for all business-type activities. Business-type activities expenses include any interest component of debt service payment obligations; however, the principal component of debt service is excluded from expenses.



FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City uses fund accounting to ensure and 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 financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City Council. With the implementation of GASB 54, the presentation of City financial statements has been consolidated to combine all governmental activity with characteristics similar to the General Fund with the General Fund and categorized as Other Governmental Funds. In addition to the traditional General Fund, other funds such as the family of Library Funds are now reported with the General Fund in the category of Other Governmental Funds. With the implementation of GASB 68, net pension liabilities are now recorded in the balance sheet of proprietary funds and in the government wide financial statements. However, as governmental funds are to provide information on near-term inflows, outflows, and balances of spendable resources, GASB 68 accounting of net pension liabilities are not recognized at the governmental fund level of reporting.



As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $27.4 million, a decrease of $2.1 million or 7% compared with the previous year. Of the ending fund balance amounts, approximately $4.5 million or 16.4% constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder of the fund balance is either non-spendable form, committed, or assigned to indicate that it is 1) not in a spendable form of $4.4 million, 2) restricted for particular purposes of $18.2 million, or 3) committed for particular purposes of $0.3 million. General Fund The General Fund is the primary operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was $4.5 million, while the total fund balance was approximately $5.1 million. With the implementation of GASB 54, the presentation of City financial statements has been consolidated to combine all governmental activity with characteristics similar to the General Fund with the General Fund. In addition to the traditional General Fund, other funds such as the Traffic Safety, Traffic Offender, State COPS, and Library operating funds are now reported with the General Fund. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance at June 30, 2016 represents approximately 14.4% of total General Fund expenditures for the year ended June 30, 2016, while total fund balance represents approximately 16.3% of that same amount. Current year operations decreased the fund balance of the City’s General Fund by $1.2 million or 18.7% over the ending fund balance of the prior year. Key factors in this decrease are as follows:

Increase in revenues of less than $0.1 million or 0.15% primarily due to an increase in taxes of $486,773, charges for services of $472,926, license and permits $13,306, and interest earning increased $11,410 or 47.8% . The remaining revenue categories decreased with revenue from other agencies of $576,036, operating transfers in less operating transfers out of $731,819 and, other revenues decreasing $359,463.

Overall expenditures in the general fund increased $0.9 million or 2.8% compared to the previous year. o Personnel services increased $0.2 million or 0.9% while maintenance and operations

increased $0.5 million or 6.3%, capital outlay expenses increased by $0.1 million or 62% compared with the prior year.

o Expenditure category increases amounted to $2.9 million or 9.5% compared to total expenditures in the previous year. Expenses increased in nine categories; Fire increased $1,037,076 or 22.7%, Finance and City Treasury increased $562,656 (20.7%), Planning increased $348,849 (53.1%), Other expenses increased $360,491 (32.1%), Recreation increased $286,088 (59.9%), Parks increased $226,577 (15.0%), Library increased $33,752 (3.0%), City Clerk increased $22,589 (14.6%), and City Engineer increased $2,377 (0.1%) compared with the same categories in the previous year.

o Expenditure category decreases amounted to $2.0 million or 6.6% compared to total expenditures in the previous year. Expenses decreased in eight categories; Information Systems decreased $1,039,732 or 98.9% as a majority of its functions were reclassified and moved to an Internal Service Fund effective July 1, 2015, Non-departmental expenses decreased $643,001 (58.0%), Police decreased $172,004 (1.7%), Administration decreased $86,547 (16.7%), City Council decreased $73,283 (46.4%), Building and Building Inspection decreased $5,738 (1.2%), Human Resources decreased $1,609 (0.3%), and City Attorney decreased $1,058 (0.2%) compared with the same categories in the previous year.



Proprietary Funds The information provided relating to the City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the enterprise funds at the end of the year amounted to $9.0 million, an increase of $3.9 million or 76.4% compared with the previous year. The unrestricted net position in the Electric Utility proprietary fund was $18.0 million, the single largest component of proprietary net position. The primary cause of the increase of unrestricted net position of the enterprise funds is the positive operating income due to implemented rate increases in the Water, Wastewater, and Solid Waste Utilities. Following you will find additional information about the four significant Utilities; Water, Electric, Wastewater, and Solid Waste. Water Utility The Water Fund net position increased by $1.5 million or 11.7% compared with the previous year. Net income increased net position by $1.5 million or 11.7% compared to the net position in the prior year. Net position increased due to prior period adjustments related to implementation of GASB 68 ($0.2 million) and a prior period adjustment to accounts receivables of $0.4 million. Operating revenues increased $0.2 million or 2.0% while operating expenses increased $0.2 million or 2.2% compared to the previous year. Operating revenues exceeded operating expenses by $2.0 million, while non-operating activities decreased net position by $0.5 million, virtually unchanged from the prior year. The third of five rate adjustments was implemented in July 2015 in compliance with Proposition 218; however, the approved adjustment included the suspension of 50% of the 15% approved increase. The set of approved rate adjustments were implemented to accomplish several goals including:

to improve revenue levels to help reestablish revenues at levels sufficient to cover expenditures and debt service;

to establish reserves equal to 90 days of operation expenses based on industry standards;

to insure continued compliance with debt coverage covenants; and

to implement a planned replacement program at the end of the five-year rate setting authority (June 30, 2018) for the Fund’s infrastructure to insure the safe and reliable delivery of service to ratepayers.

If the set of approved rate adjustments scheduled to be phased in over five years are implemented and operational results are consistent with the assumptions underlying the rate adjustments, the Water Fund is projected to achieve all the goals identified by June 30, 2018, the end of the term of the rate increase schedule. As of July 2016, four of the five scheduled adjustments have been implemented. The implementation of the fourth adjustment in July 2016 resulted in the suspension of the entire 15% increase related to consumption while approving the 15% increase on the fixed meter charge and implementing the suspended 7.5% increase from July 2014 on the fixed meter charges. Implementation of GASB 68 in 2015 reduced the unrestricted net position of the Water Utility by $4.9 million which will likely delay achievement of two of the goals of the rate adjustments: the establishment of unrestricted net position equal to 90 days of operation expenses and the implementation of a planned replacement program for the Fund’s infrastructure.



Electric Utility The Electric Fund net position increased by $2.8 million or 6.5% compared with the previous year. Net income increased net position by $2.8 million or 6.5%. The City secures wholesale electricity through a joint powers agency, the Northern California Power Agency (NCPA). The City, a founding member of NCPA when it was established in 1968, is able to secure purchased power supplies at bulk power rates for customers within the City through NCPA. Without the resources of NCPA, a small electric utility like the City would be at a significant disadvantage in today’s wholesale power market. Operating revenues decreased by $0.8 million or 3.2% compared with the prior year while operating expenses decreased by $0.4 million or 2.2% compared with the previous year. Overall, operating revenues exceeded expenses by $4.4 million, a decrease of $0.4 million or 7.5% compared with the previous year. The Electric Fund has been operating with temporarily reduced residential and commercial rates since August 2012. The temporary rates reflect a reduction of 3% from the approved rates for residential and commercial class customers. Wastewater Utility The Wastewater Fund net position increased by $1.5 million or 4.7% compared with the previous year including restatement of the prior net position. Net income increased net position by $1.5 million or 4.7% compared to the net position in the prior year. Operating revenues increased $1.5 million or 11.2% while operating expenses increased $0.7 million or 6.1% compared to the previous year. Operating revenues exceeded operating expenses by $3.3 million, while non-operating activities decreased net position by $1.8 million. The third of five rate adjustments was implemented in July 2015 in compliance with Proposition 218. The set of approved rate adjustments were implemented to accomplish several goals including:

to improve revenue levels to help reestablish revenues at levels sufficient to cover expenditures and debt service;


to insure continued compliance with debt coverage covenants; and

to implement a planned replacement program for the Fund’s infrastructure to insure the safe and reliable delivery of service to ratepayers by June 30, 2023.

If the set of approved rate adjustments scheduled to be phased in over five years are implemented and operational results are consistent with the assumptions underlying the rate adjustments, the Wastewater Fund is projected to achieve all the goals identified by June 30, 2018, the end of the term of the rate increase schedule except the goal to implement a planned replacement program for the Fund’s infrastructure, originally projected to be achieved at the end of a second five-year rate setting authority by the end of the 2022-23 fiscal years. As of July 2016, four of the five scheduled adjustments have been implemented. The July 2016 rate increase of 10.5% was implemented as approved. Implementation of GASB 68 reduced unrestricted net reserves of the Wastewater Utility by $3.8 million which will likely delay the achievement of two of the goals of the rate adjustments: the establishment of unrestricted net position equal to 90 days of operation expenses and the implementation of a planned replacement program for the Fund’s infrastructure within 10 years of the initial implementation of the rate adjustments in August 2013.



Solid Waste Utility The Solid Waste Fund net position decreased by $0.1 million or 5.6% compared with the previous year. $1.3 million of the decrease is attributable to recognition of increased landfill closure costs resulting from the acceptance by CalRecycle1 of the landfill’s revised final estimated capacity. Net income, other than the additional landfill closure costs, increased net position by $1.2 million or 47.9%. Operating revenues increased $0.4 million or 5.0% while operating expenses increased $1.8 million or 27.3% compared to the previous year. Excluding the recognition of the landfill closure costs, operating expenses increased $0.5 million or 7.6% compared to the previous year. Operating expenses exceeded operating revenues by $0.2 million, while non-operating activities increased net position by less than $0.1 million. The second of five rate adjustments was implemented in July 2015 in compliance with Proposition 218. The set of approved rate adjustments were implemented to accomplish several goals including:


to fund the utility’s share of costs for the installation of a gas collection and monitoring system as required by the State of California at the utility owned landfill which will cost approximately $1.4 to $2.4 million;

to meet the requirements of the loan with CalRecycle obtained to fund the gas collection and monitoring system; and

to fund a planned replacement program for the utility.

If the set of approved rate adjustments scheduled to be phased in over five years are implemented and operational results are consistent with the assumptions underlying the rate adjustments, the Solid Waste Fund is projected to achieve all the identified goals by June 30, 2019, the end of the term of the rate increases except for the goal to achieve unrestricted reserves equal to 90 days of operation expenses. As of July 2016, the third of five scheduled adjustments have been implemented. The July 2016 rate increase of 3.6% was implemented as approved. Implementation of GASB 68 for the fiscal year ended June 30, 2015 and the recognition of the increased landfill closure costs for fiscal year ended June 30, 2015 have reduced unrestricted net reserves of the Solid Waste Utility by $5.1 million which will likely delay the achievement of two of the goals of the rate adjustments: the establishment of unrestricted net position equal to 90 days of operation expenses and the implementation of a planned replacement program for the Fund’s capital and infrastructure needs. The Solid Waste Utility’s project to install a gas collection and monitoring system, originally scheduled to be operational at the beginning of the 2016-17 fiscal year has been delayed by permitting issues and is now anticipated to be under construction during 2016-17. The delay has also delayed the Solid Waste Utility’s obligation to fund the project above the commitment from CalRecycle of a $1.0 million loan.

1 CalRecycle is the regulatory agency that oversees landfill operations in California. 2

2



Proprietary Funds summary Total net position for all business-type activities increased by $7.3 million or 7.4% compared with the previous year. Net operating revenues increased the net position of all business-type activities by $10.9 million while net non-operating revenue and expenses reduced net position by $3.6 million. The main factors contributing to the net operating increases are increases in operating revenues over operating expenses in the Water, Electric, and Wastewater funds with cumulative increases of $9.7 million. General Fund Budgetary Highlights Final expenditures for the General Fund at year-end were $6.3 million or 16.8% less than the final budget and $2.3 million or 6.9% less than the original budget. These positive variances over the original and final budgets are primarily due to the following:

Vacant positions held for salary saving and from vacancies due to turnover.

Newly hired employees replacing existing filled positions have a lower pension cost due to pension reform than employees hired before implementation of the City’s second tier benefit plans with CalPERS1 especially for CalPERS safety members of the Police and Fire Departments.

The final expenditure budget exceeds the original budget by $4.0 million. The primary reason for this difference is the recognition of awarded grants during the fiscal period in the Police, Planning and Parks Departments. The Planning Division initiated a council approved zoning update which included $0.4 million of additional appropriations as well as $0.6 million of developer funded appropriations during the fiscal year. The Library initiated the Charlotte Web bookmobile capital project with $0.6 million of additional appropriations funded with resources from various grant sources. Actual revenues were $1.8 million or 6.6% less than the original budget and $2.7 million or 9.6% less than the final budget. Interest income exceeded both the original and final budgets by less than $0.1 million or 36.9%. Other revenues were less than the original budget by $0.7 million or 55.7% and less than the final budget by $1.1 million or 65.1%. Charges for services were less than the original budget by $0.7 million or 7.2% and less than the final budget by $0.8 million or 8.2%. Actual tax revenues were less than the original and final budgets by $0.4 million or 2.8%. Sales tax revenue increases were less than anticipated during the 2015-16 fiscal year while charges for services and sales of assets were also lower than anticipated during the 2015-16 fiscal year. For more detailed information on the General Fund budgetary comparison, see the Required Supplementary Information section of this report.

1 CalPERS is an acronym for California Public Employees’ Retirement System

3

3



CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of the June 30, 2016 year-end, the City had $271 million invested in a broad range of capital assets, net of accumulated depreciation. This amount represents a net decrease (including additions, deductions and transfers) of $6.1 million, or 2.2% over the previous year.

2015 2016 2015 2016 2015 2016

Land and land rights 28,161,104$ 28,161,104$ 7,146,096$ 7,146,096$ 35,307,200$ 35,307,200$

Buildings and improvements 20,557,553 19,914,458 166,215,815 160,918,784 186,773,368 180,833,242

Machinery and equipment 7,133,438 7,121,258 1,340,491 1,676,819 8,473,929 8,798,077

Construction in process 5,437,193 5,667,364 3,608,322 3,797,151 9,045,515 9,464,515

Infrastructure 37,159,151 36,272,144 37,159,151 36,272,144

Totals 98,448,439$ 97,136,328$ 178,310,724$ 173,538,850$ 276,759,163$ 270,675,178$

Total

Governmental

Activities

Business-Type

Activities

This year’s major capital asset additions included the following:

Capital Assets for governmental activities as of June 30, 2016 totaled $97.1 million (net of accumulated depreciation). This was a $1.3 million decrease from the prior year, after $4.5 million in depreciation, resulting in additions totaling $3.2 million. Major capital asset additions during the fiscal year included the following:

o Street renovation projects $1,188,595 o Vehicle acquisitions $958,574 o Federal and State funded Safe Routes to School sidewalk projects $121,879 o Security and alert system $147,509 o Ventilation improvements for City facilities $37,387 o Network and communications enhancements $307,209 o Recreation facilities improvements $257,173

Capital Assets for business-type activities as of June 30, 2016 totaled $173.5 million (net of accumulated depreciation). This was a $4.8 million decrease from the prior year which, after $8.4 million in deprecation, resulted in additions totaling $3.8 million (net of deductions). Major additions include the following:

o Renovation to the Water distribution system $504,766 o Capital replacement of Water revenue meters $112,921 o Security and alert system for Wastewater treatment facility $53,499 o Transit system vehicle and farebox acquisitions $346,505 o Transit maintenance facility project $389,820 o Solid Waste Division’s Landfill improvements $157,506 o Electric system equipment enhancements $168,607 o Electric system meter replacement and meter reading project $131,825 o Electric system 4kv to 12kv conversion project improvements $1,895,253 o Airport apron improvements $70,330

For more detailed information on capital assets, see Note 4 in the Basic Financial Statements.



Long-Term Debt The issuance of the Basic Financial Statements for the Fiscal Year Ended June 30, 2016 and June 30, 2015 include the implementation of GASB 68. GASB 68 provides for the recognition of net pension liabilities in the government-wide financial statements along with proprietary fund financial statements beginning with the Basic Financial Statements issued for the Fiscal Year Ended June 30, 2015. Prior to the Basic Financial Statements issued for the Fiscal Year Ended June 30, 2015, pension liabilities were reported in accordance with GASB 27 in the notes to the financial statements. The issuance of the Basic Financial Statements for the Fiscal Year Ended June 30, 2016 provides the first year under GASB 68 in which comparative information can be provided for pension liabilities reported under GASB 68. The City’s overall net pension liability reported at June 30, 2016 is $60.8 million with $44.0 reported in governmental activities, $16.7 million reported in business-type activities, and $0.1 million reported in fiduciary funds. This compares with overall net pension liabilities reported at June 30, 2015 of $55.5 million, $39.9 million, $15.6 million, and $0.1 million in the same categories. The $60.8 million net pension liability is the net of reportable pension assets of $183.1 million resulting in a funding ratio of 75.1% at June 30, 2016 for all City plans combined. The prior year net pension liability for all City plans combined was $55.5 million with a funding ratio or 76.8%. While net pension liabilities are long term in nature, the long term debt note (Note 5) does not include a discussion related to pension costs as GASB 68 requires a separate note entirely devoted to pension debt. For more information related to pension costs as required by GASB 68, see Note 6 in the Basic Financial Statements as well as the Required Supplementary Information of the Basic Financial Statements. The City consolidated City-wide compensated absences and other accrued wages and benefits in the Employee Benefits and Insurance Control Fund, an Internal Service Fund, at June 30, 2015. This consolidation eliminated Business Activity compensated absences in the long term debt summary and increased the Governmental Activities compensated absences; however, overall compensated absence debt (short term and long term) changed by $0.4 million or 10.6% between June 30, 2015 and June 30, 2016 due entirely to the cumulative changes in employee’s earned benefits during the 2015-16 fiscal year. At the end of the current fiscal year, the City had long-term debt outstanding of $113.1 million, not including pension liability reported separately above. Of this amount, $6.5 million represents long-term leases outstanding backed by the equipment purchased, $33.1 million represents assessment district and enterprise fund bonds secured solely by specified revenue sources, and $56.3 million represents long-term loans payable. Outstanding debt associated with the upgrade of the Wastewater Plant accounts for approximately $73.8 million of the $113.1 million, or approximately 65.2%, of total outstanding long-term debt of the City. The City has a single long-term note with an outstanding balance of $1,426 which is scheduled to be fully paid off by June 30, 2017.



Total debt decreased by $4.7 million during the current fiscal year. The key factors in this decrease were:

Decrease of $3.5 million in the principal balance of the State Revolving Loan due to payments.

Decrease of $1.3 million due to payments on principal on bonds.

Decrease of $0.9 million in leases payable due to payments

Increase of $0.4 million in compensated absences due to the increases in employee leave balances.

Increase of $1.3 million of landfill closure and post-closure liabilities due to the recognition of the increased capacity of the landfill by CalRecycle.

The City currently has no general obligation debt outstanding. For more detailed information on long-term debt, see Notes 56, 67, 101, and 167 in the Basic Financial Statements. SIGNIFICANT ACCOMPLISHMENTS - FISCAL YEAR ENDING JUNE 30, 2016

The City initiated a project to replace its existing legacy financial management software with the adoption of the FY 2015-17 biennial budget. A steering committee completed an extensive request for proposal and the proposal was let during the 2015-16 fiscal year. The steering committee reviewed the submissions received and a system was selected. On September 20, 2016, the City Council approved the purchase and installation of a replacement financial management system. The conversion and installation process began on November 29, 2016 with all modules expected to be installed and operational by 2019.

The third of five approved rate adjustments for the Water and Wastewater utilities were put into place on July 1, 2015 in accordance with Proposition 218

The second of five approved rate adjustments for the Solid Waste utilities was implemented on July 1, 2015 in accordance with Proposition 218.

The City’s Successor Agency to the (former) Lompoc Redevelopment Agency submitted a revision of the Long Range Property Management Plan to the Department of Finance on June 30, 2016 for approval. Approval of the revised plan was received on August 12, 2016.

An agency wide master fee study, initiated to validate existing fees and to implement fees for services provided in accordance with Proposition’s 4 and 26 was adopted on January 5, 2016.

2015 2016 2015 2016 2015 2016

Compensated absences 3,475,306$ 3,843,130$ -$ -$ 3,475,306 3,843,130$

Accrued l iabi l i ties 6,798,001 6,247,001 6,798,001 6,247,001

Revenue bonds 2,135,000 2,065,000 32,287,009 31,042,177 34,422,009 33,107,177

Loans payable - - 59,798,789 56,287,590 59,798,789 56,287,590

Long-term capita l leases 4,423,107 3,857,803 3,031,532 2,660,984 7,454,639 6,518,787

Landfi l l closure and post-

closure costs 5,841,167 7,142,778 5,841,167 7,142,778

Notes payable 8,301 1,426 8,301 1,426

Totals 16,831,414$ 16,012,934$ 100,966,798$ 97,134,955$ 117,798,212$ 113,147,889$

Outstanding Debt at Year End

Total

Governmental

Activities

Business-Type

Activities



The Lompoc Library, formerly a separate and distinct governmental agency, was incorporated into the City’s governance structure on July 1, 2015. The City had previously provided all administrative services to the Lompoc Library and continues to provide substantial operational resources to the Library.

The Santa Barbara County Library Zone map was revised effective July 1, 2015 moving the Buellton Branch Library from Zone 2 (administered by the City of Lompoc and the Lompoc Library) to Zone 1 (administered by the City of Santa Barbara). The Lompoc Library continues to administer the Vandenberg Village Branch Library under contract with the County of Santa Barbara.

The Lompoc Library acquired the Charlotte Web Bookmobile with capital and operational grants provided by the Benton Trust, the Lompoc Library Foundation and others.

The Lompoc Airport continues implementation of a two phase major apron repaving project using FAA grant funding. Phase one was completed during the 2015-16 fiscal year and phase two is scheduled to be completed during the 2016-17 fiscal year.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

The City’s Bradley-Burns sales tax receipts increased 3.5% over the previous year with growth of 2.8% budgeted for 2016-17. The State’s 2004-05 budget included the issuance of “Economic Recovery Bonds which used a portion of the City’s Bradley-Burns 1% sales tax rate to finance the bonds. This mechanism was later called the “Triple Flip.” The bonds were fully repaid by the State in FY 2015-16 with a final close out of payments to taxing entities. The City received the final payment under the “Triple Flip” on August 31, 2016 recorded as a receivable as of June 30, 2016. The City’s full 1% Bradley-Burns sales tax rate has now been restored. The fiscal effect increased sales tax receipts in 2015-16 by approximately $287,000, effectively repaying the delayed distribution from the initiation of the “Triple Flip” in 2004-05.

Transient Occupancy Tax receipts increased 3.8% over the previous year and are budgeted to increase 6.4% in 2016-17 over the previous year due to the projected addition of a hotel at the end of the 2016-17 fiscal year.

Secured property tax revenue increased 2.4% over the previous year. Secured property taxes are anticipated to increase 6.2% in 2016-17 over 2015-16.

A conservative approach was taken in implementing the 2015-2017 biannual budget as the local economy is following a similar pattern established overall for the nation and state.

These indicators were taken into account when preparing the City’s biennial budget for fiscal years 2015-17.

The General Fund’s total fund balance decreased during the fiscal year ending June 30, 2016 by $1.2 million or 18.7% to $5.1 million. The unassigned General Fund’s fund balance at June 30, 2016 is $4.5 million or 14.4% of 2015-16 expenditures and 14.2% of 2016-17 appropriations. Unassigned fund balance is $1.2 million less at June 30, 2016 than at June 30, 2015, the beginning of the most recent biennial budget cycle. Unassigned fund balance does not meet the City’s Fund Balance Policy level of 16.7% using either actual expenditures of 2015-16 or budgeted appropriations of 2016-17. The long-range General Fund projection anticipated the reduction of unassigned fund balance as CalPERS increases pension contribution amounts through fiscal year 2019-20 with the General Fund projected to meet the Fund Balance Policy lever once again in fiscal year 2024-25.



The City’s adopted General Fund biennial budget for 2015-2017 includes General Fund expenditures of $67.5 million, an increase of 19.9% over the previously adopted 2-year budget. The 2009-11, 2011-13 and 2013-15 budgets incorporated budget reduction mechanisms in response to the Great Recession. While the 2015-17 budget is 19.7% greater than the 2007-09 budget, it represents a 2.5% annual increase over the 2007-09 budget cycle. During the 2013-15 adopted budget, 9 additional public safety positions were funded with Federal hiring grant awards. Funding for 7 of the 9 positions expired during the 2013-15 cycle while 6 of the 9 positions were retained in the 2015-17 budget. The State of California has caused and continues to cause significant uncertainty in the government sector. This has been especially true for California Redevelopment Agencies. On December 29, 2011, the California Supreme Court issued its opinion in the case of California Redevelopment Association, eta/. v. Ana Matosantos, etc., eta., Case No. S194861, and upheld the validity of Assembly Bill X126 ("AB 26") and invalidated Assembly Bill X127 ("AB 27"). The result of this decision is that all redevelopment agencies have been dissolved as of February 1, 2012. The City is now the Successor Agency of the former Lompoc Redevelopment Agency (RDA) and is responsible for “winding down” the financial activity of the former RDA. The Successor Agency was required to submit and implement a long range property management plan (LRPMP) for non-housing property held by the former RDA. The LRPMP originally was approved by the Successor Agency Oversight Committee and submitted to the Department of Finance (DOF) on September 26, 2013. The original submission to DOF was returned for modification and on February 27, 2015, DOF approved the resubmitted LRPMP. The original deadline for obtaining approval of the LRPMP by the DOF was December 31, 2015 but the deadline was extended to June 30, 2016 when the dissolution law was revised to allow public parking lots owned by the Successor Agency that do not produce revenue in excess of reasonable maintenance costs to be transferred to the City and retained as governmental use properties. The Successor Agency submitted a second revised LRPMP to DOF on June 30, 2016 requesting the transfer of public parking lots owned by the Successor Agency to the City according to the revision of dissolution law. The DOF approved the second revised LRPMP on August 12, 2016. The State of California continues the “winding down” of successor agencies with the annual consolidation of the enforceable obligation filing requirement. Required Obligation Payment Schedules (ROPS) had been required to be submitted semi-annually since 2012 but with the reporting cycle due February 1, 2016, the ROPS is due once for the 2016-17 period and annually on February 1 for each subsequent period. The Successor Agency has outstanding debt requiring debt service payments until September 2039. There are still many economic uncertainties facing local governments in the coming years, which could impact the City’s overall revenues, however sales tax revenue trends appear to provide for annual growth of between 3% and 5% for the next several years. Property taxes are anticipated to grow at no more than two percent as limited by Proposition 13 passed in 1978. Transient Occupancy Tax appears ready to have sustained growth of 5% to 8% annually due to the recent implementation of the Lompoc Tourism Improvement District and the construction of a new hotel which is anticipated to be open during the April 1, 2017 to June 30, 2017 period. The challenges facing the City are not unique as all cities across California face the same issues as well many cities do across the nation.



Expenditure increases continue to challenge local governments. Rising costs related to health care and retirement contributions continue to be significant factors facing cities. On September 12, 2012 the Governor signed pension reform AB 340, which the California State Legislature approved on August 31, 2012. Within AB 340 is the California Public Employees’ Pension Reform Act of 2013 (PEPRA), which affects most California retirement systems, including CalPERS, effective January 1, 2013. PEPRA generally restricts current pension provisions while increasing flexibility for employee/employer cost sharing. It includes one new retirement formula for Miscellaneous members and three new retirement formulas for Safety members. While PEPRA will have no significant immediate impact to pension costs, the law is designed to reduce pension costs of all public employers over time as new employees enter the PEPRA plans. New employees hired after December 31, 2012 will be enrolled in a plan with substantially lower benefits with the new employees required to pay at least 50% of the annual normal pension costs. The pension contribution rates for existing employees are expected to rise as the legislation, beginning January 1, 2013 allows employers to require that employees contribute half of the total normal cost capped at 8% of salary for miscellaneous members and 12% of salary for safety members by 2018. Prior to the implementation of PEPRA, the City successfully negotiated new pension plans for Miscellaneous and Safety members in 2011. New hires after implementation are eligible for the CalPERS 2.0% at 60 plan if a Miscellaneous member and the 3% at 55 plan if a Safety member. With implementation of PEPRA, if a newly hired employee is determined to be a “classic” member, actively employed by a CalPERS agency within 6 months of hiring, they are enrolled in the City’s second tier plans (either 2.0% at 60 or 3% at 55 depending on the employee’s membership – Miscellaneous or Safety) even if hired after December 31, 2012, the PEPRA implementation date. At June 30, 2016, the City employed 100 members in either the 2.0% at 60 or the 2% at 62 Miscellaneous plans and 29 members in either the 3% at 55 or 2.7% at 55 Safety plans. In addition to PEPRA, as a member of the CalPERS system, the City’s retirement plans is subject to revised amortization policies adopted by the CalPERS board which became effective with the employer contribution rates for the 2015-16 fiscal year. The revised smoothing policy are expected to pay for all gains and losses over a fixed 30 year period with a five year phase in period and is anticipated to allow for the elimination of unfunded liabilities in the pension system in 30 years. This new actuarial method will negatively impact member agencies as contributions are anticipated to grow substantially over the five year phase in period between 2015-16 and 2019-20. The City’s closed safety plan (3% at 50) is pooled with other like plans throughout the state. Up until the implementation of PEPRA, the City’s safety members were in distinct “pools” based on the benefit plan they were in. With the implementation of PEPRA and CalPERS revised smoothing policy, the individual pooled plans were consolidated into a single CalPERS safety pool while retaining distinctive characteristics based on the individual plans.


The pooled plans had significant changes to contribution formulas beginning in the 2015-16 fiscal year that eliminated an uniform percentage of salary rate of contribution and replaced that contribution methodology with a methodology for contributions of a combination of a set dollar amount related to unfunded liability payments and a percentage of salary for the employer’s share of the normal cost of the pension plan. Beginning with the 2017-18 fiscal year, the City’s miscellaneous plans will also utilize the methodology combining a fixed payment for its unfunded liability and a percentage of salary for the City’s share of the normal cost of the pension plan. The change in the method of payment for the miscellaneous plan will make comparisons with prior years less than straightforward. However, the fixed dollar contribution amount for the City’s plans are known for Fiscal Year’s 2015-16 and 2016-17 and estimates are provided by CalPERS for future years up to Fiscal Year 2022-23 with annual valuations published in August 2016. The valuations are available online from CalPERS. With the most current valuations for both the miscellaneous and safety plans, the annual fixed dollar contribution amounts are estimated to increase annually with a total fixed dollar amount due for fiscal year 2017-18 (the first year both plans pay a fixed contribution) of $4,060,437 rising annually through 2022-23 where the estimated contribution will be $7,354,262 With the segregation of the methodology between fixed unfunded liability payment and a percentage contribution for current normal costs, the normal cost component is relatively stable for both plans. The miscellaneous plan’s normal cost rate (as a percentage of salary) was 10.70% for 2015-16 and will be 10.84% for 2016-17, and 10.50% for 2017-18 and is estimated to be 10.5% for 2018-19 through 2022-23. The normal cost rates, although not required information, are presented here as additional information to help readers assess future cost. The safety plan rates are differentiated between tiers and are as follows: Fiscal Year Tier 1 Tier 2 Tier 3 Actual rates 2015-16 19.263% 17.295% 11.923% 2016-17 20.123% 18.301% 12.821% 2017-18 20.310% 18.487% 12.729% Estimated rates 2018-19 20.3% 18.5% 12.7% 2019-20 20.3% 18.5% 12.7% 2020-21 20.3% 18.5% 12.7% 2021-22 20.3% 18.5% 12.7% 2022-23 20.3% 18.5% 12.7% The primary reason for the change from a percentage of salary to a combination formula is the implementation of PEPRA. Over time, the City’s primary plans will lose members from attrition while new members will be hired into either the City’s classic plan (3% at 55 for safety and 2% at 60 for miscellaneous) or the PEPRA plan (2.7% at 57 for safety and 2% at 62 for miscellaneous). Without modifications, the City’s original closed plan (3% at 50 for safety and 2.7% at 55 for miscellaneous) will lose active members while the obligation to existing members will continue. CalPERS mitigated this eventuality by consolidating all pooled Safety plans into a single pool (and all pooled Miscellaneous plans into a separate single pool) beginning with the valuations published as of June 30, 2013. Additional information regarding the City’s plans can be obtained from CalPERS at 400 P Street, Sacramento, California 95814.



Management is aware of the economic uncertainties along with the Federal and State changes in policies and is prepared to recommend the necessary measures to mitigate their impact on services. Sound budget policies have allowed the City of Lompoc to weather lingering economic uncertainties in fiscal year 2015 without interrupting essential services. Although the economy and the State budget have impacted City revenues, these impacts have been mitigated with proper fiscal management. In addition, by building reserves during the economic “good times” of the 1990’s, the City is positioned well to meet economic challenges in the future. Beginning with the adoption of the 2015-17 budget, the City implemented a 10 year economic forecast as it relates to the City’s General Fund. This forecast provides for the modeling of the CalPERS phased-in implementation of its new amortization formula as well as other factors. The 10 year forecast can be found on pages 132-133 of the 2015-17 budget available online at www.cityoflompoc.com. In the Electric Fund, the City implemented a temporary reduction in consumer rates in August 2012. The temporary reduction was reviewed as part of the 2015-17 budget process and was extended for the 2015-17 budget cycle. The reduction from August 2012 did not affect the Electric Fund’s operational results for the 2012-16 period as wholesale energy delivery costs did not increase as fast and as much as had been projected during the 2011-13 budget preparation process. The City had increased rates by 6% increase in the 2011-2012 fiscal year and had a 3% increase scheduled for the 2012-2013 fiscal year, however the City has deferred the 3% rate increase and reduced consumer rates an additional 3% in August 2012. The existing rate schedule, including the 3% rate increases proposed for July 1, 2013 are still effective and can be implemented in the event wholesale power costs, energy delivery costs, or other operational costs increase such that the utility would need the additional revenue to maintain the required operating reserve as outlined in the utility’s reserve policy. A cost of service study is budgeted for the 2016-17 fiscal year to provide the Electric Fund with information about costs by rate classes. Results of the study can be used in future budget processes to adjust customer rates appropriately. The City held public hearings in compliance with Proposition 218 on August 6, 2013 for the Water or Wastewater Utilities and the City Council authorized up to 5 years of increases for both funds with the initial increase effective 30 days following the hearing. The public hearings were the result of a rate study process initiated in December 2011 authorized as part of the 2011-13 budget. The approved rate adjustments are anticipated to improve revenue levels to help reestablish revenues at levels sufficient to cover expenditures and debt service and to establish reserves equal to three months (90 days) of operation expenses based on industry standards and to insure continued compliance with debt coverage covenants. The later adjustments may allow the implementation of a funded replacement program for both utilities such that replacement of critical infrastructure will have a funding source when needed. The rate adjustment is scheduled to be phased in over five years achieving the reserve level goal by the fourth or fifth year for Water (depending on future operation results) and by the sixth year for Wastewater (depending on future operation results and future rate setting authority) and may provide for the funding of the replacement program of the Water Utility by the end of the fifth year of the proposed adjustments and by the tenth year for the Wastewater Utility (depending on future rate setting authority after the fifth year of the existing authority).


The Water Utility experienced an increase in user fees and charges for services of $178,276 in 2015-16 over 2014-15 or an increase of 1.6%. The increase is less than the rate increase implemented July 2015 due to conservation measures imposed by the State of California due to the continuing drought in the State. The Wastewater Utility experienced an increase in user fees and charges for services of $1,358,011 in 2015-16 over 2014-15 or an increase of 13.3%. This increase is in line with the rate increase implemented July 2015 of 10.5%. The rate study proposed rate increases of 15% and 10.5% respectively for the third year of the five year implementation of rates. The Wastewater Utility’s overall operational results include revenue changes from regional partners, other agencies. Partners include Vandenberg Village Community Services District and Vandenberg Air Force Base. Partner revenues are not subject to the utility rate study but rather are based on long term agreements with each partner paying for their share of treatment plant costs (operational, capital and debt service). The five year implementation plans of both the Water and Wastewater Utility’s rates include annual reviews of results prior to implementation of the following years’ increase. On May 19, 2015, the City Council suspended 50% of the approved 15% rate increase (7.5%) effective July 1, 2015 for the Water Utility. On May 17, 2016, the City Council implemented the 15% rate increase scheduled for July 1, 2016 along with restoring the 7.5% increase suspended effective July 1, 2015 for fixed charges only. The 15% rate increase scheduled for July 1, 2016 was not implemented for consumption charges and the suspended 7.5% rate increase scheduled for July 1, 2015 remains suspended for consumption charges. The Wastewater Utility rate adjustment effective July 1, 2016 was approved at the 10.5% rate as originally approved. The July 1, 2016 adjustment is the fourth of five adjustments provided for in the approval by the City Council on August 6, 2013. The final year increases will be reviewed prior to implementation with the 2017-18 rates to be considered in May 2017. The Solid Waste Fund also conducted a rate review study during 2013 and a public hearing on the proposed rates was held in compliance with Proposition 218 on June 3, 2014. The rates were approved over five years (the maximum allowed under Proposition 218) and implemented 30 days after adoption with an annual review by the City Council. The Solid Waste Utility experienced an increase in user fees and charges for services of $29,381 in 2015-16 over 2014-15 or an increase of 0.1%. The rate study proposed a rate increase of 3.6% for the second year of the five year implementation of rates which was affirmed by the City Council on May 17, 2016. The 2016-17 rate adjustment will be reviewed in May 2017. Revenue derived from the rate adjustments will be required to pay for the Utility’s cost share of the installation of a required landfill gas collection and control system (estimated to cost $1.4 million in 2012). The estimated cost of 2012 was arrived at prior to review of system plans and designs by the Santa Barbara Air Pollution Control Board, the delegated regulatory authority over the project, which has made extensive modifications to the design requirements. To minimize ratepayer cost increases due to this mandate, the Solid Waste Utility obtained a $1,000,000 loan amortized over 10 years from the State of California’s CalRecycle program. The loan was approved with a fixed annual rate of 0.249% and is available to pay for project costs including design and installation of the gas collection system. The Solid Waste Utility is responsible for design and installation costs above $1,000,000. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Lompoc’s Finance Division at 100 Civic Center Plaza, Lompoc, CA 93436.

46

Basic Financial

47

This Page Intentionally Left Blank

48 The accompanying notes are an integral part of these financial statements


Activities Activities Total

AssetsCash and investments 37,655,355$ 25,802,002$ 63,457,357$ Cash with fiscal agents 1,301,989 11,562,884 12,864,873 Restricted cash with fiscal agents 647,238 647,238 Accounts receivable 811,389 7,768,535 8,579,924 Tax receivable 1,496,096 1,496,096 Interest receivable 63,174 34,561 97,735 Due from other governments 449,723 25,415 475,138 Prepaid expenses 48,048 141,973 190,021 Due from other funds (4,144,680) 4,144,680 - Inventories 489,263 2,045,127 2,534,390 Loans receivable 4,360,122 4,360,122 Land held for resale 200,000 200,000 Other post employment benefits (OPEB) assets 1,941,165 1,941,165 Land 28,161,104 7,146,096 35,307,200 Construction in progress 5,667,364 3,797,151 9,464,515 Depreciable capital assets, net of

accumulated depreciation 63,307,860 162,595,603 225,903,463

Total assets 141,807,972 225,711,265 367,519,237

Deferred Outflow of ResourcesDeferred pensions 8,161,224 3,874,280 12,035,504

Unamortized loss on refundings - 164,243 164,243

Total deferred outflows of resources 8,161,224 4,038,523 12,199,747

City of LompocStatement of Net Position

June 30, 2016

The accompanying notes are an integral part of these financial statements 49




June 30, 2016

LiabilitiesAccounts payable and accrued liabilities 2,428,701$ 971,789$ 3,400,490$ Unearned revenue 413,653 2,559,061 2,972,714 Interest payable 48,985 1,316,660 1,365,645 Deposits and retentions payable 1,106,217 937,893 2,044,110 Noncurrent l iabilities:

Due within one year 5,727,439 5,263,410 10,990,849 Due in more than one year 10,285,495 91,871,545 102,157,040

Net Pension LiabilityDue in more than one year 43,943,278 16,710,466 60,653,744

Total l iabilities 63,953,768 119,630,824 183,584,592

Deferred Inflow of ResourcesDeferred pensions 7,510,749 4,151,461 11,662,210

Total deferred inflows of resources 7,510,749 4,151,461 11,662,210

Net PositionNet investment in capital assets 98,929,131 83,710,916 182,640,047 Restricted:

Low income housing 4,948,164 4,948,164 Construction 12,524,012 759,287 13,283,299 Debt service 117,735 6,768,022 6,885,757 Other purposes 605,908 5,745,616 6,351,524

Unrestricted (38,620,271) 8,983,662 (29,636,609)

Total net position 78,504,679$ 105,967,503$ 184,472,182$


Operating Capital

Charges for Grants and Grants and

Expenses Services Contributions Contributions

Governmental activities:General government 5,380,272$ 8,471,018$ 74,580$ $ Police protection 8,949,193 297,198 784,894 Fire protection 4,759,981 60,640 137,952 Engineering/streets 5,209,658 130,489 974,445 Building 457,452 271,581 Community development 1,986,913 118,959 503,700 Parks and recreation 3,880,341 326,440 486,302 Nondepartmental 1,482,048 Health and welfare 43,090 Interest on long-term debt 119,943

Total governmental activities 32,225,801 9,719,415 1,987,428 974,445

Business-type activities:Water 9,948,010 11,311,760 5,326 86,574 Electric 19,490,681 23,371,738 467,032 256,404 Wastewater 13,541,408 11,663,084 3,312,472 Solid Waste 8,436,331 8,223,839 23,739 Other 4,984,079 3,114,214 3,215,528

Total business-type activities 56,400,509 57,684,635 7,024,097 342,978

General revenues:Sales taxes 0 0 0 0Property taxesTransient occupancy tax (TOT)Vehicle l icense feesGas taxBusiness taxFranchise feesState of California in-lieuProperty transfer taxLicense and permitsInterest incomeOther revenues

Transfers

Total general and business-type revenues

Change in net position

Net position - beginning of year

Prior year restatement

Net position - beginning of year, restated

Net position - end of year

Functions/Programs

Program Revenues

City of LompocStatement of Activities

June 30, 2016


Total Total



3,165,326$ $ 3,165,326$ (7,867,101) (7,867,101) (4,561,389) (4,561,389) (4,104,724) (4,104,724)

(185,871) (185,871) (1,364,254) (1,364,254) (3,067,599) (3,067,599) (1,482,048) (1,482,048)

43,090 43,090 (119,943) (119,943)

(19,544,513) (19,544,513)

1,455,650 1,455,650 4,604,493 4,604,493 1,434,148 1,434,148

(188,753) (188,753) 1,345,663 1,345,663

8,651,201 8,651,201

6,841,524$ $ 6,841,524$ 4,156,536 8,667 4,165,203 1,794,142 1,794,142 3,169,397 3,169,397

997,050 29,539 1,026,589 349,682 349,682 607,534 607,534

14,180 14,180 86,642 86,642

300,183 300,183 376,324 285,959 662,283 650,430 79,046 729,476

1,731,068 (1,731,068) -

21,074,692 (1,327,857) 19,746,835

1,530,179 7,323,344 8,853,523

81,486,167 101,306,255 182,792,422

(4,511,667) (2,662,096) (7,173,763)

76,974,500 98,644,159 175,618,659

78,504,679$ 105,967,503$ 184,472,182$

Net Revenues (Expenses) and Changes in Net Position


Other Total

Governmental Governmental

General Funds Funds

AssetsCash and investments 4,284,901$ 18,203,128$ 22,488,029$ Accounts receivable 298,053 493,273 791,326 Tax receivable 1,496,096 1,496,096 Interest receivable 7,901 30,010 37,911 Due from other governments 213,026 236,697 449,723 Prepaid expenses 48,048 48,048 Due from other funds 166,000 166,000 Property held for resale 200,000 200,000 Inventories 41,839 5,348 47,187 Loans receivable 4,360,122 4,360,122

Total assets 6,389,864$ 23,694,578$ 30,084,442$

Liabilities and Fund BalanceLiabilities:

Accounts payable 790,473$ 172,725$ 963,198$ Due to other funds 166,000 166,000 Deposits payable 99,670 1,006,547 1,106,217 Unearned revenue 413,653 413,653


City of LompocBalance Sheet

Governmental FundsJune 30, 2016


Other Total


General Funds Funds

City of LompocBalance Sheet

Governmental FundsJune 30, 2016

Fund balance:Nonspendable:

Inventories 41,839$ 5,348$ 47,187$ Long term loans receivable 4,356,759 4,356,759

Restricted for: Low income housing 4,948,164 4,948,164 Road surface repairs 8,027,040 8,027,040 Library services 455,801 455,801 Debt service 117,735 117,735 Law enforcement 2,970 2,970 Other capital projects 4,496,972 4,496,972 Other purposes 82,878 64,259 147,137

Committed to: Library acquisitions 313,856 313,856 Health and welfare 21,410 21,410

Unassigned 4,505,550 (5,207) 4,500,343 Economic Uncertainty

Total fund balance 5,086,068 22,349,306 27,435,374

Total l iabilities and fund balance 6,389,864$ 23,694,578$ 30,084,442$


Total fund balance - governmental funds 27,435,374$

Amounts reported for governmental activities in the statement of

net position are different because:

Capital assets: In governmental funds, only current assets are reported. In the

statement of net position, all assets are reported, including capital assets and

accumulated depreciation. Net capital assets relating to governmental activities

consisted of:

Capital assets at estimated historical cost 158,277,085

Accumulated depreciation (66,524,768)

91,752,317

Interest payable: In governmental funds, interest on long-term debt is not

recognized until the period in which it matures and is paid. In the statement of net

position, it is recognized in the period that it is incurred. The additional l iability

for unmatured interest owed at year-end was: (31,000)

Long-term liabilities: In governmental funds, only current l iabilities are reported.

In the statement of net position, all l iabil ities, including long-term liabilities, are

reported. Long-term liabilities relating to governmental activities consisted of:

Tax Allocation Bonds - 2004 2,065,000

Capital leases payable 841,487

Net Pension Liabilities 40,842,326

(43,748,813)

Deferred Inflows and Outflows: The deferred inflow and outflows are not current

assets or resources; and they are not due in the current period and therefore are

not reported in the governmental funds.

Deferred outflows 7,441,401

Deferred inflows (6,740,098)

Internal service funds: Internal service funds are used to conduct activities for

which costs are charged to other funds on a full cost-recovery basis. Because

internal service funds are presumed to operate for the benefit of governmental

activities, assets and liabilities of internal service funds are reported with

governmental activities in the statement of net position. Net position for internal

service funds was: 2,395,498

Total net position - governmental activities 78,504,679$

City of Lompoc

Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position

Year Ended June 30, 2016


Other Total


General Funds Funds

Revenues:

Taxes 14,296,202$ 3,720,486$ 18,016,688$

Licenses and permits 300,183 300,183

Fines and penalties 92,073 92,073

Revenues from other agencies 1,478,220 1,483,653 2,961,873

Charges for current services 8,880,735 746,607 9,627,342

Interest 35,278 192,090 227,368

Other revenues 572,009 78,421 650,430

Total revenues 25,654,700 6,221,257 31,875,957

Expenditures:

Personnel services 22,188,324 618,766 22,807,090

Maintenance and operations 8,746,607 1,496,132 10,242,739

Capital outlay 343,753 2,042,415 2,386,168

Debt service:

Principal 129,072 129,072

Interest and fiscal charges 120,828 120,828

Total expenditures 31,278,684 4,407,213 35,685,897

Excess of revenues over (under) expenditures (5,623,984) 1,814,044 (3,809,940)

Other financing sources (uses):

Operating transfers in 5,003,948 330,860 5,334,808

Operating transfers out (550,058) (3,028,302) (3,578,360)

Total other financing sources (uses) 4,453,890 (2,697,442) 1,756,448

Net change in fund balance (1,170,094) (883,398) (2,053,492)

Fund balance - beginning of year 6,256,162 23,232,704 29,488,866

Fund balance - end of year 5,086,068$ 22,349,306$ 27,435,374$

City of Lompoc

Statement of Revenues, Expenditures, and Changes in Fund balance

Governmental Funds

June 30, 2016


Total net change in fund balance - governmental funds (2,053,492)$

Amounts reported for governmental activities in the statement of

activities are different because:

Capital outlay: In governmental funds, the costs of capital assets are reported as

expenditures in the period when the assets are acquired. In the statement of

activities, costs of capital assets are allocated over their estimated useful l ives as

depreciation expense. The difference between capital outlay expenditures and

depreciation expense for the year was:

Expenditures for capital outlay - governmental funds 2,386,168

Depreciation expense (3,280,274)

(894,106)

Loss from disposal of capital assets: In governmental funds, the entire proceeds from

disposal of capital assets are reported as revenue. In the statement of activities,

only the resulting gain or loss is reported. The difference between the proceeds

from disposal of capital assets and the resulting gain or loss was: (196,816)

Principal payments on long-term debt: In governmental funds, repayments of long-

term debt are recognized as expenditures. In the government-wide statements,

repayments of long-term debt are reported as reductions of l iabilities.

Expenditures for repayment of the principal portion of long-term debt were: 71,799

Pension expense: In governmental funds, pension expenses are included in the

Statement of Activities, however they do not require the use of current financial

resources and therefore are not reported as expenditures in the governmental funds

(net change): 1,582,864

Interest expense: Interest on long-term debt is recognized as an expenditure in

governmental funds when it is due. In the statement of activities, interest expense

is recognized as the interest accrues, regardless of when it is due. The difference in

interest expense paid and interest accrued was: 884

Internal service funds: Internal service funds are used to conduct certain activities

for which costs are charged to other funds on a full cost-recovery basis. Because

internal service funds are presumed to operate for the benefit of governmental

activities, internal service activities are reported with governmental activities in

the statement of activities. The net increase in the internal service funds was: 3,019,046

Total change in net position - governmental activities 1,530,179$


Governmental Funds to the Statement of Activities

City of Lompoc

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of




Water Electric Wastewater

Utility Utility Utility

Current assets:Cash and investments 3,898,028$ 3,624,098$ 7,138,518$ Cash with fiscal agents 11,562,884 Restricted cash with fiscal agent 566,434 80,804 Accounts receivable, net 1,258,485 2,616,886 2,117,362 Interest receivable 2,259 5,345 5,956 Due from other governments - - - Prepaid expenses - 139,570 - Due from other funds 80,610 4,774,145 - Inventories 292,270 1,656,167 27,024

Total current assets 6,098,086 24,379,095 9,369,664

Noncurrent assets:Capital assets:Land 529,778 250,304 321,758 Construction in progress 217,962 1,446,058 8,085 Structures and improvements 33,314,004 15,461,393 139,759,111 Vehicles and equipment 22,589,821 37,121,239 13,422,842 Less accumulated depreciation (31,004,998) (26,056,007) (46,869,200)

Total capital assets net of accumulated depreciation 25,646,567 28,222,987 106,642,596

Other post employment benefits (OPEB) asset

Total noncurrent assets 25,646,567 28,222,987 106,642,596

Total assets 31,744,653 52,602,082 116,012,260

Deferred Outflows of ResourcesDeferred pensions 1,001,690 1,019,396 784,578 Unamortized loss on refunding 125,609 38,634

Total deferred outflows of resources 1,127,299 1,019,396 823,212

Business-Type Activities Enterprise Funds

Assets


Proprietary FundsJune 30, 2016


Activities

Solid Waste Other Enterprise Total Internal

Disposal Funds Enterprise Service Funds

6,218,287$ 4,923,071$ 25,802,002$ 15,167,326$ - 11,562,884 1,301,989

647,238 731,283 1,044,519 7,768,535 20,063

8,751 12,250 34,561 25,263 - 25,415 25,415 - 2,403 141,973 - - 4,854,755 501,544 - 69,666 2,045,127 442,076

6,958,321 6,077,324 52,882,490 17,458,261

262,231 5,782,025 7,146,096 - 214,197 1,910,849 3,797,151 7,942

1,663,302 5,357,500 195,555,310 733,942 2,394,189 4,306,311 79,834,402 21,297,583

(2,879,265) (5,984,639) (112,794,109) (16,655,456) 1,654,654 11,372,046 173,538,850 5,384,011

1,941,165

1,654,654 11,372,046 173,538,850 7,325,176

8,612,975 17,449,370 226,421,340 24,783,437

809,800 258,816 3,874,280 719,823 164,243

809,800 258,816 4,038,523 719,823


Governmental



Proprietary Funds, continuedJune 30, 2016

Page 2




LiabilitiesCurrent liabilities:

Accounts payable 271,586$ 147,412$ 162,037$ Due to other funds - - - Accrued wages and benefits - - -

Unearned revenue - - 2,557,615 Interest payable 188,332 13,464 1,109,581 Deposits payable 8,037 181,571 Trust deposits - - - Reserve fund - VVCSD 737,985 Current portion of claims payable Current portion of compensated absencesCurrent portion of capital leases payable 148,570 183,430 9,353 Current portion of loans payable 1,426 3,573,973 Current portion of revenue bonds 661,901 - 648,099

Total current l iabilities 1,279,852 525,877 8,798,643

Noncurrent liabilities:Claims payable, net of current portion - - Compensated absences - - - Landfil l closure and post closure costs Capital leases payable, net of current portion 210,580 1,667,235 115,949 Loans payable, net of current portion 52,713,616 Revenue bonds, net of current portion 11,554,433 18,177,744 Net pension liability 4,313,953 4,408,857 3,385,063

Total noncurrent l iabilities 16,078,966 6,076,092 74,392,372


Deferred Inflows of ResourcesDeferred pensions 1,072,196 1,094,466 840,895

Total deferred outflows of resources 1,072,196 1,094,466 840,895

Net Position Net investment in capital assets 13,195,266 26,372,322 31,442,496 Restricted for:

Construction 759,287

Debt service 753,238 6,014,784

Other purposes 1,514,040 Unrestricted 492,434 18,038,681 (5,413,005)

Total net position 14,440,938$ 45,925,043$ 32,803,562$


60,596$ 330,158$ 971,789$ 217,655$ 155,619 554,456 710,075 4,646,224

- - - 1,247,848

- 1,446 2,559,061 - 1,758 3,525 1,316,660 17,985

189,608 - 10,300 10,300

737,985 1,363,001

3,698,212 33,232 3,426 378,011 596,226

3,575,399 - 1,310,000 -

251,205 903,311 11,758,888 11,787,151

- 4,884,000 - - - 144,918

7,142,778 7,142,778 246,742 42,468 2,282,974 2,420,090

52,713,616 29,732,177

3,485,382 1,117,211 16,710,466 3,100,952

10,874,902 1,159,679 108,582,011 10,549,960

11,126,107 2,062,990 120,340,899 22,337,111

866,414 277,490 4,151,461 770,651 866,414 277,490 4,151,461 770,651

1,374,680 11,326,152 83,710,916 4,308,860

759,287 - 6,768,022 -

2,460,298 1,771,278 5,745,616 50,000 (6,404,724) 2,270,276 8,983,662 (1,963,362)

(2,569,746)$ 15,367,706$ 105,967,503$ 2,395,498$

Activities



Governmental





Operating revenues:

User fees and charges for services 11,279,318$ 23,217,582$ 11,607,895$

Revenue from other agencies 5,326 467,032 3,312,472

Other operating revenues 32,442 154,056 49,189

Facilities rental 100 6,000

Total operating revenues 11,317,086 23,838,770 14,975,556

Operating expenses:Personnel services 2,808,714 2,078,023 2,442,540

Maintenance and operations 5,046,607 15,605,350 4,682,456

Depreciation and amortization 1,479,954 1,753,020 4,533,624

Total operating expenses 9,335,275 19,436,393 11,658,620

Operating income (loss) 1,981,811 4,402,377 3,316,936

Nonoperating revenues, expenses, and transfers:

Interest earnings 22,812 135,764 38,684

Interest expense (612,735) (54,288) (1,882,788)

Capital grants and contributions 86,574 256,404

Other revenue, net of expenses 29,275 33,651 6,144

Gas taxes

Operating transfers in

Operating transfers out (1,989,465)

Total nonoperating revenues and expenses (474,074) (1,617,934) (1,837,960)

Net income (loss) 1,507,737 2,784,443 1,478,976

Net Position - beginning of year 13,549,808 44,167,916 31,865,289

Prior year restatement (616,607) (1,027,316) (540,703)

Net Position - beginning of year, as restated 12,933,201 43,140,600 31,324,586

Net Position - end of year 14,440,938$ 45,925,043$ 32,803,562$


City of LompocStatement of Revenues, Expenses and Changes in Fund Net Position

Proprietary FundsYear Ended June 30, 2016


Activities



6,062,820$ 2,632,596$ 54,800,211$ 25,919,631$

23,739 3,215,528 7,024,097

2,161,019 1,472 2,398,178

488,813 494,913 -

8,247,578 6,338,409 64,717,399 25,919,631

2,532,265 1,131,174 10,992,716 8,046,225

5,729,259 3,314,611 34,378,283 13,721,984

157,104 507,553 8,431,255 1,171,004

8,418,628 4,953,338 53,802,254 22,939,213

(171,050) 1,385,071 10,915,145 2,980,418

47,110 41,589 285,959 148,956

(17,703) (30,741) (2,598,255) (84,948)

- 342,978

6,144 3,832 79,046

29,539 29,539

258,397 258,397 177,198

(1,989,465) (202,578)

35,551 302,616 (3,591,801) 38,628

(135,499) 1,687,687 7,323,344 3,019,046

(2,023,980) 13,747,222 101,306,255 535,221

(410,267) (67,203) (2,662,096) (1,158,769)

(2,434,247) 13,680,019 98,644,159 (623,548)

(2,569,746)$ 15,367,706$ 105,967,503$ 2,395,498$

Governmental





Cash flows from operating activities:

Cash received from customers 11,157,961$ 23,267,010$ 11,233,097$

Cash received from other agencies 5,326 467,032 3,312,472

Cash received from interfund services provided

Internal activity - cash paid from (to) other funds 7,683 166,709

Cash paid to suppliers for goods and services (5,035,822) (16,429,154) (4,793,288)

Cash paid to employees (3,033,043) (2,305,760) (2,618,062)

Net cash provided by operating activities 3,102,105 5,165,837 7,134,219

Cash flows from noncapital financing activities:

Cash received from other agencies 12,485

Other revenue 29,275 33,651 6,146

Net operating transfers (1,989,465)

Net cash provided (used) by non-capital financial 29,275 (1,955,814) 18,631

activities

Cash flows from capital and related financing activities:

Acquisition and construction of capital assets (654,682) (1,928,631) (9,128)

Principal payments on long term debt (780,038) (179,106) (4,138,506)

Interest payments on long term debt (599,022) (54,249) (1,936,529)

Cash from capital grants and contributions 86,574 256,404

Net cash used by capital and related financial

activities (1,947,168) (1,905,582) (6,084,163)

Cash flows from investing activities:

Interest on investments 23,600 137,851 36,307

Net cash provided by investing activities 23,600 137,851 36,307

Net increase in cash and investments 1,207,812 1,442,292 1,104,994

Cash and investments - beginning of year 3,256,650 13,744,690 6,114,328

Cash and investments - end of year 4,464,462$ 15,186,982$ 7,219,322$

Summary of cash investments - end of year: Cash and investments 3,898,028$ 3,624,098$ 7,138,518$

Cash with fiscal agents 566,434 11,562,884 80,804

Total cash and investments - end of year 4,464,462$ 15,186,982$ 7,219,322$

Statement of Cash FlowsProprietary Funds



City of Lompoc


Activities



8,255,329$ 3,086,168$ 56,999,565$ $

23,739 3,215,528 7,024,097

25,917,010

(148,784) (27,760) (2,152) 2,152

(4,467,249) (3,460,481) (34,185,994) (14,403,892)

(2,713,686) (1,201,524) (11,872,075) (7,653,213)

949,349 1,611,931 17,963,441 3,862,057

33,371 45,856

6,144 75,216

258,397 (1,731,068) (25,380)

6,144 291,768 (1,609,996) (25,380)

(173,877) (940,128) (3,706,446) (949,817)

(32,474) (3,330) (5,133,454) (563,502)

(17,880) (31,084) (2,638,764) (88,264)

342,978 (697,879)

(224,231) (974,542) (11,135,686) (2,299,462)

45,466 38,244 281,468 138,781

45,466 38,244 281,468 138,781

776,728 967,401 5,499,227 1,675,996

5,441,559 3,955,670 32,512,897 14,793,319

6,218,287$ 4,923,071$ 38,012,124$ 16,469,315$

6,218,287$ 4,923,071$ 25,802,002$ 15,167,326$

- - 12,210,122 1,301,989

6,218,287$ 4,923,071$ 38,012,124$ 16,469,315$


Governmental


Page 2



Operating income (loss) 1,981,811$ 4,402,377$ 3,316,936$

Adjustments to reconcile operating income (loss) to cash

provided (used) by operating activities:

Depreciation and amortization 1,479,954 1,753,020 4,533,624

Accounts receivable (153,799) (104,728) (429,987)

Due from other funds 7,683 166,709

Prepaid expenses 198,274

Inventories (14,767) (174,869) 1,729

Accounts payable 24,902 (654,807) (60,490)

Due to other funds

Accrued wages and benefits (224,329) (227,737) (175,522)

Deposits payable 650 (192,402)

Unearned revenue (52,071)

Trust deposits

Compensated absences -

Landfil l closure and postclosure costs

Claim liabilities

Total adjustments 1,120,294 763,460 3,817,283

Net cash provided by operating activities 3,102,105$ 5,165,837$ 7,134,219$


Proprietary FundsStatement of Cash Flows, continuedCity of Lompoc



Activities



(171,050)$ 1,385,071$ 10,915,145$ 2,980,418$

157,104 507,553 8,431,255 1,171,004

31,490 (36,913) (693,937) (14,096)

174,392 2,152

(903) 197,371

(27,822) (215,729) (100,552)

(39,601) (116,902) (846,898) (18,882)

(148,784) (27,760) (176,544)

(181,421) (70,184) (879,193) 322,511

(191,752)

(243) (52,314)

200 200

(166) (166) 70,501

1,301,611 1,301,611

(550,999)

1,120,399 226,860 7,048,296 881,639

949,349$ 1,611,931$ 17,963,441$ 3,862,057$

Governmental



Successor Agency

Private-Purpose

Trust Fund Agency Funds

AssetsCash and investments 720,027$ 1,665,819$

Cash with fiscal agent 1,318,968

Accounts receivable, net 162,289

Interest receivable 1,252 1,306

Loans receivable 117,805

Total assets 2,158,052 1,829,414

Deferred Outflows of ResourcesDeferred pensions 25,113

Total deferred outflows of resources 25,113 -$

LiabilitiesAccounts payable 4,056 4,917

Accrued wages and benefits 4,816

Interest payable 227,971

Long-term debt due within one year 367,019

Long-term debt due in more than one year 13,015,189

Amounts due to others 1,824,497

Pension Liability 108,816

Total l iabilities 13,727,867 1,829,414$

Deferred Inflows of ResourcesDeferred pensions 26,998

Total deferred inflows of resources 26,998 -$

Net PositionHeld in trust for successor agency activities (11,571,700)$


Statement of Fiduciary Net Position

Fiduciary Funds

June 30, 2016


Successor Agency

Private-Purpose

Trust Fund

Additions:

Property taxes 1,713,915$

Other revenues 13,742

Total additions 1,727,657

Deductions:

Administrative expenses 120,046

Interest on long term debt 698,210

Total deductions 818,256

Transfer In 55,254

Change in net position 964,655

Net position - beginning of year (12,530,346)

Prior year restatements (6,009)

Net position - beginning of year (12,536,355)

Net position - end of year (11,571,700)$


Statement of Change in Fiduciary Net Position

Fiduciary Funds

June 30, 2016

70 Notes to the financial statements

City of Lompoc

Notes to the Financial Statements

For the Year Ended June 30, 2016

Page

The notes are an integral part and essential to present fairly the information contained in the overview level of

the basic financial statements. Narrative explanations are intended to communicate information that is not

readily apparent or cannot be included in the statements themselves, and to provide additional disclosures as

required by the Governmental Accounting Standards Board.

1. Summary of Significant Accounting Policies ......................................................................... 71

2. Cash and Investments .......................................................................................................... 80

3. Loans Receivable .................................................................................................................. 84

4. Capital Assets ...................................................................................................................... 86

5. Long-Term Liabilities ........................................................................................................... 88

6. Pension Plans ....................................................................................................................... 93

7. Other Post-Employment Benefits……………………………………………………………………………….………..105

8. Interfund Transactions………………………………………………………………………………………….……….108

9. Revenue Limitations by California Proposition 218………………………………………….…………………..109

10. Risk Management…………………………………………………………………………………………………….………..109

11. Joint Ventures………………………………………………………………………………………………….……………..110

12. Net Position and Fund Balances Deficiencies…………………………………………………….……………….113

13. Airport Operating Leases………………………………………………………………………………………………..113

14. Commitments and Contingencies………………………………………………………………………………….114

15. Prior Year Restatements……………………………………………………………………………………………...114

16. Successor Agency Trust for Assets of Former Redevelopment Agency……………………………………115

17. Recent Pronouncements…………………………………………………………………………………………….….119

18. Subsequent Events………………………………………………………………………………………………………..122

Notes to the financial statements 71

City of Lompoc Notes to the Financial Statements For the Year Ended June 30, 2016

Note 1: Summary of Significant Accounting Polices

The Reporting Entity The City of Lompoc (the City) was incorporated in 1888. The City is a general law city under the laws of the State of California and operates under a Council-Administrator form of government. The City provides the following services: public safety (police and fire), construction and maintenance of highways and streets, sanitation, culture and recreation, public improvements, planning, zoning and general administration. Enterprise funds, operated in a manner similar to a private business, include water, electric, wastewater, solid waste, transit, and other business-type enterprises. The City has defined its reporting entity in accordance with the Governmental Accounting Standards Board (GASB) Statement No. 14, amended by GASB Statements No. 39 and 61. These statements provide guidance for determining which organizations, functions and activities of a government should be included in the general purpose financial statements. The criteria for inclusion in the basic financial statements are generally based upon the ability of the City to exercise oversight responsibility over such organizations, functions and activities. Oversight responsibility is generally defined as the existence of financial interdependency and/or the ability to appoint governing boards, to designate management, to significantly influence operations, to approve operating budgets or control day-to-day activities. The accompanying financial statements include all activities and reporting entities over which the City exercises oversight responsibility. Effective January 31, 2012, the Lompoc Redevelopment Agency of the City of Lompoc (the Agency) was dissolved through the Supreme Court decision on Assembly Bill IX 26. This action impacted the reporting entity of the City that previously had reported the Agency as a blended component unit. See Note 16 for additional information on the dissolution and reporting of the Agency as a private-purpose trust fund. In determining the financial reporting entity for the City, the following governmental unit has met the criteria for inclusion in the City's financial statements. Lompoc Public Financing Authority The Lompoc Public Financing Authority (the Authority) was established in 1984, and is a separate governmental entity under the laws of the State of California. The purpose of the Authority is to provide financing for the construction and acquisition of selected City facilities. The City Council and the Board of Directors of the Authority are legally separate boards; however, they share a common membership. Activities of the Authority are accounted for in the applicable City governmental or enterprise funds. Separate financial statements are not prepared for the Authority, as it is included in the accompanying financial statements as a blended component unit.


Note 1: Summary of Significant Accounting Policies (Continued)


Major Funds and Other Funds GASB Statement No. 34 defines major funds and requires that the City's major governmental funds be identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined and reported in a single column, regardless of their fund type. Major funds are defined as funds that have assets, liabilities, revenues, or expenditures/expenses equal to ten percent of their fund-type total and at least five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds. The City reported the following major governmental funds in the accompanying financial statements: General Fund: This fund accounts for all financial resources except those to be accounted for in another fund. It is the general operating fund of the City. Capital Projects Funds: This fund accounts for resources used for the acquisition and construction of capital facilities by the City. The City reported the following major proprietary funds in the accompanying financial statements: Water Utility Fund: This fund accounts for the operation of the City's water utility, a self-supporting activity, which renders a service on a user charge basis to residents and businesses. Electric Utility Fund: This fund accounts for the operations of the City's electric utility, a self-supporting activity, which renders service on a user charge basis to residents and businesses. Wastewater Utility Fund: This fund accounts for the operations of the City's wastewater utility, a self-supporting activity, which renders service on a user charge basis to residents and businesses. Solid Waste Fund: This fund accounts for the operations of the City's solid waste collection and disposal services, a self-supporting activity, which renders service on a user charge basis to residents and businesses. The city also reported the following non-major funds: Internal Service Funds: Internal Service Funds are used to finance and account for special activities and services performed by designated departments of the City for other departments in the City on a cost reimbursement basis. The following four funds are the internal services funds.




Employment Benefits and Insurance Control: This fund accounts for the administration of various benefit and insurance programs of the City. Such programs include activity for accrued leave, health care, retirement and other employee benefits; workers compensation, general liability, property, and other insurance programs. Vehicle: This fund accounts for the operation, maintenance and replacement of vehicles and equipment used by all City departments. The source of revenue is from reimbursement of fleet replacement, maintenance and operation costs allocated to each department by assignment of vehicle allocations. Communications: This fund accounts for the replacement and upgrade of technology, equipment, and services. Primary service areas to all departments include: desktop computer services, fiber and connectivity infrastructure services and equipment, network computer applications and equipment; replacement, maintenance, and operations of telephone communication systems and equipment. Stores: This accounts for the central duplication, printing, mail services, and inventory services, supplies, and equipment provided to all City departments. The source of revenue for this fund is from reimbursement of cost for services and supplies purchased. Fiduciary Funds: These are funds held that are custodial in nature and do not involve measurement of results of operation. The City maintains four agency funds. The financial activities of these funds are excluded from the governmental-wide financial statements, but are presented in separate fiduciary fund statements. Agency funds apply the accrual basis of accounting but do not have a measurement focus. Successor Agency Private Purpose Trust Fund: This fund is used to account for assets and liabilities held in trust for the Successor Agency to the former Lompoc Redevelopment Agency. Basis of Accounting The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent that they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources.




Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Other revenues susceptible to accrual include other taxes, intergovernmental revenues, interest, and charges for services. Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted Net Position may be available to finance program expenditures/expenses. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. 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 enterprise funds are charges to customers for sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The City has established agency funds, which are used to account for funds held by the City as an agent for private individuals or organizations. The agency funds are accounted for using the accrual basis of accounting. Budgetary Information A two-year budget is legally adopted for all funds by the City Council prior to July 1 of odd years, on a basis consistent with accounting principles generally accepted in the United States of America. After adoption of the final budget, transfers of appropriations within a General Fund department, or within other funds, can be made by the Management Services Director. Budget modifications between funds and increases or decreases to a fund's overall budget, must be approved by the City Manager or City Council. Numerous properly authorized amendments were made during the fiscal year. The appropriations are legally adopted at the major expenditure classification level for each department within each fund. Expenditures may not legally exceed appropriations at the department level.




Cash and Cash Equivalents For purposes of the statement of cash flows, the City considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The proprietary funds' deposits in the City-wide cash management pool are, in substance, demand deposits and are, therefore, considered cash equivalents for purposes of the statement of cash flows. Fair Value Measurements As defined in GASB Statement No. 72, Fair Value Measurement and Application, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City uses valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. GASB Statement No. 72 establishes a hierarchy of inputs to valuation techniques used to measure fair value. That hierarchy has three levels: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — Observable inputs, other than Level 1 prices, for the asset or liability, either directly or indirectly; Level 3 — Unobservable inputs for the asset or liability. For fiscal year ended June 30, 2016, the application of valuation techniques applied to the City’s financial statements has been consistent. Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". All trade and property tax receivables are shown net of any allowance for uncollectible accounts if material. Property tax assessment and collection is administered by the County of Santa Barbara. Property Taxes California Constitution Article XIIIA limits the combined property tax rate to 1% of a property's assessed valuation. Additional taxes may be imposed with voter approval. Assessed value is calculated at 100% of a property's fair value, as defined by Article XIII A, and may be increased no more than 2% per year unless a change in ownership occurs. The state legislature has determined the method of distributing the 1% tax levy among the various taxing jurisdictions.




In 2011 the City elected to receive property tax revenue in accordance with the County's Teeter plan whereby the County remits 100% of taxes levied without regard to delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and interest. Property taxes are billed and collected by the County on behalf of the City. Property taxes attach as an enforceable lien on the property on March 1. Taxes levied on July 1 are due on November 1 and February 1, and become delinquent after December 10 and April 10, respectively. Inventories Inventories are valued at weighted average cost for all funds under the consumption method of accounting. Under this method, purchases are recorded as increases in inventory and charged to expenditures when used. Prepaid Expenses/Expenditures Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses in the financial statements. Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair value on the date contributed. The City's policy is to capitalize all capital assets with costs exceeding certain minimums of $2,500 and with useful lives exceeding one year. With the implementation of GASB Statement No. 34, the City has recorded all its public domain (infrastructure) capital assets, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each fiscal year represents that fiscal year's pro rata share of the cost of capital assets. GASB Statement No. 34 requires that all capital assets with limited useful lives be depreciated over their estimated useful lives. Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each fiscal year until the asset is fully depreciated. Detailed information on the City’s capital assets can be found in Note 4.




The City has assigned the useful lives listed below to capital assets: Buildings and utility plants 10-50 years Improvements other than buildings 5-10 years Equipment and vehicles 6-30 years Infrastructure 10-50 years Deferred Outflows of Resources and Deferred Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In the government-wide and proprietary funds statement of net position, the City reported two items in this category:

1. Unamortized loss on refunding – A deferred charge on refunding bonds results from the difference in the carrying value of debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

2. Deferred pensions – A deferred resource is defined as an acquisition of net pension applicable to a future reporting period. These balances represent current fiscal year contribution, to the pension plan that will be applied as a reduction in net pension liability in the next fiscal year; or other items arising from changes in actuarial assumptions, differences between actual and projected experience, or differences between actual and projected investment gains/losses. These amounts will be amortized and reported as a component of pension expense in future fiscal years.

Deferred inflows of resources In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents acquisitions of fund balance or net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reported the following in the government-wide and proprietary funds statement of net position in the following category:

1. Deferred pensions – A deferred resource is defined as the balance that arises from changes in actuarial assumptions; difference between actual and projected experience; or difference between actual and projected investment gains/losses. These amounts will be amortized and reported as a component of pension expense in future fiscal years.

Detailed information on the City’s pension plans can be found in Note 6.




Compensated Absences In compliance with GASB Statement No. 16, the City has established a liability for accrued sick leave and vacation (compensated absences), in the Employment Benefit and Insurance Control Fund, an Internal Service Fund. The Employment Benefit and Insurance Control Fund is reimbursed through payroll charges to all other funds based on estimates of benefits to be earned and used during the fiscal year. This liability is set up for current employees at the current rates of pay. If sick leave and vacation are not used by the employee during the term of employment, vested compensation is payable to the employee at the time of retirement. It is the policy of the City to pay all accumulated vacation pay when an employee retires or separates from employment. Accumulated sick pay is payable according to a schedule based on years of service when an employee retires from the City. Such compensation is calculated at the employee's prevailing rate at the time of retirement or separation. Each fiscal year, an adjustment to the liability is made based on pay rate changes and adjustments for the current portion of the liability. The liability is included in Note 5: Long-Term Liabilities. Net Pension Liability The City recognizes a net pension liability, which represents the City's proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial reports provided by the California Public Employees' Retirement System (CalPERS) plans (Plans). The net pension liability is measured as of the City's prior fiscal year-end. Changes in the net pension liability are recorded, in the period incurred, as pension expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in the net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expensed or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred. 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 CalPERS plans 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. Projected earnings on pension investments are recognized as a component of pension expense. Net Position GASB Statement No. 34, amended by GASB Statement No. 63, adds the concept of net position, which is measured on the full accrual basis, to the concept of fund balance, which is measured on the modified accrual basis.




Net position is the excess of all the City's assets over all its liabilities. Net position is divided into three categories. These categories apply only to net position, which is determined only at the government-wide level, and are described below: Net Investment in Capital Assets: Describes the portion of net position which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted Net Position: Describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and funds restricted to low and moderate income purposes. Unrestricted Net Position: Describes the portion of net position which is not restricted to use. Fund Equity The City’s fund financial statements report fund balance in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, identifies five components of fund balance: nonspendable, restricted, committed, assigned, and unassigned. Nonspendable: This component consists of amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted: This component consists of amounts that have constraints placed on them either externally by third-parties (creditors, grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the City to assess, levy, charge or otherwise mandate payment of resources (from external resource providers) and includes legally enforceable requirement (compelled by external parties) that those resources be used only for the specific purposes stipulated in the legislation. Committed: This component consists of amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City's highest level of decision making authority which includes the City Municipal Code, Ordinances and Resolutions. Those committed amounts cannot be used for any other purpose unless the City removes or changes the specified use by taking the same type of action (City Municipal Code, Ordinance and Resolution) it employed previously to commit those amounts.


Note 2: Cash and Investments



Assigned: This component consists of amounts that are constrained by the City's intent to be used for specific purposes, but are neither restricted nor committed. Such intent should be expressed by the City Council or its designated officials to assign amounts to be used. Constraints imposed on the use of assigned amounts can be removed with no formal Council actions. Unassigned: This component consists of amounts that have not been restricted, committed or assigned to specific purposes. Fund Balance Spending Policy The City has formally adopted a spending policy regarding the order in which restricted, committed, assigned, and unassigned fund balances are spent when more than one amount is available for a specific purpose. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned and unassigned) are available for use it is the City's policy to use committed resources first, then assigned, and then unassigned as they are needed. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, as prescribed by the GASB and the American Institute of Certified Public Accountants, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

At June 30, 2016, cash and investments held by the City Treasury are reflected in the financial

statements as follows:

Cash and investments held in City Treasury 80,674,282$

Less cash held and investments in fiduciary funds (3,704,814)

Total government-wide 76,969,468$



Investment Policy

Cash balances from all funds are combined and invested to the extent possible, pursuant to the City's

investment policy, and State Government Code. The earnings from these investments are allocated monthly

to each fund, based on an average of monthly opening and closing balances of cash and investments.

Interest earned from cash and investments with fiscal agents is credited directly to such funds.

As defined in the California Government Code Section 53601 and the City's investment policy, the

following investment instruments are authorized:

Securities issued or guaranteed by the federal government or its agencies

Repurchase and reverse repurchase agreements

Bankers' acceptances

Commercial paper

Corporate notes and money market mutual funds

Negotiable certificates of deposit

State Local Agency Investment Fund (LAIF)

Note 2: Cash and Investments (Continued)

The policy, in addition to State statutes, establishes that funds on deposit in banks must be federally

insured or collateralized and investments shall have maximum maturity not to exceed five years and be

subject to limitations to a certain percent of the portfolio for each of the authorized investments.

At June 30, 2016, cash and investments consisted of the follows:

Fair Percent ofValue Portfolio

Cash and cash equivalents:Cash on hand (petty cash and change funds) 4,085$ 0.0%

Deposits with financial institutions 4,702,163 6.11%

Investments:

Local Agency Investment Fund (LAIF) 26,258,233 34.1%

Cash with fiscal agents 13,512,111 17.6%

Certificates of Deposits 4,405,744 5.7%

US Government Securities 28,087,132 36.5%

Total 76,969,468$ 100.0%




Highly liquid market investments with maturities of one year or less at time of purchase are stated at

amortized cost. All other Investments are stated at fair value based on quoted market prices, in

accordance with GASB standards.

The City maintained investments with the State of California Local Agency Investment Fund (LAIF). The

LAIF is an external investment pool sponsored by the State of California. These pooled funds

approximate fair value. The administration of the LAIF is provided by the California State Treasurer and

regulatory oversight is provided by the Pooled Money Investment Board and the Local Investment

Advisory Board. State statutes, bond resolutions, and LAIF investment policy resolutions allow

investments in United States government securities, negotiable certificates of deposit, bankers'

acceptances, commercial paper, corporate bonds, bank notes, mortgage loans and notes, other debt

securities, repurchase agreements, reverse repurchase agreements, equity securities, real estate, mutual

funds and other investments. The State LAIF pool credit quality is unrated.

Cash with Fiscal Agents

The City had $13,512,111 funds held by fiscal agents pledged for the payment or security of certain

liabilities, bonds and capital leases. The California Government code provides that these monies, in the

absence of specific statutory provisions governing the issuance of bonds, certificates, or leases, may be

invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments

its 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, not

permitted by the City's general investment policy, been authorized.

Custodial Credit Risk - Deposits

Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned

to it. The City does not have a formal deposit policy for custodial credit risk in addition to the California

Government Code collateral requirements. All deposits held by financial institutions are fully insured or

collateralized with securities, held by the pledging financial institutions' trust departments in the City's

name.

For custodial credit risk associated with deposits, the City's policy is to follow the California Government

Code which required California financial institutions to secure the City's deposits by pledging

government securities as collateral. The market value of the pledge securities must equal 110% of the

City's deposits. California law also allows financial institutions to secure City deposits by pledging first

trust deed mortgage notes equal to 150% of the City's deposits.




Interest Rate Risk

The City's formal investment policy does not limit investment maturities as a means of managing its

exposure to fair value losses arising from increasing interest rates. However, the City's investment

portfolio shall remain sufficiently liquid to enable the City to meet its cash flow requirements. An

adequate portion of the portfolio shall be maintained in liquid short term securities which can be

converted to cash and guarantee the City's ability to meet operating expenditures.

The City categories its fair value measurements within the fair value hierarchy established by generallyaccepted accounting principles. These principles recognize a three-tiered fair value hierarchy, as follows:

l Level 1: Investments reflect prices quoted in active market;l Level 2: Investments reflect prices that are based on similar observable assets either directly or

indirectly, which may include inputs in markets that are not considered to be active; and,l Level 3: Investments reflect prices based upon unobservable sources.

The valuation technique used was indirect matrix pricing by the City's vendor in comparable benchmark quoted markets.

At June 30, 2016, investments by maturities was as follows:

Investments held by fiscal agents are structured with maturity dates that correspond to the payment of final debt

service of the respective liability.

Types of Investments June 30, 2016 Level 2Investment by fair value hierarchy US Federal Agency Securities 28,087,132$ 28,087,132$ Certificate of Deposits 4,405,744 4,405,744 Total investment by fair value hierarchy 32,492,876 32,492,876$

Investment not subject to fair value hierarchy Local Agency Investment Fund (LAIF) 26,258,233 Total investment not subject to fair value hierarchy 26,258,233

Total investment measured at fair value 58,751,109$

Active Market Less Than One Month One to Three to

Value One Month to One Year Three Years Five Years

State LAIF 26,258,233$ $ 26,258,233$ $ $

U.S. government-sponsored enterprise 28,087,132 - - 7,765,399 20,321,733

Collateralized certificates of deposit 4,405,744 - 241,310 2,433,224 1,731,210

Total 58,751,109$ -$ 26,499,543$ 10,198,623$ 22,052,943$




Note 3: Loans Receivable

Credit Risk

State law limits investments in commercial paper, corporate bonds, and mutual bond funds to the top

two ratings issued by nationally recognized statistical rating organizations. The City has no investment

policy that would further limit its investment choices.

The City places no limit on the amount the City may invest in any one issuer. The City is unlimited in the

amount and percentage of the total portfolio it may invest in Certificates of Deposit. The City's

investments in the LAIF represented 46% of total cash and investments at June 30, 2016.

Investments that exceed 5% of the portfolio by issuer are summarized below:

Community Development Loans Receivable

Community Development Block Grants provide for low-income housing assistance; first time home buyers assistance; and single and multi-family rehabilitation loans. The City of Lompoc Single Family Rehabilitation Loan Program (the Program) assists low and moderate income homeowners within the City by providing low interest rate loans for home rehabilitation projects. Loans are collateralized by a Deed of Trust recorded on the property. The Program's goals are to provide income qualified homeowners the opportunity to make home improvements and repairs at minimal cost and allow them to protect and/or increase the value of their investment. The Program is designed to improve the quality of life for low-income families and seniors by maintaining and upgrading the City's housing stock. The Program also provides for loans to individuals and

The following table identifies the Standard & Poor's credit quality ratings for those investments requiring

disclosure as of June 30, 2016.

Active Market

Value AA+ Not Rated

State LAIF 26,258,233$ $ 26,258,233$

U.S. government-sponsored enterprise 28,087,132 28,087,132

Collateralized certificates of deposit 4,405,744 4,405,744

58,751,109$ 28,087,132$ 30,663,977$

Active Market Percent of

Value Portfolio

Federal Home Loan Mortgage Corporation 10,611,024$ 38%

Federal National Mortgage Association 3,861,205 14%

Federal Farm Credit Banks 5,791,417 21%

Federal Home Loan Banks 7,823,486 28%



Note 3: Loans Receivable (Continued)

and other organizations that provide benefits to low-income households or neighborhoods. The loans'

principal and interest amounts are typically deferred and due at maturity. Some loan terms provide for maturity upon the sale of the property. Interest rates range from 0% - 5% per annum. At June 30, 2016,

the outstanding loans receivable was $1,632,390.

Affordable Housing-ln-Lieu Loans Receivable

The City established an Affordable Housing In-Lieu Fee Program (the Program) to allow a developer of a

residential development to elect to pay a fee as an alternative to providing affordable housing units

on-site, if on-site units are determined to be infeasible. The Program was originally established for

residential developments located outside the boundaries of the Old Town Lompoc Redevelopment

Project Area. At June 30, 2016, the outstanding loans receivable was $230,000.

The City manages low and moderate income housing loans in its various programs. The loans are

collateralized by a Deed of Trust recorded on the property. The loans' principal and interest amounts are

typically deferred and due at maturity. Some of the loans provide for maturity upon the sale of the

property. Interest rates range from 0% - 5% per annum. At June 30, 2016, the outstanding loans

receivable was $2,497,732.

At June 30, 2016, the aggregate maturities of loans receivable were as follows:

For the Year Ending June 30,2017 120,044$ 2018 6,499 2019 6,697 2020 6,901 2021 7,175

Thereafter 4,212,806

Total 4,360,122$



Note 4: Capital Assets

Capital assets activity for the year ended June 30, 2016, was as follows:

Balance BalanceJune 30, 2015 Additions Deductions Transfers June 30, 2016

Capital assets not being depreciated:Land 28,161,104$ $ $ $ 28,161,104$ Construction in progress 5,437,193 1,137,806 - (907,635) 5,667,364

Total capital assets not being depreciated 33,598,297 1,137,806 - (907,635) 33,828,468

Capital assets being depreciated:Buildings and improvements 36,526,733 359,908 (16,935) 15,305 36,885,011 Vehicles and equipment 30,257,674 1,543,410 (1,959,730) 116,421 29,957,775 Infrastructure 78,564,395 294,859 - 786,044 79,645,298

Total capital assets being depreciated 145,348,802 2,198,177 (1,976,665) 917,770 146,488,084

Less accumulated depreciation for:

Buildings and improvements 15,969,180 995,797 (15,925) 21,501 16,970,553

Vehicles and equipment 23,124,236 1,487,571 (1,763,924) (11,366) 22,836,517

Infrastructure 41,405,244 1,967,910 43,373,154

Total accumulated depreciation 80,498,660 4,451,278 (1,779,849) 10,135 83,180,224

Total capital assets being depreciated, net 64,850,142 (2,253,101) (196,816) 907,635 63,307,860

Governmental activities capital assets, net 98,448,439$ (1,115,295)$ (196,816)$ -$ 97,136,328$

(568,745)$ $

Depreciation expense charged to functions/programs for the government activities was as follows:

Governmental activities:

General government 266,530$

Police protection 120,242

Fire protection 30,414

Engineering/streets 2,047,174

Building 10,532

Community development 132,423

Parks and recreation 672,960

Internal service funds

Vehicle 881,137

Communications 279,493

Stores 10,373

Total governmental activities depreciation expense 4,451,278$

Governmental activities capital assets include assets under capital leases. The amount of assets under capital leases

included in buildings and improvements was $1,366,398 and in equipment was $842,604, and related accumulated

depreciation was $440,284 and $184,838, respectively, as of June 30, 2016.

Governmental activities



Note 4: Capital Assets (Continued)

Balance Balance

June 30, 2015 Additions Deductions Transfers June 30, 2016

Capital assets not being depreciated:

Land 7,146,096$ $ $ $ 7,146,096$

Construction in progress 3,608,322 2,085,336 (145,944) (1,750,563) 3,797,151

Total capital assets not being depreciated 10,754,418 2,085,336 (145,944) (1,750,563) 10,943,247

Capital assets being depreciated:

Buildings and improvements 195,305,502 33,812 215,996 195,555,310

Vehicles and equipment 76,613,658 1,686,177 1,534,567 79,834,402

Total capital assets being depreciated 271,919,160 1,719,989 - 1,750,563 275,389,712

Less accumulated depreciation for:

Buildings and improvements 29,089,687 5,546,839 - 34,636,526

Vehicles and equipment 75,273,167 2,884,416 78,157,583

Total accumulated depreciation 104,362,854 8,431,255 - - 112,794,109

Total capital assets being depreciated, net 167,556,306 (6,711,266) - 1,750,563 162,595,603

Business-type activities capital assets, net 178,310,724$ (4,625,930)$ (145,944)$ -$ 173,538,850$

Depreciation expense was charged to functions as follows:

Business-type activities:

Water 1,479,954$

Waste water 4,533,624

Transit 331,158

Electric 1,753,020

Solid Waste 157,104

Airport 152,997

River Park Campground 6,279

Broadband 17,119

Total business-type activities depreciation expense 8,431,255$

Business-type activities capital assets include assets under capital leases. The amount of assets under capital leases

included in buildings and improvements was $2,915,638 and in equipment was $3,178,914, and related accumulated

depreciation was $939,403 and $1,323,162, respectively, as of June 30, 2016.

Business activities



Note 5: Long-Term Liabilities

During the year ended June 30, 2004, tax allocation bonds in the amount of $9,955,000 were issued to finance the construction and maintenance of the Aquatic Center, park improvements and other capital improvements.

The City has pledged its tax increment and property assessment for repayment of the bonds. The City's former

Redevelopment Agency secured $7,350,000 of the issue amount from future tax increment while the City's Park

Maintenance and City Pool Assesment District secured the remaining amount of $2,605,000 from annual property

assessment. The portion of the bonds related to the former Redevelopment Agency has been transferred to the

Successor Agency Trust Fund as of February 1, 2012 (See Note 16). The bonds bear interest rates from 2.75 to

4.85%. Principal and interest payments are due each March 2 and September 2 through September 2, 2034. At

June 30, 2016, the principal balance outstanding on the City's portion of the bonds was $2,065,000.

At June 30, 2016, the aggregate maturities of 2004 tax allocation bonds were as follows:

Principal Interest Total

70,000$ 93,711$ 163,711$

75,000 90,855 165,855

75,000 87,855 162,855

80,000 84,705 164,705

85,000 81,270 166,270

480,000 346,095 826,095

600,000 219,873 819,873

600,000 59,898 659,898

2,065,000$ 1,064,262$ 3,129,262$

For the Year Ending June 30,

2017

2018

2019

2020

2021

2022-2026

2027-2031

2032-2035

Total

The City's long-term debt for the year ended June 30, 2016 was as follows:

Balance Balance Due Within

Governmental Activities 6/30/15 Additions Deductions 6/30/16 One Year

2004 tax allocation bonds 2,135,000$ $ (70,000)$ 2,065,000$ 70,000$ Capital leases payable 4,423,104 55,254 (620,555) 3,857,803 596,226

Claims liabilities 6,798,000 463,552 (1,014,551) 6,247,001 1,363,001

Compensated absences 3,475,306 3,716,203 (3,348,379) 3,843,130 3,698,212

Total 16,831,410$ 4,235,009$ (5,053,485)$ 16,012,934$ 5,727,439$

See Note 10 for detail of estimated claims liabilities, which are included in other liabilities on the government- wide statement of net position.

2004 Tax Allocation Bonds



Note 5: Long-Term Liabilities (Continued)

The City's long-term debt for the year ended June 30, 2016 was as follows:

Capital Leases Payable

The City leases vehicles and equipment under capital leases that expire through September 2028.

At June 30, 2016, future minimum payments on capital leases were as follows:

685,377$

613,282

531,833 522,478

422,460

1,549,121 4,324,551 (466,748)

3,857,803

(596,226) 3,261,577$ Capital lease obligation, net of current portion

2017

2018

20192020

2021

ThereafterTotal minimum lease payments

Less amounts representing interestPrincipal portion of capital lease obligation

Less current principal portion


Balance Balance Due Within

Business-type Activities 6/30/15 Additions Deductions 6/30/16 One Year

1998 Revenue Bonds 4,765,000$ $ 405,000$ 4,360,000$ 425,000$

2005 Revenue Bonds 13,310,000 440,000 12,870,000 455,000

2007 Revenue Bonds 14,425,000 410,000 14,015,000 430,000

32,500,000 1,255,000 31,245,000 1,310,000

Less: Unamortized bond discount (212,991) 10,169 (202,823)

Total revenue bonds 32,287,009 - 1,265,169 31,042,177 1,310,000

Wastewater state loan payable 59,798,788 3,511,199 56,287,589 3,573,973

Water loan payable 8,301 6,875 1,426 1,426

Capital leases payable 3,031,533 - 370,548 2,660,985 378,011

Landfill closure and post-closure costs 5,841,167 1,301,611 7,142,778

100,966,798$ 1,301,611$ 5,153,791$ 97,134,955$ 5,263,410$




2007 Water and Wastewater Revenue Bonds

On February 14, 2007, revenue bonds in the amount of $17,080,000 were issued. Of the bond issue, $14,545,000

was used to finance a portion of the Wastewater Treatment Plant Upgrade and the reminder was used to finance

a water capital project. The bonds bear interest from 3.75 to 4.375% and are due in annual installments on March

1 through March 1, 2037. The bonds were issued at a discount of $195,452 which is reported on the accompanying

financial statements as a deduction from bonds payable and is being charged to operations as amortization

expense through the year 2037. At June 30, 2016, the principal balance outstanding on the bonds was $14,015,000

and the unamortized bond discount was $134,407.

Revenue Bonds


difference of $656,970 between the reacquisition price and the net carrying amount of the old debt.

This unamortized loss on refunding is reported in the accompanying financial statements as deferred

outflows of financial resources and is being amortized as additional interest expense through the year

2022 using the striaght-line method and was $164,243 as of June 30, 2016. The City completed the advance

refunding to reduce its total debt service payment by $822,744 and obtained an economic gain (difference

between the present value of the old debt and the new debt service payments) of $497,677. The bonds

bear interest from 3.50 to 5.00% and are due in semi-annual installments on March 1 and September 1

through March 1, 2028. At June 30, 2016, the principal amount outstanding on the bond was $4,360,000.


On March 22, 2005, revenue bonds in the amount of $16,970,000 were issued to finance various water and

wastewater capital projects. The bonds bear interest from 3.50 to 4.50% and are due in annual installments

on March 1 through March 1, 2035. The bonds were issued at a discount of $109,605 which is reported in the

accompanying financial statements as a deduction from bonds payable and is being charged to operations

as amortization expenses through the year 2035. At June 30, 2016, the principal amount outstanding on the

bonds was $12,870,000 and the unamortized bond discount was $68,416.

On July 7, 1998, revenue bonds in the amount of $9,535,000 were issued. Of this bond issue, $4,470,000

was used to finance various water capital projects and the remaining amount of $5,065,000 was used to

advance refund the 1992 Water and Wastewater Revenue Bonds. The advance refunding resulted in a





On February 14, 2007, revenue bonds in the amount of $17,080,000 were issued. Of the bond issue, $14,545,000

was used to finance a portion of the Wastewater Treatment Plant Upgrade and the reminder was used to finance

a water capital project. The bonds bear interest from 3.75 to 4.375% and are due in annual installments on March

1 through March 1, 2037. The bonds were issued at a discount of $195,452 which is reported on the accompanying

financial statements as a deduction from bonds payable and is being charged to operations as amortization

expense through the year 2037. At June 30, 2016, the principal balance outstanding on the bonds was $14,015,000

and the unamortized bond discount was $134,407.

Revenue Bonds


difference of $656,970 between the reacquisition price and the net carrying amount of the old debt.

This unamortized loss on refunding is reported in the accompanying financial statements as deferred

outflows of financial resources and is being amortized as additional interest expense through the year

2022 using the striaght-line method and was $164,243 as of June 30, 2016. The City completed the advance

refunding to reduce its total debt service payment by $822,744 and obtained an economic gain (difference

between the present value of the old debt and the new debt service payments) of $497,677. The bonds

bear interest from 3.50 to 5.00% and are due in semi-annual installments on March 1 and September 1

through March 1, 2028. At June 30, 2016, the principal amount outstanding on the bond was $4,360,000.


On March 22, 2005, revenue bonds in the amount of $16,970,000 were issued to finance various water and

wastewater capital projects. The bonds bear interest from 3.50 to 4.50% and are due in annual installments

on March 1 through March 1, 2035. The bonds were issued at a discount of $109,605 which is reported in the

accompanying financial statements as a deduction from bonds payable and is being charged to operations

as amortization expenses through the year 2035. At June 30, 2016, the principal amount outstanding on the

bonds was $12,870,000 and the unamortized bond discount was $68,416.

On July 7, 1998, revenue bonds in the amount of $9,535,000 were issued. Of this bond issue, $4,470,000

was used to finance various water capital projects and the remaining amount of $5,065,000 was used to

advance refund the 1992 Water and Wastewater Revenue Bonds. The advance refunding resulted in a

At June 30, 2016, the aggregate maturities of the revenue bonds were as follows:

For the Year Ending June 30, Principal Interest Total

2017 1,310,000$ 1,392,437$ 2,702,437$

2018 1,370,000 1,336,324 2,706,324

2019 1,420,000 1,277,024 2,697,024

2020 1,480,000 1,215,574 2,695,574

2021 1,550,000 1,150,836 2,700,836

2022-2026 7,330,000 4,757,741 12,087,741

2027-2031 7,785,000 3,420,733 11,205,733

2032-2036 8,005,000 1,637,100 9,642,100

2037-2038 995,000 132,300 1,127,300 Total 31,245,000$ 16,320,069$ 47,565,069$

Wastewater State Loan Payable

On May 3, 2007, the City executed a contract and obtained financing for the Wastewater Treatment Plant

upgrade project from the State Water Resources Control Board (SWRCB). Proceeds borrowed during the

construction phase that were converted to the loan payable were $76,337,875. Under the terms of the

agreement, the loan was considered to be interest free during the construction phase with a required

matching portion of $15,267,940 which was equal to 16.667% of the total estimated cost of the project.

The total repayment obligation, including imputed interest, to the SWRCB loan is $91,605,815. Repayment

on the loan began during the year ended June 30, 2011 and is due in equal annual payments of $4,580,291

through 2030. The imputed interest rate on the loan is approximately 1.77%. At June 30, 2016, the principal

balance outstanding was $56,287,589.

At June 30, 2016, the aggregate maturities of the wastewater state loan payable were as follows:


2017 3,573,973$ 1,006,318$ 4,580,291$

2018 3,637,869 942,422 4,580,291

2019 3,702,907 877,383 4,580,290

2020 3,769,108 811,182 4,580,290

2021 3,836,493 743,798 4,580,291

2022-2026 24,503,031 2,978,714 27,481,745

2027-2030 13,264,208 790,510 14,054,718 Total 56,287,589$ 8,150,327$ 64,437,916$




Water Loan Payable

During the year ended June 30, 1997, the City obtained a loan payable of $124,000 from the State for

construction of a wet well. The loan is due in annual installments of principal and interest of $7,290

at 5% interest per annum through 2017. At June 30, 2016, the principal balance outstanding was $1,426.

At June 30, 2016, the aggregate maturities of the water loan payable were as follows:


2017 1,426$

Total 1,426$

Capital Leases Payable

The City leases vehicles and equipment under capital leases that expire through June 2027. At June 30, 2016, future minimum payments on capital leases were as follows:


2017 444,507$

2018 444,507

2019 243,319

2020 243,319

2021 243,319


Total minimum lease payments 3,054,500

Less amounts representing interest (393,515)

Principal portion of capital lease obligation 2,660,985

Less current principal portion (378,011)

Capital lease obligation, net of current portion 2,282,974$

Landfill Closure and Post-Closure Costs

State and federal laws and regulations require the City to place a final cover on its sanitary landfill site

when it stops accepting waste and to perform certain maintenance and monitoring functions at the site

for thirty years after closure. Although closure and post-closure costs will be paid only near or after the

date that the landfill stops accepting waste, the City reports a portion of these closure and post-closure

care costs as an operating expense in each period based on landfill capacity used as of each balance

sheet date. The landfill closure and post-closure care liability of $7,142,778 at June 30, 2016 represents

the cumulative amount to date based on the use of 34.4% of the estimated capacity of the landfill.

This amount is based on what it would cost to perform all closure and post closure care in 2016. The

City expects to close the landfill in the year 2047. Actual cost may be higher due to inflation, changes

in technology, or changes in regulations.


Note 6: Pension Plans

Agent-Multiple Employer Plan



General Information about the Pension Plans

Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan for all

qualified permanent and probationary employees. CalPERS acts as a common investment and administrative

agent for its participating member employers. Benefit provisions under the Plan is established by State statute

and City resolution. CalPERS issues publicly available reports that include a full description of the pension

plans regarding benefit provisions, assumptions and membership information that can be found on the

CalPERS website.

The City is required by state and federal laws and regulations to make annual contributions to the reserve

account to finance closure and post-closure care. The City is in compliance with these requirements, and

at June 30, 2016, restricted net position in the amount of $2,460,298 was designated for this purpose. The

City expects that future inflation costs will be paid from interest earnings on these annual contributions.

However, if interest earnings are inadequate or additional post-closure care requirements are determined

(due to changes in technology or applicable laws or regulations, for example), these cost may need to be

covered by charges to future landfill users.

The City contributes to the CalPERS for its employees. The City participates in one agent-multiple employer

plan for its miscellaneous employees (Miscellaneous Plan) and five cost sharing employer groups for its safety

employees (Safety Plans). The Miscellaneous Plan is described in the first section of the footnote under Agent-

Multiple Employer Plan and the Safety Plans follow and are described in the second section of the footnote

under Cost-Sharing Employer Plans. The portion of the Miscellaneous Plan that has been allocated to the Successor

Successor Agency Trust Fund, an Agency Fund, is included in the Miscellaneous Plan summaries in this footnote.

A summary of the government-wide balances for all Plans at June 30, 2016 are as follows:

Net Pension

Liability

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Miscellaneous Plan 39,044,589$ 9,066,066$ 9,701,790$

Safety Plan 21,717,971 2,994,551 1,987,418

Less Successor Agency Fund (108,816) (25,113) (26,998)

Total Government-Wide 60,653,744$ 12,035,504$ 11,662,210$



Note 6: Pension Plans (Continued)

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living

adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full time employment. Members

with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All

members are eligible for non-duty disability benefits after 10 years of service. The death benefit is

one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement

2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public

Employees' Retirement Law.

The Miscellaneous Plan's provisions and benefits in effect at June 30, 2016, are summarized as follows:

Prior to November 19, 2011 to On or after

Hire date November 19, 2011 December 31, 2012 January 1, 2013

Benefit formula 2.7% @ 55 2% @ 60 2% @ 62

Benefit vesting schedule 5 years service 5 years service 5 years service

Benefit payments monthly for life monthly for life monthly for lifeRetirement age 50 - 55 50 - 63 52 - 67Monthly benefits,

as a % of eligible 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%

Required employee contribution rates 8% 7% 6.25%

Required employer contribution rates 20.897% 20.897% 20.897%

Miscellaneous

While the City's Miscellaneous Plan is not closed to new entrants, the component option of 2.7% @ 55

is closed to new entrants. Classic Members, as defined by CalPERS, entering the City's Miscellaneous

Plan would enter the 2% @ 60 option while New Members, as defined by CalPERS, entering the City's

Miscellaneous Plan would enter the 2% @ 62 option.

Employees Covered

At June 30, 2016, the following employees were covered by the benefit terms for

the Miscellaneous plan.

Miscellaneous

Inactive employees or beneficiaries currently receiving benefits 311

Inactive employees entitled to but not yet receiving benefits 185

Active employees 288

Total 784




While the City's Miscellaneous Plan is not closed to new entrants, the component option of 2.7% @ 55

is closed to new entrants. Classic Members, as defined by CalPERS, entering the City's Miscellaneous

Plan would enter the 2% @ 60 option while New Members, as defined by CalPERS, entering the City's

Miscellaneous Plan would enter the 2% @ 62 option.

Employees Covered

At June 30, 2016, the following employees were covered by the benefit terms for

the Miscellaneous plan.

Miscellaneous

Inactive employees or beneficiaries currently receiving benefits 311

Inactive employees entitled to but not yet receiving benefits 185

Active employees 288

Total 784

Contributions. 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

Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined

rate is the estimated amount necessary to finance the costs of benefits earned by employees during the

year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute

the difference between the actuarially determined rate and the contribution rate of employees.

Net Pension Liability

The City's net pension liability for the Miscellaneous Plan is measured as the total pension liability,

less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of

June 30, 2015, using an annual actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015

using standard update procedures. A summary of principal assumptions and methods used to

determine the net pension liability is shown below.

Actuarial Assumptions. The total pension liabilities in the June 30, 2014 actuarial valuations were

determined using the following actuarial assumptions:

Miscellaneous

Valuation Date June 30, 2014

Measurement Date June 30, 2015

Actuarial Cost Method Entry-Age Normal Cost Method

Actuarial Assumptions:

Discount Rate 7.65%

Inflation 2.75%

Payroll Growth Varies by Entry Age and Service

Projected Salary Increase 3.3% -14.2% (1)

Investment Rate of Return 7.50% (2)

Mortality (3)

(1) Depending on age, service and type of employment.

(2) Net of pension plan investment expenses, including inflation.

(3) Derived using CalPERS' Membership Data for all Funds.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2014

valuation were based on the results of a April 2010 actuarial experience study for the period 1997

to 2007. Further details of the Experience study can found on the CalPERS website.




Change in Assumption. CalPERS has implemented a Change of Assumption and this year (Measurement

Date 2015) the discount rate was changed from 7.50% (net of administrative expense) to 7.65%.

Discount Rate. The discount rate used to measure the total pension liability was 7.65% for the Plan. To

determine whether the municipal bond rate should be used in the calculation of a discount rate for each

plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different

from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.

Therefore, the current 7.65% discount rate is adequate and the use of the municipal bond rate calculation

is not necessary. The long term expected discount rate of 7.65% will be applied to all plans in the Public

Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be

obtained from the CalPERS website.

The long-term expected rate of return on pension plan investments was determined using a building-block

method in which best-estimate ranges of expected future real rates of return (expected returns, net of

pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term 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 returns were calculated over the short-term

(first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected

nominal returns for both short-term and long-term, the present value of benefits was calculated for

each fund. The expected rate of return was set by calculating the single equivalent expected return

that arrived at the same present value of benefits for cash flows as the one calculated equivalent

expected return that arrived at the same present value of benefits for cash flows as the one calculated

equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

The following table reflects the long-term expected real rate of return by asset class. The rate of return

was calculated using the capital market assumptions applied to determine the discount rate and asset

allocation. These rates of return are net of administrative expenses.






Discount Rate. The discount rate used to measure the total pension liability was 7.65% for the Plan. To

determine whether the municipal bond rate should be used in the calculation of a discount rate for each

plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different

from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.

Therefore, the current 7.65% discount rate is adequate and the use of the municipal bond rate calculation

is not necessary. The long term expected discount rate of 7.65% will be applied to all plans in the Public

Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be

obtained from the CalPERS website.






returns of all the funds asset classes, expected compound returns were calculated over the short-term




that arrived at the same present value of benefits for cash flows as the one calculated equivalent

expected return that arrived at the same present value of benefits for cash flows as the one calculated


The following table reflects the long-term expected real rate of return by asset class. The rate of return

was calculated using the capital market assumptions applied to determine the discount rate and asset

allocation. These rates of return are net of administrative expenses.

Current Taget

Allocation

Real Return

Years 1 - 10 (a)

Real Return

Years 11 + (b)Global equity 51.0% 5.25% 5.71%Global fixed income 19.0% 0.99% 2.43%Inflation sensitive 6.0% 0.45% 3.36%Private equity 10.0% 6.83% 6.95%Real estate 10.0% 4.50% 5.13%Infrastructure and forestland 2.0% 4.50% 5.09%Liquidity 2.0% -0.55% -1.05%

Total 100.0%

(a) An expected inflation of 2.5% used for this period

(b) An expected inflation of 3.0% used for this period.

Changes in the Net Pension Liability

The change in the Net Pension Liability for the Miscellaneous Plan follows:

Total Pension Plan Fiduciary Net Pension

Liability Net Pension Liability/(Asset)

(a) (b) (c) = (a) - (b)

Balance at June 30, 2014 161,829,698$ 125,504,352$ 36,325,346$

Changes in the year:

Service cost 2,837,509 2,837,509

Interest on the total pension liability 11,831,510 11,831,510

Changes in benefits terms -

Change in assumptions (2,823,325) (2,823,325)

Difference between actual and expected experience (1,957,610) (1,957,610)

Contributions - Employer 3,250,690 (3,250,690)

Contributions - Employees 1,269,810 (1,269,810)

Net Investments income 2,789,070 (2,789,070)

Benefit payments, including refunds of employee

contributions (7,614,518) (7,614,518) -

Administrative Expense (140,729) 140,729

Net Change 2,273,566 (445,677) 2,719,243

Balance at June 30, 2015 164,103,264$ 125,058,675$ 39,044,589$

Asset Class

Increase (Decease)

Miscellaneous




Deferred Outflows Deferred Inflows

of Resources of Resources

Pension contributions subsequent to measurement date 3,733,272$ $

Difference between expected and actual experience (1,326,123)

Change in assumptions (1,912,575)

5,332,794 (6,463,093)

Total 9,066,066$ (9,701,791)$

Net difference between projected and actual

earnings on plan investments

Miscellaneous

Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the

net pension liability of the City for the Miscellaneous Plan, calculated using the discount rate for the

Miscellaneous Plan, as well as what the City's net pension liability would be if it were calculated using

a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous

1% Decrease 6.65%

Net Pension Liability 60,422,794$

Current Discount Rate 7.65%


1% Increase 8.65%


Pension Plan Fiduciary Net Position. Detailed information about the pension plan's fiduciary net position

is available in the separately issued CalPERS financial reports.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2016, the City's pension expense for the Miscellaneous Plan was $983,569

of which $989,173 was recognized as pension expense for the City and $5,604 was recognized as pension

expense for the Successor Agency Trust Fund. At June 30, 2016, the City reported deferred outflows

of resources and deferred inflows of related to pensions from the following sources:


Cost-Sharing Employer Plans



The deferred outflows of resources related to contributions subsequent to the measurement date of

$3,733,272 will be recognized as a reduction of the net pension liability in the year ended June 30, 2017.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to

pensions will be recognized as pension income as follows:

Payable to the Pension Plan

For the year ended June 30, 2016, the City reported a payable of $0 for the outstanding amount of

contributions to the pension plan as required.

Measurement Periods

Ended June 30: Amount

2016 (2,363,404)

2017 (2,363,404)

2018 (975,389)

2019 1,333,200

(4,368,997)$

-

Miscellaneous

General Information about the Pension Plans

Plan Descriptions. As noted above, the City contributes to CalPERS for a defined benefit pension plan

for all qualified permanent and probationary employees. CalPERS acts as a common investment and

administrative agent for its participating member employers. Benefit provisions under the Plan is

established by State statute and City resolution. CalPERS issues publicly available reports that include

a full description of the pension plans regarding benefit provisions, assumptions and membership

information that can be found on the CalPERS website.

The City participates in five safety cost-sharing multiple-employer plans. The Safety Plans consist of

Police and Fire Tier 1, Police Tier 2, Fire Tier 2, and Police and Fire PEPRA.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living

adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full time employment. Members

with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All

members are eligible for non-duty disability benefits after 10 years of service. The death benefit is

one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement

2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public

Employees' Retirement Law.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the

net pension liability of the City for the Miscellaneous Plan, calculated using the discount rate for the

Miscellaneous Plan, as well as what the City's net pension liability would be if it were calculated using

a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous

1% Decrease 6.65%


Current Discount Rate 7.65%


1% Increase 8.65%


Pension Plan Fiduciary Net Position. Detailed information about the pension plan's fiduciary net position


Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2016, the City's pension expense for the Miscellaneous Plan was $983,569

of which $989,173 was recognized as pension expense for the City and $5,604 was recognized as pension

expense for the Successor Agency Trust Fund. At June 30, 2016, the City reported deferred outflows

of resources and deferred inflows of related to pensions from the following sources:




The Plans' provisions and benefits in effect at June 30, 2016, are summarized as follows:

Police Tier 2

November 19, 2011 to

Hire date December 31, 2012

Benefit formula 3.0% @ 50 3.0% @ 50 3.0% @ 55

Benefit vesting schedule 5 years service 5 years service 5 years service

Benefit payments monthly for life monthly for life monthly for life

Retirement age 50 - 55 50 - 55 50 - 55

3.00% 3.00% 2.4% to 3.0%

Required employee contribution rates 9% 9% 9%

Required employer contribution rates 35.409% 35.409% 23.065%

Police Tier 1

Safety

Prior to

November 19, 2011

Fire Tier 1

Prior to

September 24, 2011

Monthly benefits, as a % of

eligible compensation

The Police Pooled Plan effective prior to November 19, 2011 and the Fire Pooled Plan effective

prior to September 24, 2011 are closed to new entrants.

Contributions. 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 July 1 following notice of a change in the rate. Funding contribution

for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially

determined rate is the estimated amount necessary to finance the costs of benefits earned by

employees during the year, with an additional amount to finance any unfunded accrued laibility.

The City is required to contribute the difference between the actuarially determined rate and the

contribution rate of employees.

Hire date 3.0% @ 55 2.7% @ 57

Benefit formula 5 years service 5 years service

Benefit vesting schedule monthly for life monthly for life

Benefit payments 50 - 55 50 - 57

Retirement age eligible compensation 2.4% to 3.0% 2.0% to 2.7%

Required employee contribution rates 9% 12.25%

Required employer contribution rates 23.065% 12.250%

Police & Fire PEPRAFire Tier 2

On or after

January 1, 2013

September 24, 2011 to

December 31, 2012

Safety




Employer contributions for years ended June 30, were as follows:

2013/14 2014/15

Annual Employer Contributions 1,776,894$ 1,784,713$

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

The City reported net pension liablilities for its proportionate share of the net pension liablility

for the years ended June 30, were as follows:

June 30, 2016 June 30, 2015

21,717,971$ 19,193,402$

The City's net pension liability for Safety Plan is measured as the proportionate share of the net pension

liability. The net pension liability of each of the Plans is measured as of June 30, 2015, and the total pension

liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as

of June 30, 2014 rolled forward to June 30, 2015 using standard update procedures. The City's proportion of

the net pension liability was based on a projection of the City's long-term share of contributions to the

pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City's proportionate share of the net pension liability for its Safety Plan were as follows:

Net Pension Liability Ended June 30 6/30/2015 6/30/2016

Measurement Date 6/30/2014 6/30/2015

Percentage 0.512% 0.579%

For the year ended June 30, 2016, the City recognized pension expense of $599,295 for the Safety Plans.

ChangeIncrease/(Decrease)

City Proportionate Share

of the Net Pension Liability

Fiscal Year Paid

2015/16

2,073,074$

0.067%

Percentage Share of Risk Pool




At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources

related to pensions for all Safety Plans from the following sources:

Deferred Outflows Deferred Inflowsof Resources of Resources

Pension contributions subsequent to measurement date 2,073,074$

Difference between expected and actual experience (233,018)

Change in assumptions (1,071,734)

Net differences between projected and actual earnings

on plan investments (543,162)

Change in employer's proportion 864,841 -

Difference between the employer's contribution and the -

employer's proportionate share of contributions 56,637 (139,504)

Total 2,994,552$ (1,987,418)$

Pension contributions subsequent to the measurement date of $2,073,074 are reported as deferred

outflows of resources and will be recognized as a reduction of the net pension liability in the year

ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows

of resources related to pension will be recognized as pension income for all Safety Plans as follows:

Measurement Periods

Ended June 30: Amount

2016 (573,134)

2017 (582,587)

2018 (576,984)

2019 666,765

(1,065,940)$

-

-

-

-

-

Safety




Actuarial Assumptions. The total pension liabilities in the June 30, 2014 actuarial valuations for all Safety

Plans were determined using the following actuarial assumptions:

Safety

Valuation Date June 30, 2014

Measurement Date June 30, 2015

Actual Cost Method Entry-Age Normal Cost Method

Actuarial Assumptions:

Discount Rate 7.65%

Inflation 2.75%

Payroll Growth Varies by Entry Age and Service

Projected Salary Increase 3.3% -14.2% (1)

Investment Rate of Return 7.5% (2)

Mortality (3)

(1) Depending on age, service and type of employment.

(2) Net of pension plan investment expenses, including inflation

(3) Derived using CalPERS1 Membership Data for all Funds.

The mortality table used was developed based on CalPERS' specific data. The table includes 20 years of

mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer

to the 2014 experience study report.

All other actuarial assumptions used in the June 30, 2014 valuation were based on the results of a January

2014 actuarial experience study for the period 1997 to 2011. Further details of the Experience Study can

found on the CalPERS website.



Discount Rate. The discount rate used to measure the total pension liability was 7.65% for each Plan.

To determine whether the municipal bond rate should be used in the calculation of a discount rate

for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would

be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans

run out of assets. Therefore, the current 7.65% discount rate is adequate and the use of the municipal

bond rate calculation is not necessary. The long term expected discount rate of 7.65 % will be applied

to all plans in the PERF. The stress test results are presented in a detailed report that can be obtained

from the CalPERS website.









returns of all the funds' asset classes, expected compound returns were calculated over the short-term




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


CalPERS reported a preliminary 0.6% net return on investment for the 12 month period that ended June 30,

2016. CalPERS assets at the end of the fiscal year stood at more than $295 billion. The table below reflects

the Net Rate of Return and Asset Allocation for year ending June 30, 2016 by assets class:

Current Taget

Allocation

Real Return

Years 1 - 10 (a)

Real Return

Years 11 + (b)

Global equity 51.0% 5.25% 5.71%

Global fixed income 19.0% 0.99% 2.43%

Inflation sensitive 6.0% 0.45% 3.36%

Private equity 10.0% 6.83% 6.95%

Real estate 10.0% 4.50% 5.13%

Infrastructure and forestland 2.0% 4.50% 5.09%

Liquidity 2.0% -0.55% -1.05%

Total 100.0%

(a) An expected inflation of 2.5% used for this period

(b) An expected inflation of 3.0% used for this period.

Safety

Asset Class




Note 7: Other Post-Employment Benefits

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The

following presents the City's proportionate share of the net pension liability for the Safety Plans,

calculated using the discount rate for, as well as what the City's proportionate share of the net pension

liability would be if it were calculated using a discount rate that is 1-percentage point lower or

1-percentage point higher than the current rate as follows:

6.65% 7.65% 8.65%

(1% Decrease) (Current Rate) (1% Increase)

Risk Pool Total Pension Liability (TPL) 18,131,714,318$ 16,093,204,683$

Employer's Actuarial Accrued Liability 0.43979% 0.43979% 0.43979%

Proportionate share of (TPL) 90,674,010 79,740,741 70,775,661

Proportionate share of Fiduciary Net

Position (FNP) 58,022,770 58,022,770 58,022,770

Net Pension Liability 32,651,240$ 21,717,971$ 12,752,891$

Pension Plan Fiduciary Net Position. Detailed information about each safety plan's fiduciary net position


Payable to the Pension Plan

For the year ended June 30, 2016, the City reported a payable of $0 for the outstanding amount of

contributions to the pension plan as required.

20,617,757,339$

Discount Rate

Plan Description

The City's primary other post-employment benefits (OPEB) cost obligation is for retiree health benefits under its election to participate in the CALPERS Health Benefit Program, an agent multiple-employer definedbenefit OPEB plan, under the "unequal contribution option." The City entered the CALPERS medical insuranceprogram in 2000 under the Public Employees' Medical and Hospital Care Act (PEMHCA). The required employercontribution was $125 per month in 2016.



Note 7: Other Post-Employment Benefits (Continued)

In addition to the pension benefits described in Note 6, the City provides post-employment health care insurance, in accordance with Memorandums of Understanding, to all employees who retire from the City on or after attaining age 55 with at least 15 years of service. Currently, 72 retirees meet those eligibilityrequirements. The City pays a percentage of the cost incurred by pre-Medicare retirees, toward healthand dental insurance, beginning with 50% with 15 years of service and increasing 2.5% with each year, toa maximum of 75% with 25 years of service. The City also reimburses a fixed amount up to $100 per monthfor a Medicare supplement for the 19 retirees eligible for Medicare

During the fiscal year ended June 30, 2009, the City entered into an agreement with California Employers' Retiree Benefit Trust (CERBT) to pre-fund the City's OPEB liability.

Funding Policy

The contribution requirements of the plan members and the City are established and may be amended byby the City. The City prefunds the plan through CERBT by contributing at least 100% of the annual requiredcontribution.

The City's annual OPEB cost (expense) is calculated based upon the annual required contribution (ARC), anamount actuarially determined in accordance with the parameters of GASB Statement No. 45.

The City's ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normalcost each year and amortize the unfunded actuarial liability over a period of 30 years. The ARC for the fiscal year 2015-2016 was $1,108,000.

For the fiscal year 2015-2016, the City contributed $1,805,879 to the Plan. The City paid $697,879 to the CALPERSHealth Benefit Program or directly to retirees during the year, and did not request reimbursement for eligiblecosts paid under this plan. The expenditure of $1,108,000 represented the City's contributions to the Plan on apay-as-you-go basis.

CERBT is a tax-qualified irrevocable trust organized under Internal Revenue Code Section 115 and establishedto pre-fund retiree healthcare benefits. CERBT issues a publicly available financial report including GASBStatement No. 43 disclosure information in aggregate with other CERBT participating employers. That reportmay be obtained by contacting PERS, 400 P Street, Sacramento, California 95814.

Annual OPEB Cost and Net OPEB Obligation

The following table shows the components of the City's annual OPEB cost, the actual amount contributed tothe plan, and changes in the City's OPEB obligation:

Annual Required Contributions 1,108,000$ Annual OPEB cost 1,108,000 Contributions made (1,805,879) Change in net OPEB obligation (697,879) Net OPEB asset - beginning of year (1,243,286)

Net OPEB asset - end of year (1,941,165)$



Note 7: Other Post-Employment Benefits (Continued)

The City Retiree Medical annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, andthe net OPEB obligation for the years ended June 30, 2014, 2015, and 2016 (in thousands) were as follows:

Percentage ofFiscal Year Annual Actual Annual OPEB Net OPEB

Ended OPEB Cost Contribution Cost Contributed Asset06/30/14 1,346$ 1,980$ 147.1% (634)$ 06/30/15 1,073$ 1,682$ 156.8% (1,243)$ 06/30/16 1,108$ 1,806$ 163.0% (1,941)$

Funded Status and Funding Progress

The funded status of the plan (in thousands) of June 30, 2015, the plan's most recent actuarial valuation datewas as follows:

Actuarial accrued liability (AAL) 24,098$ Actuarial value of plan assets 6,463 Unfunded AAL (UAAL) 17,635 Funded ratio 26.8%Covered payroll 21,403 UAAL as a percentage of covered payroll 82.4%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptionsabout the probability of occurrence of events far into the future. Examples include assumptions about futureemployment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status ofthe plan and the annual required contributions of the employer are subject to continual revision as actualresults are compared with past expectations and new estimates are made about the future.

The schedule of funding progress is presented as required supplementary information following the notesto the financial statements. The schedule presents multiyear trend information about whether the actuarialvalue of Plan assets is increasing or decreasing over time relative to the actuarial liability for benefits.

Actuarial Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan asunderstood by the employer and the plan members) and include the types of benefits provided at thetime of each valuation and the historical pattern of sharing of benefit costs between the employer andplan members to that point. The actuarial methods and assumptions used include techniques that aredesigned to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarialvalue of assets, consistent with the long-term perspective of the calculations.

In the June 30, 2015 actuarial valuation the entry age normal actuarial cost method was used. The actuarial assumptions included a 7.25% investment rate of return (net of administrative expenses), which is theexpected long-term investment return on CERBT investments and a 3.25% inflation assumption. The initialhealth care cost trend rates were 5.0 to 7.2% and the ultimate rate was 4.5%. The actuarial value of assets isequal to the market value. The unfunded actuarial accrued liability (UAAL) is being amortized as a levelpercentage of projected payroll over 30 years on a closed basis. The remaining amortization period atJune 30, 2016 was 23 years.



Note 8: Interfund Transactions

Interfund Receivables and Payables (Due to/Due From)

Interfund receivables and payables include temporary negative cash balances that result fromthe timing of cash flows at year end and the time lag between the dates that transactions arerecorded in the accounting system and payment between funds are made. Liquidation of inter-fund receivables and payables typically occurs in the first quarter of the subsequent fiscal year.Interfund balances between governmental funds are not included in the government-wide statement of Net Position.

At June 30, 2016, interfund receivables and payables were as follows:

Interfund InterfundReceivables Payables

Other Governmental Funds 166,000$ 166,000$

Internal Service Funds 501,543 4,646,223

Enterprise Funds 4,854,758 155,619

Other Enterprise Funds 554,459

Total 5,522,301$ 5,522,301$

Interfund receivables and payables within the same fund type of $1,177,621 are excluded from

the Statement of Net Position. The interfund balance on the Statement of Net Position of

$4,144,680 exlcudes this amount, as it nets to zero.

Included within the Electric Utility Fund and the Communication Fund is an interfund balance of

$4,800,283 that will not be repaid within one year. The arrangement was established to develop

broadband services and repayment will be as revenues become available in the Communication

Fund.

Interfund Transfers

Interfund transfers are used to move revenues from the fund with collection authorization to

the debt service fund as debt service principal and interest payments become due and to move

unrestricted fund revenues to finance various programs that the government must account for

in other funds in accordance with budgetary authorizations, including amounts provided as

matching funds for various grant programs.

For the year ended June 30, 2016, interfund transfers were as follows:

Transfers In Transfers OutGeneral Fund $ 5,003,947 $ 550,057 Other Governmental Funds 330,860 3,028,302 Internal Service Funds 177,198 202,578 Enterprise Funds 1,989,466 Other Enterprise Funds 258,398

Total 5,770,403$ 5,770,403$



Proposition 218, which was approved by voters in November 1996, regulates the City's ability to impose,

increase and extend taxes, assessments, and fees. Any new, increase, or extended taxes, assessments, and

fees subject to the provisions of Proposition 218, require voter approval before they can be

implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to

the voter initiative process and may be rescinded in the future years by the voters. Therefore, the City's

ability to finance the services for which the taxes, assessments, and fees were imposed may be

significantly impaired.

Note 9 : Revenue Limitations Imposed By California Proposition 218

Note 10 : Risk Management

The City is partially self-insured for workers' compensation, liability claims, and property losses and fully

self-insured for unemployment claims. The City has been partially self-insured for workers'

compensation since 1976.

The Self-Insured Retention (SIR) for property insurance is $25,000. Insurable property is generally covered

for all risks, excluding earthquake and flood, by a policy with an aggregate limit of $119.48 million.

Various unique risks, such as boilers, machinery and data processing equipment are also insured.

On July 1, 2003, the City joined the California Public Entity Insurance Authority (CPEIA) for the purpose of

purchasing excess liability and workers' compensation insurance. The CPEIA was formed under the Joint

Powers Agreement (JPA) provision of state law (Government Codes 990, 990.4, 990.8, and 6500-6515). In

addition, CPEIA is governed by bylaws adopted by the JPA members. The fund is directed by a board of

directors comprised of representatives elected from the various participating municipal agencies. The

allocation of the liability insurance policy costs are calculated based on the recommendations of

insurance brokers/consultants using recognized insurance experience rating techniques. Separate

financial statements of CPEIA may be obtained by writing the Accounting Department, CSAC- Excess

Insurance Authority, 75 Iron Point Circle, Suite 200, Folsom, CA 95630, or by phoning (916) 850-7300.

The City is self-insured for the first $100,000 per occurrence, and excess insurance through CPEIA provides

coverage to a maximum of $15,000,000 per occurrence. The City's self-insured retention (SIR) for

workers' compensation is $300,000 per occurrence and excess insurance through CPEIA provides coverage

to a maximum of $50,000,000 per occurrence. There were no significant reductions in insurance coverage

from the prior year. For fiscal years ended June 30, 1996 through 2016, no claims settlements have

exceeded insurance coverage.

Interfund transfers within the same fund type of $4,039,335 are excluded from the Statement ofare excluded from the Statement of Activities. The transfers balance on the Statement of Activitiesof $1,731,068 excludes this amount, as it nets to zero.

Note 8: Interfund Transactions (Continued)



Note 11 : Joint Venture (Joint Power Agreements)

Note 10 : Risk Management (Continued)

The City's self-insurance fund is financed through contributions made by the City's general fund and

enterprise funds. Third party administration provides data on estimated claims liabilities (paid and

reserves). As of June 30, 2016, the estimated outstanding liability was $5,720,000 for workers'

compensation and $527,000 for general liability. The Employee Benefits and Insurance Control Fund has

total Net Position of $5,537,662, of which $3,546,497 is available for the known outstanding liabilities

and for future catastrophic losses. Estimated liabilities for incurred but not reported (IBNR) claims are

$2,931,234 at June 30, 2016. Such amounts have been accrued in the accompanying financial statements

in the self-insurance internal service fund.

The City of Lompoc participates in two joint ventures under joint powers agreements, Northern

California Power Agency (NCPA) and Transmission Agency of Northern California (TANC).

NCPA is a nonprofit, joint powers agency of the State of California and is comprised of 11 cities, one port

authority, a transit authority, and two other associate member entities. The Agency is generally

empowered to purchase, generate, transmit, distribute, and sell electrical energy. The Agency is

governed by a Commission comprised of one representative for each member. The Commission is

responsible for the general management of the affairs, property and business of the Agency. Separate

financial statements of the agency may be obtained by writing NCPA, 651 Commerce Dr., Roseville,

California 95678-6411.

Changes in balances of claims liablilities for general liability and workers' compensation insurance

were as follows:

Estimated unpaid claims liability 6/30/14 6,584,002$

Incurred claims and increase in estimated claims liability at 6/30/15 836,893

Claim payments (622,895)

Estimated unpaid claims liability 6/30/15 6,798,000

Incurred claims and increase in estimated claims liability at 6/30/16 463,552

Claim payments (1,014,551)

Estimated unpaid claims liability 6/30/16 6,247,001$



TANC was organized under the California government code pursuant to a joint powers agreement

entered into by 15 northern California utilities, of which the City is a part of under NCPA. Each TANC

member has agreed to pay a pro rata share of the cost to operate TANC and has the right to participate

in future project agreements. TANC is the project manager for the California-Oregon Transmission

Project. The purpose of the project is to upgrade certain facilities and construct new facilities as needed

to allow mutually beneficial power sales between the Pacific Northwest and California. Separate financial

statements of the agency may be obtained by writing TANC, PO Box 15129, Sacramento, California

95851-0129.

While the City is in part contingently liable for a certain portion of the long-term debt of each agency,

the joint venture's continued existence does not depend upon the continued funding and/or

participation by the City. The City's participating percentage in each agency is 3.649% and .408% for NCPA

and TANC, respectively, and is below that which would be considered a "controlling or significant

influence". Therefore, the City's interests in NCPA and TANC are not equity interests.

Under the terms of the NCPA and TANC joint power agency agreements, the City is contingently liable,

directly or indirectly, for a portion of the long-term debt of these agencies under a take-or-pay or

guarantee arrangement. The City was contingently liable at June 30, 2015, the most recent information

available, for approximately $0.64 million for its interest in TANC (principal $.53 million, interest $.11

million). In addition, the City was contingently liable at June 30, 2015 for approximately $52.0 million for

its interest in NCPA (principal $30.48 million, interest $21.52 million). Under certain circumstances, such

as default or bankruptcy of the other participants, the City may also be liable to pay a portion of the debt

of these agencies on behalf of the other participants in these agencies.

The NCPA's Geothermal Project has experienced greater than anticipated declines in steam production

from existing geothermal wells on its leasehold property. Recent results of the continuing well analysis

program indicate that the potential productive capacity for the geothermal steam reservoir is less than

previously estimated. Therefore, NCPA has modified the operations of the Geothermal Project to reduce

the average annual output from past levels. As a result, the per-unit cost of power generated by the

projects will be higher than anticipated.

Note 11 : Joint Venture (Joint Power Agreements) (Continued)



Note 11 : Joint Venture (Joint Power Agreements) (Continued)

For the year ended June 30, 2015, the combined financial information for the joint power agencies

(in thousands) were as follows:

NCPA TANC

Assets

Current assets 81,501$ 57,168$

Property, equipment and capital project costs 618,708 277,147

Restricted assets and other assets 454,428 43,417

Deferred outflows of resources 67,424 3,615

Total assets and deferred outflows 1,222,061$ 381,347$

Liabilities and Capitalization

Current liabilities 92,231$ 51,951$

Member advances 993 10,410

Long-term debt and other liabilities 1,016,916 303,847

Deferred inflows of resources 81,930 102

Members' capital 29,991 15,037

Total liabilities, deferred inflows, and capitalization 1,222,061$ 381,347$

Revenues:

Interest 1,429$ (88)$

Operating revenues and other revenues 429,083 48,355

Total revenues 430,512 48,267

Costs and expenses:

General and other operating costs 378,672 31,016

Interest and other financing costs 44,885 13,872

Total costs and expenses 423,557 44,888

Reserve additions and refunds (9,197) (1,399)

Net income (loss) (2,242) 1,980

Accumulated net revenues:

Beginning of year 32,233 16,113

End of year 29,991$ 18,093$



Note 12: Net Position and Fund Balance Deficiency

Note 13: Airport Operation Leases

The City acquired the airport in 1991. As of June 30, 2016, there were 20 long-term lease agreements

with the City. The leases include rental of airport hangars, a land lease with the City's wastewater fund, a

land and mineral lease, two land leases with private parties and tie down revenues. Each lease is set with

terms specific to the rates set at the time of the lease and the size of the hanger or land. A majority of the

leases have a consumer price index (CPI) inflator in the lease. The most common inflator has a 1% above

the CPI with minimum of a 3% increase. Leases range from 5 years to 40 years.

As of June 30, 2016, the City had negative net positions and fund balance in the following funds:

Ending Fund

Balance/Net Position

SLTPP (4,330)$

Right-of-Way Maint Fund (164,753)

Park Assess District (877) Solid Waste Disposal (2,569,746) Recreation (131,489)

Aquatic Center (256,511)

Broadband (30,793)

Communications (5,415,777)

Amounts collected for rentals and leases for the year ended 2016 were $208,248.

At June 30, 2016, the future minimum long-term lease revenues were as follows:

For the Year Ending June 30,2017 118,577$ 2018 117,770 2019 120,094 2020 108,273 2021 109,776


Total 2,951,495$



Note 14 : Contingencies and Commitments

Note 15: Prior Year Restatements

Contingent Liabilities

The City is presently involved in certain matters of litigation that have arisen in the normal course of

conducting City business. City management believes, based upon consultation with the City Attorney,

that these cases, in the aggregate, are adequately covered by insurance and not expected to result in a

material adverse financial impact on the City.

Grant Commitments

The City had received state and federal funds for specific purposes that are subject to review and audit

by the grantor agencies. Although such audits could generate expenditure disallowances under terms of

the grants, it is believed that any required reimbursements will not be material.

Construction Commitments

Construction and other significant commitments were $1,636,112 as of June 30, 2016. Long-term

construction contracts are billed and paid on a percentage of completion bases by construction

phase.

The City implemented GASB Statement No. 68, Financial Reporting for Pensions – an amendment of Statement No.

27, and GASB Statement No. 71, Pension Transitions for Contributions Made Subsequent to the Measurement Date

– an amendment of GASB Statement No.68, in fiscal year 2015. While an adjustment of $63,584,628 was made to

reduce beginning net position to reflect the cumulative impact of implementing these standards, the application of

GASB Statement No. 68 for the year ended June 30, 2016 identified an additional adjustment that should have

been made of $3,141,001 which was shown as deferred inflows at June 30, 2015.

The City evaluated the subsidiary utility accounts receivable ledger as of June 30, 2015 and June 30, 2016 and

determined the collectable balance was overstated. A prior year restatement was recorded to decrease the

beginning utility accounts receivable and beginning net positions in the Water, Electric, Wastewater and Solid

Waste utility funds by a cumulative $1,739,615 as of June 30, 2015.

The City, during its analytical review procedures as of June 30, 2016, revealed the depreciation for the

Governmental and Internal Service Funds year over year was understated for the year ended June 30, 2015. A prior

year restatement was recorded in the Internal Service and Governmental funds decreasing net position in the

amount of $2,293,147.



Note 16: Successor Agency Trust for Assets of Former Redevelopment Agency

On December 29, 2011, the California Supreme Court upheld Assembly Bill IX 26 (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 Lompoc that previously had reported a redevelopment agency within the

reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local

government will agree to serve as the "successor agency" to hold the assets until they are distributed to

other units of state and local government. On February 1, 2011, the City of Lompoc became the

Successor Agency for the Lompoc Redevelopment Agency and assumed the assets and liabilities of the

Lompoc Redevelopment Agency. This assumption is by operation of law pursuant to California Health

and Safety Code subsections 34171(j) and 34173(d)(1).

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of

California cannot enter into new projects, obligations or commitments. Subject to the control of a newly

established oversight board, remaining assets can only be used to pay enforceable obligations in

existence at the date of dissolution (including the completion of any unfinished projects that were

subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary

to pay the estimated annual installment payments on enforceable obligations of the former

redevelopment agency until all enforceable obligations of the prior redevelopment agency have been

paid in full and all assets have been liquidated.

The Bill directs the State Controller of the State of California to review the propriety of any transfers of

assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If

the public body that received such transfers is not contractually committed to a third party for the

expenditure of encumbrance of those assets, the State Controller is required to order the available

assets to be transferred to the public body designated as the successor agency.

Management believes, in consultation with legal counsel, that the obligations of the former

redevelopment agency due to the City are valid enforceable obligations payable by the successor agency

trust under the requirements of the Bill. The City's position on this issue is not a position of settled law

and there is a considerable legal uncertainty regarding this issue. It is reasonably possible that a legal

determination may be made at a later date by an appropriate judicial authority that would resolve this

issue unfavorably to the City.



Note 16: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on

December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to

operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of

the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund, the

Trust Fund) in the financial statements of the City.

Local Agency Investment Fund (LAIF)

The Trust Fund had $296,993 in cash and investments as of June 30, 2016, that was held in LAIF which

represented 14.6% of total cash and investments. The City manages the Trust Fund's cash and

investments in a consistent manner as the rest of its cash and investment pool. Refer to Note 2 for

additional information regarding LAIF.

Cash with Fiscal Agent

The California Government code provides that these monies, in the absence of specific statutory

provisions governing the issuance of bonds, certificates, or leases, may be invested in accordance with

the ordinance, resolutions, or indentures specifying the types of investments its fiscal agents may make.

These ordinances, resolutions, and indentures are generally more restrictive than the Trust Fund's

general investment policy. In no instance have additional types of investments, not permitted by the

Trust Fund's general investment policy, been authorized.

At June 30, 2016, cash and investments consisted of the follows:

Fair Percent ofValue Portfolio

Cash and cash equivalents:

Deposits with financial institutions 50,752$ 2.5%

Investments:

Local Agency Investment Fund (LAIF) 296,993 14.6%

Cash with fiscal agents 1,318,968 64.7%

Certificates of Deposits 51,155 2.5%

US Government Securities 321,127 15.7%

Total 2,038,995$ 100.0%




The former redevelopment agency loaned redevelopment tax increments to organizations to assist in

the production of affordable housing and the rehabilitation of commercial properties within the

redevelopment area prior to the Agency's dissolution. The loans are collateralized by a Deed of Trust

recorded on the property. The loan's principal and interest repayments range from monthly payments,

to term deferment, and single payments due at maturity. Some of the loans mature upon the sale or title

transfer of the property. Interest rates range from 0% to 5% per annum. At June 30, 2016, outstanding

loans receivable was $117,805.

Long-term Debt

The change in long-term liabilities for the year ended June 30, 2016 were as follows:

Balance Balance Due within

June 30, 2015 Additions Deductions June 30, 2016 One Year

2004 tax allocation bonds 5,880,000$ $ 190,000$ 5,690,000$ 195,000$

2010 tax allocation bonds 7,855,000 165,000 7,690,000 170,000

Capital leases payable 59,263 - 57,244 2,019 2,019

Compensated absences 269 - 80 189 -

Total 13,794,532$ $ 412,324$ 13,382,208$ 367,019$


During the year ended June 30, 2004, the former redevelopment agency issued $7,350,000 of tax

allocation bonds to finance the construction projects relating to the Aquatic Center. The former Agency

had pledged its tax increment for the repayment of the bonds. The bonds bear interest rates from 2.75

to 4.85%. Principal and interest payments are due each March 2 and September 2 through September 2,

2034. At June 30, 2016, the principal balance outstanding was $5,690,000.

At June 30, 2016, the aggregate maturities of loans receivable were as follows:

14,078$

14,506

14,947

15,402

15,870

43,002

117,805$

Thereafter

Total

2017


2018

2019

2020

2021





During 2010, the former redevelopment agency issued $8,385,000 of tax allocation bonds to finance the

construction projects relating to the Community and Senior Center and the dehumidifier for the Aquatic

Center. The former Agency had pledged its tax increment for the repayment of the bonds. The bonds

bear interest rates from 2.00 to 5.75%. Principal and interest payments are due each March 1 and

September 1 through September 1, 2039. At June 30, 2016, the principal balance outstanding was

$7,690,000.

At June 30, 2016, the aggregate maturities of the 2010 tax allocation bonds were as follows:


2017 170,000$ 436,559$ 606,559$

2018 175,000 430,169 605,169

2019 180,000 422,941 602,941

2020 195,000 414,950 609,950

2021 200,000 406,034 606,034

2022-2026 1,165,000 1,871,284 3,036,284

2027-2031 1,510,000 1,532,469 3,042,469

2032-2036 2,005,000 1,057,250 3,062,250

2036-2040 2,090,000 398,700 2,488,700

7,690,000$ 6,970,356$ 14,660,356$

At June 30, 2016, the aggregate maturities of the 2004 tax allocation bonds were as follows:


2017 195,000$ 265,610$ 460,610$

2018 205,000 258,151 463,151

2019 215,000 250,273 465,273

2020 220,000 241,873 461,873

2021 230,000 233,035 463,035

2022-2026 1,320,000 1,011,185 2,331,185

2027-2031 1,660,000 683,543 2,343,543

2032-2035 1,645,000 252,594 1,897,594

Total 5,690,000$ 3,196,264$ 8,886,264$



Note 17: Recent Pronouncements


Pensions

The City has allocated a proportion of the Miscellaneous Plan that relates to the Trust Fund. The portion

of the net pension liability allocated to the Trust Fund is $108,816. The portion of the deferred outflows

of resources and deferred inflows of resources allocated to the Trust Fund are $25,113 and $26,998,

respectively. See Note 6 for further information on the Miscellaneous Pension Plan.

New Accounting Standards

In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application, which

addresses accounting and financial reporting issues related to fair value measurements. This Statement also

provides guidance for applying fair value to certain investments and disclosures related to all fair value

measurements. The provisions of Statement No. 72 are effective for fiscal years beginning after June 15,

2015. Implementation of this statement resulted in additional fair value measurement disclosures. See Note

2 for further discussion.

In June 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related

Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB

Statements 67 and 68. The requirements of this Statement extend the approach to accounting and financial

reporting established in Statement 68 to all pensions, with modifications as necessary to reflect that for

accounting and financial reporting purposes, any assets accumulated for pensions that are provided through

pension plans that are not administered through trusts that meet the criteria specified in Statement 68

should not be considered pension plan assets. The provisions of Statement No. 73 are effective for fiscal

years beginning after June 15, 2015. Implementation of this statement did not have a material impact on

the City’s financial statements.



Note 17: Recent Pronouncements (Continued)

New Accounting Standards (Continued)

In June 2015, GASB issued Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other

Than Pension Plans, which establishes financial reporting standards for state and local governmental OPEB

plans—defined benefit OPEB plans and defined contribution OPEB plans—that are administered through

trusts or equivalent arrangements. The provisions of Statement No. 74 are effective for fiscal years

beginning after June 15, 2016. Management has not yet determined the impact of this Statement on its

financial statements.

Additionally, in June 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for

Postemployment Benefit Plans Other Than Pensions. Statement No. 75 establishes new accounting and

financial reporting requirements for governments whose employees are provided with OPEB, as well as for

certain non-employer governments that have a legal obligation to provide financial support for OPEB

provided to the employees of other entities. The provisions of Statement No. 75 are effective for fiscal years

beginning after June 15, 2017. Management has not yet determined the impact of this Statement on its

financial statements.

In June 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for

State and Local Governments. The objective of this Statement is to identify—in the context of the current

governmental financial reporting environment—the hierarchy of generally accepted accounting principles.

The "GAAP hierarchy" consists of the sources of accounting principles used to prepare financial statements

of state and local governmental entities in conformity with GAAP and the framework for selecting those

principles. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and

addresses the use of authoritative and non-authoritative literature in the event that the accounting

treatment for a transaction or other event is not specified within a source of authoritative GAAP. The

provisions of Statement No. 76 are effective for fiscal years beginning after June 15, 2015. Implementation

of this statement did not have a material impact on the City’s financial statements.

In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. Statement No. 77 requires

disclosure of tax abatement information about (1) a reporting government's own tax abatement

agreements and (2) those that are entered into by other governments and that reduce the reporting

government's tax revenues. The provisions of Statement No. 77 are effective for fiscal years beginning after

December 15, 2015. Implementation of this statement did not have a material impact on the City’s financial

statements.

See notes to required supplementary information 121




In December 2015, GASB issued Statement No. 78, Pensions Provided through Certain Multiple-Employer

Defined Benefit Pension Plans. The objective of this Statement is to address a practice issue regarding the

scope and applicability of Statement No. 68, Accounting and Financial Reporting for Pensions. This

statement was issued to assist certain state and local governments that are having trouble obtaining

measurements and data points for pension provided through certain private or federally sponsored

multiple-employer defined benefit pension plans, such as Taft-Hartley plans or plans with similar

characteristics, and to state or local governmental employers for which employees are provided with such

pensions. This statement is effective for the City’s fiscal year ending June 30, 2017. Management has not yet

determined the impact of this Statement on its financial statements.

In December 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants.

This Statement addresses accounting and financial reporting for certain external investment pools and pool

participants. Specifically, it establishes criteria for an external investment pool to qualify for making the

election to measure all of its investments at amortized cost for financial reporting purposes. This statement

is effective for the City’s fiscal year ending June 30, 2016. Implementation of this statement did not have a

material impact on the City’s financial statements.

In January 2016, GASB issued Statement No. 80, Blending Requirements for Certain Component Units—an

amendment of GASB Statement No. 14. The objective of this Statement is to improve financial reporting by

clarifying the financial statement presentation requirements for certain component units. This Statement

amends the blending requirements established in paragraph 53 of Statement No. 14, The Financial

Reporting Entity, as amended. This statement is effective for the City’s fiscal year ending June 30, 2017.

Management has not yet determined the impact of this Statement on its financial statements.

In March 2016, GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. The objective of this

Statement is to improve accounting and financial reporting for irrevocable split-interest agreements by

providing recognition and measurement guidance for situations in which a government is a beneficiary of

the agreement. This statement is effective for the City’s fiscal year ending June 30, 2018. Management has

not yet determined the impact of this Statement on its financial statements.




Note 18: Subsequent Events


Events subsequent to June 30, 2016 have been evaluated through December 22, 2016, which is the date the

financial statements were available to be issued. Management did not identify any subsequent event for the

year ending June 30, 2016.

In March 2016, GASB issued Statement No. 82, Pension Issues—an amendment of GASB Statements No. 67,

No. 68, and No. 73. The objective of this Statement is to address certain issues that have been raised with

respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial

Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That

Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements

67 and 68. Specifically, this Statement addresses issues regarding (1) the presentation of payroll-related

measures in required supplementary information, (2) the selection of assumptions and the treatment of

deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3)

the classification of payments made by employers to satisfy employee (plan member) contribution

requirements. This statement is effective for the City’s fiscal year ending June 30, 2017, except for the

requirements for selection of assumptions which will be effective during the City’s fiscal year ending June 30,

2018. Management has not yet determined the impact of this Statement on its financial statements.

In November 2016, GASB issued Statement No. 83, Capital Asset Retirement Obligations. Statement No.

83 provides financial statement users with information about asset retirement obligations that were not

addressed in GASB standards by establishing uniform accounting and financial reporting requirements for

these obligations. The provisions of Statement No. 83 are effective for reporting periods beginning after

June 15, 2018. Management has not yet determined the impact of this Statement on its financial

statements.



(Unaudited)

124 See notes to required supplementary information

City of Lompoc Budgetary Comparison Schedule—General Fund


Variance with

Budget

Original Final Actual Positive

Budget Budget (GAAP Basis) (Negative)

Revenues:

Taxes 14,706,318$ 14,706,318$ 14,296,202$ (410,116)$

Licenses and permits 390,696 390,696 300,183 (90,513)

Fines and penalties 105,862 105,862 92,073 (13,789)

Revenues from other agencies 1,387,977 1,843,833 1,478,220 (365,613)

Charges for current services 9,566,706 9,676,375 8,880,735 (795,640)

Interest 25,763 25,763 35,278 9,515

Other revenues 1,291,825 1,874,226 572,009 (1,302,217)

Total revenues 27,475,147 28,623,073 25,654,700 (2,968,373)

Expenditures:

City council 96,858 96,858 84,767 12,091

Administration 540,847 540,847 431,045 109,802

City attorney 616,599 616,599 478,278 138,321

City clerk 202,062 202,062 177,088 24,974

Finance and city treasurer 3,401,196 3,471,360 3,286,752 184,608

Human resources 627,674 694,888 572,235 122,653

Planning 922,827 2,152,224 1,006,293 1,145,931

Non-departmental (303,180) (240,819) 465,885 (706,704)

Building and building inspections 508,427 510,906 476,450 34,456

Information systems 100,369 103,367 11,211 92,156

Police 10,746,536 11,574,898 10,028,983 1,545,915

Fire 5,388,663 5,533,875 5,610,922 (77,047)

Recreation 798,128 814,901 763,864 51,037

Parks 1,870,517 2,184,274 1,738,112 446,162

City engineer and streets 4,787,944 4,823,712 3,507,341 1,316,371

Library 1,451,459 2,379,618 1,157,409 1,222,209

Other 1,820,507 2,129,350 1,482,049 647,301

Total expenditures 33,577,433 37,588,920 31,278,684 6,310,236

-

Deficiency of revenues over expenditures (6,102,286) (8,965,847) (5,623,984) 3,341,863


Operating transfers in 6,071,377 6,187,465 5,003,948 (1,183,517)

Operating transfers out (1,362,215) (1,377,303) (550,058) 827,245

Total other financing sources (uses) 4,709,162 4,810,162 4,453,890 (356,272)

Net change in fund balance (1,393,124) (4,155,685) (1,170,094) 2,985,591

Fund balance - beginning of year 6,256,162 6,256,162 6,256,162 -

Fund balance - end of year 4,863,038$ 2,100,477$ 5,086,068$ 2,985,591$


City of Lompoc Schedule of Funding Progress for OPEB Obligation

For the Year Ended June 30, 2016 (Amount in thousands)

Projected Unit UAAL as a

Actuarial Credit Actuarial Percentage

Actuarial Value Accrued Unfunded Funded Covered of Covered

Valuation Date of Assets Liability (AAL) AAL (UAAL) Ratio Payroll Payroll

6/30/11 2,136$ 13,285$ 11,149$ 16.1% 19,568$ 57.0%

6/30/13 3,182$ 12,809$ 9,627$ 24.8% 20,762$ 46.4%

6/30/15 6,463$ 24,098$ 17,635$ 26.8% 21,403$ 82.4%


City of Lompoc Schedule of the Changes in Net Pension Liability and Related Ratios

Miscellaneous Agent Multiple-Employer Plan (Calculated as of June 30, 2015 and reported as of June 30, 2016)

Last 10 Years*

* Fiscal year 2016 was the second year of the implementation therefore only two years are shown. Information is

required only for measurement periods for which GASB Statement No. 68 is applicable. The current measurement

period is the year ended June 30, 2015.

Fiscal Year 2015-16 2014-15

Measurement Date 2014-15 2013-14

Total Pension Liability

Services Cost 2,837,509$ 2,970,875$

Change of Assumptions 11,831,510 11,428,244

Difference between expected and actual experience (2,823,325)

Interest on total pension liability (1,957,610)

Benefit payment, including refunds of employee contributions (7,614,518) (6,921,136)

Net Change on total pension liability 2,273,566 7,477,983

Total pension liability - beginning 161,829,698 154,351,715

Total pension liability - ending (a) 164,103,264$ 161,829,698$

Plan fiduciary net position

Contributions - employer 3,250,690$ 3,289,224$

Contributions - employee 1,269,810 1,343,721

Net investment income 2,789,070 18,835,132

Benefit payments (7,614,518) (6,921,136)

Administrative expense (140,729) -

Net change in plan fiduciary net position (445,677) 16,546,941

Plan fiduciary net position - beginning 125,504,352 108,957,411

Plan fiduciary net position - ending (b) 125,058,675$ 125,504,352$

Plan net pension liability (assets) - ending (a) - (b) 39,044,589$ 36,325,346$

Plan fiduciary net position as a percentage of the total pension liability 76.21% 77.55%

Covered-employee payroll 15,724,628 15,540,484

Plan net pension liability (assets) as a percentage of covered-employee payroll 248.30% 233.75%


City of Lompoc Schedule of the Plan Contributions

Miscellaneous Agent Multiple-Employer Plan For the Year Ended June 30, 2016

Last 10 Years*




Fiscal Year 2015-16 2014-15 2013-14

Actuarially determined contribution 3,733,272$ 3,250,690$ 3,289,224$

Contributions in relation to the actuarially

determined contributions (3,733,272) (3,250,690) (3,289,224)

Contribution deficiency (Excess) - - -

Covered-employee payroll 16,486,900 15,724,628 15,540,484

Contributions as a percentage of covered-employee payroll 22.64% 20.67% 21.17%


City of Lompoc Schedule of the Changes in Net Pension Liability and Related Ratios

Safety Cost Sharing Plan For the Year Ended June 30, 2016

Last 10 Years*

Fiscal Year 2015-16 2014-15

Measurement Date 2014-15 2013-14

City's proportionate of net pension liability 0.3490% 0.3085%

City's proportionate share of net pension liability 21,717,971$ 19,193,402$

City's covered-employee payroll 5,656,523 5,713,483

City's proportionate share of net pension liability as a percentage

of covered-employee payroll 380.12% 335.93%

Plan's fiduciary net position as a percentage of the plan's total pension

liability 77.27% 78.83%





City of Lompoc Schedule of the Plan Contributions

Safety Cost Sharing Plan For the Year Ended June 30, 2016

Last 10 Years*

Fiscal Year 2015-16 2014-15 2013-14

Actuarially determined contribution 2,073,074$ 1,784,713$ 1,776,894$

Contributions in relation to the actuarially

determined contributions (2,073,074) (1,784,713) (1,776,894)

Contribution deficiency (Excess) - -

Covered-employee payroll 6,061,433 5,656,523 5,713,483

Contributions as a percentage of covered-employee payroll 34.20% 31.55% 31.10%

The Annual Valuation Report as of June 30, 2013 was used to determine the Fiscal Year 2015-16 contribution and

covered payroll amounts.





City of Lompoc Notes to Required Supplementary Information


Schedule of the Changes in Net Pension Liability and Related Ratios - Miscellaneous

1. Benefit changes. The figures shown do not include any liability impact that may have resulted from plan

changes which occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of

Two years Additional Service Credit (a.k.a. Golden Handshakes).

2. Changes in assumptions. The discount rate was changed from 7.5 percent (net of administrative expenses) to 7.65 percent.

Schedule of the Plan Contributions - Miscellaneous Plan

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2015-16

were from the June 30, 2013 public agency valuations.

Actuarial cost method Entry-Age Normal Cost Method

Amortization method For Details, see June 30, 2013 Actuarial Valuation Report

Remaining amortization period For Details, see June 30, 2013 Actuarial Valuation Report

Asset valuation method Acturial Value of Assets. For Details, see June 30, 2013 Actuarial Valuation Report

Inflation 2.75%

Salary increases Varies by Entry Age and Service

Payroll growth 3.00%

Investment rate of return 7.50% net of pension plan investment and amdministrative expenses; includes inflation.

Retirement age The probabilities of mortality are based on the 2010 CALPERS Experience Study for the

Mortality period from 1997 to 2007. Pre-retirement and post retirement mortality rates include

5 years of projected mortality improvement using Scale AA published by the Society of

Acturaries.

Schedule of the City's Proportionate Share of the Net Pension Liability - Cost Sharing Plans

The plan's proportionate share of aggregate contributions may not match the actual contributions made by the

employer during the measurement period. The plan's proportionate share of aggregate contributions i s based

on the plan's proportion of fiduciary net pos i tion shown on l ine 5 of the table as wel l as any additional s ide

fund (or unfunded l iabi l i ty) contributions made by the employer during the measurement period. This data i s

not required to be displayed by GASB 68 for employers participating in cost-sharing plans , but i t i s being shown

here because i t i s used in the ca lculation of the Plan's pens ion expense.

Schedule of the City's Contribution - Cost Sharing




2. Changes in assumptions. The discount rate was changed from 7.5 percent (net of administrative expenses) to 7.65 percent.


City of Lompoc Notes to Required Supplementary Information


Schedule of the Changes in Net Pension Liability and Related Ratios - Miscellaneous




2. Changes in assumptions. The discount rate from 7.5 percent (net of administrative expenses) to 7.65 percent.

Schedule of the Plan Contributions - Miscellaneous Plan

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2015-16

were from the June 30, 2013 public agency valuations.

Actuarial cost method Entry-Age Normal Cost Method

Amortization method For Details, see June 30, 2013 Actuarial Valuation Report

Remaining amortization period For Details, see June 30, 2013 Actuarial Valuation Report

Asset valuation method Acturial Value of Assets. For Details, see June 30, 2013 Actuarial Valuation Report

Inflation 2.75%

Salary increases Varies by Entry Age and Service

Payroll growth 3.00%

Investment rate of return 7.50% net of pension plan investment and amdministrative expenses; includes inflation.

Retirement age The probabilities of mortality are based on the 2010 CALPERS Experience Study for the

Mortality period from 1997 to 2007. Pre-retirement and post retirement mortality rates include

5 years of projected mortality improvement using Scale AA published by the Society of

Acturaries.

Schedule of the City's Proportionate Share of the Net Pension Liability - Cost Sharing Plans

The plan's proportionate share of aggregate contributions may not match the actual contributions made by the

employer during the measurement period. The plan's proportionate share of aggregate contributions i s based

on the plan's proportion of fiduciary net pos i tion shown on l ine 5 of the table as wel l as any additional s ide

fund (or unfunded l iabi l i ty) contributions made by the employer during the measurement period. This data i s

not required to be displayed by GASB 68 for employers participating in cost-sharing plans , but i t i s being shown

here because i t i s used in the ca lculation of the Plan's pens ion expense.

Schedule of the City's Contribution - Cost Sharing




2. Changes in assumptions. The discount rate from 7.5 percent (net of administrative expenses) to 7.65 percent.

132

City of Lompoc Other Supplementary Information For the Year Ended June 30, 2016

133

City of Lompoc Other Governmental Funds (Non-Major)


SPECIAL REVENUE FUNDS

Special Gas Tax – This fund accounts for revenues received from the Highway Users Tax (Motor Vehicle

Fuel Tax) gas tax which allocation must be spent on maintenance or construction of streets and roads

under the jurisdiction of the City.

Local Transportation – This fund is used to account for funds provided from the Transportation

Development Act derived from the dedicated $0.0025 general California Sales Tax available for

maintenance of streets and roads under the jurisdiction of the City.

Jailer-Dispatcher Training – This fund accounts for funds allocated by and received from the California

Department of Corrections and Rehabilitation to provide training of jailers and correctional officers.

Community Development - This fund is used to account for revenues received from federal and state

housing grants to provide decent housing, suitable living environments, and economic development

principally for very-low to moderate income families through public services.

(PEG)/TAP Cable Access - This fund is used for the Public, Education, and Government (PEG) and the

Television Access Partner (TAP) to account for revenue received for the Public, Education, and

Government and Television Access Partner TV radio and cable programming facility for operating and

maintenance of the cable access facility. Revenue is derived from the City’s ordinance under the Digital

Infrastructure and Video Competition Act (DIVCA) of 2006.

Human Services – This fund is used to account for the contributions made to aid human services and

non-profit organizations that primarily benefit very-low to moderate income persons.

Beatification - This fund is used to account for contributions and fundraisers that provide funding for

City beautification projects.

SLTPP – The State and Local Transportation Partnership Program, established in 1989, is used to account

for the revenues received from the State Highway Account. Funding is used to improve the City’s street

and roads.

Federal Roads – This fund is used to account for street and road projects funded with Federal Road

funds. Funding, generally through a competitive process, allows for the improvement of City sidewalks,

bridges, and streets and roads.

Local STP – This fund accounts for expenditures allocated to the City from the Surface Transportation

Program (STP), which provides funding for Federal-aid highways, bridges, tunnel, and other eligible

projects.

Right-of-Way Maintenance - This fund is used to account for the collection of Right-of-Way

reimbursements for services provided to enterprise activities.

134



SPECIAL REVENUE FUNDS (Continued)

Measure A Transportation Improvement – This fund accounts for streets and road maintenance

expenditures funded from revenues received by the City due to the passage of Measure “A”, passed by

the voters of Santa Barbara County in November 2009. Measure “A” continued the $0.005 sales tax

initiated with the passage of Measure “D” by voters of Santa Barbara County in 1988. Measure “A” was

implemented on April 1, 2010 and sales tax collections under Measure “A” will continue for 30 years.

Affordable Housing In-Lieu – This fund accounts for revenues received from commercial and residential

developers to provide affordable housing for very-low to moderate income families. Developers who do

not provide affordable housing can pay an in-lieu payment to the City which would then be responsible

to develop the required housing.

CAPITAL PROJECT FUNDS (Continued)

Civic Center – This fund accounts for revenue received from developer impact fees and expenditures for

capital projects to improve and expand police facilities and provide equipment for expanded police

service delivery.

Capital Development – This fund accounts for revenues received from a variety of developer fees

including development impact fees for capital projects to improve and expand park, recreational, and

fire facilities.

Street Development - This fund accounts for revenues received from grants, developer impact fees, and

other developer fees to be used for capital projects to improve and expand streets and roads, and other

right-of way facilities and assets.

Park Assessment District – This fund accounts for revenues received from a special assessment

approved by district voters in 2002 to be used for improving and maintaining park and recreational

facilities within the district. The formal name of the district is the Park Maintenance and Pool

Operations Assessment District No. 2002-1.

Library Impact Fees - This fund is used to account for developer impact fees that are used to meet the

capital improvement needs of library facilities and the capital outlay needs for equipment and materials

for library operations.

Children’s Library – This fund was initially established to account for funds received from foundation

and trust contributions to be used toward the capital development of a children’s mobile library. With

the acquisition of the children’s mobile library, restricted trust fund contributions provide annual grant

revenues to provide for the operations of the children’s mobile library services, including operations of

the mobile library itself.

135

DEBT SERVICE FUNDS

Lease Purchase – This fund is used to account for financing proceeds to be used toward the purchase of

capital assets that are acquired under lease agreements and to account for the annual debt service

obligations during the term of the financing.

Assessment District – This fund is used to account for the debt service payments to meet the

requirements and terms of the 2004 Aquatic Center Bonds issued by the Lompoc Financing Authority.

Revenues required for the payment obligations are provided from the revenues of the Park Assessment

District.



136

City of Lompoc Combining Balance Sheet

Other Governmental Funds For the Year Ended June 30, 2016

Special Local Jailer-Dispatcher

Gas Tax Transportation Training

AssetsCash and investments 1,602,206$ 252,463$ 3,270$

Accounts receivable 2,408

Interest receivable 2,802

Due from other governments

Due from other funds

Inventories 5,348

Property held for resale

Loans receivable

Total assets 1,610,356$ 254,871$ 3,270$


Accounts payable 11,703$ 4,950$ 300$

Due to other funds

Deposits payableAccrued wages and benefits

Total l iabilities 11,703 4,950 300

Fund balance:

Nonspendable:

Inventories 5,348

Long-term loans receivable

Restricted for:

Low income housing

Road surface repairs 1,593,305 249,921

Debt service

Law enforcement 2,970

Other capital projects

Other purposesCommitted to:

Library acquisitions

Health and welfare

Unassigned

Total fund balance (deficit) 1,598,653 249,921 2,970

Total l iabilities and fund balance 1,610,356$ 254,871$ 3,270$

Special Revenue

137

Community PEG / TAP Human

Development Cable Access Services Beautification SLTPP Federal Road

797,458$ $ 27,130$ 15,686$ $ 185,381$

102,607 49,449 1,491 65

1,406 47 27

236,697

1,632,390

2,533,861$ 49,449$ 28,668$ 15,778$ $ 422,078$

1,332$ 968$ 7,258$ $ 4,330$ 49,005$

1,332 968 7,258 4,330 49,005

1,629,027

903,502.00

373,073

48,481 15,778

21,410

(4,330)

2,532,529 48,481 21,410 15,778 (4,330) 373,073

2,533,861$ 49,449$ 28,668$ 15,778$ -$ 422,078$

Special Revenue

138


Other Governmental Funds, continued For the Year Ended June 30, 2016

Page 2

AssetsCash and investments

Accounts receivable

Interest receivable



Inventories


Loans receivable

Total assets


Accounts payable

Due to other funds


Total l iabilities

Fund balance:

Nonspendable:

Inventories


Restricted for:

Low income housing

Road surface repairs

Debt service

Law enforcement




Health and welfare

Unassigned

Total fund balance (deficit)

Total l iabilities and fund balance

Measure A Affordable

Right-of-Away Transportation Housing

Local STP Maintenance Improvement In-Lieu

$ 856$ 1,864,392$ 3,837,977$

172,299 150,523

391 2,520 6,685

166,000

200,000

2,727,732

172,299$ 1,247$ 2,183,435$ 6,772,394$

3,901$ $ 2,773$ $

166,000

3,901 166,000 2,773

2,727,732

4,044,662

168,398 (164,753) 2,180,662

168,398 (164,753) 2,180,662 6,772,394

172,299$ 1,247$ 2,183,435$ 6,772,394$

Special Revenue

139

Park

Civic Capital Street Assessment Library Children's

Center Development Development District Impact Fees Library

288,374$ 4,285,786$ 4,618,506$ $ 216,348$ 89,560$

411 6,489 7,531

93 7,496 7,986 10 378 169

288,878$ 4,293,282$ 4,632,981$ 10$ 216,726$ 97,260$

36,360$ 48,828$ $ 887$ $ 130$

1,006,547

36,360 48,828 1,006,547 887 130

3,626,434

252,518 4,244,454

216,726 97,130

(877)

252,518 4,244,454 3,626,434 (877) 216,726 97,130

288,878$ 4,293,282$ 4,632,981$ 10$ 216,726$ 97,260$

-

Capital Projects

140


Other Governmental Funds, continued For the Year Ended June 30, 2016

Page 3

AssetsCash and investments

Accounts receivable

Interest receivable



Inventories


Loans receivable

Total assets


Accounts payable

Due to other funds


Total l iabilities

Fund balance:

Nonspendable:

Inventories


Restricted for:

Low income housing

Road surface repairs

Debt service

Law enforcement




Health and welfare

Unassigned

Total fund balance (deficit)

Total l iabilities and fund balance

Total Other

Lease Assessment Governmental

Purchase District Funds

$ 117,735$ 18,203,128$

493,273

30,010

236,697

166,000

5,348

200,000

4,360,122

-$ 117,735$ 23,694,578$

$ $ 172,725$

166,000

1,006,547

1,345,272

5,348

4,356,759

4,948,164

8,027,040

117,735 117,735

2,970

4,496,972

64,259

313,856

21,410

(5,207)

117,735 22,349,306

-$ 117,735$ 23,694,578$

Debt Service

141


142

City of Lompoc Combining Statement of Revenues, Expenses and

Change in Fund Balance (Deficit) Other Governmental Funds


Special Local Jailer-Dispatcher

Gas Tax Transportation Training

917,194$ 79,856$ $

5,508

13,706 789 11

930,900 80,645 5,519

1,653

221,384 4,067

59,572 252,295

280,956 252,295 5,720

649,944 (171,650) (201)

(544,360) (445,066)

(544,360) (445,066) -

105,584 (616,716) (201)

1,493,069 866,637 3,171

1,598,653$ 249,921$ 2,970$

Special Revenue

Revenues:

Taxes

Revenues from other agencies

Charges for current services

Interest

Other revenues

Total revenues

Expenditures:

Personnel services

Maintenance and operations

Capital outlay

Debt service:

Principal

Interest and fiscal charges

Total expenditures

Excess of revenues over (under) expenditures



Operating transfers out

Total other financing sources (uses)

Extraordinary loss

Net change in fund balance (deficit)

Fund balance (deficit) - beginning of yearPrior year restatements

Fund balance (deficit) - end of year

143

Community PEG / TAP Human

Development Cable Access Services Beautification SLTPP Federal Road

$ 193,135$ $ $ $ $

503,700 343,915 458,231

2,584 4,693

40,734 (96) 220 129 (18) 634

(150) 18,625 1,697

546,868 197,732 18,845 1,826 343,897 458,865

236,041 183,896 (9,556)

217,089 61,358 41,188 (253) 90,931

176,322 2,123 206,212

629,452 247,377 41,188 (253) 206,212 81,375

(82,584) (49,645) (22,343) 2,079 137,685 377,490

634 98,446

634 98,446 - - - -

(81,950) 48,801 (22,343) 2,079 137,685 377,490

2,614,479 (320) 43,753 13,699 (142,015) (4,417)

2,532,529$ 48,481$ 21,410$ 15,778$ (4,330)$ 373,073$

Special Revenue

144


Change in Fund Balance (Deficit) Other Governmental Funds, continued

For the Year Ended June 30, 2016 Page 2

Revenues:

Taxes



Interest

Other revenues

Total revenues

Expenditures:

Personnel services


Capital outlay

Debt service:

Principal


Total expenditures






Extraordinary loss




Measure A Affordable

Right-of-Away Transportation Housing

Local STP Maintenance Improvement In-Lieu

$ $ 2,230,466$ $

172,299

378,240 43,090

(13) 1,890 11,675 33,901

172,286 380,130 2,242,141 76,991

105,229

103,497 410,338 176,200

810,639

103,497 - 1,220,977 281,429

68,789 380,130 1,021,164 (204,438)

(172,000) (544,883) (1,128,900)

(172,000) (544,883) (1,128,900) -

(103,211) (164,753) (107,736) (204,438)

271,609 - 2,288,398 6,976,832 -

168,398$ (164,753)$ 2,180,662$ 6,772,394$

Special Revenue

145

Park

Civic Capital Street Assessment Library Children's

Center Development Development District Impact Fees Library

$ $ $ $ $ $

11,984 236,107 42,118 27,791

2,357 49,142 33,765 65 1,800 1,399

58,249

14,341 285,249 75,883 65 29,591 59,648

66,383 35,120

73,231 32,655 24,708 29,831

36,360 194,862 304,030

109,591 227,517 - 91,091 - 368,981

(95,250) 57,732 75,883 (91,026) 29,591 (309,333)

23,304 125,000

(33,353) (34,740)

23,304 (33,353) - 90,260 - -

(71,946) 24,379 75,883 (766) 29,591 (309,333)

324,464 4,220,075 3,550,551 (111) 187,135 406,463 -

252,518$ 4,244,454$ 3,626,434$ (877)$ 216,726$ 97,130$

Capital Projects

146


Change in Fund Balance (Deficit) Other Governmental Funds, continued

For the Year Ended June 30, 2016 Page 3

Revenues:

Taxes



Interest

Other revenues

Total revenues

Expenditures:

Personnel services


Capital outlay

Debt service:

Principal


Total expenditures






Extraordinary loss




Total Other

Lease Assessment Governmental

Purchase District Funds

$ 299,835$ 3,720,486$

1,483,653

746,607

192,090

78,421

- 299,835 6,221,257

618,766

9,908 1,496,132

2,042,415

59,072 70,000 129,072

24,404 96,424 120,828

83,476 176,332 4,407,213

(83,476) 123,503 1,814,044

83,476 330,860

(125,000) (3,028,302)

83,476 (125,000) (2,697,442)

- (1,497) (883,398)

119,232 23,232,704

-$ 117,735$ 22,349,306$

Debt Service

147

City of Lompoc Other Enterprise Funds (Non-Major)


Airport – This fund is used to account for revenues to develop and maintain and operate the Airport

facility and the related operations, maintenance, and capital expenditures of the Airport facility.

Lompoc Transit – This fund is used to account for revenues from the Transportation Development Act,

Federal Transit Administration grants, fare box and other revenues and expenditures for daily

operations and capital needs of local transit services.

Recreation – This fund is used to account for the revenues received from fees collected from various

recreational programs and park facility rentals and the related direct expenditures from providing the

programs.

River Park Campground – This fund is used to account for the revenue collected at the River Park

Campground facility and to account for expenditures to operate, maintain and provide for the capital

needs of the camping facility.

Aquatic Center – This fund is used to account for the Lompoc Aquatic Center revenue and contributions

and to account for expenditures for the maintenance, operation, and capital needs of the pool facilities.

Lompoc Valley Community Center – This fund is used to account for revenues collected for activities at

the Lompoc Valley Community Center and to account for expenditures to operate, maintain, and

provide for the capital needs of the facility.

Broadband – This fund is used to account for revenues received from customers that use the City’s

wireless internet system which provides funding for the development and maintenance of the

broadband system.

148

City of Lompoc Combined Statement of Net Position (Deficit)

Other Enterprise Funds For the Year Ended June 30, 2016

Lompoc Lompoc

Airport Transit RecreationAssets

Current assets:

Cash and investments 257,551$ 4,418,418$ 4,484$

Accounts receivable, net 15,493 1,022,083 724

Interest receivable 538 11,290 15

Due from other governments 25,415

Prepaid expenses 2,403

Inventories 45,972 23,694

Total current assets 344,969 5,475,485 7,626

Noncurrent assets:

Capital assets:

Land 5,401,514

Construction in progress 108,366 1,802,483

Structures and improvements 4,349,457 819,672

Vehicles 2,448,262

Equipment 821,168 643,185 15,807

Less accumulated depreciation (2,078,055) (3,365,520) (15,807)

Total noncurrent assets 8,602,450 2,348,082 -

Total assets 8,947,419 7,823,567 7,626

Deferred Outflows of Resources

Deferred pensions 26,361 73,161 29,694

Total deferred outflows of resources 26,361 73,161 29,694


Accounts payable 23,312 261,310 12,176

Due to other funds 208,532

Unearned revenue - 1,446

Trust deposits 10,300

Interest payable 3,193 332

Current portion of capital leases payable 3,426

Total current l iabilities 245,337 265,068 13,622

149

Lompoc Valley Total

River Park Aquatic Community Other Enterprise

Campground Center Center Broadband Funds

178,782$ 2,486$ 11,156$ 50,194$ 4,923,071$

6,219 1,044,519

327 11 69 12,250

25,415

- 2,403

69,666

179,109 2,497 11,156 56,482 6,077,324

380,511 5,782,025

1,910,849

188,371 - 5,357,500

2,448,262

40,147 17,330 320,412 1,858,049

(213,344) (17,330) (294,583) (5,984,639)

395,685 - - 25,829 11,372,046

574,794 2,497 11,156 82,311 17,449,370

52,019 52,410 25,171 258,816

52,019 52,410 - 25,171 258,816

24 27,454 4,910 972 330,158

345,924 - 554,456

1,446

10,300

- 3,525

3,426

345,948 27,454 4,910 972 903,311

150

City of Lompoc Combined Statement of Net Position (Deficit)

Other Enterprise Funds, continued For the Year Ended June 30, 2016

Page 2

Lompoc Lompoc

Airport Transit Recreation

Noncurrent liabilities:

Capital leases payable, net of current portion 42,468

Net Pension liability 114,096 318,005 124,080

Total noncurrent l iabilities 114,096 360,473 124,080

Total l iabilities 359,433 625,541 137,702

Deferred Inflows of Resources

Deferred pensions 28,317 78,831 31,107

Total deferred outflows of resources 28,317 78,831 31,107

Net position (deficit)Net investment in capital assets 8,602,450 2,302,188 -

Restricted for other purposes 1,771,278

Unrestricted (16,420) 3,118,890 (131,489)

Total net position (deficit) 8,586,030$ 7,192,356$ (131,489)$

151

Lompoc Valley Total



42,468

223,425 227,540 110,065 1,117,211

223,425 227,540 - 110,065 1,159,679

569,373 254,994 4,910 111,037 2,062,990

55,573 56,424 27,238 277,490

55,573 56,424 - 27,238 277,490

395,685 - - 25,829 11,326,152

- - 1,771,278

(393,818) (256,511) 6,246 (56,622) 2,270,276

1,867$ (256,511)$ 6,246$ (30,793)$ 15,367,706$

152

City of Lompoc Combined Statement of Revenues, Expenses and

Change in Fund Net Position (Deficit) Other Enterprise Funds


Lompoc Lompoc


Operating revenues:

User fees and charges for services 232,441$ 1,278,499$ 254,875$

Revenue from other agencies 155,944 3,055,150 4,434

Other operating revenues 1,022 12

Facilities rental 208,248 57,378 103,423

Total operating revenues 597,655 4,391,039 362,732

Operating expenses:

Personnel services 69,137 216,553 182,912

Maintenance and operations 308,715 2,359,987 175,656

Depreciation and amortization 152,997 331,158

Total operating expenses 530,849 2,907,698 358,568

Operating income (loss) 66,806 1,483,341 4,164

Nonoperating revenues and expenses:

Interest earnings 2,195 37,552 Other revenue, net of expenses 3,832 Gas taxes 29,539

Interest expense (13,289) (1,551)

Operating transfers in -

Total nonoperating revenues and expenses (7,262) 65,540 -

Net income (loss) 59,544 1,548,881 4,164

Net position (deficit) - beginning of year 8,532,786 5,661,040 (128,820)

Prior year restatement (6,300) (17,565) (6,833)

Net position (deficit) - beginning of year, as restated 8,526,486 5,643,475 (135,653)

Net position (deficit) - end of year 8,586,030$ 7,192,356$ (131,489)$

153

Lompoc Valley Total



248,211$ 463,415$ 15,077$ 140,078$ 2,632,596$

3,215,528

309 129 1,472

139 119,625 488,813

248,211 463,863 134,702 140,207 6,338,409

103,885 434,485 47,250 76,952 1,131,174

16,807 297,851 87,263 68,332 3,314,611

6,279 17,119 507,553

126,971 732,336 134,513 162,403 4,953,338

121,240 (268,473) 189 (22,196) 1,385,071

1,546 31 265 41,589 3,832

29,539

(15,901) (30,741)

258,397 - - 258,397

(14,355) 258,428 - 265 302,616

106,885 (10,045) 189 (21,931) 1,687,687

(92,688) (233,899) 6,057 2,746 13,747,222

(12,330) (12,567) - (11,608) (67,203)

(105,018) (246,466) 6,057 (8,862) 13,680,019

1,867$ (256,511)$ 6,246$ (30,793)$ 15,367,706$

154

City of Lompoc Combined Statement of Cash Flows

Other Enterprise Funds For the Year Ended June 30, 2016

Lompoc Lompoc



Cash received from customers 582,416$ 1,153,685$ 357,829$

Cash received from other agencies 155,944 3,055,150 4,434

Internal activity - cash paid from (to) other funds (20,332)

Cash paid to suppliers for goods and services (516,229) (2,264,083) (178,084)

Cash paid to employees (75,024) (232,849) (191,677)

Net cash provided (used) by operating activities 126,775 1,711,903 (7,498)


Cash received from other agencies 3,832 29,539 -

Net operating transfers -

Net cash provided by non-capital financial 3,832 29,539 -

activities


Acquisition and construction of capital assets (157,407) (782,721) -

Principal payments on long term debt - (3,330) -

Interest payments on long term debt (13,608) (1,575) -

Net cash used by capital and related financial

activities (171,015) (787,626)


Interest on investments 2,084 34,502 8

Net cash provided (used) by investing activities 2,084 34,502 8

Net increase (decrease) in cash and investments (38,324) 988,318 (7,490)

Cash and investments - beginning of year 295,875 3,430,100 11,974

Cash and investments - end of year 257,551$ 4,418,418$ 4,484$

Reconciliation of cash and investments to the balance sheet:

Cash and investments 257,551$ 4,418,418$ 4,484$

Restricted cash and investments

Total cash and investments - end of year 257,551$ 4,418,418$ 4,484$

155

Lompoc Valley Total



248,211$ 463,863$ 135,702$ 144,462$ 3,086,168$

3,215,528

(7,428) (27,760)

(17,225) (317,271) (93,609) (73,980) (3,460,481)

(119,377) (452,809) (47,250) (82,538) (1,201,524)

104,181 (306,217) (5,157) (12,056) 1,611,931

- - 33,371

- 258,397 - - 258,397

- 258,397 - - 291,768

- (940,128)

- (3,330)

(15,901) - (31,084)

(15,901) (974,542)

1,345 (6) 311 38,244

1,345 (6) - 311 38,244

89,625 (47,826) (5,157) (11,745) 967,401

89,157 50,312 16,313 61,939 3,955,670

178,782$ 2,486$ 11,156$ 50,194$ 4,923,071$

178,782$ 2,486$ 11,156$ 50,194$ 4,923,071$

-

178,782$ 2,486$ 11,156$ 50,194$ 4,923,071$

156

City of Lompoc Combined Statement of Cash Flows Other Enterprise Funds, continued For the Year Ended June 30, 2016

Page 2

Lompoc Lompoc


Operating income (loss) 66,806$ 1,483,341$ 4,164$

Adjustments to reconcile operating income (loss) to net cash

provided (used) by operating activities:

Depreciation and amortization 152,997 331,158

Accounts receivable 140,505 (182,204) (469)

Prepaid expenses (903)

Inventories (17,491) (10,331)

Accounts payable (190,023) 106,235 (1,282)

Due to other funds (20,332)

Accrued wages and benefits (5,887) (16,296) (8,765)

Unearned revenue - (243)

Trust deposits 200

Compensated absences - - -

Total adjustments 59,969 228,562 (11,662)

Net cash provided (used) by operating activities 126,775$ 1,711,903$ (7,498)$

157

Lompoc Valley Total



121,240$ (268,473)$ 189$ (22,196)$ 1,385,071$

6,279 17,119 507,553

1,000 4,255 (36,913)

(903)

(27,822)

(418) (19,420) (6,346) (5,648) (116,902)

(7,428) (27,760)

(15,492) (18,158) (5,586) (70,184)

- (243)

- 200

- (166) - - (166)

(17,059) (37,744) (5,346) 10,140 226,860

104,181$ (306,217)$ (5,157)$ (12,056)$ 1,611,931$

158

City of Lompoc Internal Service Funds


INTRODUCTION

Internal Service Funds are used to finance and account for special activities and services performed by

designated departments of the City for other departments in the City on a cost reimbursement basis.

Employment Benefits and Insurance Control – This fund accounts for the administration of various

benefit and insurance programs of the City. Such programs include activity for accrued leave, health

care, retirement and other employee benefits; workers compensation, general liability, property, and

other insurance programs.

Vehicle – This fund accounts for the operation, maintenance and replacement of vehicles and

equipment used by all City departments. The source of revenue is from reimbursement of fleet

replacement, maintenance and operation costs allocated to each department by assignment of vehicle

allocations.

Communications – This fund accounts for the replacement and upgrade of technology, equipment, and

services. Primary service areas to all departments include: desktop computer services, fiber and

connectivity infrastructure services and equipment, network computer applications and equipment;

replacement, maintenance, and operations of telephone communication systems and equipment.

Stores – This accounts for the central duplication, printing, mail services, and inventory services,

supplies, and equipment provided to all City departments. The source of revenue for this fund is from

reimbursement of cost for services and supplies purchased.

159


160

City of Lompoc Combined Statement of Fund Net Position, (Deficit)

Internal Service Funds For the Year Ended June 30, 2016

Employment

Benefits and

Insurance Control VehicleAssets

Current assets:

Cash and investments 14,438,674$ 466,702$

Cash with fiscal agents 1,301,989

Accounts receivable, net 8,502 1,513

Interest receivable 24,425 838

Inventories 324,984

Due from other funds 501,544

Total current assets 14,973,145 2,096,026

Noncurrent assets:

Construction in progress 7,942

Structures and improvements 716,005

Vehicles & Equipment 18,994,154

Less accumulated depreciation (15,015,974)

Total capital assets net of accumulated depreciation - 4,702,127

Other post employment benefits (OPEB) prepayment 1,941,165

Total noncurrent assets 1,941,165 4,702,127

Total assets 16,914,310 6,798,153

Deferred Outflows of Resources

Deferred pensions 348,536

Total deferred outflows of resources - 348,536


Accounts payable 38,671 152,904 Due to other funds

Accrued wages and benefits 1,247,846

Interest payable 17,985

Current portion of claims payable 1,363,001

Current portion of compensated absences 3,698,212

Current portion of capital leases payable 596,226

Total current l iabilities 6,347,730 767,115

Noncurrent liabilities:

Claims payable, net of current portion 4,884,000

Compensated absences 144,918

Capital leases payable, net of current portion 2,420,090

Net Pension liability 1,496,856

Total noncurrent l iabilities 5,028,918 3,916,946

Total l iabil ities 11,376,648 4,684,061

161

Communication Stores Total

227,085$ 34,865$ 15,167,326$

1,301,989

48 10,000 20,063

25,263

117,092 442,076

501,544

227,133 161,957 17,458,261

7,942

(109,031) 126,968 733,942

2,303,429 21,297,583

(1,540,668) (98,814) (16,655,456)

653,730 28,154 5,384,011

1,941,165

653,730 28,154 7,325,176

880,863 190,111 24,783,437

371,287 719,823

371,287 - 719,823

19,282 6,800 217,657 4,646,224 4,646,224

1,247,846

17,985

1,363,001

3,698,212

596,226

4,665,506 6,800 11,787,151

4,884,000

144,918

2,420,090

1,604,096 3,100,952

1,604,096 - 10,549,960

6,269,602 6,800 22,337,111

162

City of Lompoc Combined Statement of Fund Net Position (Deficit)

Internal Service Funds, continued For the Year Ended June 30, 2016

Page 2

Employment

Benefits and

Insurance Control Vehicle

Deferred Inflows of Resources

Deferred pensions 372,326

Total deferred outflows of resources - 372,326

Net position (deficit)Net investment in capital assets 1,941,165 1,685,811 Restricted for other purposes 50,000 -

Unrestricted 3,546,497 404,491

Total net position 5,537,662$ 2,090,302$

163


398,325 770,651

398,325 - 770,651

653,730 28,154 4,308,860 - - 50,000

(6,069,507) 155,157 (1,963,362)

(5,415,777)$ 183,311$ 2,395,498$

164

City of Lompoc Combined Statement of Revenues, Expenses and

Changes in Fund Position (Deficit) Internal Service Funds


Employment

Benefits and


Operating revenues:

Charge for services 18,591,598$ 4,395,631$

Total operating revenues 18,591,598 4,395,631

Operating expenses:

Personnel services 6,138,471 912,375

Maintenance and operations 10,662,768 1,828,663

Depreciation and amortization 881,138

Total operating expenses 16,801,239 3,622,176

Operating income 1,790,359 773,455

Nonoperating revenues and expenses:

Interest earnings 141,728 6,193

Interest expense (72,467)

Operating transfers in 3,000 46,711

Operating transfers out (202,578)

Total nonoperating revenues and expenses (57,850) (19,563)

Net income 1,732,509 753,892

Net position (deficit) - beginning of year 3,805,153 2,406,616

Prior year restatement (1,070,206)

Net position (deficit) - beginning of year, as restated 3,805,153 1,336,410

Net position (deficit) - end of year 5,537,662$ 2,090,302$

165


2,543,755$ 388,647$ 25,919,631$

2,543,755 388,647 25,919,631

995,379 8,046,225

860,464 370,089 13,721,984

279,493 10,373 1,171,004

2,135,336 380,462 22,939,213

408,419 8,185 2,980,418

871 164 148,956

(12,481) (84,948)

127,487 177,198

(202,578)

115,877 164 38,628

524,296 8,349 3,019,046

(5,851,510) 174,962 535,221

(88,563) (1,158,769)

(5,940,073) 174,962 (623,548)

(5,415,777)$ 183,311$ 2,395,498$

166

City of Lompoc Combined Statement of Cash Flows

Internal Service Funds For the Year Ended June 30, 2016

Employment

Benefits and



Cash received from interfund services provided 18,588,977$ 4,395,631$

Internal activity - cash paid from (to) other funds 156,210

Cash paid to suppliers for goods and services (11,221,951) (1,926,160) Cash paid to employees (5,584,283) (990,556)

Net cash provided (used) by operating activities 1,938,953 1,478,915


Net operating transfers (199,578) 46,711

Net cash provided (used) by non-capital financial activities (199,578) 46,711


Acquisition and construction of capital assets (601,095)

Principal payments on long term debt (563,502)

Interest payments on long term debt (75,783)

Other post employment benefits (OPEB) prepayment (697,879)

Net cash used by capital and related financing activities (697,879) (1,240,380)


Interest on investments 132,077 5,683

Net cash provided by investing activities 132,077 5,683

Net increase (decrease) in cash and cash equivalents 1,173,573 290,929

Cash and investments - beginning of year 13,265,101 1,477,762

Cash and investments - end of year 14,438,674$ 1,768,691$

Summary of cash investments - end of year:

Cash and investments 14,438,674$ 466,702$

Cash with fiscal agents 1,301,989

Total cash and investments - end of year 14,438,674$ 1,768,691$

167


2,543,755$ 388,647$ 25,917,010$

(154,058) - 2,152

(864,485) (391,294) (14,403,890) (1,078,376) (7,653,215)

446,836 (2,647) 3,862,057

127,487 - (25,380)

127,487 - (25,380)

(348,722) (949,817)

(563,502)

(12,481) (88,264)

(697,879)

(361,203) (2,299,462)

870 151 138,781

870 151 138,781

213,990 (2,496) 1,675,996

13,095 37,361 14,793,319

227,085$ 34,865$ 16,469,315$

227,085$ 34,865$ 15,167,326$

1,301,989

227,085$ 34,865$ 16,469,315$

168

City of Lompoc Combined Statement of Cash Flows Internal Service Funds, continued For the Year Ended June 30, 2016

Page 2

Employment

Benefits and


Operating income 1,790,359$ 773,455$

Adjustments to reconcile operating income (loss) to net cash

provided by operating activities:

Depreciation and amortization 881,138

Accounts receivable (2,621) (1,513)

Inventories (95,893)

Due from/to other funds 156,210

Accounts payable (8,184) (91)

Accrued wages and benefits 483,687 (78,181)

Compensated absences 70,501

Claim liabilities (550,999)

Total adjustments 148,594 705,460

Net cash provided (used) by operating activities 1,938,953$ 1,478,915$

169


408,419$ 8,185$ 2,980,418$

279,493 10,373 1,171,004

38 (10,000) (14,096)

(4,659) (100,552)

(154,058) 2,152

(4,061) (6,546) (18,882)

(82,995) 322,511

70,501

(550,999)

38,417 (10,832) 881,639

446,836$ (2,647)$ 3,862,057$

170

Statistical Section (unaudited)

The statistical section provides mostly trend data and nonfinancial infor-

mation useful in assessing the City’s financial condition. Because of the

special character of the data presented in the statistical section (i.e., da-

ta of prior years, nonfinancial data), the section does not fall within the

scope of the independent audit. This section includes the:

Financial Trends

Net Position by Component

Change in Net Position

Fund Balances of Governmental Funds

Change in Fund Balance of Governmental Funds

Revenue Capacity

Governmental Activities Tax Revenues by Source

Assessed Value of Taxable Property

Principal Property Taxpayers

Secured Property Tax Roll Levies and Collections

Property Tax Rates - Direct and Overlapping Governments

Taxable Sales by Type of Business

Sales and use Tax Historical Rates

Debt Capacity

Ratio of Outstanding Debt by Type

Ratio of General Bonded Debt Outstanding

Direct and Overlapping Debt

Legal Debt Margin Information

Schedule of Revenue Bond Coverage Water

Schedule of Revenue Bond Coverage Wastewater

171

Demographic and Economic Information

Major - Principal Employer

Demographic and Economic Statistics

Operating Information

Full Time Equivalent City Government Employees by Category

Capital Assets Statistical Function

Operating Indicators

172

City of Lompoc Net Position by Component

Last Ten Fiscal Years (Amounts in thousands)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Governmental Activities

Net Investment in Capital Assets 62,506$ 71,722$ 81,172$ 72,170$ 75,815$ 86,804$ 91,673$ 90,244$ 91,890$ 98,929$

Restricted 275 - 321 153 27,246 15,195 15,332 17,665 18,793 18,196

Unrestricted 36,897 43,740 41,038 50,328 15,723 16,594 17,129 15,782 (33,709) (38,620)

Total Governmental Net Position 99,677 115,462 122,531 122,651 118,784 118,593 124,134 123,691 76,975 78,505

Business-Type Activities

Net Investment in Capital Assets 69,202 55,980 56,551 75,799 84,631 86,490 84,704 84,014 83,330 83,711

Restricted 21,977 647 5,605 4,846 7,835 8,305 9,739 17,968 10,222 13,273

Unrestricted 1,939 22,794 16,257 2,954 4,600 9,595 11,328 5,958 5,092 8,984

Total Business-Type Net Position 93,118 79,421 78,413 83,599 97,065 104,390 105,771 107,940 98,644 105,968

Primary Government

Net Investment in Capital Assets 131,708 127,702 137,724 147,969 160,445 173,294 176,378 174,258 175,220 182,640

Restricted 22,252 647 5,926 4,999 35,081 23,500 25,071 35,632 29,015 31,469

Unrestricted 38,835 66,534 57,296 53,282 20,322 26,189 28,457 21,740 (28,617) (29,637)

Total Primary Government Net Position 192,795$ 194,883$ 200,945$ 206,250$ 215,849$ 222,983$ 229,905$ 231,630$ 175,618$ 184,472$

Source: City of Lompoc Annual Financial Report

173

City of Lompoc Change in Net Position


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Expenses


General government 4,791$ 4,992$ 5,187$ 4,192$ 5,117$ 5,670$ 5,092$ 6,448$ 5,985$ 5,380$

Police protection 8,117 9,206 9,869 9,243 9,590 10,349 9,325 10,884 8,702 8,949

Fire protection 3,180 3,347 3,429 3,087 3,540 3,760 3,668 4,397 4,072 4,760

Engineer and streets 5,856 6,384 4,575 5,792 6,449 6,245 6,795 7,659 5,880 5,210

Building 1,228 1,599 1,447 1,339 571 469 458 484 466 457

Community development and health and welfare 2,146 2,897 4,000 4,102 2,697 1,686 855 1,213 1,563 1,987

Parks and recreation 4,253 4,718 4,998 3,818 3,680 3,938 3,759 3,424 3,499 3,880

Nondepartmental 746 829 942 723 842 907 960 1,037 1,134 1,482

Interest on long-term debt 601 632 533 817 1,011 807 146 116 123 120

Total governmental activities 30,917 34,604 34,980 33,113 33,498 33,829 31,059 35,661 31,424 32,226

Business type activities

Water 7,290 8,584 8,729 8,456 8,633 8,745 9,724 9,700 9,767 9,948

Electric 16,074 17,732 20,361 16,687 16,802 17,298 19,344 19,153 19,929 19,491

Wastewater 6,106 7,732 7,721 7,361 6,765 9,851 12,907 12,814 12,958 13,541

Solid Waste 5,600 6,517 6,240 5,959 6,137 6,100 6,563 6,503 6,640 8,436

Other 4,262 4,984 5,048 5,703 5,137 4,604 5,297 5,652 5,533 4,984

Total business type activities expenses 39,332 45,548 48,100 44,166 43,474 46,599 53,835 53,821 54,827 56,401

Total primary government expenses 70,249$ 80,152$ 83,081$ 77,279$ 76,972$ 80,428$ 84,894$ 89,483$ 86,252$ 88,626$

Program Revenues


Charges for Services

General government 4,999$ 5,344$ 5,632$ 5,249$ 7,182$ 7,298$ 7,579$ 6,866$ 7,286$ 8,471$

Police protection 283 386 311 383 - 22 21 316 254 297

Fire protection 87 82 91 97 - - - 21 85 61

Engineer and streets 476 282 310 244 4 2 21 34 196 130

Building 199 205 136 50 - - - 634 445 272

Community development and health and welfare 879 803 555 450 56 186 337 348 410 162

Parks and recreation 173 197 169 155 311 1,264 377 867 669 326

Operating grants and contributions 7,947 5,928 3,748 5,342 2,304 1,944 1,769 2,843 2,653 1,987

Capital grants and contributions 1,927 2,459 9,045 1,332 2,131 1,355 696 897 1,351 974

Total governmental activities

program revenues 16,972 15,687 19,997 13,303 11,988 12,071 10,801 12,826 13,349 12,681

Business type activities

Charges for Services

Water 7,476 8,089 8,422 8,310 8,255 8,415 8,858 10,168 11,081 11,312

Electric 16,334 16,470 17,593 19,149 21,463 22,956 23,378 22,694 23,929 23,372

Wastewater 6,966 8,963 8,790 8,824 9,401 7,895 7,995 8,963 10,221 11,663

Solid Waste 5,439 5,740 5,939 5,918 6,353 6,634 7,093 7,295 7,844 8,224

Other 1,241 1,425 1,621 2,702 1,824 2,065 2,800 3,303 3,419 3,114

Operating grants and contributions 1,961 2,891 2,657 4,647 4,911 4,767 5,382 4,868 5,466 7,024

Capital grants and contributions 1,359 288 2,317 3,045 1,150 2,335 1,728 283 1,259 343

Total business activities

program revenues 40,775 43,866 47,338 52,594 53,356 55,068 57,232 57,573 63,218 65,052

Total primary government

Program Revenue 57,747$ 59,553$ 67,335$ 65,897$ 65,344$ 67,138$ 68,033$ 70,400$ 76,567$ 77,733$

Fiscal Year End June 30

174

City of Lompoc Change in Net Position, continued


Page 2

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Net (expense)/revenue

Governmental activities (13,945)$ (18,917)$ (14,983)$ (19,810)$ (21,510)$ (21,758)$ (20,258)$ (22,835)$ (18,075)$ (19,545)$

Business-type activities 1,443 (1,682) (762) 8,428 9,883 8,469 3,397 3,752 8,391 8,651


Net (Expense)/Revenue (12,502)$ (20,600)$ (15,746)$ (11,383)$ (11,628)$ (13,290)$ (16,861)$ (19,083)$ (9,684)$ (10,893)$

General Revenue and Other Change in Net Position


Taxes

Sales Tax 4,037$ 4,040$ 3,566$ 3,154$ 5,178$ 5,658$ 5,865$ 6,289$ 6,607$ 6,842$

Property 6,085 7,053 6,940 6,516 6,636 5,156 3,719 3,955 4,060 4,157

Transient occupancy tax (TOT) - - - - 1,504 1,032 1,313 1,621 1,728 1,794

vehicle l icense fees 3,023 3,191 3,172 2,990 2,924 2,925 2,903 2,932 3,048 3,169

Gas Tax - - - - 1,414 2,162 1,841 2,840 2,595 997

Other taxes 2,574 2,476 2,365 2,255 - - - - - -

Business tax - - - - 221 331 281 320 338 350

Franchise fees 1,117 1,176 1,160 1,201 617 611 609 397 501 608

State of California in-lieu - - - - 17 8 8 8 8 14

Property transfer tax - - - - 49 62 64 72 90 87

License and permits - - - - 133 259 314 395 287 300

Interest income 2,032 2,084 1,019 323 322 147 116 128 302 376

Other revenues 969 840 2,851 991 381 1,511 1,142 1,748 1,092 650

Transfers 960 906 1,025 1,074 1,261 1,191 1,160 1,686 (2,724) 1,731

Extraordinary gain/Special Item - - - - - 351 6,670 - 1,202 -

Prior Year Restatement 1,083 12,936 (46) 1,426 (3,014) 165 (205) - (47,774) -

Total governmental activities 21,881 34,702 22,053 19,930 17,643 21,568 25,800 22,391 (28,641) 21,075

Business-type activities

Property Tax 7 24 6 7 7 7 4 9 9 9

Sales Tax - 97 103 - - - - - - -

Gas Tax - - - - - - 277 29 30 30

Interest Earnings 149 1,855 856 296 214 275 57 51 129 286

Other revenues (67) 271 212 327 492 238 171 80 62 79

Transfers (960) (906) (1,025) (1,074) (1,261) (1,191) (1,160) (1,686) 2,724 (1,731)

- - - - - - (750) - - -

Prior Year Restatement 87 (13,357) (395) (2,798) 4,131 (473) (615) (67) (20,640) -

Total business type activities (785) (12,015) (245) (3,242) 3,583 (1,144) (2,016) (1,583) (17,686) (1,328)

Total primary government net expenses 21,096$ 22,687$ 21,808$ 16,688$ 21,226$ 20,424$ 23,783$ 20,807$ (46,327)$ 19,747$

Change in Net Position - - - - - - - -

Governmental activities 7,936$ 15,785$ 7,069$ 120$ (3,868)$ (191)$ 5,541$ (444)$ (46,716)$ 1,530$

Business-type activities 658 (13,697) (1,008) 5,186 13,466 7,325 1,381 2,169 (9,295) 7,323

8,594$ 2,088$ 6,062$ 5,306$ 9,598$ 7,135$ 6,922$ 1,725$ (56,011)$ 8,854$

Cumulative effect from change

in accounting principle


change in net position

Fiscal Year End June 30

175

City of Lompoc Fund Balance of Governmental Funds (General Fund)


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

General Fund

Nonspendable:

Inventory 31$ 35$ 32$ 31$ 33$ 34$ 29$ 47$ 39$ 42$

Long term loans receivable 211 194 176 157

Restricted for:

Library Services 665 973 910 812 496 483 443 443 427 456

Other purpose 3 71 68 64 66 75 83

Unassigned: 7,247 7,300 5,864 5,612 6,239 5,368 4,812 5,319 5,715 4,506

Total General Fund balance 8,154$ 8,502$ 6,982$ 6,615$ 6,839$ 5,953$ 5,348$ 5,875$ 6,256$ 5,086$


Note: Economic uncertainty funds of $2 mill ion are reflected in the unassigned fund balance in the graph.

Fiscal Year Ended June 30

176

City of Lompoc Fund Balance of Governmental Funds (All Other Governmental Funds)


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

All Other Governmental Funds

Nonspendable:

Inventory 4$ 10$ 8$ 8$ 6$ 5$ 8$ 9$ 8$ 5$

Long term loans receivable 5,350 6,506 7,755 6,885 5,125 7,648 6,807 4,946 4,442 4,357

Restricted for:

Low income housing 4,643 4,546 4,678 4,948 3,492 1,932 2,183 1,332 5,149 4,948

Road surface repairs 8,921 10,000 8,895 9,238 8,096 8,747 8,111 8,310 8,462 8,027

Debt service 401 458 441 436 1,331 123 116 115 119 118

Law Enforcement 6 17 23 28 19 1 4 1 3 3

Other capital projects 2,328 4,037 4,427 12,466 11,301 3,051 3,126 4,171 4,545 4,497

Other purpose 2,371 2,174 1,838 1,437 2,440 965 1,285 3,227 14 64

Committed to: - - - - - - - - - -

Library Acquisitions 290 403 372 295 281 367 386 572 594 314

Health and welfare 57 62 56 58 69 72 56 42 44 21

Assigned to:

Unassigned: - - - - (485) - - - (147) (5)

Total Other Governmental Fund balance 24,371 28,213 28,492 35,800 31,675 22,911 22,083 22,724 23,233 22,349

Total Governmental Fund balance 32,524$ 36,715$ 35,474$ 42,415$ 38,514$ 28,864$ 27,430$ 28,599$ 29,489$ 27,435$



177

City of Lompoc Change in Fund Balance of Governmental Funds


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Revenues

Taxes 16,825$ 17,124$ 15,545$ 14,458$ 18,559$ 17,944$ 16,365$ 18,434$ 18,975$ 18,017$

Licenses and permits 2,479 1,393 896 723 133 259 314 395 287 300

Fines and penalties 21 15 14 72 127 92 99 98 100 92

Revenues from other agencies 6,982 6,952 8,699 6,421 4,308 3,299 2,466 3,733 3,434 2,962

Charges for current services 7,274 7,933 7,955 7,382 7,552 8,680 8,473 8,989 9,246 9,627

Interest 1,467 1,497 719 269 243 88 74 98 240 227

Other revenues 1,197 1,079 3,093 1,237 381 1,511 1,142 1,748 1,092 650

Total Revenues 36,245 35,993 36,921 30,562 31,304 31,873 28,932 33,495 33,373 31,876

Expenditures

General government 4,742 5,141 5,523 4,484 5,283 5,414 4,803 6,103 4,487 3,987

Police protection 8,254 8,807 9,363 8,916 9,182 9,535 9,776 10,087 10,154 10,013

Fire protection 3,275 3,285 3,337 3,139 3,364 3,564 3,814 4,185 4,569 5,507

Engineering/streets 4,539 4,611 4,690 3,725 4,278 4,008 5,052 5,301 6,580 6,045

Building 1,198 1,653 1,362 1,175 498 469 458 484 384 476

Community development 2,171 2,832 4,738 3,584 2,911 2,531 1,547 1,546 2,527 2,700

Parks and recreation 3,623 4,160 4,141 3,676 2,088 2,229 2,350 2,107 2,335 2,798

Non-department 782 822 866 760 831 798 1,627 912 1,122 1,482

Health 40 40 49 43 32 41 60 58 41 41

Capital Outlay 2,839 1,934 4,558 1,973 8,120 5,441 1,930 3,680 2,654 2,386

Debt Service - - - - - - - - - -

Principle 215 217 259 1,533 311 361 105 92 120 129

Interest 451 444 474 470 767 904 147 116 124 121

Total Expenses 32,128 33,945 39,360 33,479 37,666 35,295 31,669 34,671 35,099 35,686

Excess of revenues over (under)

expenditures 4,117 2,047 (2,439) (2,917) (6,361) (3,423) (2,736) (1,176) (1,726) (3,810) - - - - - -

Other Financing Sources(Uses)

Issuance of debt/refunding debt - 1,193 - 8,385 - - - - - -

Tranfers In 6,411 7,142 7,339 6,329 10,397 9,159 4,455 5,715 6,004 5,335

Transfers Out (5,648) (6,010) (6,094) (4,941) (8,231) (7,509) (2,948) (3,370) (3,388) (3,578)

Total other financing source(uses) 763 2,325 1,245 9,773 2,167 1,650 1,508 2,345 2,616 1,756

Extraordinary loss (7,878)

Net change in fund balance 4,880$ 4,372$ (1,195)$ 6,857$ (4,195)$ (9,650)$ (1,229)$ 1,169$ 890$ (2,053)$

Debt Service as a percentage of

noncapital expenditures 2.32% 2.11% 2.15% 6.79% 3.79% 4.43% 0.86% 0.68% 0.76% 0.76%



178

City of Lompoc Governmental Activities Tax Revenues by Source


Fiscal

Year

Sales

Tax

Property

Tax

Property Tax

in-lieu VLF

Transient

Occupancy

Franchise

Tax

Business

Tax

Transportation

Tax Other Taxes

2007 6,421$ 6,718$ 3,023$ 1,377$ 422$ 305$ 2,253$ 87$

2008 6,252 7,171 3,191 1,499 437 329 1,583 92

2009 5,422 7,049 3,172 1,411 457 323 1,059 66

2010 4,961 6,617 2,990 1,401 385 308 1,199 60

2011 5,178 6,636 2,924 1,504 617 * 221 1,414 66

2012 5,658 5,156 2,925 1,032 611 * 331 2,162 70

2013 5,865 3,719 ** 2,903 1,313 609 * 281 1,841 73

2014 6,289 3,955 2,932 1,621 397 320 2,840 81

2015 6,607 4,060 3,048 1,728 501 338 2,595 98

2016 6,842 4,157 3,169 1,794 608 350 997 *** 101

* PEG was classified as a Franchise tax in 2011 and 2012, all other years as charges for services and/or l icense and permits.

** In Fiscal Year 2012, the Redevelopment Agency was dissolved, effective January 31, 2012.

*** Legisation restricted use of transportation funds for street and roads which greatly reduced the allocation by SBCAG.


179

City of Lompoc Assessed Value of Taxable Property


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Residential 1,863,826$ 1,988,804$ 1,920,946$ 1,777,155$ 1,723,150$ 1,727,323$ 1,716,208$ 1,733,449$ 1,805,387$ 1,895,115$

Commercial 224,223 232,144 252,433 257,003 260,178 257,890 258,913 265,140 266,551 271,852

Industrial 74,035 78,140 86,116 88,688 96,986 101,567 106,986 107,158 100,558 98,140

Dry Farm 1,368 1,807 6,139 6,135 6,035 5,809 5,752 5,812 5,875 6,033

Institutional 13,335 14,114 14,495 14,952 17,915 14,654 14,243 18,114 18,321 18,637

Irrigated 462 471 481 490 489 493 503 513 515 525

Miscellaneous 15 15 16 16 16 16 16 17 17 17

Recreational 6,311 6,437 6,566 6,468 6,456 6,344 6,586 6,107 6,013 6,413

Vacant 52,604 33,949 55,561 53,377 43,903 43,289 31,175 28,867 32,784 34,374

SBE Nonunitary 1,280 1,064 794 645 645 665 22 22 22 22

Unsecured 67,787 76,209 79,738 79,030 77,454 75,977 76,885 74,954 92,146 89,944

Total 2,305,247$ 2,433,154$ 2,423,284$ 2,283,960$ 2,233,227$ 2,234,024$ 2,217,290$ 2,240,151$ 2,328,188$ 2,421,072$

Source: Santa Barbara County Assessor 2005/06 - 2014/15 Combined Tax Roll

Note: Exemp values are not included in the Totals.

180

City of Lompoc Principal Property Taxpayers

Current Year and Nine Years Ago

Percentage Percentage

Secured & of Secured & of

Unsecured Assessed Unsecured Assessed

Taxpayer Types of Business Value Rank Valuation Value Rank Valuation

Windscape Village LLC Real Estate 37,613,238$ 1 1.55% 28,429,447$ 2 1.23%

Shoot The Breeze Limited Real Estate 21,053,469 2 0.87% 18,515,806 6 0.80%

KW Ravenswood LLC Apartments 20,937,000 3 0.86% 21,010,360 3 0.91%

Centro Watt Property Owner II, LLC Commercial 20,182,000 4 0.83% 19,148,617 5 0.83%

Wal-mart Real Estate Business Trust Commercial 19,518,671 5 0.81% 8,631,808 9 0.37%

Raytheon Company Industrial 16,720,810 6 0.69% 20,996,836 4 0.91%

Majestic Advisors LLC Commercial 14,404,000 7 0.59%

Nesbitt Partners Lompoc Ventures Real Estate 11,230,803 8 0.46% 9,864,835 8 0.43%

Lom-Cal Facility, LLC Institutional 10,338,685 9 0.43%

Seabreeze Apartments Apartments 9,715,200 10 0.40%

Centix Homes Neveda GP Real Estate 32,928,500 1 1.43%

Bascal Properties LLC Commercial 12,436,294 7 0.54%

Fagerdala USA Lompoc Inc Industrial 8,512,826 10 0.37%

Total 181,713,876$ 7.51% 180,475,329$ 7.83%

Source: Santa Barbara County Assessor 2015-16 and 2006-07 Combined Tax Rolls and the SBE Non Unitary Tax Roll

2006-072015-16

181

City of Lompoc Secured Property Tax Roll Levies and Collections

Last Ten Fiscal Years Ending June 30, 2016 (Amounts in thousands)

Fiscal Total Tax Levy Percent of

Collections in

Subsequent Amount Percent of

Year for Fiscal year Amount Levy Years Collected Levy

2007 3,816,078 3,735,924 97.9% 79,065 3,814,282 100.0%

2008 4,018,395 3,921,150 97.6% 95,748 4,016,899 100.0%

2009 3,994,810 3,881,768 97.2% 109,742 3,991,510 99.9%

2010 3,758,534 3,666,594 97.6% 87,007 3,753,601 99.9%

2011 * 3,664,804 3,602,289 98.3% 56,407 3,658,696 99.8%

2012 * 3,660,522 3,613,524 98.7% 41,406 3,654,930 99.8%

2013 * 3,659,766 3,622,705 99.0% 31,121 3,653,826 99.8%

2014 * 3,693,395 3,663,929 99.2% 22,890 3,686,819 99.8%

2015 * 3,838,762 3,806,619 99.2% 20,521 3,827,140 99.7%

2016 * 3,993,943 3,954,163 99.0% - 3,954,163 99.0%

Notes:

Collection within the Fiscal

Year of the Levy

Total Collection

to Date

* The City has elected the Teeter Plan method of property tax collections in FY 2010-2011, where by the County remits

100% of taxes levied to the City and pursues collection and any delinquent taxes and related penalties and interest.

Source: Santa Barbara County Auditor-Controller's Office

182

City of Lompoc Property Tax Rates

Direct and Overlapping Governments Last Ten Fiscal Years

Agency 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Basic Levy 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000%

Allan Hancock Community College Bond 2006 0.02500% 0.02475% 0.02500% 0.02500% 0.02500% 0.02500% 0.02500% 0.02500% 0.02500% 0.02500%

Lompoc Health Care Bond 0.06104% 0.05986% 0.09080% 0.09080% 0.09080% 0.09080% 0.09988% 0.09079% 0.08200% 0.08036%

Lompoc Unified School Bond 2003 0.05084% 0.04982% 0.06000% 0.06000% 0.06000% 0.06360% 0.07123% 0.07835% 0.08227% 0.07733%

Total 1.13688% 1.13443% 1.17580% 1.17580% 1.17580% 1.17940% 1.19611% 1.19414% 1.18927% 1.18269%

City's Share of 1% Levy Per Prop 13 0.16728% 0.16728% 0.16728% 0.16728% 0.16728% 0.16728% 0.16728% 0.16728% 0.16728% 0.16728%

Voter Approved City Debt Rate

Redevelopment Rate 1.00000% 1.00000% 1.00000% 1.00000% 1.00000% 1.00000%

Total Direct Rate 0.25630% 0.26499% 0.26903% 0.26762% 0.26682% 0.26599% 0.26804% 0.27092% 0.26176% 0.25999%

Source: Santa Barbara County Assessor 2006/07 and 2015/16 Tax Rate Table

183

City of Lompoc Sales and Use Tax Historical Rates

State and Measure A & D City Combined

Effective Date Ending Date County Rate City & County Roads Rate Rate

1/1/16 Current 6.50% 0.50% 1.00% 8.00%

1/1/13 12/31/15 6.75% 0.50% 0.75% 8.00%

7/1/11 12/31/12 6.50% 0.50% 0.75% 7.75%

4/1/09 6/30/11 7.50% 0.50% 4 0.75% 8.75%

7/1/04 3/31/09 6.50% 0.50% 0.75% 5 7.75%

1/1/02 6/30/04 6.00% 0.50% 1.00% 7.50%

1/1/01 12/31/01 5.75% 0.50% 1.00% 7.25%

7/15/91 12/31/00 6.00% 0.50% 1.00% 7.50%

1/1/91 7/14/91 4.75% 0.50% 1.00% 6.25%

12/1/89 12/31/90 5.00% 0.50% 3 1.00% 6.50%

4/1/74 11/30/89 4.75% 1.00% 5.75%

10/1/73 3/31/74 3.75% 1.00% 4.75%

7/1/73 9/30/73 4.75% 1.00% 5.75%

7/1/72 6/30/73 3.75% 1.00% 4.75%

8/1/67 6/30/72 4.00% 1.00% 5.00%

1/1/62 7/31/67 1 3.00% 1.00% 4.00%

7/1/49 12/31/61 3.00% 3.00%

7/1/43 6/30/49 2.50% 2.50%

7/1/35 6/30/43 3.00% 3.00%

8/1/33 6/30/35 2 2.50% 2.50%

ordinances for the State Board of equalization to collect the local tax.

3. Measure "D" proposed by Santa Barbara County and approved November 1989. It remained in effect for twenty

years and sunsetted on March 31, 2010.

5. In March 2004, a State ballot measure was passed issuing deficit reduction bonds. It went into effect July 1, 2004

and repealed 25% of the local 1% sales tax. The new 1/4 cent sales tax was to be dedicated to repaying deficit

reduction bonds. Cities and counties would then be made whole by the State from an increase in property tax.

This was referred to as the "triple fl ip" and theoretically considered revenue neutral to the Cities and Counties,

and Schools effect by the State enactment of proposition 57.

2. Sales tax only. The use tax was enacted effective July 1, 1935.

1. The Bradley-Burns Uniform Local Sales and Use Tax Law was enacted 1955. The law authorizes cities and

counties to impose a sales and use tax. Effective January 1, 1962, all cities and counties have adopted

4. Measure "A" proposed by Santa Barbara County and approved November 2008. Scheduled to remain in effect for

thirty years starting April 1, 2010 replacing Measure D.

184

City of Lompoc Taxable Sales by Business Type

Last Ten Calendar Years (Amounts in thousands)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Food Stores 19,961$ 21,801$ 22,544$ 22,950$ 22,740$ 22,996$ 23,270$ 25,011$ 24,016$ 24,043$

Eating and Drink Places 39,251 40,190 40,758 38,137 38,562 40,295 41,856 43,572 47,360 52,843

Auto Dealers and Supplies 71,421 68,466 49,759 37,594 38,152 47,651 55,370 54,780 60,869 64,354

Service Stations 46,751 51,411 55,645 45,344 52,390 62,453 68,109 66,120 66,255 57,614

Other Retail Stores 138,655 132,858 128,037 110,291 108,646 109,300 112,372 120,354 125,858 134,545

All Other Outlets 76,683 79,809 76,972 66,282 69,118 73,779 79,181 89,398 102,848 94,578

Total 392,722$ 394,535$ 373,715$ 320,598$ 329,609$ 356,475$ 380,157$ 399,236$ 427,205$ 427,976$

Source: State of California Board of Equalization and the HDL Companies

Note: Due to confidentiality issues, the name of the ten largest revenue payers are not available.

The categories presented are intended to provide alternative information regarding the source of the City's revenue.

185

City of Lompoc Ratio of Outstanding Debt by Type

Last Ten Fiscal Years

Fiscal

Year

Redevelopment

Bond

Redevelopment

Agency Loans Capital Leases Revenue Bonds Notes and Loans Capital Leases

Total Primary

Government

% of Estimated

Actual Value of

Taxable Property

Outstanding

Debt Per

Capita

2007 7,200,000 1,961,450 2,204,226 40,785,000 7,463,727 961,012 60,575,415 2.63% 1,567

2008 7,050,000 2,013,950 5,401,320 40,025,000 47,470,232 5,724,823 107,685,325 4.43% 2,757

2009 6,895,000 2,066,450 4,669,886 39,070,000 73,893,786 5,310,899 131,906,021 5.44% 3,363

2010 15,120,000 846,225 5,630,089 38,085,000 76,375,941 4,890,137 140,947,392 6.17% 3,554

2011 17,345,000 750,000 4,719,858 36,505,223 73,270,081 4,451,722 137,041,884 6.14% 3,491

2012 2,325,000 * - 3,819,921 35,467,766 69,993,696 4,031,427 115,637,810 5.18% 2,954

2013 2,265,000 - 3,164,226 34,641,672 66,658,342 3,630,825 110,360,065 4.98% 2,806

2014 2,200,000 - 5,177,870 33,486,840 63,263,166 3,443,165 107,571,041 4.80% 2,700

2015 2,135,000 - 4,423,104 32,287,009 59,807,089 3,031,533 101,683,735 4.37% 2,448

2016 2,065,000 - 3,857,803 31,042,177 56,289,015 2,660,985 95,914,980 3.96% 2,326

* Deduction in the 2004 Tax Allocation Bond, 2010 Tax Allocation Bond, capital leases and loans payable include

debts transferred to the Successor Agency Trust fund as of February 1, 2012 in the amount of $15,547,688.


Governmental Activities Business-Type Activities

186

City of Lompoc Ratio of General Bonded Debt Outstanding


Fiscal

Year Population 1

Estimated Actual

Taxable Value of

Property 2

General Bonded

Debt

Service Payable from

Enterprise

Net Bonded

Debt

Ratio of Net

Bonded Debt to

Assessed Value

Net Bonded

Debt per Capita

2007 38,665 2,305,246,904$ - - - 0% -

2008 39,055 2,433,153,792 - - - 0% -

2009 39,226 2,423,283,577 - - - 0% -

2010 39,661 2,283,959,160 - - - 0% -

2011 39,258 2,233,225,993 - - - 0% -

2012 39,151 2,234,005,481 - - - 0% -

2013 39,328 2,217,289,247 - - - 0% -

2014 39,846 2,240,152,279 - - - 0% -

2015 41,541 2,328,188,735 - - - 0% -

2016 41,244 2,421,088,437 - - - 0% -

Sources: 1. California State Departement of Finance (Excluding Prison Population)

2. Santa Barbara County Assessor

187

City of Lompoc Direct and Overlapping Debt

2015-16 Assess Valuation: 2,421,088,437$

Total Debt City's Share of

Direct and Overlapping Tax and Assessment Debt: 6/30/2016 % Applicable (1) Debt 6/30/16

Allan Hancock Community College District

District Certificates of Participation 128,079,576$ 9.903% 12,683,720$

Lompoc Unified School District 25,665,971 50.079% 12,853,262

Lompoc Healthcare District 71,795,000 48.179% 34,590,113

City of Lompoc Park Maintenance and City Pool

Assessment District No. 2 2,065,000 100.000% 2,065,000

Total Gross Direct and Overlapping Tax and Assessment Debt 62,192,095

Overlapping General Fund Debt

Santa Barbara County General Fund Obligation 54,790,000 3.360% 1,840,944

Total Gross Overlapping General Fund Debt 1,840,944

Less: Santa Barbara County self-supporting obligation 131,712

Total Net Overlapping General Fund Debt 1,709,232

Overlapping Tax Increment Debt (Successor Agency): 13,380,000 100.000% 13,380,000

Total Direct Debt -

Total Gross Overlapping Debt 77,413,039

Total Net Overlapping Debt 77,281,327

Gross Combined Total Debt 77,413,039 (2)

Net Combined Total Debt 77,281,327$

(1) The percentage of overlapping debt applicable to the city is estimated using taxable property value. Applicable percentage were estimated

by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total

taxable assessed value.

(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratio to 2015-16 Assessed Valuation:

Total Direct and Overlapping Tax and Assessment Debt …………………………2.57%

Total Direct Debt ………………..…………………………………………….………………0.00%

Gross Combined Debt ………………………………………………………………………….…..3.20%

Net Combined Debt ………………………………………………………………………….……..3.19%

Ratios to Redevelopment Incremental Valuation ($309,225,541):

Total Overlapping Tax Increment Debt ……………………………………………….…..4.33%

Source: California Municipal Statistics

188

City of Lompoc Legal Debt Margin Information


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Debt Limit 86,446,759$ 91,243,267$ 90,873,134$ 85,648,469$ 83,745,975$ 83,775,206$ 83,148,347$ 84,005,710$ 87,307,078$ 90,790,816$

Total net debt applicable to limit - - - - - - - - - -

Legal debt margin 86,446,759$ 91,243,267$ 90,873,134$ 85,648,469$ 83,745,975$ 83,775,206$ 83,148,347$ 84,005,710$ 87,307,078$ 90,790,816$

Total net debt applicable to the

l imit as a percentage of the limit 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Legal Debt Margin Calculation for Fiscal Year 2016

Assessed Value 2,421,088,437$

Debt Limit - 3.75 % of Total Assessed Value 90,790,816$

Amount of Debt Applicable to the Limit -

Legal Debt Margin 90,790,816$

Source: Santa Barbara County Tax Rates and Assessed Valuations

Note: Section 43605 of California Code, which established the debt l imit of 15%, is based on assessed valuation being

equivalent to 25% of full market value. In 1981-82, assessed valuation became equal to full market valuation. As a

result, 1981-82 and subsequent years charter debt l imit is computed at 1/4 of 15% or 3.75% of the full market

valuation.

189

City of Lompoc Schedule of Revenue Bond Coverage

Water Utility Fund Last Ten Fiscal Years

Fiscal

Year

Gross Revenues

(1)

Direct Operating

Expenses (2)

Net Revenue

Available for Debt

Service Principal(3) Interest Total Coverage

2007 7,865,019 6,055,499 1,809,520 391,267 740,211 1,131,478 1.60

2008 8,446,658 6,480,474 1,966,184 410,017 811,275 1,221,292 1.61

2009 8,505,957 6,506,782 1,999,175 478,097 775,714 1,253,811 1.59

2010 8,345,930 6,019,147 2,326,783 486,894 746,419 1,233,313 1.89

2011 8,291,181 6,242,496 2,048,685 510,020 725,933 1,235,953 1.66

2012 8,431,527 6,078,988 2,352,539 533,146 703,991 1,237,137 1.90

2013 8,885,285 6,929,945 1,955,340 551,272 688,589 1,239,861 1.58

2014 10,312,102 6,907,379 3,404,723 583,773 650,926 1,234,699 2.76

2015 11,167,144 7,008,001 4,159,143 606,899 627,226 1,234,125 3.37

2016 11,369,173 7,233,153 4,136,020 629,400 605,503 1,234,903 3.35

1. Operating and non-operating revenues

2. Excludes depreciation and debt service payments

3. Principle and Interest for the Water and Wastewater 1998, 2005 and 2007 Revenue Bonds.

Source: City of Lompoc Annual Financial Statements

190

City of Lompoc Schedule of Revenue Bond Coverage

Wastewater Utility Fund Last Ten Fiscal Years

Fiscal

Year

Gross

Revenues (1)

Direct Operating

Expenses (2)

Net Revenue

Available for Debt

Service Principal (3) Interest Total Coverage

2007 7,450,650 5,060,355 2,390,295 198,733 654,249 852,982 2.80

2008 9,824,619 5,408,619 4,416,000 349,983 1,075,283 1,425,266 3.10

2009 9,320,006 5,323,743 3,996,263 476,903 1,021,848 1,498,751 2.67

2010 10,357,112 4,965,292 5,391,820 498,106 991,645 1,489,751 3.62

2011 11,923,690 4,377,959 7,545,731 514,980 972,424 1,487,404 5.07

2012 11,162,567 5,057,664 6,104,903 541,854 952,153 1,494,007 4.09

2013 11,534,325 6,776,029 4,758,296 558,728 930,758 1,489,486 3.19

2014 12,210,798 6,721,517 5,489,281 581,227 908,582 1,489,809 3.68

2015 13,525,938 6,923,189 6,602,749 603,101 885,660 1,488,761 4.44

2016 15,020,384 7,526,485 7,493,899 625,600 855,698 1,481,298 5.06

1. Operating and non-operating revenues

2. Excludes depreciation and debt service payments

3. Principle and Interest for the Water and Wastewater 1998, 2005 and 2007 Revenue Bonds.

Source: City of Lompoc Annual Financial Statements

191

City of Lompoc Principal Employers

Current Year and Nine Years Ago

Percentage of Total Percentage of Total

Employer Employees Rank City Employment Employees Rank City Employment

Vandenberg AFB 6,878 1 7.49% * **

Lompoc Unified School District 955 2 5.49% **

Lompoc Hospital 540 3 3.10% **

U.S. Department of Justice 513 4 2.95% **

Den Mat Holdings LLC 321 5 1.84% **

Imerys Filtration Minerals 175 6 1.01% **

Walmart 170 7 0.98% **

Home Depot 83 8 0.48% **

Housing Authority, County of Santa Barbara 50 9 0.29% **

Albertson 38 10 0.22% **

9,723 23.84%

* Vandenberg Airforce is located outside of the City l imits. Employement numbers are estimated based on the 2010 United States Census.

** Information unavialable, the last CAFR produced was fiscal year ended June 30, 2006.

2016 2007

192

City of Lompoc Demographic and Economic

Last Ten Years

Fiscal

Year Population 1

Person Income

(in Thousands) 2

Per Capita Peronnel

Income 2 Unemployment Rate # Median Age 2

% of pop 25+ with High

School Degree 2

% of pop 25+ with

Bachelor's Degree 2

2006 41,786 823,272 19,702 7.4% * * *

2007 41,918 865,725 20,653 7.9% * * *

2008 42,843 894,244 20,873 9.8% * * *

2009 42,801 863,894 20,184 14.7% 32.80 76.9% 15.0%

2010 43,079 794,635 18,446 16.3% 32.70 73.3% 12.5%

2011 42,854 826,611 19,289 15.4% 32.00 74.3% 14.1%

2012 42,730 837,252 19,594 10.8% 31.90 73.6% 13.9%

2013 43,314 850,470 19,635 9.7% 32.20 73.4% 14.9%

2014 43,439 848,016 19,522 7.9% 32.00 73.0% 14.2%

2015 44,116 867,396 19,662 6.9% 32.20 75.0% 14.3%

Sources: 1. State of California Department of Finance

2. US Census Bureau

3. California Employment Development Department

4. This report was complied by HDL, Coren & Cone

* Information unavailable

193

City of Lompoc Full Time Equivalents City Government Employees by Function

Last Ten Years

Fiscal Year

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

City Council 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.55 0.55 0.3

Mayor and City Council Members* 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

City Administration 3.2 3.2 3.2 3.2 2.4 2.4 2.2 2.2 2.3 2.3 3.8

City Clerk 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 2.0 2.0 2.0

City Attorney 3.0 3.0 3.0 3.0 3.0 3.0 1.0 1.0 1.0 1.0 1.0

Human Resources 7.0 7.0 7.0 7.0 7.0 7.0 6.0 6.0 6.0 6.0 6.0

Management Services 28.2 28.2 28.2 28.2 28.2 28.2 28.2 28.2 29.2 29.2 29.2

IS and Communications 10.1 10.1 10.1 10.1 10.3 10.3 10.4 10.4 11.9 11.9 13.2

Police 65.0 65.0 66.0 66.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0

Fire 25.5 25.5 25.5 25.5 25.4 25.4 26.0 26.0 27.0 27.0 29.3

Police and Fire Grants* 4.5 7.0 9.0 9.0 6.0 6.0 5.0 5.0 15.0 15.0 8.0

Community Development 6.8 6.9 7.4 7.4 13.3 13.3 13.9 13.9 12.5 12.5 14.1

Community Services 38.8 43.0 42.5 42.5 33.1 33.1 33.0 33.0 32.7 32.7 37.2

Library Grant* 1.0 1.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Public Util ities 119.1 120.2 120.2 120.2 118.4 118.4 118.5 118.5 115.9 115.9 111.4

Public Works 64.7 64.7 64.2 64.2 64.5 64.5 60.8 60.8 59.3 59.3 64.2

Total 375.9 381.3 381.8 381.8 377.03 377.03 371.42 371.42 368.38 368.38 379.75

* Information only not included in totals

Source: City of Lompoc Budget Records

194

City of Lompoc Capital Assets Statistics by Function


Fiscal Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Police

Stations 1 1 1 1 1 1 1 1 1 1

Jails 1 1 1 1 1 1 1 1 1 1

Fire

Stations 2 2 2 2 2 2 2 2 2 2

Engineering/Streets/Transit

Lane miles 255 257 257 257 257 257 270 270 270 274

Community Services

Park and sports facil ities 13 13 13 13 13 13 13 13 13 13

Civic auditoriums 1 1 1 1 1 1 1 1 1 1

Swim Pools 3 3 3 3 3 3 3 3 3 3

Libraries 1 1 1 1 1 1 1 1 1 1

County Libraries operated by the City 2 2 2 2 2 2 2 2 2 1

Recreational Centers 1 1 1 1 1 2 2 2 2 2

Water

Number of wells 10 10 10 10 10 10 10 10 10 10

Number of treatment plants 2 2 2 2 2 2 2 2 2 2

Wastewater

Number of treatment plants 1 1 1 1 1 1 1 1 1 1

Electric

Number of customers 15,066 15,187 15,308 15,430 15,554 15,678 15,804 15,930 16,058 16,186

Solid Waste

Landfil l acreage 115 115 115 115 115 115 115 115 115 115

Capacity 39 39 39 39 39 39 39 39 39 39

Airport

Runways & taxiways,

Paved surfaces (sq. footage) 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000 1,020,000

Acreage 193 193 193 193 193 193 193 193 193 193

* Data not available

195

City of Lompoc Operating Indicators by Function/Program


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Police

DUI arrest 59 52 67 64 66 46 71 73 37 *

Traffic coll ision 518 468 430 392 312 343 304 281 288 *

Calls for service 24,344 23,287 23,613 26,080 27,912 28,617 28,433 27,331 31,723 *

On views 14,407 14,754 15,754 17,489 15,162 14,963 14,238 16,757 11,609 *

Total calls 38,751 38,041 39,367 43,569 43,074 43,580 42,671 44,088 43,332 *

Fire

Medical responses 1,897 1,927 2,047 2,204 2,158 2,242 2,409 2,644 2,742 *

Fire and safety inspections 1,075 1,084 659 665 478 472 341 336 269 *

Engineering/Streets and Roads/Transit

Surface seal (Lane miles) 23.24 1.55 0.00 23.56 29.68 1.41 10.75 2.29 24.43 *

Street overlays (Lane miles) 0.22 5.66 2.26 4.47 0.00 0.99 7.36 2.29 - *

Transit passengers (1) 292,956 293,084 261,943 230,847 232,999 139,564 137,743 323,544 321,043 298,546

Parks & Recreation

Parks bookings 3,119 3,245 3,719 4,239 3,846 3,973 3,950 4,227 3,152 3,941

Facil ity bookings 2,933 2,585 2,486 1,991 1,810 1,607 1,929 2,513 3,693 2,968

Aquatics center bookings 2,102 2,557 2,561 2,265 2,456 1,766 1,542 2,278 2,140 1,604

Aquatic Attendance 87,734 95,263 100,669 104,938 108,276 112,743 112,283 115,342 122,123 123,674

Community Development

Building inspection completed 3,818 3,406 3,090 3,891 4,832 1,848 2,652 3,967 4,097 6,412

Total permit issued 469 435 369 380 415 503 650 571 534 479

Water

Water customer accounts 9,598 9,690 9,328 9,394 9,407 9,446 9,591 9,700 9,780 9,875

Acre feet of water consumed 4,730 4,745 4,554 4,276 4,112 4,191 4,474 4,460 3,953 3589

Wastewater

Flow (mill ions gallons per day) 2.8 3.1 3.15 3.07 3.1 2.75 2.8 3.24 2.95 2.97

Bio-chemical oxygen demand 335 330 342 288 324 339 341 370 345 334

Suspended solids 323 303 328 288 308 328 300 299 258 282

Electric

Electric Customer Meters 15,070 14,399 14,385 14,461 14,547 14,557 14,822 14,974 15,010 15,060

Total MWH Purchased 144,795 143,964 141,960 142,430 139,350 135,786 135,182 139,339 138,426 134,823

Purchased power costs $11,775,300 $11,643,668 $13,351,111 $10,840,277 $9,681,965 $9,395,703 $10,506,729 $10,973,777 $12,061,555 10,546,800$

Solid Waste

Refuse collected (tons/day) 111 106 98 94 91 89 90 92 102 112

Recyclables collected (tons/day) 29 26 26 25 20 20 21 18 21 22

Airport

Gallons of jet and aviation fuel sold 38,597 54,613 49,938 57,469 47,259 54,879 49,580 41,941 46,226 53,638

Library

Library card holders 31,892 29,991 39,723 39,652 32,977 22,946 25,502 24,973 21,651 22,003

Public internet use 87,394 107,980 109,063 160,686 * 169,279 42,905 70,303 76,353 59,114

Materials checked out 289,496 299,846 332,186 322,784 356,886 346,490 323,418 341,801 329,865 334,673

Number of programs-all ages 307 388 380 336 324 * 256 273 346 436

Program attendance 8,527 8,803 10,032 9,835 11,551 12,824 11,709 10,073 8,603 9,967

* Data not available (Streets and Roads, Police, and Fire Reports are by Calendar Year Reports with l imited information avialable from the Library system)

(1) Transit passenger numbers in FY 2012 and FY 2013 reflects the Clean Air Express commuter service being administered outside the City of Lompoc.

Fiscal Year

Documents

omprehensive Annual Financial Report · Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the City of Lompoc for the fiscal year ended June