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As management of the Conejo Recreation and Park District (the District), we offer readers of the District's financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2021. FINANCIAL HIGHLIGHTS • On June 30, 2021, the District assets and deferred outflows exceeded liabilities and deferred inflows by $169.5 million (net position). Of this amount, $18.6 million (unrestricted net position) may be used to meet the District's ongoing obligations to citizens and creditors. 0 The District's government -wide net position increased $10.2 million during the fiscal year. At the close of fiscal year 2020/21, the District governmental funds reports a combined ending fund balance of $53.7 million, an increase of $9.7 million from the prior year. Approximately $38.7 million of fund balance, or 72% percent, is in the General Fund. Of this amount, $7.3 million is unassigned General Fund balance. At the close of fiscal year 2020/21, the General Fund budget to actual report shows a $0.5 million increase in appropriation. Actual revenues exceeded budgeted amounts by $4.1 million, primarily due to conservative budget amounts due to the uncertainty of the COVID- 19 pandemic. Recreation fees were lower than prior years due to COVID-19 restrictions but exceeded budgeted amounts. In addition, the District budgeted to reduce General Fund expenses in light of the COVID-19 uncertainty. As a result, fund balance increased by $2.9 million rather than the budgeted decrease of $4.4 million. As of June 30, 2021, the District's other governmental funds, excluding the General Fund, reported combined ending fund balances of $14.9 million. The District continues to actively manage its retiree liabilities. The Board set up a Reserve Policy and various funds to offset the District's CaIPERS unfunded liability and to temper increased future pension and retiree costs. After years of dedication and contributions per the Reserve Policy; the District has identified funding to address 99% of these liabilities. As the District's known liabilities are nearly fully funded, the District will need to address and prioritize anticipated future capital needs such as deferred repair and replacement of aging infrastructure, wildfire response, property acquisition to maintain a sufficient parks - to -population ratio, structure hardening and other resiliency improvements. This discussion and analysis is intended to serve as an introduction to the District's basic financial statements. The District's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. 2