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Home My WebLink AboutFin Financial Reports FY2015-16{{a SAN RAFAEL SIA` THE CITY WITH A MISSION Agenda Item No: 3.d Meeting Date: November 7, 2016 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE Prepared by: Mark Moses Finance Director City Manager Approval: TOPIC: YEAR-END FINANCIAL STATEMENTS AND RELATED AUDIT REPORTS SUBJECT: FISCAL YEAR 2015-2016 ANNUAL FINANCIAL REPORT; GANN APPROPRIATIONS LIMIT; MEMORANDUM ON INTERNAL CONTROL; CHILD DEVELOPMENT PROGRAM; AND TRANSPORTATION DEVELOPMENT ACT RECOMMENDATIONS: ACCEPT THE FISCAL YEAR 2015-2016 ANNUAL FINANCIAL REPORT, THE GANN APPROPRIATIONS LIMIT REPORT, THE MEMORANDUM ON INTERNAL CONTROL, CHILD DEVELOPMENT PROGRAM REPORT, AND THE TRANSPORTATION DEVELOPMENT ACT REPORT BACKGROUND: As required by local code, State law, bond covenants, and best practices, the City of San Rafael completes an annual audit of its financial activities. The auditing firm of Maze and Associates, Accountancy Corporation conducted the audit for fiscal year 2015-2016. Their work was completed in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget Circular A-133, Audits of State and Local Government and Non -Profit Orizanizations. The requirements of Section 1.5 of Article XHIB of the California Constitution are met with an agreed-upon procedure report applied to the Gann Appropriation Limit calculated for the year ending June 30, 2017. A Memorandum on Internal Control is also prepared by the auditors to identify areas that could improve the City's organization and controls over its financial activities. These reports are also attached to this staff report. Also, as part of the fiscal year-end closing activities, the Finance and Community Services departments worked with Maze and Associates to complete the annual audit of the City's childcare program, as required by the State of California. FOR CITY CLERK ONLY File No.: 8-1 x 8-9 x 9-3-20 Council Meeting: 11/07/2016 Disposition: Accepted reports SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 Finally, the federal Single Audit Act requires that any local agency expending $500,000 or more in combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a separate audit on those programs and a separate Single Audit Report is issued. This threshold was triggered in fiscal year 2015-2016; however, due to the number of programs requiring audit, the report could not be completed in time to be included. Staff expects to return to the City Council in early 2017 with the completed Single Audit report. These reports were presented to the City Council Finance Committee on October 11, 2016 and November 1, 2016, at which time they were reviewed and discussed. ANALYSIS: Overview The Fiscal Year 2015-2016 saw a continuation of the City's fiscal recovery. The City's General Fund Emergency Reserves continue to meet the target level of ten percent of operating expenses established by City Council Policy. Although the City's year ending fund balances are strong, critical unmet needs have accumulated, as a result of the past, multi-year deferral of various capital improvements, maintenance and technology support projects and initiatives. Most of the unassigned general fund balance as of June 30, 2016 has been dedicated to one-time initiatives. Fiscal year 2015-2016 marks the second year of implementation of the new pension accounting standard issued by the Governmental Accounting Standards Board (GASB) known as GASB 68. These requirements, which affect all public agencies with defined benefit pension programs, are designed to enhance the comparability of financial statements by requiring the measurement of pension -related assets and liabilities at fair value, using a consistent and more detailed definition of fair value and accepted valuation techniques. The net impact of implementing GASB 68 lowers the City's net position as of June 30, 2016 is $116.9 million from a reporting perspective. The net pension liability as of this date was measured to be $142.3 million. The full funding of the City's pension costs have been incorporated into the adopted fiscal year 2016-2017 budget; therefore, there is no negative impact on City operations or services resulting from the implementation of this new reporting standard. Consistent with the policy adopted by the City Council upon the implementation of Measure E transactions and use tax (TUT) in April 2014, the City has set-aside the portion of the Measure E that exceeds the former Measure S TUT (i.e., one-quarter of one percent from the three-quarter of one percent tax) for public safety facilities construction and improvements. The accumulated balance grew from $4,389,470 as of July 1, 2015, to $6,336,377 by June 30, 2016. During the year $1,901,094 was expended on San Rafael Essential Facilities project -related activities in preparation for the upcoming major construction. Fiscal Year 2015-16 Annual Financial Report — Citvwide Financial Results The actual results of the City's financial activities are presented in the attached Comprehensive Annual Financial Report. The report includes Government -wide financial statements with governmental activities and business -type activities presented separately. Net position is one indicator of the City's financial position. At the end of the fiscal year, net position of the City SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pa2e: 3 governmental activities was $131.7 million, a decrease of $10.0 million from the prior year adjusted balance. This decrease is largely attributable to the allocation of pension expense under the methodology required by GASB 68. The Parking Fund, reported as a business -type activity, ended the fiscal year with a net position of $9.8 million, the same balance as it ended the previous fiscal year. Cash contributes approximately 30% of this net position, with the remainder contributed by parking infrastructure. A financial summary of revenues and expenditures is shown in the Statement of Activities and Changes in Net Position. Total governmental expenditures of $110.9 million exceeded revenues of $100.9 million $10.0 million. This performance was negatively impacted by the reporting methodology (under GASB 68) for reporting pension expenses. Additional explanatory information is provided in the Management's Discussion and Analysis (MD&A) section beginning on page three. The MD&A provides key highlights and a summary view of financial activities for the year. Financial Results: General Fund The final operating results for the General Fund exceeded the projections made at the time the budget was adopted for fiscal year 2015-2016. This variance was driven by positive performance in the areas of property tax, transient occupancy tax, and unanticipated reimbursements from fire strike team activity. General Fund revenues exceeded expenditures and net transfers by $4.3 million. Of this amount, $1.9 million was assigned to the Measure E — Public Safety Facility Reserve; $1.0 was assigned to one-time MOU contractual obligations; $0.4 million was added to the Emergency Cash Flow reserve; $0.4 million was added to the infrastructure reserve; $0.3 million was added to the General Plan / Long Range Planning reserve; $0.2 million was used for prepaid expenses; and $0.1 million was retained in Unassigned General Fund balance. Gann Appropriations Limit The Agreed -Upon Procedures report for the Gann Appropriations Limit required three procedures to be performed including testing the accuracy of the calculations and comparison of information presented. No exceptions were noted in these procedures for compliance with the Proposition 111 fiscal year 2016-2017 Appropriations Limit calculation. Memorandum on Internal Control The auditors are required to communicate to the City Council matters that come to their attention relating to the audit in a report entitled Memorandum on Internal Control and Required Communications. For this report, there were two areas that the auditors considered to be internal control deficiencies. One pertained to the timeliness of bank reconciliations, and the other to the verification of department revenue and other financial transaction information that flows to the City's general ledger. The City's management responses to these two items describe the corrective measures, including process and procedural changes that the City is undertaking. This communication included references to a few new pronouncements issued by the Governmental Accounting Standards Board (GASB) which become effective in upcoming fiscal years. The most notable of these pronouncements is GASB Statement No. 75, which becomes effective in fiscal year 2017-2018. This Statement introduces new reporting requirements for SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pa2e: 4 other post -employment benefits (e.g., retiree medical) similar to those just implemented for defined benefit pension plans. The City is currently planning an early implementation of this Statement (i.e., fiscal year 2016-2017). Child Development Program (Childcare) Audit The Childcare Program had positive operating results, with $4.3 million in total revenues and $3.8 million in expenditures for the fiscal year. After transfers, the fund balance was increased by $242,036, from $911,808 to $1,153,844. Approximately half of the residual funds have been accumulated for capital improvements. The audit resulted in no adverse findings. Transportation Development Act Audit Audited financial statements for the City's Bicycle/Pedestrian Projects were prepared in order to comply with the Transportation Development Act. The scope of this audit covered $251,466 in TDA revenues (Metropolitan Transportation Commission grants) that were used for multi -use pathway repairs. FISCAL IMPACT: No fiscal impact occurs by the City Council's acceptance of these reports. The fiscal year 2015-2016 Comprehensive Annual Financial Report and related reports are presented as the actual results of the City and related entities' financial activities for the year. RECOMMENDATION: Staff recommends that City Council accept the reports as presented. Attachments: htti)://docs.citvofsanrafael.or2/Finance/reporting/FY15-16-CAFR.Ddf httD://docs.citvofsanrafael.or2/Finance/reDortin2/FY 15-16-GANN.Ddf httD://docs.citvofsanrafael.or2/Finance/reDortin2/FY 15-16-MOIC.Ddf httn://docs.citvofsanrafael.or2/Finance/reDortin2/FY 15-16-Childcare.pdf httn://docs.citvofsanrafael.or2/F/ inance/reDortin2/F/ Y15-16-TDA.ndf WACouncil Material\Staff Reports\2016\City\YE-Financial-Audit Reports FY15-16.doc r SAT RAFAEL A� THE CITY WITH A. MISSION COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDING JUNE 307 2016 Sunset at Loch Lomond -Alarina COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2016 City of San Rafael, California 1400 Fifth Avenue San Rafael, California 94901 Prepared by the Finance Department of the City of San Rafael San RafaeC7heater INTRODUCTORY SECTION CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 Table of Contents INTRODUCTORY SECTION TABLE OF CONTENTS Letterof Transmittal.................................................................................................................................... v Mission Statement and Vision Statement...................................................................................................xi CityCouncil and Staff...............................................................................................................................xii LocationMap............................................................................................................................................xiii OrganizationalChart .................................................................................................................................xiv Certificate of Achievement for Excellence in Financial Reporting........................................................... xv FINANCIAL SECTION I Independent Auditor's Report.................................................................................................................. l Management's Discussion and Analysis..................................................................................................5 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position............................................................................................................. 25 Statementof Activities.................................................................................................................. 26 Fund Financial Statements: Major Governmental Funds: BalanceSheet............................................................................................................................ 30 Balance Sheet - Reconciliation of Governmental Fund Balances to Net Position of Governmental Activities..............................................................................31 Statement of Revenues, Expenditures, and Changes in Fund Balances....................................32 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities................................................................................. 33 Proprietary Funds: Statement of Net Position.......................................................................................................... 36 Statement of Revenues, Expenses, and Changes in Fund Net Position....................................37 Statementof Cash Flows...........................................................................................................38 CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 Table of Contents FINANCIAL SECTION (Continued) I Fiduciary Funds: Statement of Fiduciary Net Position.........................................................................................40 Statement of Changes in Fiduciary Net Position.......................................................................41 Notes to Basic Financial Statements.................................................................................................. 43 Required Supplementary Information: Post -Employment Healthcare Benefits Schedule of Funding Progress ........................................ 93 Schedule of Contributions — Last 10 Years.................................................................................. 94 Schedule of the City's Proportionate Share of the Net Pension Liability ..................................... 96 Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetary Basis GeneralFund............................................................................................................................. 98 Traffic and Housing Mitigation Special Revenue Fund............................................................ 99 GasTax Special Revenue Fund...............................................................................................100 Supplementary Information: Non -major Governmental Funds: Combining Balance Sheets.........................................................................................................106 Combining Statements of Revenues, Expenditures, and Changes inFund Balance................................................................................................................... 112 Budgeted Non -major Governmental Funds: Combining Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual......................................................................118 Internal Service Funds: Combining Statements of Net Position.......................................................................................128 Combining Statements of Revenues, Expenses and Changes in Fund Net Position...................130 Combining Statements of Cash Flows........................................................................................132 Agency Funds: Combining Statements of Changes in Assets and Liabilities ......................................................136 ii CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 Table of Contents STATISTICAL SECTION I Financial Trends: Net Position by Component — Last Ten Fiscal Years............................................................................. 140 Changes in Net Position — Last Ten Fiscal Years....................................................................................142 Fund Balances of Governmental Funds — Last Ten Fiscal Years............................................................146 Changes in Fund Balance of Governmental Funds — Last Ten Fiscal Years .......................................... 148 Revenue Capacity: Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years ............................ 150 Property Tax Rates - All Overlapping Governments— Last Ten Fiscal Years ........................................ 151 Principal Property Tax Payers — Current Year and Nine Years Ago ...................................................... 152 Property Tax Levies and Collections — Last Ten Fiscal Years............................................................... 153 Debt Capacity: Ratio of Outstanding Debt by Type — Last Ten Fiscal Years................................................................. 154 Computation of Direct and Overlapping Debt........................................................................................ 155 Computation of Legal Bonded Debt Margin.......................................................................................... 156 Revenue Bond Coverage Parking Facility — Last Ten Fiscal Years ....................................................... 157 Demographic and Economic Information: Demographic and Economic Statistics — Last Ten Fiscal Years............................................................ 158 Principal Employers — Last Eight Calendar Years................................................................................. 159 Operating Information: Full -Time Equivalent City Government Employees by Function — Last Ten Fiscal Years....................................................................................................................... 160 Operating Indicators by Function/Program — Last Ten Fiscal Years ...................................................... 162 Capital Asset Statistics by Function/Program — Last Ten Fiscal Years..................................................164 iii October 17, 2016 Honorable Mayor, Members of the City Council and Residents of San Rafael: The Comprehensive Annual Financial Report ("CAFR") of the City of San Rafael ("City") for the year ended June 30, 2016, is hereby submitted as required by local ordinances, state statutes and bond covenants. This financial report has been prepared in conformance with Generally Accepted Accounting Principles as promulgated by the Governmental Accounting Standards Board and includes the report of the independent certified public accounting firm, Maze and Associates Accountancy Corporation, which has issued an unqualified, or "clean" opinion on the City's financial statements for the fiscal year ended June 30, 2016. The independent audit of the financial statements is part of a broader, federally mandated examination known as a "Single Audit", which is designed to meet the needs of federal grantor agencies. The standards governing Single Audits require the independent auditor to report on the audited agency's internal controls and compliance with legal requirements, with special emphasis on such controls and requirements involving the administration of federal funding. These reports will be available in the City's separately issued Single Audit Report. City Management is responsible for both the data accuracy, and the completeness and fairness of the presentation of this report. To the best of our knowledge and belief, the data presented is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City. Further, the CAFR is prepared in accordance with procedures and policies set by the Government Finance Officers Association. The analysis of the financial condition and the result of operations can be found in the financial section of the Management's Discussion and Analysis document. The CAFR is organized into three sections: 1. Introductory section, which is unaudited, includes this letter of transmittal, an organizational chart and a list of the City's elected and appointed officials. 2. Financial section, includes the general-purpose financial statements, related footnote disclosures, and the combining and individual fund and account group financial statements and schedules, as well as the independent auditors' report. 3. Statistical section, which is unaudited, includes selected financial and demographic information, presented on a multi-year basis. Generally, ten-year data is presented for expenditures, revenues, assessed valuation for local properties and construction activity. Gary 0 Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember V REPORTING ENTITY — PROFILE OF THE GOVERNMENT The City of San Rafael is located 17 miles north of San Francisco in Marin County. Protected by its Mediterranean like setting along the shores of the San Francisco Bay, the City enjoys a mild climate year round. As the County seat, San Rafael is considered the commercial, financial, cultural and civic hub of Marin County. Abundant recreational facilities are available in and around the City. The City's park and recreational resources include 19 city parks, 393 acres of developed parkland, city and county open space, and China Camp State Park. San Rafael is close to other attractions, including the Golden Gate Bridge, Muir Woods, Point Reyes National Seashore, Mount Tamalpais, multiple state parks, San Francisco, Oakland and the Sonoma and Napa wine country. In 1874, the City of San Rafael became the first incorporated city in the county, later becoming a charter city in 1913 by vote of City residents. The City Council comprises five members; four are elected at -large to four-year terms while the mayor is elected separately to a four-year term. The City's land area is 22 square miles, including seventeen square miles of land and 5 of water and tidelands. San Rafael's population on January 1, 2016 was 60,582, an increase of 0.1% from the January 1, 2015 population of 60,507 (revised from 59,214). Downtown San Rafael is the location of many community events, including the Thursday night Farmers Market Festivals six months out of the year, Second Friday Art Walks, the Twilight Criterium Bike Race, Mill Valley Film Festival, Winter Wonderland/Parade of Lights, and many more. San Rafael is also the heart of the County's cultural activities with venues such as the Marin Center, which presents numerous ballets, concerts, speaking engagements as well as the award winning Marin County Fair; the Falkirk Cultural Center, providing art exhibits and children's programming; the Christopher B. Smith Film Center, and a host of other diverse dining and entertainment venues. The City is also home to the distinguished Dominican University of California. The City of San Rafael provides a full range of municipal services required by statute or charter, namely: police and fire protection, construction and maintenance of streets, parks, storm drains and other infrastructure, recreation, childcare, permits, planning, code enforcement, and a library system serving two locations. The City performed certain infrastructure construction and economic development activities through a separate Redevelopment Agency until its dissolution on February 1, 2012. The City of San Rafael accepted the role of Successor Agency to the Redevelopment Agency per Council action on January 3, 2012, and now conducts its economic development activities with funding from its General Fund. Gary O. Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember V1 The City and California Municipal Finance Authority compose the San Rafael Joint Powers Financing Authority, originally established by the City and former Redevelopment Agency for the purpose of financing redevelopment and other projects. The San Rafael Sanitation District is a discretely presented component unit of the City of San Rafael and is presented independent of City financial information. For a further explanation of these entities, refer to Note 1 — Summary of Significant Accounting Policies in the Financial Section of the CAFR. The City participates in various organizations through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these agencies exercise full powers and authorities within the scope of the related Joint Powers Agreement including the preparation of annual budgets, accountability for all funds, and the power to make and execute contracts. Obligations and liabilities of the separate entities are not those of the City. For a further explanation of these separate entities, refer to Note 12 — Jointly Governed Organizations in the CAFR. Fiscal year 2015-2016 marks the second year of implementation of Governmental Accounting Standards Board Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions. The purpose of this reporting requirement is to improve the decision-making usefulness of information in financial reports and enhance its value for assessing accountability and inter -period equity by requiring recognition of the entire net pension liability and a more comprehensive measure of pension expense. The net pension liability reported as of June 30, 2016, is based on the latest available GASB 67/68 report prepared by the Marin County Employees' Retirement Association (MCERA), which was prepared as of June 30, 2015. The next report is anticipated to be completed within the next 60 days. The City expects the measurement of its net pension obligation to increase from the $142.3 million reported in this year's financial reports. The primary factor contributing to this increase is the annual investment return for fiscal year 2015-2016 which, at 1.68%, fell significantly short of the assumed 7.25% rate. More detailed and specific information will be available once MCERA releases its report. ECONOMIC FACTORS The City has a diversified economic base, which includes an assortment of high-tech, financial, service -based, entertainment and industrial businesses. Downtown San Rafael provides a mix of restaurants, retail shops and financial institutions. The City's varied economic base is reflected in its property tax base, which is 71 % residential, 19% commercial; 4% institutional, 6% unsecured and others. The top 50 sales tax producers provide 59% of overall sales tax revenues. Gary O Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember vii Fiscal year 2015-2016, marked the second full year of the Measure E Transaction and Use Tax (TUT). This 0.75% tax took effect in April 2014, supplanting the former TUT (Measure S) of 0.50%. The revenue from this tax was approximately $11.5 million in the year ended June 30, 2016, with one-third of the funds allocated to the San Rafael Essential Facilities project, which includes construction and improvements to several public safety facilities. Approximately $6.3 million has been accumulated for this project, for which design work is well underway and construction expected to begin in the upcoming fiscal year. Total Measure E revenues account for 16% of General Fund Revenues. Regular sales tax revenues, which have shown a significant recovery over the past few years, account for 30% of General Fund revenues; while property -related taxes, which have also recovered well, account for 23% of General Fund revenues. Demoaraphio Data The following is a sample of demographic and economic attributes that make San Rafael an exceptional place to live and work. El Economic development organizations in San Rafael include the San Rafael Chamber of Commerce, Downtown Business Improvement District, and the Marin Economic Forum. 0 Marin County's top 10 employers include Kaiser Permanente, Marin General Hospital, BioMarin Pharmaceutical, Autodesk, Dominican University of California, Bradley Real Estate, Novato Community Hospital Wells Fargo, FICO, and W Bradley Electric. 0 Major shopping areas, as measured in available retail square footage, include the Downtown corridor (938,000 aggregate), Northgate Mall (725,000), Montecito Center (130,000) and Northgate One (113,900). El The top three sales tax categories in 2016 for San Rafael were: 1. Autos and Transportation (33.1%), 2. General Consumer Goods (20%), and 3. Building and Construction (18.8%). El Several hotels and motels support tourism activity, led by 235 room facilities for both the Embassy Suites and Four Points Sheraton. Citywide, the total number of hotel rooms is 787. El Establishing and maintaining affordable residential housing for sale and lease continues to be a challenge both in San Rafael and throughout Marin County. Rents for one - bedroom apartments range from $2,000 to $2,440, while two bedroom apartments go for $2,625 to $3,505. The median home value in San Rafael is $880,300. Recent Growth and economic vibrancv: BioMarin Pharmaceutical received approvals for a new office building (72,000 sq. ft.) along with the second phase of the parking garage (an additional 300 parking spaces to the recently completed 600 space garage). Gary O Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember V 111 • BioMarin Pharmaceutical purchased a 3 acre site across from its Corporate. Center site and intends to apply for 200,000 square feet of additional office space. Upon approval and construction of the new office buildings, the BioMarin Pharmaceutical corporate headquarters facility will include a total of 673,000 square feet at its campus. • The former Yardbirds Garden Center was re -tenanted with an Ace Hardware store. This 8,000 square feet property was one of the last large vacancies along the Fourth Street commercial corridor and it signifies the return to near full occupancy for retail stores in the Downtown core for the first time since the recession. • Construction is nearing completion for various projects related to the SMART (Sonoma Marin Area Rapid Transit) train. Train tracks, platforms and related infrastructure are all completed for the Downtown and Civic Center Stations. Train service is scheduled to start in late 2016. • Construction is nearing completion for the first phase of `The Village at Loch Lomond'. This project features 80 housing units; 22,000 square feet of commercial space; new recreation areas along the shoreline, and improved marina facilities. • A 40 unit apartment building at 815 B Street approved. • Whistlestop plans to build a 50 unit senior apartment building along with a senior services center next to the proposed new 200,000 square feet BioMarin Pharmaceutical office building at 999 Third Street. • Vacancy rates are reaching all-time lows for retail and office space in the Downtown area and for industrial space throughout the city. Asking rents have increased throughout all market types. FINANCIAL INFORMATION The City's management is responsible for establishing and maintaining internal controls to ensure that the City's assets are adequately protected from loss, theft or misuse. In addition, management controls ensure that proper accounting data is collected so as to prepare reports in conformance with generally accepted accounting principles. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived. All internal control evaluations occur within the above framework. It is management's belief that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance that financial transactions are properly recorded. Gary O. Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember ix The City develops a budget based upon City Council priorities and department objectives. The Finance Department maintains a traditional line item budget by major function. Budget control is accomplished at the functional or division level within each fund. This budget creates a comprehensive management and fiscal system aimed at achieving the objectives of each operating level consistent with those that have been set for the community by the City Council. Each department director is responsible for accomplishing goals within his or her functional area and monitoring the use of her or his budget allocations consistent with policies set by the City Council and monitored by the City Manager. ACKNOWLEDGMENTS The preparation of this City-wide document would not have been possible without the assistance from each of the City's departments. We would like to specifically call out the diligent, dedicated efforts of the Finance Department's staff: appreciation goes to Van Bach, Accounting Manager; and Francis Law, Senior Accountant. These employees were instrumental in coordinating the annual audit in a timely and professional manner. We believe this document meets the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting requirements, and will be submitting it to the GFOA to determine its eligibility. If accepted, this will mark the fifth consecutive year that the City received the award. Lastly, we appreciate the ongoing leadership and support from the Mayor, City Councilmembers and the City Council Finance Committee. Their strong commitment to financial accountability and stewardship provide inspiration to the organization for a high level of achievement. Respectfully submitted, Jim chutz Ci Manager Gary D. Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember X Mark Moses Finance Director Gary D. Phillips, Mayor • Kate Colin, Vice Mayor • Maribeth Bushey, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember X '� AN RAFAEL THE CITY WITH A MISSION MISSION STATEMENT The Mission of the City of San Rafael is to enhance the quality of life and to provide for a safe, healthy, prosperous and livable environment in partnership with the community. VISION STATEMENT Our vision for San Rafael is to be a vibrant economic and cultural center reflective of our diversity, with unique and distinct neighborhoods in a beautiful natural environment, sustained by active and informed residents and a responsible innovative local government. January 1996 xi '� AN RAFAEL THE CITY WITH A MISSION City Council and Staff City Council Gary O. Phillips, Mayor Kate Colin, Vice Mayor Andrew McCullough, Councilmember Maribeth Bushey, Councilmember John Gamblin, Councilmember Elected Officials Rob Epstein, City Attorney Esther Beirne, City Clerk Executive Team Jim Schutz, City Manager Cristine Alilovich, Assistant City Manager Diana Bishop, Chief of Police Stacey Peterson, Human Resources Director Chris Gray, Fire Chief Sarah Houghton, Library Director Paul Jensen, Community Development Director Bill Guerin, Public Works Director Carlene McCart, Community Services Director Mark Moses, Finance Director Doris Toy, District Manager/ Engineer- SRSD CAFR Team Mark Moses, Finance Director Van Bach, Accounting Manager Francis Law, Senior Accountant xii Petaluma H Greater San Francisco �F Bay Area 5 0 5 10 15 Miles Napa AEL W Vacaville Concord 1 Sausaliio Berkeley O O o*a rSa,, O 1Francisco Alam 7SAeandro 'South Sar1� Francisc Hayward =` o 'Fremont San � O Mateo '` Y Palo Alto'_ O. San Joss LOCATION MAP Xiii W ry U O v , 'E N_ O m dA 4 -JO U Y C X1V O Y L - C p E > L OSS O 4J vI Ln N p o — U E +� O E U m U Y v c v E � a E - E o CL C a) Q U v p p 'v c +� U L 41 Y T v E CQ =3U m i i o N C N c T U p LU 0 U m c E - �m Q- � p L Q Q � T N E o m o_ a p N co :L- iv CN E C V Cj C o L 7 Q = 6 Y Q o Q u, C O > + C10 j N a Ou > p w tn N N T U Q F w Q tin v C U m E O Y O N d N N C � X1V G� Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of San Rafael California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 wj�w A4%-PA*wr Executive Director/CEO xv A Ll 104 FA mPU-"ql =*a 1 [0 JV, MAZE T INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of San Rafael, California Report on Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of San Rafael (City), California, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the component unit financial statements of the San Rafael Sanitation District, which represents 18%, 30%, and 14%, respective, of the assets, net position, and revenue of the entity -wide reporting entity. These component unit financial statements were audited by other auditors, whose report thereon has been furnished to us and our opinion, insofar as it relates to the amounts included for the San Rafael Sanitation District, is based solely on the report of these auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. T 925.930.0902 Accountancy Corporation v 925.930.0135 3478 Buskirk Avenue, Suite 215 a mazeOmazeassociates.com Pleasant Hill. CA 94523 w mazeassociates.com Opinions In our opinions, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, the aggregate remaining fund information and the discretely presented component unit of the City as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis and required supplementary information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements as a whole. The Introductory Section, Supplementary Information, and Statistical Section as listed in the Table of Contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. The Supplementary Information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 12, 2016, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. K c4� e, A o6 o Cto:r" Pleasant Hill, California October 12, 2016 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 This analysis of the City of San Rafael's (City) financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2016. Please read it in conjunction with the basic financial statements and the accompanying notes to those basic financial statements. FINANCIAL HIGHLIGHTS Government -wide: Net Position — The assets of the City exceeded its liabilities as of June 30, 2016 by $131.7 million. • Activities — During the fiscal year the City's total expenses of $115.7 exceeded revenues of $105.7 million for governmental and business -type activities million by $10.0 million. Changes in Net Position — The City's total net position decreased by $10.0 million in fiscal year 2015-2016. Net position of governmental activities decreased by $10.0 million, while net position of the business -type activities remained the same. Fund Level: • Governmental Funds — As of the close of fiscal year 2015-2016, the City's governmental funds reported combined ending fund balances of $50.2 million, an increase of $2.4 million from the fund balance of the prior year. Of this total amount, $0.5 million is nonspendable, $27.5 million is restricted, $3.8 million is committed, $16.6 million is assigned, and $1.8 million is unassigned. • Governmental fund revenues were $100.6 million, an increase of $5.0 million from the previous fiscal year. In addition to moderate economic growth, this increase was enhanced by the termination of the State's triple flip sales tax distribution program, which generated a one-time catch up of approximately $1.2 million for which distribution had been delayed. • Governmental fund expenditures increased by $9.5 million to $98.5 million, from $89.0 million in the prior year, due primarily to increased capital expenditures for street maintenance, public safety infrastructure and other capital improvement program expenditures. • Enterprise fund operating revenue remained level relative to the prior year, at $5.2 million. Enterprise operating expenditures totaled $4.6 million, an increase of $0.5 million over the previous year. The increase was attributable primarily to the allocation of pension expense to the parking fund. OVERVIEW OF FINANCIAL STATEMENTS The Comprehensive Annual Financial Report is composed of the following: 1. Introductory section, which includes the Transmittal Letter and general information 2. Management's Discussion and Analysis (this part) 3. Basic Financial Statements, which include the Government -wide and the Fund financial statements along with the Notes to these financial statements 4. Combining statements for Non -Major Governmental Funds, Internal Services Funds, and Fiduciary Funds 5. Statistical Information CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, which have three components: 1) Government -wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements. The basic financial statements include the City (primary government) and all legally separate entities (component units) for which the government is financially accountable. This report also contains other supplementary information in addition to the basic financial statements for further information and analysis. Government -wide Financial Statements The government -wide financial statements present the financial picture of the City and provide readers with a broad view of the City's finances. These statements present governmental activities and business -type activities separately and include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). Additionally, certain interfund receivables, payables, and other interfund activity have been eliminated as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34. The Statement of Net Position and the Statement of Activities and Changes in Net Position report information about the City as a whole. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities and Changes in Net Position presents information showing how the City's net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of timing of related cash flows. In the Statement of Net Position and the Statement of Activities and Changes in Net Position, City activities are separated as follows: Governmental Activities — Most of the City's basic services are reported in this category, including Public Safety, Public Works and Parks, Community Development, Cultural and Recreation, and Government Administration (finance, human resources, legal, City Clerk and City Manager operations). Property tax, sales and use taxes, user fees, interest income, franchise fees, hotel taxes, business licenses, and property transfer taxes, plus state and federal grants finance these activities. Business -type Activities — The City charges fees to customers to cover the full costs of certain services it provides. The City's Parking Services program is the City's sole business -type activity. Discretely Presented Component Units — The government—wide financial statements include not only the City itself (the primary government), but also the San Rafael Sanitation District, a legally separate entity for which the City is financially accountable. Financial information for the San Rafael Sanitation District is reported separately from the financial information presented for the primary government. The government -wide financial statements can be found on pages 25 through 27 of this report. C:7 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Fund Financial Statements and Major Component Unit Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. The fund financial statements provide detailed information about each of the City's most significant funds called major funds. The concept of major funds and the determination of the major funds were established in the Governmental Accounting Standards Board Statement No. 34. Each major fund is presented individually with all non -major funds summarized and presented in a single column. Further detail on the non -major funds is presented on pages 106 through 125 of this report. Governmental Funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial capacity. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for government funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are presented on the page immediately following each governmental fund financial statement. The City has twenty-nine governmental funds, of which three are considered major funds for presentation purposes. Each major fund is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. The City's three major funds are: the General Fund, Gas Tax, and Traffic and Housing Mitigation. Data from the other twenty-six governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 30 through 33 of this report. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements on pages 106 through 125 of this report. Proprietary Funds — The City maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses an enterprise fund to account for its Parking Services program and reports it as a major fund. Internal service funds are used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its building maintenance; vehicle, equipment and computer replacement; workers' compensation; general liability; self-insured dental program; other employee and retiree benefits programs. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the government -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. Like the government -wide financial statements, proprietary fund financial statements use the accrual basis of accounting. There is no reconciliation needed between the government -wide financial statements for business - type activities and the proprietary fund financial statements. The basic proprietary fund financial statements can be found on pages 36 through 38 of this report. fd CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Fiduciary Funds — Fiduciary funds are used to account for resources held for the benefit of parties 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. The City acts as an agent on behalf of others, holding amounts collected, and disbursing them as directed or required. The City's fiduciary activities are reported in the separate Statements of Fiduciary Net Position and the Agency Funds Statement of Changes in Assets and Liabilities. The City's fiduciary funds include a private purpose trust fund to account for activities of the City of San Rafael Successor Agency and an agency fund that accounts for resources held by the City in a custodial capacity for the Pt. San Pedro Road Assessment District. Information for the fiduciary funds can be found on pages 40 through 41 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 43 through 89 of this report. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. One section includes budgetary comparison statements for the major funds (general, gas tax, and traffic and housing mitigation). The other section is a schedule of funding progress for the Marin County Employees' Retirement System. All budgeted positions that are filled by either full-time or permanent part- time employees (working seventy-five percent of full-time equivalent) are eligible to participate in this system. Required supplementary information can be found on pages 93 through 100 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS Statement of Net Position Net position is one indicator of the City's financial position. During this fiscal year, the net position of the City was $131.7 million from Governmental Activities and $9.8 million from Business -type Activities, for a total of $141.5 million. This represents a decrease of $10.0 million from the prior year net position. E:l CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 The following is the condensed Statement of Net Position for the fiscal years ended June 30, 2016 and 2015: Summary of Net Position (in thousands) Governmental assets increased by $9.5 million, primarily due to increases in cash and short-term receivables associated with positive operating results and set aside for specific purposes (e.g., public safety facility construction and improvements, other capital improvement projects, and risk management reserves). Current and other liabilities increased by approximately $1.2 million, primarily due to an increase in unearned revenue. Noncurrent governmental liabilities increased by $66.7 million, mostly attributable to the increase in net pension liability (Note 9). The net position in business -type activities reflects the activity of the Parking Services program and increased by $16 thousand from the previous year. The $2.0 million increase in noncurrent liabilities was driven by the increase in net pension liability, but was substantially offset by a $1.2 million increase in deferred outflows and a $0.4 million decrease in deferred inflows. At June 30, 2016, the largest portion of net position in the amount of $204.7 million consisted of the City's investment in capital assets net of related debt. This component represents the total amount of funds required to acquire capital assets less any related debt used for such acquisition that is still outstanding. The City uses these assets to provide services to residents. The capital assets of the City are not sources of income for repayment of debt as most assets are not revenue generating and generally are not liquidated to repay debt. Therefore, debt service payments are funded from other sources available to the City. 0 Governmental Activities Increase Business -Type Activities Increase 2016 2015 (Decrease) 2016 2015 (Decrease) Current and other assets $86,543 $80,056 $6,487 $3,050 $2,679 $371 Capital assets 194,086 191,074 3,012 16,699 16,742 (43) Total assets 280,629 271,130 9,499 19,749 19,421 328 Deferred outflows related to pension (Note 9) 57,287 21,622 35,665 1,939 734 1,205 Current and other liabilities 11,843 10,664 1,179 500 509 (9) Noncurrent liabilities 161,643 94,916 66,727 10,259 8,294 1,965 Total liabilities 173,486 105,580 67,906 10,759 8,803 1,956 Deferred inflows related to pension (Note 9) 32,710 45,498 (12,788) 1,107 1,546 (439) Net Position: Net investment in capital assets 193,707 190,621 3,086 10,958 10,745 213 Restricted 31,287 33,389 (2,102) 0 0 0 Unrestricted (93,274) (82,336) (10,938) (1,136) (939) (197) Total net position $131,720 $141,674 ($9,954) $9,822 $9,806 $16 Governmental assets increased by $9.5 million, primarily due to increases in cash and short-term receivables associated with positive operating results and set aside for specific purposes (e.g., public safety facility construction and improvements, other capital improvement projects, and risk management reserves). Current and other liabilities increased by approximately $1.2 million, primarily due to an increase in unearned revenue. Noncurrent governmental liabilities increased by $66.7 million, mostly attributable to the increase in net pension liability (Note 9). The net position in business -type activities reflects the activity of the Parking Services program and increased by $16 thousand from the previous year. The $2.0 million increase in noncurrent liabilities was driven by the increase in net pension liability, but was substantially offset by a $1.2 million increase in deferred outflows and a $0.4 million decrease in deferred inflows. At June 30, 2016, the largest portion of net position in the amount of $204.7 million consisted of the City's investment in capital assets net of related debt. This component represents the total amount of funds required to acquire capital assets less any related debt used for such acquisition that is still outstanding. The City uses these assets to provide services to residents. The capital assets of the City are not sources of income for repayment of debt as most assets are not revenue generating and generally are not liquidated to repay debt. Therefore, debt service payments are funded from other sources available to the City. 0 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 A portion of the City's net position of $31.3 million is subject to external restrictions, and their use is determined by those restrictions whether legal or by covenant. The remaining portion, unrestricted negative $94.4 million, represents the extent to which the net investment in capital assets and restricted net position exceed total assets. Net Position as of 6/30/2016 Total = $ 141,542 (in thousands) Invested in Capital Assets (net) $204,665 Restricted 31,287 Unrestricted (94,410) Total Net Position $141,542 10 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Statement of Activities - Governmental The following is the condensed Statement of Activities and Changes in Net Position for the fiscal years ended June 30, 2016 and 2015: Summary of Changes in Net Position (in thousands) 11 Governmental Activities Increase 2016 2015 (Decrease) REVENUES Program revenues: Charges for services $21,310 $19,758 $1,552 Operating grants and contributions 4,678 4,186 492 Capital grants and contributions 1,471 1,308 163 Total program revenues 27,459 25,252 2,207 General revenues: Property taxes 19,999 19,039 960 Sales taxes 34,348 32,270 2,078 Paramedic tax 4,226 3,820 406 Transient occupancy tax 3,063 2,662 401 Franchise tax 3,418 3,272 146 Business license tax 2,825 2,670 155 Other taxes 3,465 3,296 169 Investment earnings 300 216 84 Miscellaneous 1,387 2,255 (868) Total general revenues 73,031 69,500 3,531 TOTAL REVENUES 100,490 94,752 5,738 EXPENSES General government 12,953 9,100 3,853 Public safety 55,400 39,969 15,431 Public works and parks 22,929 16,893 6,036 Community/economic development 4,307 3,128 1,179 Culture and recreation 15,027 11,198 3,829 Interest on long-term debt 277 284 (7) TOTAL EXPENSES 110,893 80,572 30,321 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENSES (10,403) 14,180 (24,583) OTHER FINANCING SOURCES (USES) Transfers in 449 433 16 Total Other Financing Sources (Uses) 449 433 16 Special Item * - 4,462 (4,462) Net Change in Net Position (9,954) 19,075 (29,029) Beginning Net Position, July 1, 2015 141,674 122,599 19,075 Ending Net Position, June 30,2016 $131,720 $141,674 ($9,954) *-To establish GASB 45 and 68 receivable from San Rafael Sanitation District in fiscal year 2015 (first year of implementation). 11 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 The City's governmental activities net position decreased by $10.0 million during fiscal year 2015-2016. Charges for services were approximately $1.6 million higher than those of the previous year. This increase was driven by the reporting of San Rafael Sanitation District personnel reimbursement -related charges in the newly established internal service fund. Meanwhile, the City recorded a $2.1 million year -over -year increase in Sales taxes, $1.2 million of which was due to a one-time catch up of sales tax revenues that were delayed during the 10 -year State modification to sales tax distribution (Triple Flip) which terminated on December 31, 2015. Property taxes and transient occupancy taxes registered year -over year increases of $1.0 million and $0.4 million, respectively. Miscellaneous revenues were down $0.9 million, due to by approximately $0.8 million in reimbursements of State -mandated costs recorded in the previous year. The fiscal year 2015-2016 governmental expenses were $30.3 million more than those of the previous fiscal year. Approximately $25 million of this increase is attributable to the allocation of pension expense under GASB 68. The remaining year -over -year increase is attributable to other operating costs, which increased by approximately $5 million, which is consistent with the rate of revenue growth supporting these expenses. The following graph shows governmental revenues by source: $71,34 Revenues by Source Governmental Activities Total - $100,490 (in thousands) 12 ■ Charges for services 4,678 ■ Operating grants and contributions 51,471 Capital grants and contributions ■ faxes Investment earnings ■ Miscellaneous N $eo $so $40 $30 $20 $10 $0 CITY OF SAN RAFAE Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Expenses and Program Revenues Governmental Activities o c� ya�_�1 4 C �,t of Jae QJ� ■Program Revenues ��OC Expenses LJ� Total expenses for governmental activities were $110.6 million (excluding interest on long-term debt of $277 thousand). Program revenues offset total expenditures as follows: • Those who directly benefited from programs contributed $21.3 million in charges for services. • A total of $6.1 million in operating and capital projects were funded by outside agencies through operating, capital grants, and contributions. As a result, total expenses that were funded by tax revenues, investment income, other general revenues and fund balance were $83.2 million. Functional expenses for the year ended June 30, 2016 were as follows: Expenses by Function (in thousands) Function Amount Percent of Total General government $12,953 11.6% Public safety 55,400 50.0% Public works and parks 22,929 20.6% Community development 4,307 3.9% Culture and recreation 15,027 13.6% Interest on debt 277 0.3% Total expenses $110,893 100% 13 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Statement of Activities — Business -type Summary of Changes in Net Position For the periods ended June 30, (in thousands) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENSES 464 931 (467) OTHER FINANCING SOURCES (USES) Transfers out (448) (433) (15) Total Other Financing sources (uses) Net Change in Net Position 16 498 (482) Fund Balance, Beginning as of 7/1/15 9,806 9,308 498 Net Position, Ending as of 6/30/16 $9,822 $9,806 $16 The net position for business -type activities was increased by $16 thousand in fiscal year 2015-2016 from the prior fiscal year. Parking services is the City's only business -type activity with income derived from program revenues of $5.2 million. Program revenues include parking meter coin income of $1.9 million and parking garage hourly and monthly parking income of $1.3 million. Revenues also include parking and non -vehicle code fines totaling $2.0 million. Total expenses for parking services were $4.8 million and transfers out to general fund and non -major governmental fund for support totaled $448 thousand during the fiscal year 2015-2016. 14 Business -Type Activities Increase 2016 2015 (Decrease) Revenues Program revenues: Charges for services $5,212 $5,174 $38 Total program revenues 5,212 5,174 38 General revenues: Miscellaneous 15 7 8 Total general revenues 15 7 8 TOTAL REVENUES 5,227 5,181 46 Expenses General government 4,763 4,250 513 TOTAL EXPENSES 4,763 4,250 513 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENSES 464 931 (467) OTHER FINANCING SOURCES (USES) Transfers out (448) (433) (15) Total Other Financing sources (uses) Net Change in Net Position 16 498 (482) Fund Balance, Beginning as of 7/1/15 9,806 9,308 498 Net Position, Ending as of 6/30/16 $9,822 $9,806 $16 The net position for business -type activities was increased by $16 thousand in fiscal year 2015-2016 from the prior fiscal year. Parking services is the City's only business -type activity with income derived from program revenues of $5.2 million. Program revenues include parking meter coin income of $1.9 million and parking garage hourly and monthly parking income of $1.3 million. Revenues also include parking and non -vehicle code fines totaling $2.0 million. Total expenses for parking services were $4.8 million and transfers out to general fund and non -major governmental fund for support totaled $448 thousand during the fiscal year 2015-2016. 14 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS Governmental Funds Fund Balance Classifications In February 2009, the Governmental Accounting Standards Board issued Statement No. 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions. The objective of GASB 54 was to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be applied. Under GASB 54, fund balances are classified in five categories: nonspendable, restricted, committed, assigned, and unassigned based on hierarchy of constraint. Further details on fund balance classifications can be found in Note 8B. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financial capacity. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of June 30, 2016, the City reported a combined ending fund balance of $50.2 million of all its governmental funds (an increase of $2.4 million from the prior year): $0.5 million is non -spendable, $27.5 million is restricted, $3.8 million is committed, $16.6 million is assigned and $1.8 million is unassigned. General Fund - The General Fund is the primary operating fund of the City. General Fund - The fund balance of the General Fund as of June 30, 2016 was $18.7 million (an increase of $4.3 million from the prior year balance): $0.5 million is non -spendable, $16.4 million is assigned, and $1.8 million is unassigned. The assigned portion of the balance includes $6.9 million for emergency and cash flow needs, which meets the minimum target reserve of ten percent of operating expenditures. General Fund Budcetary Hi2hli2hts: The original adopted General Fund budget projected total revenue of $72.7 million and transfers -in of $1.3 million for total resources of $74.0 million. This budget appropriated expenditures of $67.1 million and transfers -out of $2.6 million for total appropriations of $69.7 million. Transfers -out were later increased by $1.8 million to accommodate the funding of the San Rafael Essential Facilities project from Measure E Transactions and Use Tax (TUT), based on actual project expenditures. Actual revenues, at $74.8 million, exceeded the original budgeted revenues by $2.1 million. This positive performance was driven by tax revenues (primarily property tax and transient occupancy tax) that exceeded budget projections, coupled with approximately $500K in unanticipated reimbursements for fire strike team activity. Fiscal year 2015-2016 General Fund revenues exceeded expenditures and net transfers by $4.3 million. Of this amount, $1.9 million was added to Measure E - Public Safety Facility reserve; $1.0 was assigned to one-time MOU contractual obligations; $0.4 million was added to the Emergency Cash Flow reserve; $0.4 million was added to the Infrastructure reserve; $0.3 million was added to the General Plan / Long Range Planning reserve; $0.2 million was used for prepaid expenses, and $0.1 million was retained in Unassigned General Fund balance. 15 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Summary of General Fund Budget and Actual For the fiscal year ended June 30, 2016 (in thousands) Adopted Budget Revenues $72,686 Transfers in 1,357 Total resources 74,043 Expenditures 67,112 Transfers out 2,560 Total uses 69,672 Net Operating Results $4,371 Revised Budget Actual $74,756 $70,747 1,111 1,039 75,867 71,786 $67,198 63,096 4,341 1,698 71,539 64,794 $4,328 $6,992 Traffic and Housing Mitigation Fund — The City uses this fund to collect developer contributions to be used for major street improvement and housing infrastructure projects. During the year, the fund balance decreased from $12.2 million to $10.4 million. Revenues totaled $0.4 million, while $0.7 million was charged against this fund to support the maintenance of the City-wide traffic model, including the Tamalpais Avenue queue cutter. In addition, $1.5 million was transferred to the Gas Tax Fund to support the Downtown Rail Readiness project. The balance in the fund is being held in anticipation of major street projects identified in the General Plan 2020 and other qualifying expenditures. Gas Tax Fund — The City uses this fund to manage its allocation of State gasoline taxes and local funding for street maintenance projects. Gas tax expenditures exceeded revenues and net transfers by $948 thousand in fiscal year 2015-2016 and the ending fund balance decreased from $7.6 million as of June 30, 2015, to $6.7 million as of June 30, 2016. Expenditures during fiscal year 2015-2016 totaled $7.1 million. In addition to routine street -related maintenance, expenditures include $2.3 million for Downtown Rail Readiness, $1.2 million for miscellaneous street resurfacing, $811K for Del Presidio Blvd—Pt. San Pedro resurfacing, and $638K for H Street drainage improvements. The largest sources of revenues were $1.3 million in development impact fees, $1.2 million from State gasoline taxes, $596 thousand in local Measure A funds, and $188 thousand in reimbursements. Non -major Governmental Funds — The City's non -major funds are presented in the basic financial statements in the aggregate. At June 30, 2016, non -major funds had a total fund balance of $14.4 million, a $1.4 million increase from the previous year. The increase included a $242 thousand increase to the childcare operating and capital reserves, a $377 thousand increase in emergency medical services reserves. The remaining increase of approximately $0.8 million is the net of capital accumulation for major projects (e.g., Andersen Drive), less spending down on other capital projects (e.g., Rossi Pump Station, Terra Linda pool house improvements). Of the ending total non -major fund balances of $14.4 million: $10.5 million (73%) is legally restricted for specific purposes by external funding source providers, $3.8 million (26%) is committed for special purposes by the City Council, and $ 0.1 million (1%) is assigned. Additional information about these aggregated non -major funds is presented in the combining statements which immediately follow the required supplementary information. 101 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Proprietary Funds The City's proprietary funds are presented in the basic financial statements in a manner similar to that found in the government -wide financial statements, but in more detail. As noted in the Summary of Changes in Net Position — Business -type Activities at page 36, the City's proprietary fund net position was increased by $10.6 thousand during the fiscal year. The Parking Services Fund is the City's sole business -type (Enterprise) activity. The proprietary fund operating revenue was increased by $36 thousand in fiscal year 2015-2016 to $5.212 million. The Enterprise fund operating expenses were $4.6 million in fiscal year 2015-2016, an increase of $0.5 million over the prior fiscal year. The City's Internal Service Funds are also reported in this Proprietary Fund classification. In fiscal year 2015-2016, the Internal Services Funds were comprised of: Building Maintenance, Vehicle Replacement, Equipment Replacement, Employee Benefits, Liability Insurance, Workers' Compensation, Dental Insurance, Employee Retirement, and OPEB/Retiree Medical. The following additional three funds have now been reclassified into Internal Service Funds: Radio Replacement Fund — In prior years, this fund was part reported under the Capital Projects Funds. Effective in fiscal year 2015-2016, the City reclassified this fund to an Internal Service Fund. As of June 30, 2016, the Radio Replacement Fund had a total net position of $383 thousand, all of which was unrestricted. Telephone Replacement Fund — In prior years, this fund was part reported under the Capital Projects Funds. Effective in fiscal year 2015-2016, the City reclassified this to an Internal Service Fund. As of June 30, 2016, the Telephone Replacement Fund had a total net position of $338 thousand, all of which was unrestricted. Sewer Maintenance — In prior years, this fund was reported under the Special Revenue Funds. Effective in fiscal year 2015-2016, the City reclassified this fund to an Internal Service Fund to record both the cost of providing services to the San Rafael Sanitation District and the charges for those services. As of June 30, 2016, the Sewer Maintenance Fund had a total net position of $0. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City's investment in capital assets for its governmental and business -type activities as of June 30, 2016 amounts to $210.8 million, net of accumulated depreciation of $161.0 million. This investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems, and similar items. The net addition to the City's investment in capital assets for the current fiscal year was $8.7 million, offset by accumulated depreciation of $5.7 million. Additions to capital assets during fiscal year 2015-2016 included: ➢ Construction in Progress: $7.0 million: • Downtown Rail Readiness - $2.5 million • San Rafael Essential Facilities - $1.8 million • Terra Linda Pool House - $1.0 million 17 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 • Del Presidio Blvd -Pt. San Pedro Resurfacing - $0.8 million • Rossi Pump Station - $0.7 million • Other - $0.2 million ➢ Infrastructure: $1.7 million • Puerto Suello - $1.7 million The City's Capital Assets for the fiscal years ending June 30, 2016 and 2015 were as follows: Summary of Capital Assets (in thousands) Business -type Activities Land 2016 2015 Governmental Activities 10,714 10,714 Land $83,261 $83,261 Construction in progress 11,520 4,506 Land improvements 9,020 8,789 Buildings and structures 41,667 41,486 Machinery and equipment 18,477 18,927 Infrastructure 187,213 185,529 Less accumulated depreciation (157,072) (151,423) Subtotal Governmental Activities 194,086 191,075 Business -type Activities Land 8,621 8,621 Buildings and structures 10,714 10,714 Machinery and equipment 1,267 1,185 Less accumulated depreciation (3,902) (3,778) Subtotal Business -type Activities 16,700 16,742 Total Capital Assets $210,786 $207,817 Additional information on the City's capital assets can be found in Note 5 on pages 62 through 63 of this report. CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 Debt Administration The City's debt is discussed in more detail in Note 6 to the financial statements. The debt of the former Redevelopment Agency is reported under the Successor Agency, which is presented as Private -Purpose Trust Fund on the Statement of Fiduciary Net Position. See Note 15 of the financial statements for additional information. The City's long-term obligations for the fiscal years ending June 30, 2016 and 2015 were as follows: Summary of Long -Term Debt (in thousands) 19 2016 2015 Governmental Activity Debt: 2010 Taxable Pension Obligation Bonds $4,490 $4,490 PG & E City Hall HVAC Retrofit Note Payable 246 279 PG & E Street Light Retrofit Note Payable 133 175 Subtotal Governmental Activity Debt 4,869 4,944 Business -type Debt: PG & E Parking Lot Lighting Retrofit Note Payable 48 55 2012 Authority Lease Revenue refunding Bonds, as adjusted 5,693 5,942 Subtotal Business -type Debt 5,741 5,997 Total Long -Term Obligations $10,610 $10,941 19 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 ECONOMIC CLIMATE AND NEXT YEAR'S BUDGET Seven years after the official end of the Great Recession, the City's revenues have firmly established themselves above the former peak set at the end of the last decade. As the City looks ahead to fiscal year 2016-2017, management is encouraged by indicators that the local economy will remain vibrant. However, relatively strong growth in the regional economy continues to be tempered by uncertainty at the state, national and international levels. The nation continues to bounce back slowly, fueled by a resurgent housing market and consistent job growth. While elements of the national economy are on the mend, there are many longer-term issues the nation must address, including funding changes to the national healthcare system, long-term underemployment and unemployment, and resolving underfunded federal entitlements and state and local pensions. The California economy continues to rebound from the recession. Although the 5.4% unemployment rate remains above the national average of 4.9%, it continues to fall and remains on a convergent track with the national average. Personal income has rebounded over the past few years, and the State continues to prosper from the flow of capital into the technology companies who are attracted to California. Although the State's has been able to slowly build back its reserves and post budget surpluses, there are concerns that budget shortfalls could return within the next few years. In addition, the "wall of debt" which, when pension and retiree medical liabilities are considered, reaches into the hundreds of billions of dollars and managing the impact of the severe drought most of the 58 counties are likely to burden the State for several years. Locally, the 3.5% Marin County unemployment rate is the second lowest in the State. According to the Marin Economic Forum, the County added 2,600 payroll jobs and gained approximately 200 payroll businesses in 2015. Real personal income is projected to grow at an average rate of just over 2% over the next year, and Marin County's taxable sales per capital are the third highest in the State. Marin County median home prices now hover around $1 million and continue to rise, while the recovery of commercial real estate has led to stable rents averaging $2.60 per square foot. The City's general fund is fueled by the momentum of four consecutive years of strong operating results. Service levels have increased moderately over the past few years, with additional resources being allocated to homeless issues, massage ordinance enforcement, open space management and deferred maintenance. At the same time, the City is fully funding its actuarially -determined, required contributions for both pension and retiree medical (OPEB) obligations. The City enters fiscal year 2016-2017 with approximately $6.3 million accumulated from a dedicated portion of its Measure E Transaction Use Tax (TUT) for public safety facilities construction and improvements. One-third of this twenty-year San Rafael three-quarter percent TUT, which became effective April 1, 2014, has been set aside by City Council direction for this purpose. Reductions in staffing and service levels, coupled with deferred maintenance of City facilities as method of coping with past economic downturns means that, although the City is able to maintain and, in some cases, improve on its level of services and make come strategic investments for the City's future, there will still be critical, unfunded capital and maintenance needs. The trends for sales tax and transactions and use tax (Measure E), which combined represent the City's largest tax revenue generators, suggested continued, but moderate growth. For fiscal year 2016-2017, these taxes are projected to increase by approximately four percent. The City's second largest tax generator is property tax. The City is expecting the fiscal year 2015-2016 tax roll to increase by approximately five percent over the previous year. Other tax and non -tax revenues are expected to grow moderately, in the range of two to four percent. 20 CITY OF SAN RAFAEL Management's Discussion and Analysis Fiscal Year Ended June 30, 2016 The City's largest expenditure relates to personnel costs. Salaries and benefits are tied to the labor agreements with each bargaining group. With the exception of SEIU-Childcare, which has a one-year contract terminating on October 31, 2016, the City's labor units are all operating under contracts that expire on June 30, 2018. Negotiated compensation increases in effect through June 30, 2018 range between 3.0% and 4.0% for the year. In the bond markets, the San Rafael name is recognized as a high credit municipal entity given both the City's financial strength and solid financial management. Because the City's bonds are highly sought by investors and are fairly competitive in the marketplace, the City can borrow funds at reasonably attractive rates. The City maintains an AA- issuer credit rating with Standard & Poor's Ratings Services. The City anticipates spending down most of its funds accumulated for the San Rafael Essential Facilities capital improvements project. This project, which includes a new public safety administrative building and major safety and operational improvements to fire stations, is being funded from a dedicated portion of the Measure E TUT. Other General Fund balances are expected to remain stable for the year. REQUEST FOR INFORMATION This financial report is designed to provide our residents, businesses, customers, and investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for providing high quality services within the limits of our fiscal resources. If you have questions about this report or need additional financial information, contact the City of San Rafael — Finance Department at 1400 Fifth Avenue, Room 204, San Rafael, California 94901. 21 CITY OF SAN RAFAEL STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES The Statement of Net Position and the Statement of Activities summarize the entire City's financial activities and financial position. They are also referred to as Government -wide financial statements. The Statement of Net Position reports the difference between the City's total assets and the City's total liabilities, including all the City's capital assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of the City's net position, by subtracting total liabilities from total assets. The Statement of Net Position summarizes the financial position of all of the City's Governmental Activities in a single column, and the financial position of all the City's Business -type Activities in a single column; these columns are followed by a total column which presents the financial position of the entire City. The City's Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds. Since the City's Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund transactions and balances. The City's Business -type Activities include all its Enterprise Fund activities. The Statement of Activities reports increases and decreases in the City's net position. It is also prepared on the full accrual basis, which means it includes all the City's revenues and all its expenses, regardless of when cash changes hands. This differs from the "modified accrual" basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures. The Statement of Activities presents the City's expenses first, listed by program, and follows these with the expenses of its business -type activities. Program revenues - that is, revenues which are generated directly by these programs - are then deducted from program expenses to arrive at the net expense of each governmental and Business -type program. The City's general revenues are then listed in the Governmental Activities or Business -type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position. Both these Statements include the financial activities of the City and the San Rafael Joint Powers Financing Authority which are legally separate but are considered to be component units of the City because they are controlled by the City, which is financially accountable for their activities. The balances and the activities of the San Rafael Sanitation District, a discretely presented component unit, are included in these statements in a separate column. 23 CITY OF SAN RAFAEL STATEMENT OF NET POSITION JUNE 30, 2016 25 Component Unit Primary Government San Rafael Governmental Business -type Sanitation Activities Activities Total District ASSETS Cash and investments available for operations (Note 2) $62,189,193 $2,841,692 $65,030,885 $24,011,268 Restricted cash and investments (Note 2) 979,094 979,094 Receivables: Accounts 2,519,094 32,280 2,551,374 35,042 Taxes 10,662,825 10,662,825 Grants 1,586,111 129,077 1,715,188 Interest 119,395 119,395 Loans (Note 4) 1,114,106 1,114,106 Long-term receivable from the Successor Agency (Note 15D) 1,286,882 1,286,882 Long-term receivable from San Rafael Sanitation District (Note 4H) 4,859,007 4,859,007 Internal balances (Note 3B) (46,432) 46,432 Prepaid expenses and others 1,274,272 1,274,272 54,382 Capital assets (Note 5): Nondepreciable 94,780,889 8,620,853 103,401,742 3,319,396 Depreciable, net 99,304,781 8,078,262 107,383,043 40,105,661 Total Assets 280,629,217 19,748,596 300,377,813 67,525,749 DEFERRED OUTFLOWS Deferred outflows related to pension (Note 9) 57,286,741 1,939,052 59,225,793 Total Deferred Outflows 57,286,741 1,939,052 59,225,793 LIABILITIES Accounts payable 7,269,698 166,531 7,436,229 1,283,291 Deposits payable 298,894 298,894 Interest payable 48,497 48,497 Developer deposits payable 378,067 378,067 Unearned revenue 1,059,316 1,059,316 Claims payable (Note 13): Due in one year 2,129,125 2,129,125 Due in more than one year 6,459,441 6,459,441 Compensated absences (Note 1K): Due in one year 532,265 17,841 550,106 Due in more than one year 3,725,855 124,884 3,850,739 Long -tern debt (Note 6): Due in one year 175,172 266,816 441,988 Due in more than one year 4,693,323 5,474,241 10,167,564 Long-term payable to the City of San Rafael (Note 4H) 4,859,007 Net OPEB obligation (Note 11) 9,101,000 9,101,000 Net pension liability (Note 9) 137,663,468 4,659,659 142,323,127 Total Liabilities 173,485,624 10,758,469 184,244,093 6,142,298 DEFERRED INFLOWS Deferred inflows related to pension (Note 9) 32,709,914 1,107,171 33,817,085 Total Deferred Inflows 32,709,914 1,107,171 33,817,085 NET POSITION (Note 8): Net investment in capital assets 193,707,175 10,958,058 204,665,233 43,425,057 Restricted for: Special revenue projects: Housing and street improvements 17,828,404 17,828,404 Stormwater 961,159 961,159 Emergency medical services 1,564,527 1,564,527 Other 6,488,122 6,488,122 Capital projects 4,277,761 4,277,761 Debt service 166,752 166,752 Total Restricted Net Position 31,286,725 31,286,725 Unrestricted (93,273,480) (1,136,050) (94,409,530) 17,958,394 Total Net Position $131,720,420 $9,822,008 $141,542,428 $61,383,451 See accompanying notes to financial statements 25 CITY OF SAN RAFAEL STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 26 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General government $12,952,983 $526,495 $351,921 Public safety 55,399,798 4,939,658 1,570,635 Public works and parks 22,929,289 5,157,289 2,414,374 $1,470,953 Community development 4,307,269 4,004,178 Culture and recreation 15,026,680 6,683,059 341,408 Interest on long-term debt and fiscal charges 277,263 Total Governmental Activities 110,893,282 21,310,679 4,678,338 1,470,953 Business -type Activities Parking services 4,762,851 5,212,181 - - Total Business -type Activities 4,762,851 5,212,181 - Total Primary Government $115,656,133 $26,522,860 $4,678,338 $1,470,953 Component Unit San Rafael Sanitation District $11,654,767 $15,414,530 $ 32,774 $ 69,678 General revenues: Taxes: Property Sales: Sales and Use Measure E half -cents sales tax Measure E quarter -cents sales tax Measure S Paramedic Transient occupancy Franchise Business license Other Investment earnings Miscellaneous Transfers (Note 3A) Total general revenues and transfers Change in Net Position Net Position, beginning of year Net Position, end of year See accompanying notes to financial statements 26 Net (Expenses) Revenues and Changes in Net Position Component 27 Primary Government Unit San Rafael Governmental Business -type Sanitation Activities Activities Total District ($12,074,567) ($12,074,567) (48,889,505) (48,889,505) (13,886,673) (13,886,673) (303,091) (303,091) (8,002,213) (8,002,213) (277,263) (277,263) (83,433,312) (83,433,312) - $449,330 449,330 - 449,330 449,330 (83,433,312) 449,330 (82,983,982) $3,862,215 19,998,567 19,998,567 1,367,172 22,775,945 22,775,945 7,696,000 7,696,000 3,848,000 3,848,000 28,144 28,144 4,226,020 4,226,020 3,063,263 3,063,263 3,418,277 3,418,277 2,824,664 2,824,664 3,465,193 3,465,193 300,091 14,723 314,814 46,225 1,387,315 1,387,315 448,478 (448,478) 73,479,957 (433,755) 73,046,202 1,413,397 (9,953,355) 15,575 (9,937,780) 5,275,612 141,673,775 9,806,433 151,480,208 56,107,839 $131,720,420 $9,822,008 $141,542,428 $61,383,451 27 FUND FINANCIAL STATEMENTS Major funds are defined generally as having significant activities or balances in the current year. Only individual major funds are presented in the Fund Financial Statements, while non -major funds are combined in a single column. Individual non -major funds may be found in the Supplemental Section. The funds described below were determined to be major funds by the City in fiscal year 2015-2016: GENERAL FUND Established to account for all financial resources necessary to carry out basic governmental activities of the City which are not accounted for in another fund. The General Fund supports essential City services such as police and fire protection, building and street maintenance, libraries, recreation, parks and open space maintenance. TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FUND Established to maintain long-term developer contributions for major housing and street improvement projects. GAS TAX SPECIAL REVENUE FUND Established to receive and expend the City's allocation of the State gasoline taxes. 29 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS BALANCESHEET JUNE 30, 2016 ASSETS Cash and investments available for operations (Note 2) Restricted cash and investments (Note 2) Receivables: Accounts Taxes Grants Interest Loans (Note 4) Long-term receivable from the Successor Agency (Note 15D) Prepaids Total Assets LIABILITIES Accounts payable Deposits payable Developer deposits payable Unearned revenue Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue - SB90 reimbursement receivable Unavailable revenue - long-term receivable from Successor Agency Total Deferred Inflows of Resources Fund Balances (Note 8): Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances Special Revenue Funds Traffic and Housing General Mitigation Gas Tax Other Total Governmental Governmental Funds Funds $11,761,730 $10,598,096 $7,261,703 $13,298,409 $42,919,938 $6,996,773 65,457 979,094 979,094 1,280,029 73,933 1,075,525 2,429,487 10,349,225 97,676 215,924 10,662,825 35,206 1,019,468 531,437 1,586,111 118,226 352,512 1,169 119,395 294,529 193,573 615,066 1,103,168 1,286,882 1,088,103 1,286,882 1,286,882 181,787 9,449 191,236 $25,307,614 $10,791,669 $8,452,780 $16,726,073 $61,278,136 $3,800,802 $294,565 $1,052,995 $1,848,411 $6,996,773 65,457 57,947 175,490 298,894 376,567 1,500 378,067 746,522 312,794 1,059,316 4,242,826 352,512 1,799,517 2,338,195 8,733,050 1,088,103 1,088,103 1,286,882 1,286,882 2,374,985 2,374,985 476,316 9,449 485,765 $10,439,157 6,653,263 10,459,825 27,552,245 3,799,421 3,799,421 16,440,910 119,183 16,560,093 1,772,577 1,772,577 18,689,803 10,439,157 6,653,263 14,387,878 50,170,101 $25,307,614 $10,791,669 $8,452,780 $16,726,073 $61,278,136 See accompanying notes to basic financial statements 30 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES JUNE 30, 2016 Total fund balances reported on the governmental funds balance sheet Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds because of the following: Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds. Internal service funds are used by management to charge the cost of management of building, workers' compensation, employee benefits, insurance, and post-retirement healthcare benefits to individual funds. The assets and liabilities are included in Governmental Activities in the Statement of Net Position. Interest payable on long-term debt does not require the use of current financial resources and, therefore, are not reported in the Governmental Funds. Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the Governmental Funds. Compensated absences Unavailable revenue Long-term receivables from San Rafael Sanitation District Deferred outflow related to pension Net pension liability Deferred inflow related to pension Net position of governmental activities See accompanying notes to financial statements 31 $50,170,101 186,828,735 9,700,848 (4,868,495) (4,258,120) 2,374,985 4,859,007 57,286,741 (137,663,468) (32,709,914) $131,720,420 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development Culture and recreation Capital outlay Capital improvement / special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in (Note 3A) Transfers out (Note 3A) Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR AS ADJUSTED (NOTE 1N) 14,361,801 12,239,218 7 FUND BALANCES, END OF YEAR $18,689,803 $10,439,157 $6 See accompanying notes to financial statements General $60,217,831 2,588,411 435,829 221,832 8,078,040 2,772,446 441,761 74,756,150 10,501,341 39,230,483 10,468,421 3,670,108 2,963,125 12,389 75,172 277,263 67,198,302 Special Revenue Funds Traffic and Housing Mitigation Gas Tax $58,823 $40,487 3,465,316 355,394 1,294,882 187,504 414,217 4,988,189 40,000 12,242 2,748,775 4,149,920 657,378 141,834 Other Total Governmental Governmental Funds Funds $5,648,387 139,064 2,141,647 9,944,022 2,579,484 20,452,604 795,496 7,840,683 1,173,503 9,084,979 663,837 4,014,975 697,378 7,052,771 23,573,473 $65,866,218 2,588,411 435,829 460,206 13,685,003 14,366,744 3,208,749 100,611,160 11,349,079 47,071,166 14,390,699 3,670,108 12,048,104 4,813,757 4,826,576 75,172 277,263 98,521,924 7,557,848 (283,161) (2,064,582) (3,120,869) 2,089,236 1,110,809 1,516,900 4,905,655 7,533,364 (4,340,655) (1,516,900) (400,000) (325,000) (6,582,555) (3,229,846) (1,516,900) 1,116,900 4,580,655 950,809 4,328,002 (1,800,061) (947,682) 1,459,786 3,040,045 32 600,945 12,928,092 47,130,056 653,263 $14,387,878 $50,170,101 CITY OF SAN RAFAEL Reconciliation of the NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS with the STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $3,040,045 Amounts reported for Governmental Activities in the Statement of Activities are different because of the following: Capital Assets Transactions Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense. Capital outlay and improvement expenditures are therefore added back to fund balance 9,070,964 Non -capitalized capital outlay expenditures were reclassified to various governmental activities (28,749) Depreciation expense is deducted from fund balance (6,275,340) Long -Term Debt Proceeds and Payments Repayments on long-term debt principal are expenditures in the governmental funds, but in the Statement of Net Position the repayments reduce long-term liabilities. 75,172 Accrual of Non -Current Items The amount below included in the Statement of Activities does not require the use of current financial resources and therefore is not reported as revenue or expenditures in governmental funds (net change): Compensated absences (33,730) Unavailable revenue (250,189) Long-term receivable from San Rafael Sanitary District 396,192 Net Pension Liability Transactions Governmental funds record pension expense as it is paid. However, in the Statement of Activities those costs are reversed as deferred outflows/(inflows) and an increase/(decrease) in net pension liability. (17,396,696) Allocation of Internal Service Fund Activities Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities. 1,448,976 Change in Net Position of Governmental Activities ($9,953,355) See accompanying notes to financial statements 33 PROPRIETARY FUND FINANCIAL STATEMENTS Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges, whether external or internal. The City reports its only enterprise fund, as a major fund. PARKING SERVICES FUND Established to maintain parking garages, lots and spaces in the Downtown Parking District, and to pay for parking enforcement and meter collection. INTERNAL SERVICE FUNDS Established to account for department services and financing performed for other departments within the same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting from the service. 35 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2016 ASSETS Current Assets: Cash and investments available for operations (Note 2) Receivable: Accounts Loans Grants Prepaids Total Current Assets Noncurrent Assets: Capital assets (Note 5): Nondepreciable Depreciable, net Total Noncurrent Assets Total Assets DEFERRED OUTFLOWS Deferred outflows related to pension (Note 9) Total Deferred Outflows LIABILITIES Current Liabilities: Accounts payable Interest payable Compensated absences, due in one year (Note 1K) Claims payable, due in one year (Note 13) Long-term debt, due in one year (Note 6) Total Current Liabilities Noncurrent Liabilities: Compensated absences (Note 1K) Claims payable (Note 13) Long-term debt (Note 6) Net OPEB liability (Note 11) Net Pension Liability (Note 9) Total Noncurrent Liabilities Total Liabilities DEFERRED INFLOWS Deferred inflows related to pension (Note 9) Total Deferred Inflows NET POSITION (Note 8): Net investment in capital assets Unrestricted Total Net Position Some amounts reported for business -type activities in the Statement of Net Position are different because certain internal service fund assets and liabilities are included with business -type activities. Net position business -type activities See accompanying notes to financial statements 36 Business -type Activities - Enterprise Funds Parking Services $2,841,692 32,280 129,077 3,003,049 8,620,853 8,078,262 16,699,115 19,702,164 1,939,052 1,939,052 Governmental Activities Internal Service Funds $19,269,255 89,607 10,938 1,083,036 20,452,836 61,964 7,194,971 7,256,935 27,709,771 166,531 272,925 48,497 17,841 2,129,125 266,816 499,685 2,402,050 124,884 6,459,441 5,474,241 9,101,000 4,659,659 10,258,784 15,560,441 10,758,469 17,962,491 1,107,171 1,107,171 10,958,058 (1,182,482) 9,775,576 46,432 $9,822,008 7,256,935 2,490,345 $9,747,280 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 * Reconciliation of the Change in Net Position with the Statement of Activities Change in Net Position Some amounts reported for business -type activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business -type activities which those funds serviced. Change in Net Position of Business -type Activities See accompanying notes to financial statements 37 $10,560 5,015 $15,575 Business -type Activities - Governmental Enterprise Funds Activities Parking Internal Services Service Funds OPERATING REVENUES Charges for current services $3,090,169 $15,679,243 Other operating revenues 2,122,012 1,044,249 Total Operating Revenues 5,212,181 16,723,492 OPERATING EXPENSES Personnel 2,894,496 3,671,075 Insurance premiums and claims 7,109,240 Maintenance and repairs 132,533 336,712 Depreciation (Note 5) 251,235 1,081,298 General and administrative 1,289,990 2,699,323 Total Operating Expenses 4,568,254 14,897,648 Operating Income 643,927 1,825,844 NONOPERATING REVENUES (EXPENSES) Investment income 14,723 89,073 Interest expense (199,612) Miscellaneous income 41,405 Total Nonoperating Revenues (Expenses) (184,889) 130,478 Income Before Transfers 459,038 1,956,322 TRANSFERS IN (Note 3A) 60,064 TRANSFERS OUT (Note 3A) (508,542) (502,331) Change in Net Position 10,560 1,453,991 NET POSITION, BEGINNING OF YEAR, AS ADJUSTED (Note 1N) 9,765,016 8,293,289 NET POSITION, END OF YEAR $9,775,576 $9,747,280 * Reconciliation of the Change in Net Position with the Statement of Activities Change in Net Position Some amounts reported for business -type activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business -type activities which those funds serviced. Change in Net Position of Business -type Activities See accompanying notes to financial statements 37 $10,560 5,015 $15,575 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 Business -type Activities - Governmental Enterprise Funds Activities Parking Internal Services Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds $3,090,169 $15,770,231 Cash payments to suppliers for goods and services (1,438,858) (14,769,175) Cash payments to employees for salaries and benefits (2,305,536) (146,571) Other operating revenues 2,003,585 1,044,249 Payment to OPEB Trust (63,000) Cash Flows from Operating Activities 1,349,360 1,835,734 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund payments (508,542) (502,330) Cash Flows from Noncapital Financing Activities (508,542) (502,330) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on revenue bonds (256,816) Interest expenses and fiscal charges (200,762) Acquisition of capital assets (149,928) (1,325,341) Proceeds from sale of property 1,742 41,405 Cash Flows from Capital and Related Financing Activities (605,764) (1,283,936) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 14,723 89,076 Cash Flows from Investing Activities 14,723 89,076 NET INCREASE IN CASH AND CASH EQUIVALENTS 249,777 138,544 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 2,591,915 19,130,711 CASH AND CASH EQUIVALENTS, END OF YEAR $2,841,692 $19,269,255 Reconciliation of operating income to net cash provided by operating activities: Operating income $643,927 $1,825,844 Adjustments to reconcile operating income to cash flows from operating activities: Depreciation 251,235 1,081,298 Net change in assets and liabilities: Accounts receivable (118,427) 76,436 Loans receivable 10,938 Prepaids and deposits 2,815 (1,079,422) Net OPEB obligation (63,000) Accounts payable (19,150) (1,285,508) Compensated absence obligations 13,002 (Decrease) increase in due to retirement system 575,958 Claims payable 1,269,148 Net Cash Provided by Operating Activities $1,349,360 $1,835,734 See accompanying notes to basic financial statements FIDUCIARY FUND FINANCIAL STATEMENTS I Fiduciary funds are used to account for assets held by the City as an agent or custodian for other entities. The financial activities of such funds are excluded from the Government -wide financial statements and presented in fund statements that consist of a Statement of Net Position. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY — PRIVATE PURPOSE TRUST FUND Established to account for the activities of the Successor Agency to the San Rafael Redevelopment Agency. PT. SAN PEDRO ROAD ASSESSMENT DISTRICT AGENCY FUND Established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median Landscaping Assessment District bonds. 39 CITY OF SAN RAFAEL FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2016 NET POSITION (DEFICIT) Held in trust for private purpose ($19,562,702) See accompanying notes to financial statements Successor Agency to the Redevelopment Agency Private -Purpose Agency Trust Fund Funds ASSETS Cash and investments (Note 2) $98,979 Restricted cash and investments (Note 2) $291,1 1 1 Receivable: Taxes 3,283,763 1,134 Total Assets $3,382,742 $292,245 LIABILITIES Accounts payable $1,482 Interest payable 58,960 $27,697 Other long-term obligations (Note 15D) 1,286,882 Due to bondholders 264,548 Long-term debt (Note 15C): Due within one year 2,930,000 Due more than one year 18,668,120 Total Liabilities 22,945,444 $292,245 NET POSITION (DEFICIT) Held in trust for private purpose ($19,562,702) See accompanying notes to financial statements CITY OF SAN RAFAEL STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 ADDITIONS Property taxes Total Additions DEDUCTIONS General government Interest expense Total Deductions Change in Net Position NET POSITION HELD IN TRUST FUND FOR OTHER PURPOSES Beginning of year End of year Successor Agency to the Redevelopment Agency Private -Purpose Trust Fund See accompanying notes to financial statements 41 $4,147,770 4,147,770 259,364 3,162,782 3,422,146 725,624 (20,288,326) ($19,562,702) CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Financial Reporting Entity As required by generally accepted accounting principles, the financial statements present the City of San Rafael (the City) as the Primary Government, with its component units for which the City is considered financially accountable. The component units discussed below are included in the City's reporting entity because of the significance of their operational and financial relationships with the City. B. Description of Blended Component Units The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City's blended component units, entities for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City's operations and so data from this entity is combined with the City. The City's blended component units are described below. San Rafael Joint Powers Financing Authority — The San Rafael Joint Powers Financing Authority (Authority) was formed by the City of San Rafael and the former San Rafael Redevelopment Agency (Agency) pursuant to Articles 1 and 2 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California for the purpose of assisting in the financing and refinancing of certain assessment district and redevelopment -related activities in the City. On March 18, 2013, the Agency was replaced by the California Municipal Finance Authority (CMFA) in order that the life of the Authority would extend beyond that of the Agency. The Authority is administered by a governing board whose members are the City Council of the City of San Rafael. Activities of the Authority are reported in the Parking Services Enterprise Funds. Separate financial statements are not prepared for the Authority. G Description of Discretely Presented Component Unit San Rafael Sanitation District — The San Rafael Sanitation District (District) was formed in 1947 under Section 4700 of the California Health and Safety Code to provide wastewater transmission over the southern two-thirds of the City and adjacent unincorporated areas. The District is governed by a three-member Board of Directors who are appointed to four-year terms. The City Council of the City appoints two out of the three board members and has the ability to remove the two board members at will. The City contracts with the District to maintain the collection systems in the City and surrounding unincorporated areas. These employees are paid through the City's payroll department and participate in the City's cost-sharing multiple -employer defined benefit pension plan administered by the Marin County Employees' Retirement Association (Association). These costs are the obligation of the District and not the City. As discussed in Note 4H, a receivable from the District has been established. 43 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N The District's activities are reported as a discretely presented component unit in a separate column in the basic financial statements which includes the District's assets, liabilities, revenues, expenses, results of operations and cash flows. The District's fiscal year ends on June 30 and its separately issued component unit financial statements can be obtained at the San Rafael Sanitation District, 111 Morphew Street, San Rafael, California 94901. D. Basis of Presentation Government -wide Statements - The Statement of Net Position and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund transfers and amounts owed between funds within the primary government have been eliminated from the statements. Amounts representing interfund services and uses remain in the statements. These statements distinguish between the governmental and business - type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business -type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business -type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements - The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category — governmental, proprietary, and fiduciary — are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non -major funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. E. Major Funds and Other Reported Funds Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund -type total and 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. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N The City reported the following major governmental funds in the accompanying financial statements: General Fund — Established to account for all financial resources necessary to carry out basic governmental activities of the City which are not accounted for in another fund. Traffic and Housing Mitigation Special Revenue Fund — Established to maintain long-term developer contributions for major housing and street improvement projects. Gas Tax Special Revenue Fund - Established to receive and expend the City's allocation of the State gasoline taxes. The City reported its only enterprise fund as a major fund in the accompanying financial statements. The enterprise fund is: Parking Services Fund — Established to maintain parking garages, lots and spaces in the Downtown Parking District, and to pay for parking enforcement, meter collection, and downtown enforcement services. The City also reports the following fund types: Internal Service Funds - These funds account for: building maintenance; vehicle, equipment computer, radio, and telephone replacement; employee benefits; liability insurance; workers' compensation; dental insurance; employee retirement; and retiree medical (OPEB); and sewer maintenance. Fiduciary Fund — These funds include: Successor Agency to the Redevelopment Agency Private - Purpose Trust Fund — which accounts for the accumulation of resources held by the Successor Agency to the Redevelopment Agency to be used for payments at appropriate amounts and times in the future; Pt. San Pedro Road Assessment District Agency Fund — which accumulates funds for the payment of principal and interest for Pt. San Pedro Road Median Landscaping District bonds. The financial activities of these funds are excluded from the government -wide financial statements, but are presented in the separate Fiduciary Fund financial statements. F. Basis of Accounting The government -wide, proprietary, fiduciary and discretely presented component unit 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. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. 45 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N 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 year-end with the exception of sales and use tax revenues which are reported as available if collected within ninety days of 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 they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. Those revenues susceptible to accrual are property and sales taxes, certain intergovernmental revenues, interest revenue, charges for services, fines and forfeitures. Other receipts and taxes are recognized as revenue when the cash is received. Non-exchange transactions, in which the City gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants, categorical block grants, and general revenue. Thus, both restricted and unrestricted net position may be made available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. The City considers restricted shared state revenues such as gasoline taxes and public safety sales taxes, restricted locally imposed transportation sales taxes, fines, forfeitures, licenses, permits, charges for services, and program grants as program revenues. Certain indirect costs are included in program expenses reported for individual functions and activities. G. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a 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 addition to liabilities, the statement of financial position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Unavailable revenue, a type of deferred inflow of resources, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: taxes receivable, interest on interfund advances and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. M CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I H. Budgets, Budgetary Accounting, and Encumbrances The City adopts an annual budget which is effective July 1 for the ensuing fiscal year. The budget reflects estimated revenues and expenditures, except for the capital projects funds and the Peacock Gap Assessment District Debt Service Fund. Appropriations and spending authorizations for projects in the capital projects funds and some special revenue funds are approved by the City Council on a multi-year basis. From the effective date of the budget, which is adopted at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by resolution during the fiscal year in order to respond to emerging needs, changes in resources, or shifting priorities. Expenditures may not exceed appropriations at the fund level, which is the legal level of control. The City Manager is authorized to transfer budgeted amounts between accounts, departments or funds; the Council must approve any increase in the City's operating expenditures as well as any appropriations for capital projects. Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles for the General Fund and Special Revenue Funds. Encumbrance accounting, under which purchase orders for expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. All unencumbered appropriations lapse at year end. L Cash Equivalents For purposes of the statement of cash flows, the City considers all highly liquid investments (including all restricted assets) with maturity of three months or less when purchased to be cash equivalents. The City maintains a cash and investment pool that is available for use by all funds. As the proprietary funds' share of this pool is readily available when needed, such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are related to insurance and benefits and are not considered cash equivalents for purposes of the statement of cash flows. J. 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 market value on the date contributed. The City has included the value of all infrastructure capital assets into its Basic Financial Statements using the Basic Approach for infrastructure reporting. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Capital assets, excluding infrastructure, are recorded if acquisition or construction costs exceed $25,000. The similar threshold for infrastructure is $25,000. 47 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) N 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 year until the asset is fully depreciated. 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 year represents that year's pro rata share of the cost of capital assets. The City has assigned the useful lives listed below to capital assets: Buildings, improvements, and structures 20 — 50 years Machinery and equipment 4 — 20 years Infrastructure 15 — 50 years K. Compensated Absences Compensated absences are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. Unused sick leave may be compensable up to 600 hours, depending upon the provisions of the MOUs, which vary by bargaining unit. The long-term portion of the liability for compensated absences for governmental fund type operations is recorded as compensated absences in the government -wide financial statements. Compensated absences are liquidated by the fund that has recorded the liability. Proprietary fund liabilities are recorded within their respective funds. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund. The changes of the compensated absences were as follows: W. Governmental Business -Type Activities Activities Total Beginning Balance $4,224,390 $129,723 $4,354,113 Additions 3,960,404 116,142 4,076,546 Payments (3,926,674) (103,140) (4,029,814) Ending Balance $4,258,120 $142,725 $4,400,845 Current Portion $532,265 $17,841 $550,106 W. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I L. Property Tax Levy, Collection and Maximum Rates State of California Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred, or substantially improved. The State Legislature has determined the method of distribution of receipts from a I% tax levy among the counties, cities, school districts and other districts. Marin County assesses properties, bills for and collects property taxes on the schedule that follows: Secured Unsecured Valuation/lien dates January 1 January 1 Levy dates July 1 July 1 Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31) 50% on February 1 (April 10) The term "unsecured" refers to taxes on personal property other than land and buildings. These taxes are secured by liens on the property being taxed. Property taxes are levied and recorded as revenue when received in the fiscal year of levy because of the adoption of the "alternate method of property tax distribution," known as the Teeter Plan, by the City and the County of Marin. The Teeter Plan authorized the auditor -controller of the County of Marin to allocate 100% of the secured property taxes billed, but not yet paid. The County of Marin remits tax monies to the City in three installments, as follows: 55% remitted on December 15 40% remitted on April 15 5% remitted on June 15 M. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I N. Recategorization of Funds and New Funds In Fiscal Year 2015-2016, the City reclassified the Telephone Replacement Fund and Radio Replacement Fund from Capital Project Funds to Internal Service Funds. In addition, the City reclassified the Sewer Maintenance Fund from Special Revenue Funds to Internal Service Funds. As a result of the fund recategorization, total fund balance of the governmental funds were reduced by $620,969 as of July 1, 2015. Concurrently, total net positions of the Internal Service Funds were increased by the same amount. The City added a capital projects fund, San Rafael Essential Facilities, for the purpose of reporting major capital improvements to public safety facilities. O. Implementation of Accounting Standards Adopted in the Current Year GASB Statement No. 72 — In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. The primary objective of this is to define fair value and describe how fair value should be measured, define what assets and liabilities should be measured at fair value, and determine what information about fair value should be disclosed in the notes to the financial statements. The Statement is effective for periods beginning after June 15, 2015, or the 2015-2016 fiscal year. This pronouncement was implemented effected July 1, 2015. GASB Statement No. 76 — 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 reduce the GAAP hierarchy to two categories of authoritative GAAP from the four categories under GASB Statement No. 55. The statement is effective for the periods beginning after June 15, 2015, or the 2015-2016 fiscal year. GASB Statement No. 79 — In December 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants. The objective of this Statement is to address for certain external investment pool and their participants the accounting and financial reporting implications that result from changes in the regulatory provisions referenced by previous accounting and financial reporting standards. This statement is effective for the periods beginning after December 15, 2015, or the 2015-2016 fiscal year. 50 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I P. Fair Value Measurements Fair value is defined as 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 categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs — other than quoted prices included within level 1 — that are observable for an asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability. If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. I NOTE 2 - CASH AND INVESTMENTS I A. Policies The City maintains an investment policy that emphasizes safety, liquidity and reasonable market yield. This policy is reviewed and approved by the City Council annually. The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the trust department of a bank as the custodian of certain City managed investments, regardless of their form. California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution. The City's investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. 51 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS I B. Classification Cash and investments as of June 30, 2016, are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or agency agreements. Statement of Net Position: City of San Rafael: Cash and investments available for operations $65,030,885 Restricted cash and investments 979,094 Total Primary Government Cash and Investments 66,009,979 San Rafael Sanitation District (Component Unit) Cash and investments available for operations 24,011,268 Total San Rafael Sanitation District Cash and Investments 24,011,268 Statement of Fiduciary Net Position (separate statement): Successor Agency to the Redevelopment Agency: Cash and investments available for operations 98,979 Restricted cash and investments 0 Total Successor Agency Cash and Investments 98,979 Pt. San Pedro Road Assessment District Agency Fund 291,111 Total Fiduciary Cash and Investments 390,090 Total Cash and Investments $90,411,337 The City does not normally allocate investments by fund. Each proprietary fund's portion of Cash and Investments Available for Operations is in substance a demand deposit available to finance operations, and is considered a cash equivalent in preparing the statement of cash flows. 52 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I C. Investments Authorized by the California Government Code and the City's Investment Policy The City's investment policy and the California Government Code allow the City to invest in the following provided the credit ratings of the issuers are acceptable to the City, and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City's Investment Policy where it is more restrictive: Authorized Investment Type U.S. Government Obligation U.S. Agency Securities and Instruments Repurchase Agreements Prime Commercial Paper Bankers' Acceptances Medium -Term Corporate Notes Negotiable Certificates of Deposit Non-negotiable Certificates of Deposit Local Agency Investment Fund Money Market Mutual Funds Limited Obligation Improvement Bonds related to Special Assessment Districts and Special Tax Districts The San Rafael Sanitation District maintains all of its cash in the County of Marin pooled investment fund for the purpose of increasing interest earnings through pooled investment activities. The County Pool includes both voluntary and involuntary participation from external entities. The District is a voluntary participant. The State of California statutes require certain special districts and other governmental entities to maintain their cash surplus with the County Treasurer. The District has approved by resolution, the investment policy of the County of Marin which complies with the California Government Code. 53 Minimum Maximum Maximum Maximum Credit Percentage Investment in of Maturity Quality Portfolio One Issuer 5 years N/A No limit No limit 5 years AAA No limit No limit 1 year A-1 No limit No limit 270 days A-1 25% 10% of total outstanding commercial paper 180 days A-1 40% $2,000,000 5 years A 30% 5% of portfolio 5 years A-1 30% 5% of portfolio 5 years N/A 30% 5% of portfolio N/A N/A N/A N/A N/A AAA 10% N/A 30 years N/A N/A N/A The San Rafael Sanitation District maintains all of its cash in the County of Marin pooled investment fund for the purpose of increasing interest earnings through pooled investment activities. The County Pool includes both voluntary and involuntary participation from external entities. The District is a voluntary participant. The State of California statutes require certain special districts and other governmental entities to maintain their cash surplus with the County Treasurer. The District has approved by resolution, the investment policy of the County of Marin which complies with the California Government Code. 53 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I D. Investments Authorized by Debt Agreements The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if there are insufficient resources to meet debt repayment obligations. The California Government Code requires these funds to be invested in accordance with City ordinance bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements: (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. E. GASB 72 Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by Generally Accepted Accounting Principles (GAAP). The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. 54 Maximum Maximum Percentage of Authorized Investment Type Maturity Minimum Credit Quality Portfolio U.S. Treasury Obligations 5 years to no N/A No Limit maximum U.S. Agency Securities 3 - 5 years N/A No Limit U.S. Agency Instruments 5 years AAA No Limit Repurchase Agreements 1 year A-1 No Limit Bankers' Acceptances 360 days Highest Category Rating No Limit Money Market Funds N/A Highest Category Rating No Limit Prime Commercial Paper 270 days Highest Category Rating No Limit Guaranteed Investment Contracts (fully collateralized) (A) N/A Highest Category Rating No Limit Municipal Obligations N/A Two Highest Category Ratings No Limit Medium -Term Corporate Notes 5 Years A No Limit Non -Negotiable Certificates of Deposit 180 Days N/A No Limit Negotiable Certificates of Deposit 5 Years N/A No Limit Local Agency Investment Fund N/A N/A N/A (A) Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. E. GASB 72 Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by Generally Accepted Accounting Principles (GAAP). The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. 54 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2016: Fiduciary: Total Investments 0 (a) (b) (c) Total Fiduciary Cash and Investments 390,090 Level Level Level Total City: 24,011,268 Total District's Cash and Investments $24,011,268 24,011,268 Total Cash and Investments Money Market Mutual Funds $210,600 $210,600 Local Agency Investment Fund 24,077,462 (e) 24,077,462 U.S. Treasury Notes $6,261,750 6,261,750 U.S. Agency Securities and Instruments 10,634,530 10,634,530 Medium -Term Corporate Notes 3,541,760 3,541,760 CommercialPaper 499,605 499,605 Investment in Pt. San Pedro Bonds $1,582,700 (d) 1,582,700 Total Investments $6,261,750 $38,963,957 $1,582,700 46,808,407 Cash in banks and on hand 19,201,572 Total City and Investments 66,009,979 Fiduciary: Total Investments 0 0 Cash in banks and on hand 390,090 Total Fiduciary Cash and Investments 390,090 Total City and Fiduciary Cash and Investments 66,400,069 San Rafael Sanitary District: County Investment Pool $24,011,268 (f) 24,011,268 Total District's Cash and Investments $24,011,268 24,011,268 Total Cash and Investments $90,411,337 Source: The above GASB 72 classifications into the different Input Levels are provided by the US Bank Institutional Trust & Custody. (a) Level 1 inputs are quoted prices in active market for identical assets. These are quoted prices in active markets for identical assets at the measurement date. An active market forthe asset is a market in which transactions forthe asset occurwith sufficient frequency and volume to provide pricing information on an ongoing basis. (b) Level inputs are significant other observable inputs. These inputs include: a) Quoted prices for similar assets in active markets; b) Quoted prices for identical or similar assets in markets that are not active; and c) Inputs other than quoted prices that are observable for an asset. (c) Level 3 inputs are significant unobservable inputs. These inputs shall be used to measure fair value to the er3ent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date, unobservable inputs shall reflect the assumptions that market particpants would use in pricing the asset including assumptions about risk. (d) This pertains to the City -owned bonds ofits investments in Pt. San Pedro that has no trading market and is thus listed under Level 3. This bond is valued using discounted cash flow techniques. (e) The Local Agency Investment Fund (LAIF) that is classified in Level 2 is valued based on the fair value factor provided by the Treasurer ofthe State ofCalifomia, which is calculated as the fair value divided by the amortized cost ofthe investment pool. (f) The County Investment Pool, held by the San Rafael Sanitary District, that is classified in Level is valued based on other observable inputs. 55 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I F. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City also manages its interest rate risk by holding most investments to maturity, thus reversing unrealized market gains and losses. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date: Cash in banks and on hand 390,090 Total Fiduciary Cash and Investments 390,090 Total City and Fiduciary Cash and Investments 66,400,069 San Rafael Sanitary District: County Investment Pool 24,011,268 Total District's Cash and Investments 24,011,268 Total Cash and Investments $90,411,337 56 12 Months More than Type of Investment or Less 12 Months Total City: Money Market Mutual Funds $210,600 $210,600 Local Agency Investment Fund 24,077,462 24,077,462 U.S. Treasury Notes 3,756,050 $2,505,700 6,261,750 U.S. Agency Securities and Instruments 3,506,295 7,128,235 10,634,530 Medium -Tenn Corporate Notes 2,008,080 1,533,680 3,541,760 Comnwrcial Paper 499,605 499,605 Investment in Pt. San Pedro Bonds 1,582,700 1,582,700 Total Investments $34,058,092 $12,750,315 46,808,407 Cash in banks and on hand 19,201,572 Total City and Investments 66,009,979 Fiduciary: Total Investments 0 0 Cash in banks and on hand 390,090 Total Fiduciary Cash and Investments 390,090 Total City and Fiduciary Cash and Investments 66,400,069 San Rafael Sanitary District: County Investment Pool 24,011,268 Total District's Cash and Investments 24,011,268 Total Cash and Investments $90,411,337 56 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2016, these investments matured in an average of 167 days. Money Market Mutual Funds are available for withdrawal on demand. The investment portfolio of the Money Market Mutual Fund had an average maturity of 42 days at June 30, 2016. The County's investment pool is not registered with the Securities and Exchange Commission as an investment company. The pool has a credit rating of "AAA/V1." Investments made by the Treasurer are regulated by the California Government Code and by the County's investment policy. The objectives of the policy are in order of priority, safety, liquidity, yield, and public trust. The County has established a treasury oversight committee to monitor and review the management of public funds maintained in the investment pool in accordance with Article 6 Section 27131 of the California Government Code. The oversight committee and the Board of Supervisors review and approve the investment policy annually. The County Treasurer prepares and submits a comprehensive investment report to the members of the oversight committee and the investment pool participants every month. The report covers the types of investments in the pool, maturity dates, par value, actual costs and fair value. 57 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 2 - CASH AND INVESTMENTS (Continued) I G. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2016, for each of the Primary Government's investment types as provided by Standard and Poor's or Moody's investment rating systems, except as noted: Type of Investment A AA- AA AA+ Aaa/AAA Al/Pl Total City (except Fiduciary Funds): Money Market Mutual Funds $210,600 $210,600 U.S. Agency Securities and Instrurnents 10,634,530 10,634,530 MediumTermCorporate Notes $501,910 $1,533,665 $501,090 $1,005,095 3,541,760 Commercial Paper $499,605 499,605 Total rated investments $501,910 $1,533,665 $501,090 $1,005,095 $10,845,130 $499,605 14,886,495 Not rated: Local Agency Investment Fund 24,077,462 U.S. Treasury Notes 6,261,750 Investment in Pt. San Pedro Bonds 1,582,700 Cash in banks and on hand 19,201,572 Total City Cash and Investments 66,009,979 Fiduciary: Money Market Mutual Funds $0 - Total rated investments $0 0 Not rated: Local Agency Investment Fund - Cash in banks and on hand 390,090 Total Fiduciary Cash and Investments 390,090 Total City and Fiduciary Cash and Investments 66,400,069 AAA/V1 Component Unit San Rafael Sanitary District: Investment in County Pool (Rated AAA/Vl) 24,011,268 24,011,268 Total District's Cash and Investments $24,011,268 24,011,268 Total Cash and Investments $90,411,337 H. Concentration Risk The City's investments with any one issuer that are greater than five percent of the total investments are in either an external investment pool or mutual funds and are therefore exempt. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 3 — INTER -FUND TRANSACTIONS I A. Transfers Resources may be transferred from one City fund to another. Transfers routinely fund capital projects or capital outlays, lease or debt service payments, and operating expenses. Transfers between funds during the fiscal year ended June 30, 2016, were as follows: From Fund To Fund Amount General Fund Non -Major Governmental Funds $4,340,655 (A) Gas Tax Fund General Fund 400,000 (B) Childcare Fund Non -Major Governmental Funds 325,000 (A) Traffic and Housing Mitigation Fund Gas Tax Fund 1,516,900 (C) Parking Services Enterprise Fund General Fund 418,542 (B) Non -Major Governmental Fund 90,000 (A) Internal Service Funds General Fund 292,267 (B) Non -Major Governmental Fund 150,000 (A) Parking Services Enterprise Fund 60,064 (D) $7,593,428 (A) Transfers to the Non -Major Governmental Funds were for administrative costs, program support, capital projects, and grant matching. This includes $1,849,405 transferred from the General Fund Measure E reserve to the San Rafael Essential Facilities Capital Project. (B) Transfers to the General Fund were for street maintenance support, administrative costs, engineering support and pension obligation bond debt service interest payment. (C) Transfer to Gas Tax Fund for Downtown Rail Readiness Project. (D) Transfer capital asset from Vehicle Fund to Parking Enterprise Fund. B. Internal Balances GASB 34 requires internal balances to be presented in the Government -wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business -type activities. 59 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 4 — LOANS RECEIVABLE I A. Summary of Loans Receivable The City has identified the portion of fund balance represented by these loans as nonspendable or restricted as discussed in Note 8. At June 30, 2016, these loans totaled: Employee Loans $7,232 Centertown Associates 230,066 One "H" Street Associates 48,573 Fire Chief Loan 287,297 Marin Housing Authority 530,000 Town of Ross 10,938 Total $1,114,106 B. Employee Loans The City administers a computer loan program that supports the use of technology by employees. Employees are permitted to borrow up to $1,500 for the purchase of computer hardware and software. The loans are interest-free, have maximum terms of one year, and are repaid through automatic payroll deductions. As of June 30, 2016, the balance of the employee loans receivable was $7,232. C. Centertown Associates Loan On August 20, 1990, the former Redevelopment Agency loaned Centertown Associates, Ltd, $303,000 at 3% interest due semiannually. The loan was made for the construction of a 60 -unit affordable Centertown apartment complex and is fully secured by a deed of trust. The final payment is due on July 31, 2065. With the dissolution of the Redevelopment Agency effective February 1, 2012, the assets of the Agency's Low and Moderate Income Housing fund, including the Centertown Associates loan, were assumed by the City's Low and Moderate Income Housing Special Revenue Fund. As of June 30, 2016, the balance of the loan including principal and accrued interest was $230,066. D. One "H" Street Associates Loan On January 18, 1994, the City loaned One "H" Street Associates $100,000 at zero percent interest with annual payments of $2,857 and with a final payment due January 18, 2034. As of June 30, 2016, the balance of this loan was $48,573. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 4 — LOANS RECEIVABLE (Continued) I E. Fire Chief Loan On September 17, 2007, the City Council approved a Home Loan Agreement to provide the Fire Chief with housing assistance. Under the Agreement, which was executed on October 3, 2007, the City loaned the Fire Chief $600,000 to assist in the purchase of his primary residence. The loan is secured by a recorded deed of trust. The initial interest rate to be charged was 5.25% through August 31, 2008. On September 1, 2008, and on each September 1 following, until the loan is paid off, the interest rate of the loan will be adjusted based upon the then reported quarter -to -date Local Agency Investment Fund rate on the City's investment portfolio. As of June 30, 2016, the balance of the loan was $287,297. F. Marin Housing Authority Loans On September 29, 2015, November 16, 2015, and April 19, 2016, the City made loans to the Marin Housing Authority for a low and moderate income unit, in the amounts of $135,000, $250,000 and $145,000, respectively. As with other loans made under this program, this loan is due upon the sale of the unit. As of June 30, 2016, the balances of the loans were $530,000. G. Town of Ross Loan In September 2013, the City Council authorized the sale of a police vehicle to the Town of Ross. The terms of the sale included a total sales price of $39,614 to be paid in installment payments. The balance of this loan was $10,938 as of June 30, 2016. The final payment of $10,938 will be due on November 1, 2016. H. Other Receivables The City provides staffing to San Rafael Sanitation District (District) under a contractual arrangement originated in 1987 that requires the District to pay all related employee costs incurred by the City on its behalf. Accordingly, the cost of providing pension and post -employment health benefits incurred by the City for the District staff but not yet funded are reflected by the District as an obligation, and by the City as a noncurrent receivable. The obligation as of June 30, 2016 is $4,859,007, and is composed of the following: Long-term receivable from San Rafael Sanitation District: Defined benefit pension liability allocation (GASB 68) $3,857,007 Other post -employment benefit liability allocation (GASB 45) 278,645 Otherpost-employment benefit liability in excess of GASB 45 allocation 723,355 Total long-term receivable from San Rafael Sanitation District $4,859,007 61 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 5 - CAPITAL ASSETS I Changes in capital assets during the fiscal year consisted of- Balance fBalance Balance June 30, 2015 Additions Retirements Transfers June 30, 2016 Governmental Activities Capital assets not being depreciated Land $83,261,168 $83,261,168 Construction in progress 4,506,263 $9,137,202 ($2,123,744) 11,519,721 Total capital assets not being depreciated 87,767,431 9,137,202 (2,123,744) 94,780,889 Capital assets being depreciated: Land improvements 8,788,985 231,112 9,020,097 Buildings and structures 41,485,770 181,332 41,667,102 Machinery and equipment 18,927,068 1,420,023 ($1,835,961) (34,702) 18,476,428 Infrastructure 185,528,716 1,684,222 187,212,938 Total capital assets being depreciated 254,730,539 1,420,023 (1,835,961) 2,061,964 256,376,565 Less accumulated depreciation for: Land improvements (5,530,029) (270,055) (5,800,084) Buildings and structures (15,890,764) (1,196,051) (17,086,815) Machinery and equipment (12,642,753) (1,192,106) 1,706,356 1,716 (12,126,787) Infrastructure (117,359,672) (4,698,426) (122,058,098) Total accumulated depreciation (151,423,218) (7,356,638) 1,706,356 1,716 (157,071,784) Total net capital assets being depreciated 103,307,321 (5,936,615) (129,605) 2,063,680 99,304,781 Total governmental activity capital assets $191,074,752 $3,200,587 ($129,605) ($60,064) $194,085,670 Balance Balance June 30, 2015 Additions Retirements Transfers June 30, 2016 Business -type Activities Capital assets not being depreciated: Land $8,620,853 $8,620,853 Total capital assets not being depreciated 8,620,853 8,620,853 Capital assets being depreciated: Buildings and structures 10,713,814 10,713,814 Machinery and equipment 1,185,162 $149,928 ($130,005) $61,780 1,266,865 Total capital assets being depreciated 11,898,976 149,928 (130,005) 61,780 11,980,679 Less accumulated depreciation for: Buildings and structures (2,689,233) (205,363) (2,894,596) Machinery and equipment (1,088,496) (45,872) 128,263 (1,716) (1,007,821) Total accumulated depreciation (3,777,729) (251,235) 128,263 (1,716) (3,902,417) Total net capital assets being depreciated 8,121,247 (101,307) (1,742) 60,064 8,078,262 Total business -type activity capital assets $16,742,100 ($101,307) ($1,742) $60,064 $16,699,115 CSA CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 5 - CAPITAL ASSETS (Continued) I Capital Asset Contributions - Some capital assets may have been acquired using Federal and State grant funds, or were contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed. Depreciation Allocation - Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities Balance General government Transfers & Balance 881,313 June 30, 2015 Additions Retirements Adjustments June 30, 2016 San Rafael Sanitation District 713,040 Capital assets not being depreciated: Land and easements $115,329 $115,329 Construction in progress 591,304 $5,220,500 ($2,607,737) 3,204,067 Total capital assets not being depreciated 706,633 5,220,500 (2,607,737) 3,319,396 Capital assets being depreciated: Subsurface lines 25,660,029 91,704 2,612,505 28,364,238 Sewage collection facilities 39,191,304 312,607 (4,768) 39,499,143 General plant and administration 1,615,739 34,158 1,649,897 Total capital assets being depreciated 66,467,072 438,469 2,607,737 69,513,278 Less accumulated depreciation for: Subsurface lines (10,359,256) (453,239) (10,812,495) Sewage collection facilities (16,793,792) (837,557) (17,631,349) General plant and administration (828,828) (134,945) (963,773) Total accumulated depreciation (27,981,876) (1,425,741) (29,407,617) Total net capital assets being depreciated 38,485,196 (987,272) 2,607,737 40,105,661 Total District's capital assets $39,191,829 $4,233,228 $43,425,057 Capital Asset Contributions - Some capital assets may have been acquired using Federal and State grant funds, or were contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed. Depreciation Allocation - Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program are as follows: Governmental Activities General government $462,096 Public safety 881,313 Public works and parks 5,242,820 Community development/redevelopment 57,369 Culture and recreation 713,040 Total Governmental Activities $7,356,638 Business -type Activities Parking services $251,235 Total Business -type Activities $251,235 63 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 6 — LONG TERM DEBT I The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt. A summary of governmental and business -type activities transactions for the fiscal year ended June 30, 2016, are as follows: On July 1, 2010, the City issued 2010 Taxable Pension Obligation Bonds in the amount of $4,490,000 bearing interest at rates from 6.00% to 6.25%. Interest on the Bonds are payable on January 1 and July 1 on each year. Principal payable on the Bonds will be paid on July 1 starting July 1, 2016. The Bonds were issued to prefund a portion of the obligations of the City to the Marin County Employees' Retirement Association. Payment of the principal and interest on the Bonds is not limited to any special source of funds and is payable from any legally available moneys of the City. The City is not empowered or obligated to levy or pledge taxes to make payments on the Bonds. B. Pacific Gas and Electric Note Payable On September 30, 2013, the City executed a note payable agreement with Pacific Gas and Electric (PG&E) in the amount of $634,861, bearing no interest. The debt was assumed as a means to finance energy-efficient retrofit projects which include updating existing heating, ventilation and air conditioning (HVAC) unit in City Hall and converting the street and parking lot light to light emitting diode (LED). $334,585 of the loan is for the HVAC projects and $300,276 of the loan is for the LED projects. Repayment of the loan commenced in December 2013, and is due monthly until paid in full in 2023. CZ! Authorized Balance Balance Current and Issued June 30, 2015 Additions Retirements June 30, 2016 Portion Governmental Activities: 2010 Taxable Pension Obligation Bonds 6.00%-6.25%, due 7/1/2025 $4,490,000 $4,490,000 $4,490,000 $100,000 Total Pension Obligation Bonds 4,490,000 4,490,000 100,000 PG & E City Hall HVAC Retrofit Note Payable 0.00%, due 11/30/2023 334,585 279,118 $33,280 245,838 $33,280 PG & E Street Light Retrofit Note Payable 0.00%, due 8/31/2019 233,896 174,549 41,892 132,657 41,892 Total Governmental Long-term Debt $4,943,667 $75,172 $4,868,495 $175,172 Business -type Activities PG & E Parking Lot Lighting Retrofit Note Payable 0.00%, due 11/30/2023 $66,380 $55,020 $6,816 $48,204 $6,816 2012 Authority Lease Revenue Refunding Bonds 2.00-4.00%, due 4/1/2033 6,750,000 5,955,000 250,000 5,705,000 260,000 Less: unamortized bond discount (12,872) (725) (12,147) Total Enterprise Fund Debt $5,997,148 $256,091 $5,741,057 $266,816 A. 2010 Taxable Pension Obligation Bonds On July 1, 2010, the City issued 2010 Taxable Pension Obligation Bonds in the amount of $4,490,000 bearing interest at rates from 6.00% to 6.25%. Interest on the Bonds are payable on January 1 and July 1 on each year. Principal payable on the Bonds will be paid on July 1 starting July 1, 2016. The Bonds were issued to prefund a portion of the obligations of the City to the Marin County Employees' Retirement Association. Payment of the principal and interest on the Bonds is not limited to any special source of funds and is payable from any legally available moneys of the City. The City is not empowered or obligated to levy or pledge taxes to make payments on the Bonds. B. Pacific Gas and Electric Note Payable On September 30, 2013, the City executed a note payable agreement with Pacific Gas and Electric (PG&E) in the amount of $634,861, bearing no interest. The debt was assumed as a means to finance energy-efficient retrofit projects which include updating existing heating, ventilation and air conditioning (HVAC) unit in City Hall and converting the street and parking lot light to light emitting diode (LED). $334,585 of the loan is for the HVAC projects and $300,276 of the loan is for the LED projects. Repayment of the loan commenced in December 2013, and is due monthly until paid in full in 2023. CZ! CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 6 - LONGTERM DEBT (Continued) I C. 2012 Authority Lease Revenue Refunding Bonds On August 7, 2012, the Authority issued 2012 Authority Lease Revenue Refunding Bonds in the amount of $6,750,000 bearing interest at rates from 2.00% to 4.00%. The proceeds of the Series 2012 Bonds were used to repay the Authority's 2003 Authority Lease Revenue Bonds that financed the construction of the 3rd and C Street parking structure and achieved lower interest rates and lower annual debt service payments. The refunding resulted in a net present value savings to the City in debt service of $670,496. In addition, the requisition price exceeded the net carrying amount of the old debt by $295,278. The Series 2012 Bonds are payable from lease payments made by the City to the Authority for leasing the City facilities. The rights to these lease payments have been irrevocably transferred by the Authority to the Trustee. Activities related to the Series 2012 Bonds are reported in the Parking Services Enterprise Fund. Principal payments are due annually on April 1 and interest is payable semiannually on October 1 and April 1. The Bonds maturing on or prior to April 1, 2022 are not subject to optional redemption prior to their maturity. The Bonds maturing on or after April 1, 2023 are subject to optional redemption as a whole or in part on any date after April 1, 2022 at the option of the Authority, at a redemption price equal to the principal amount of the Bonds subject to redemption, plus accrued interest to the date fixed for redemption, without premium. D. Future Debt Service Future debt service requirements, including interest, at June 30, 2016, are as follows: For the Year Governmental Activities Ended June 30 Principal Interest 2017 $175,172 $273,512 2018 280,172 264,362 2019 495,172 245,612 2020 485,261 219,662 2021 508,280 192,062 2022-2026 2,924,438 465,474 2027-2031 2032-2035 Totals Reconciliation of Long-term debt: Less: unamortized discount $4,868,495 $1,660,684 65 Business-typ e Activities Principal Interest $266,816 $193,988 276,816 186,188 281,816 178,088 291,816 169,838 296,816 161,288 1,609,124 668,314 1,880,000 382,668 850,000 51,400 5,753,204 $1,991,772 (12,147) $5,741,057 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 7 — DEBT WITHOUT CITY COMMITMENT The City has sponsored the issuance of the following debt, for which the City is not liable for repayment but acts as an agent for the property owners and bondholders: I NOTE 8 — NET POSITION AND FUND BALANCE I A. Net Position Net Position is the excess of all the City's assets and deferred outflow over all its liabilities, and deferred inflows regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the Government -wide level and business type activity 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 describes the portion of Net Position which is restricted to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Unrestricted describes the portion of Net Position which is not restricted to use. Project Original Outstanding Description Amount June 30, 2016 San Rafael Redevelopment Agency 162-175 Belvedere Multifamily Housing Revenue Bonds -2000A Apartments $3,590,529 $1,124,078 California Statewide Communities Development Authority Revenue Bonds -2002 St. Marks School 5,605,000 3,915,000 San Rafael Redevelopment Agency Variable Rate Demand Multifamily 55 Fairfax Housing Revenue Bonds -2001A Apartments 3,000,000 2,200,000 San Rafael Redevelopment Agency San Rafael Commons M ultifamily Housing Revenue Bonds -2001 Apartments 6,100,000 5,020,000 City of San Rafael Kaiser Foundation Variable Rate Revenue Bonds -2001 Series C Hospitals 200,000,000 120,630,000 San Rafael Redevelopment Agency Martinelli House Multifamily Housing Revenue Bonds -2007 Series A Project 6,000,000 1,989,078 Multifamily Housing Revenue Bonds -2007 Series B Martinelli House 1,000,000 219,539 Pt. San Pedro Road Median Landscaping Pt. San Pedro Road 1,750,000 1,582,700 Assessment District Limited Obligation Bonds -2012 Median Landscaping I NOTE 8 — NET POSITION AND FUND BALANCE I A. Net Position Net Position is the excess of all the City's assets and deferred outflow over all its liabilities, and deferred inflows regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the Government -wide level and business type activity 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 describes the portion of Net Position which is restricted to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. Unrestricted describes the portion of Net Position which is not restricted to use. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 8 — NET POSITION AND FUND BALANCE (Continued) I B. Fund Balance In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund's cash and receivables, less its liabilities. The City's fund balances are classified in accordance with Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint: Nonspendable represents balances set aside that do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category. Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources. Committed fund balances have constraints imposed by resolution of the City Council which may be altered only by resolution of the City Council. Nonspendable amounts subject to council commitments are included along with spendable resources. Assigned fund balances are amounts constrained by the City's intent that they be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Manager as designated by the City Council and may be changed at the discretion of the City Council or City Manager. This authorization is given through Resolution No. 13173 which adopts the City's Fund Balance Policy. This category includes nonspendables, when it is the City's intent to use proceeds or collections for a specific purpose; and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed. Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual General Fund balance and residual fund deficits, if any, of other governmental funds 67 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 8 - NET POSITION AND FUND BALANCE (Continued) N Detailed classifications of the City's fund balances, as of June 30, 2016, are below: Fund balances: Nonsp endable: Loans receivable Prepaids Total Nonspendable Restricted for: Assessment District capital projects Baypoint Lagoons Assessment District Bedroom tax capital projects Childcare Development services Emergency medical services 1997 financing authority revenue bonds debt service Gas tax Grants Household hazmat facility Library Library assessment Loch Lomond Assessment District Low and Moderate Income Housing M ariposa Assessment District debt service Measure A Open Space Parkland dedication Peacock Gap Assessment District debt service Public safety Pt. San Pedro -Maintenance Portion Recreation revolving Storm water Traffic and housing mitigation Total Restricted •: 300,417 300,417 217,920 217,920 58,740 58,740 1,152,149 1,152,149 1,001,277 1,001,277 1,561,657 1,561,657 147,304 147,304 $6,653,263 6,653,263 614,304 614,304 248,639 248,639 635,888 635,888 699,375 699,375 690,944 690,944 929,557 929,557 16,573 16,573 362,256 362,256 491,723 491,723 2,875 2,875 174,018 174,018 166,671 166,671 26,379 26,379 961,159 961,159 $10,439,157 10,439,157 10,439,157 6,653,263 10,459,825 27,552,245 (Continued) Special Revenue Funds Traffic and Other Housing Governmental General Fund Mitigation Gas Tax Funds Total $294,529 $294,529 181,787 $9,449 191,236 476,316 9,449 485,765 •: 300,417 300,417 217,920 217,920 58,740 58,740 1,152,149 1,152,149 1,001,277 1,001,277 1,561,657 1,561,657 147,304 147,304 $6,653,263 6,653,263 614,304 614,304 248,639 248,639 635,888 635,888 699,375 699,375 690,944 690,944 929,557 929,557 16,573 16,573 362,256 362,256 491,723 491,723 2,875 2,875 174,018 174,018 166,671 166,671 26,379 26,379 961,159 961,159 $10,439,157 10,439,157 10,439,157 6,653,263 10,459,825 27,552,245 (Continued) CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 8 — NET POSITION AND FUND BALANCE (Continued) I Assigned to Contractual commitments Special Revenue Funds $140,923 MOU - Onetime payment 1,000,000 Traffic and Other 6,850,000 6,850,000 Housing Governmental 600,000 General plan / long range planning General Fund Mitigation Gas Tax Funds Total Committed to: 6,336,377 Open space capital projects Capital improvement capital projects Total Assigned $3,766,552 $3,766,552 Equipment replacement capital projects Park capital projects 32,869 32,869 Total Committed 3,799,421 3,799,421 Assigned to Contractual commitments $140,923 $140,923 MOU - Onetime payment 1,000,000 1,000,000 Emergency and cash flow 6,850,000 6,850,000 Infrastructure reserve 600,000 600,000 General plan / long range planning 1,513,610 1,513,610 Measure E - Public Safety Facility 6,336,377 6,336,377 Open space capital projects 119,183 119,183 Total Assigned 16,440,910 119,183 16,560,093 Unassigned to: General Fund Total Fund Balances I NOTE 9 — PENSION PLANS A. Plan Description 1,772,577 1,772,577 $18,689,803 $10,439,157 1,772,577 1,772,577 $6,653,263 $14,387,878 $50,170,101 The City's defined benefit retirement plan is administered by the Marin County Employees' Retirement Association (MCERA), a retirement system established in July 1950 and governed by the California Constitution; the County Employees Retirement Law of 1937 (CERL or 1937 Act, California government Code Section 31450 et seq.); the Public Employees' Pension Reform Act of 2013 (PEPRA, Government Code Section 7522); the provisions of California Government Code Section 7500 et seq; and the bylaws, procedures, and policies adopted by MCERA's Board of Retirement. The Marin County Board of Supervisors may also adopt resolutions, as permitted by the CERL and PEPRA, which may affect the benefits of MCERA members. MCERA operates as a cost-sharing multiple employer defined benefit plan for the City and eight other participating employers: County of Marin, Local Agency Formation Commission (LAFCO), Marin City Community Services District, Marin County Superior Court, Marin/Sonoma Mosquito and Vector Control District, Novato Fire Protection District, Southern Marin Fire Protection District, and Tamalpais Community Services District. Separate actuarial valuations are performed for these other agencies and districts, and the responsibility for funding their plans rest with those entities. Post-retirement benefits are administered by MCERA to qualified retirees. Copies of MCERA's annual financial reports, which include required supplementary information (RSI) for each plan may be obtained from their office at One McInnis Parkway, Suite 100, San Rafael, CA 94903 or online at www.mcera.org. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) I B. Benefit Provisions Service Retirement: MCERA's service retirement benefits are based on the years of credited service, final average compensation, and age at retirement, according to the applicable statutory formula. Members who qualify for service retirement are entitled to receive monthly retirement benefits for life. General members hired prior to January 1, 2013 are eligible to retire once they attain the age of 50 (except Misc Tier 2, whereby the minimum age is 55) and have acquired 10 or more years of retirement service credit. A member with 30 years of service is eligible to retire regardless of age. A member who is age 70 or older is eligible to retire regardless of service credit. General members who are first hired on or after January 1, 2013 are eligible to retire once they have attained the age of 52, and have acquired 5 years of retirement service credit, or age 70, regardless of service. Safety members hired prior to January 1, 2013 are eligible to retire once they attain the age of 50 and have acquired 10 or more years of retirement service credit. A member with 20 years of service is eligible to retire regardless of age. A member who is age 70 or older is eligible to retire regardless of service. Safety members who are first hired on or after January 1, 2013 are eligible to retire once they have attained the age of 50, and have acquired 5 years of retirement service credit, or age 70, regardless of service. Disability Retirement: A member with five years of service, regardless of age, who becomes permanently incapacitated for the performance of duty is eligible to apply for a non -service connected disability retirement. Any member who becomes permanently incapacitated for the performance of duty as a result of injury or disease arising out of and in the course of employment is eligible to apply for a service -connected disability retirement, regardless of service length or age. Death Benefits: MCERA provides specified death benefits to beneficiaries and members' survivors. The death benefits provided depend on whether the member is active or retired. The basic active member death benefit consists of a members' retirement contributions plus interest plus one month's pay for each full year of service (up to a maximum of six month's pay). Retiring members may choose from five retirement benefit payment options. Most retirees elect to receive the unmodified allowance which provides the maximum benefit to the retiree and continuance of 60% of the retiree's allowance to the surviving spouse or registered domestic partner after the retiree's death. Other death benefits may be available based on the years of service, marital status, and whether the member has minor children. Cost of Living Adjustment: Retirement allowances are indexed for inflation. Most retirees receive automatic basic cost of living adjustments (COLA's) based upon the Urban Consumer Price Index (UCPI) for the San Francisco Bay Area. These adjustments go into effect on April 1 of each year. Annual COLA increases are statutorily capped at 2%, 3%, or 4% depending upon the member's retirement tier. When the UCPI exceeds the maximum statutory COLA for the member's tier, the difference is accumulated for use in future years when the UCPI is less than the maximum statutory COLA. The accumulated percentage carryover is known as the COLA Bank. 70 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) I C. Funding Policy The funding policy of MCERA provides for actuarially determined periodic contributions by the City at rates such that sufficient assets will be available to pay plan benefits when due. The employer rates for normal cost are determined using the Entry Age Normal Actuarial Cost Method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The City contribution rates for the year ended June 30, 2016 were as follows: These rates were determined by MCERA, based on the actuarial valuation dated June 30, 2014. The actual rate of return on investments during that year was 18.07%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a period of five years. The smoothed return yielded 12.43%. The City uses the actuarially determined percentages of payroll to calculate and pay contributions to MCERA. Contributions to the plan from the City were $19,339,577 for the year ended June 30, 2016, based on a total payroll of $40,300,359, of which $32,126,272 represented the basis for the plan contributions. Of the total payroll subject to plan contributions, $1,424,835 is attributable to the San Rafael Sanitation District (SRSD), a component unit of the City. Effective with the June 30, 2013 valuation, the Unfunded Actuarial Liability (UAL) as of June 30, 2013 is being amortized over a closed 17 -year period (16 years remaining as of June 30, 2014), except for the additional UAL attributable to the outstanding unfunded actuarial loss from 2009, which is being amortized over a separate closed period (currently 24 years). D. Pension Liability and Pension Expense At June 30, 2016, the City reported a liability of $142,323,127 for its proportionate share of the net pension liability; deferred inflows of $33,817,085; deferred outflows of $39,886,216 due to the change of assumptions; and additional deferred outflows of $19,339,577 from actual fiscal year 2015-2016 pension contributions made after the measurement date. Consequently, the net impact on the City's Statement of Net Position before allocations is $116,914,419. After allocations to the San Rafael Sanitation District, the net impact on the City's Statement of Position is $113,057,412. The proportionate share of the annual pension expense is $19,107,673, or 61.43% of payroll. 71 Employer Employee Contribution Rate Contribution Rate Benefit Basis City of San Rafael Misc Tier 1 48.90% 0.00% -17.85% 2.7% @ 55 Highest year City of San Rafael Misc Tier 2 45.19% 7.89% -12.62% 2.0% @ 55 Highest year City of San Rafael Fire Tier 1 75.64% 0.00% -19.79% 3.0% @ 55 Highest year City of San Rafael Fire Tier 2 72.57% 11.34% - 17.69% 3.0% @ 55 Average three highest years City of San Rafael Safety Police Tier 1 74.67% 00.00% - 19.79% 3.0% @ 55 Highest year City of San Rafael Safety Police Tier 2 76.20% 11.34% - 17.69% 3.0% @ 55 Average three highest years PEPRA Misc 41.19% 10.07% 2.0% @ 62 Average three highest years PEPRA Safety 66.40% 13.801/o - 14.80% 2.7% @ 57 Average three highest years These rates were determined by MCERA, based on the actuarial valuation dated June 30, 2014. The actual rate of return on investments during that year was 18.07%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a period of five years. The smoothed return yielded 12.43%. The City uses the actuarially determined percentages of payroll to calculate and pay contributions to MCERA. Contributions to the plan from the City were $19,339,577 for the year ended June 30, 2016, based on a total payroll of $40,300,359, of which $32,126,272 represented the basis for the plan contributions. Of the total payroll subject to plan contributions, $1,424,835 is attributable to the San Rafael Sanitation District (SRSD), a component unit of the City. Effective with the June 30, 2013 valuation, the Unfunded Actuarial Liability (UAL) as of June 30, 2013 is being amortized over a closed 17 -year period (16 years remaining as of June 30, 2014), except for the additional UAL attributable to the outstanding unfunded actuarial loss from 2009, which is being amortized over a separate closed period (currently 24 years). D. Pension Liability and Pension Expense At June 30, 2016, the City reported a liability of $142,323,127 for its proportionate share of the net pension liability; deferred inflows of $33,817,085; deferred outflows of $39,886,216 due to the change of assumptions; and additional deferred outflows of $19,339,577 from actual fiscal year 2015-2016 pension contributions made after the measurement date. Consequently, the net impact on the City's Statement of Net Position before allocations is $116,914,419. After allocations to the San Rafael Sanitation District, the net impact on the City's Statement of Position is $113,057,412. The proportionate share of the annual pension expense is $19,107,673, or 61.43% of payroll. 71 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) I The table below provides a summary of the key results during this reporting period. Summary of Results Description Net Pension Liability Deferred Inflows Deferred Outflows Additional Deferred Outflows - Actual FY 15-16 and FY 14-15 Contributions Impact on Statement of Net Position before Allocations Allocation of NPL to SRSD Allocation of Deferred Inflows (measurement date) to SRSD Allocation of Deferred Outflows (measurement date) to SRSD Allocation of Additional Deferred Outflows (contributions) to SRSD Net Impact on Statement of Net Position, net of receivable from SRSD (see Note 4M Pension Expense ($ Amount) Covered Payroll ($Amount) Pension Expense (% of Payroll) Projection of Total Pension Liability and Net Pension Liability Measurement Date Measurement Date 6/30/2015 6/30/2014 $142,323,127 $74,253,787 33,817,085 47,044,494 (39,886,216) (4,554,158) (19,339,577) (17,802,358) 116,914,419 98,941,765 4,695,240 2,543,237 1,115,626 1,611,302 (1,315,846) (155,983) (638,013) (609,741) 113,057,412 95,552,950 19,107,673 9,356,796 31,106,414 31,429,178 61.43% 29.77% Total Pension Liability (TPL) is the actuarial present value of projected benefit payments attributed to past periods of employee service. For the purposes of Governmental Accounting Standards Board Statement No. 68 (GASB 68), MCERA and the City have adopted a measurement date of June 30, 2015. The beginning of year measurement of TPL is based on the actuarial valuation as of June 30, 2014. The TPL at the end of the measurement year, June 30, 2015, is also measured as of the valuation date of June 30, 2014, and projected to June 30, 2015. The Plan Fiduciary Net Position (FNP) is the fair or market value of assets. The FNP at the beginning of the year is based on the actuarial valuation as of June 30, 2014. The FNP at the end of the measurement year, June 30, 2015, is also measured as of the valuation date of June 30, 2014, and projected to June 30, 2015. There were significant events during the projection period related to actuarial assumption changes as discussed in the actuarial assumptions section of Note 9. The Net Pension Liability (NPL) is the City liability for benefits provided through its defined benefit plan administered by MCERA. It is calculated by reducing the TPL by the FNP. 72 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) I Actuarial assumptions: The total pension liability as of June 30, 2015 was determined by an actuarial valuation as of June 30, 2014, using the following actuarial assumptions applied to all prior periods included in the measurement. The key assumptions in the valuation were: • Inflation: 3.25% • Salary increases: 3.25% plus merit component • COLA increases: 0 3% for those with a 4% COLA cap, 0 2.7% for those with a 3% COLA cap, and 0 1.9% for those with a 2% COLA cap • Investment rate of return: 7.25% net of investment expense assumed • Post -Retirement Mortality: Adopted Ca1PERS mortality tables projected generationally using Scale MP2014 These assumptions constitute a significant change from those used in prior actuarial valuations: The investment rate of return assumption of 7.25%, coupled with an inflation assumption of 3.25%, was a decrease from the former 7.50% and 3.50% assumptions for investment returns and inflation, respectively. The Post -Retirement Mortality assumption incorporated greater longevity assumptions for retirees. The combined impact of these assumption changes were the major force behind the growth in NPL from $74.3 million in the prior year to $142.3 million in the current year. During the measurement year, the service cost and interest cost increased the NPL while contributions and investment earnings offset by administrative expenses decreased the NPL. As a result, the Net Pension Liability (NPL) increased from approximately $74.3 million as of June 30, 2014, to approximately $142.3 million as of June 30, 2015. This amount is used for the purpose of reporting the City's share of NPL in the current reporting year, because the only MCERA GASB 67/68 report available at the time of the audit was that prepared as of June 30, 2015. 73 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) N Asset Allocation Policy and Expected Long-term Rate of Return by Asset Class The MCERA Board of Retirement has adopted an Investment Policy Statement (IPS), which provides the framework for the management of MCERA's investments. The IPS establishes MCERA's investment objectives and defines the principal duties of the Retirement Board, the custodian bank, and the investment managers. The asset allocation plan is an integral part of the IPS and is designed to provide an optimum and diversified mix of asset classes with return expectations to satisfy expected liabilities while minimizing risk exposure. MCERA currently employs external investment managers to manage its assets subject to the provisions of the policy. Plan assets are managed on a total return basis with a long term objective of achieving and maintaining a fully funded status for the benefits provided through the Plan. The following was the Retirement Board's adopted asset allocation policy as of June 30, 2015: Asset Class Target Allocation Long -Term Expected Real Rate of Return Domestic Equity 32% 5.35% International Equity 22% 5.55% Fixed Income 23% 0.75% Real Estate 15% 7.55% Private Equity 8% 6.25% Total 100% Determination of Discount Rate The discount rate used to measure the Total Pension Liability was 7.25%. Related to the discount rate is the funding assumption that employees will continue to contribute to the plan at the required rates and employers will continue the historical and legally required practice of contributing to the plan based on an actuarially determined contribution, reflecting a payment equal to annual normal cost, a portion of the expected administrative expenses, an amortization payment for the extraordinary losses from 2009 amortized over a closed period (24 years remaining as of the June 30, 2014 actuarial valuation) and an amount necessary to amortize the remaining Unfunded Actuarial Liability as a level percentage of payroll over a closed period (16 years remaining as of the June 30, 2014 actuarial valuation). A change in the discount rate would affect the measurement of the TPL. A lower discount rate results in a higher TPL and higher discount rates results in a lower TPL. Because the discount rate does not affect the measurement of assets, the percentage change in the NPL can be very significant for a relatively small change in the discount rate. A one percent decrease in the discount rate increases the TPL by approximately 13% and increases the NPL by approximately 85%. A one percent increase in the discount rate decreases the TPL by approximately 11% and decreases the NPL by approximately 70%. 74 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) I The table below shows the sensitivity of the NPL to a one percent decrease and a one percent increase in the discount rate: Sensitivity of Net Pension Liability to Changes in Discount Rate Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Pension Resources The impact of experience gains or losses and assumption changes on the Total Pension Liability (TPL) are recognized in the proportionate share of the pension expense over the average expected remaining service life of all active and inactive members of the plan. As of the measurement date, this recognition period was 4 years. 75 1% Discount 1% Decrease Rate Increase Description 6.25% 7.25% 8.25% Total Pension Liability $1,028,613,399 $907,195,058 $807,486,715 Fiduciary Net Position 764,871,931 764,871,931 764,871,931 Net Pension Liability $263,741,468 $142,323,127 $42,614,784 Fiduciary Net Position as a Percentage of the Total Pension Liability 74.4% 84.3% 94.7% Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Pension Resources The impact of experience gains or losses and assumption changes on the Total Pension Liability (TPL) are recognized in the proportionate share of the pension expense over the average expected remaining service life of all active and inactive members of the plan. As of the measurement date, this recognition period was 4 years. 75 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) N The following tables show the current balance and sources of deferred outflows and inflows related to the City's defined benefit retirement plan, and the scheduled recognition of these deferred amounts: $19,339,577 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year ended June 30 2017 2018 2019 2020 76 Amortization Amount $1,517,283 1,517,283 1,517,283 1,517,282 Deferred Deferred Outflows of Inflows of Description Resources Resources Changes in assumptions $39,886,216 Changes in proportion and difference between City contributions and proportionate share of contributions $8,556,872 Actual FY 15-16 contributions (post measurement date) 19,339,577 Net difference between projected and actual earnings on pension plan investments 25,260,213 Deferred Inflows and Outflows Before Allocations $59,225,793 $33,817,085 Allocation to SRSD Allocation of Deferred Inflows (measurement date) $1,115,626 Allocation of Deferred Outflows (measurement date) $1,315,846 Allocation of Additional Deferred Outflows (contributions) 638,013 Net Deferred Inflows and Outflows $57,271,934 $32,701,459 $19,339,577 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year ended June 30 2017 2018 2019 2020 76 Amortization Amount $1,517,283 1,517,283 1,517,283 1,517,282 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 9 — PENSION PLANS (Continued) N For the year ended June 30, 2016, the City recognized a pension expense of $19,107,673. This expense is allocated to Governmental activities by function, as well as to the Parking Fund. The table below presents the sources of the pension expense. Pension Expense for the year ended June 30, 2016 Operating Expenses Service cost $18,026,000 Employee contributions (7,703,594) Administrative expenses 1,710,081 Sub -total 12,032,487 Financing Expenses Interest cost 61,251,481 Expected return on assets (54,984,368) Sub -total 6,267,113 Changes Benefitchanges - Recognition of assumption changes 13,295,405 Recognition of liability gains and losses (2,852,291) Recognition of investment gains and losses (9,635,041) Sub -total 808,073 Pension Expense $19,107,673 Pension Expense as % of Payroll 61.43% Pension expense is charged to each function or program based on the proportion of each governmental program expenses for the previous fiscal year. Business -type activities are charged, based on a separate analysis of pension costs attributable to enterprise activities. The expense allocated to each function/program for the fiscal year ended June 30, 2016 is as follows: Governmental Activities General government $2,088,476 Public safety 9,222,563 Public works and parks 3,881,238 Community development 720,801 Culture and recreation 2,569,010 Total Governmental Activities $18,482,088 Business -type Activities Parking services $625,585 Total Business -type Activities 625,585 77 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which administers a defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive. The benefits a participant will receive depend on the amount contributed to the participant's account, and the returns earned on investments on those contributions. The Plan's trust administrator is Phase II, P.O. Box 12919, Newport Beach, California 92658. As established by the plan, all eligible part-time and temporary employees of the City become participants in the plan from the date that they are hired. An eligible employee is any employee who, at any time during which the employer maintains this plan, is not accruing a benefit under the Marin County Employees' Retirement Fund. As determined by the plan, each employee must contribute 3.75% of gross earnings to the plan. The City contributes an additional 3.75% of the employee's gross earnings. Contributions made by an employee and the employer vest immediately. No forfeitures were noted during the current period. During the year, the City and employees each contributed $82,853. The total covered payroll of employees participating in the plan for the year ended June 30, 2016, was $2,209,366. The total payroll for the year was $40,300,359. The City also made contributions to a 401(a) tax qualified plan for eligible executive management and mid -management employees, and elected officials. Under this plan, which was terminated effective August 3, 2015, the percent amount of contribution ranged from 3% to 4.6% of base salary of participating employees. During the year, and prior to the plan's termination, the City contributed $3,770 on behalf of these employees. W. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS The City provides certain health care benefits for retired employees and their spouses under a cost sharing defined benefit plan. The benefit provisions were established under the authority of the 1937 Act, Section 31450, et. seq. of the Government Code. Employees who meet the vesting criteria become eligible for these benefits if they receive a retirement benefit from the Marin County Employees' Retirement Association within 120 days of retirement from City employment. At June 30, 2016, 327 retirees and surviving spouses received post -employment health care benefits. The provisions and benefits of the City's Other Post Employment Benefit Plan, in effect at June 30, 2016, are summarized as follows: Elected Officials, Mid -Management, & Unrepresented Management All other Bargaining Units Eligibility Retire directly from the City Age 50 (age 55 if hired > 7/1/11) with 10 years services (Including reciprocity) OR 30 years service (Miscellaneous), 20 years service (Safety) OR Age 70 Disability Retirement Benefit Hired < 1/1/09 Full premium/cap Hired < 1/1/10 Up to cap Hired> 1/1/09 PEMHCA Min Hired> 1/1/10 PEMHCA Min Surviving Spouse Benefit Continuation to surviving spouse Medicare Part B Hired < 4/1/07 Full reimbursement None Hired > 4/1/07 None Other No Dental, Vision, or Life Benefits Funding Policy and Actuarial Assumptions The City's funding policy requires a minimum annual contribution equivalent to the annual required contribution (ARC). The ARC was determined as part of a June 30, 2013 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 4.00% investment rate of return and (b) 3.25% of general inflation increase, and (c) a healthcare trend of declining annual increases ranging from 8.30% in 2015 to 5.00% for the years starting 2021. In addition, the fixed dollar benefit amounts are assumed to be held flat in the future and the premium related benefits are assumed to increase with the healthcare trend rate. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the City and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the City and plan members at that point. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biennially as results are compared to past expectations and new estimates are made about the future. The City's OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 21 - year fixed (closed) period for June 30, 2014 in its June 30, 2013 actuarial valuation. 79 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) I Prior to the end of the fiscal year, the City's actuary prepared a new valuation, as of June 30, 2015. Although this valuation did not recalculate the ARC for the fiscal year ended June 30, 2016, it did result in a significant change to the measurement of the City's unfunded actuarial liability (UAL). The earlier valuation measured the UAL to be $21,044,000 as of June 30, 2013; the new valuation calculated the UAL to be $32,727,000 as of June 30, 2015. The major driver of this change was a revision to the actuarial methodology. To comply with newly revised Actuarial Standard of Practice No. 6 (ASOP 6), the June 30, 2015 actuarial valuation includes an implicit subsidy liability. This liability was not calculated in prior reports because of the former "community rating" exemption for employers participating in large pooled health plans like Ca1PERS. When premiums for retirees are determined using a blend of active employee and retiree experience, it creates an implicit subsidy to the retirees, since retiree healthcare costs are generally higher than those of active employees. ASOP 6 effectively requires most public agencies to calculate an implicit subsidy liability whenever their retirees participate in the group medical plans, but pay the same premiums as active employees. ASOP 6 is effective for all actuarial valuations with a measurement date on or after March 31, 2015. Funding Progress and Funded Status During the fiscal year ended June 30, 2016, the City has recorded a Net OPEB Obligation in the Statements of Net Position, representing the difference between the ARC and actual contributions, as presented below: Amounts (in thousands) Annual required contribution (ARC) $2,148 Interest on net OPEB obligation 695 Adjustment to annual required contribution (712) Annual OPEB cost 2,131 Contributions made: Benefits payment 2,194 Additional contribution to OPEB Trust - Total contributions 2,194 Change in net OPEB obligation/(asset) (63) Net OPEB Obligation (Asset) at June 30, 2015 9,164 Net OPEB Obligation (Asset) at June 30, 2016 $9,101 Generally accepted accounting principles permit assets to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such assets are placed in an irrevocable trust or equivalent arrangement. Contributions to and withdrawals from a 401(h) account held and administered by the MCERA were made by the City in prior years and included in actuarial valuations prior to June 30, 2013. On June 25, 2013, the assets were transferred from the 401(h) account to an irrevocable trust under the California Employers' Retiree Benefit Trust Fund (CERBT) managed by Ca1PERS. As of June 30, 2016, the account balance in the CERBT was $15,756,989. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 11— POST -EMPLOYMENT HEALTHCARE BENEFITS (Continued) I For the past three fiscal years, the City has calculated and recorded Net OPEB Obligation, representing the difference between the ARC, and contributions, as presented below: Funded Status and Funding Progress — As of June 30, 2015, the most recent actuarial valuation date, the plan was 32% funded. The Actuarial Accrued Liability (AAL) for benefits was $48,226 thousand and the Actuarial Value of Plan Asset was $15,449 thousand resulting in an Unfunded Actuarial Accrued Liability (URAL) of $32,727 thousand. The covered payroll (annual payroll of active employees covered by the plan) was $32,906 thousand and the ratio of UAAL to the covered payroll was 99 percent. The schedule of funding progress presented immediately following the financial statements as required supplementary information, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. I NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS I The City participates in the jointly governed organizations discussed below through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each joint organization is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint organization, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of this joint organization are not the City's responsibility and the City does not have an equity interest in the assets of each joint organization except upon dissolution of the joint organization. A. The Marin County Integrated On -Line Library System (System) The MARINet Library Consortium was formed to provide for the procurement, ownership, operation, maintenance, and governance of shared library services among the libraries, public and academic, in Marin County. Current services shared and paid for on a consortial level through annual membership dues include an integrated library system including patron database, cataloging system, and online catalog of materials; delivery of items between libraries in Marin, a statewide library delivery service called Link+, numerous online resources, and more. The Governing Board of the System consists of the library director or designated alternate of each participant in the System. In accordance with the cost sharing formula developed by the library directors of the participants, the City's share of annual operating costs is 16.37% or $188,167 for the year ended June 30, 2016. Financial statements of the System can be obtained from the County Librarian, Marin County Free Library, Marin County Civic Center, 3501 Civic Center Drive, San Rafael, California 94903. Annual Required Annual Contribution OPEB Cost Actual Percentage Net OPEB Fiscal Year (ARC) (AOC) Contribution ofAOC Obligation (Asset) Ended (000's omitted) (000's omitted) (000's omitted) Contributed (000's omitted) June 30, 2014 $2,496 $2,380 $2,600 109% $9,296 June 30, 2015 2,112 2,118 2,250 106% 9,164 June 30, 2016 2,148 2,131 2,194 103% 9,101 Funded Status and Funding Progress — As of June 30, 2015, the most recent actuarial valuation date, the plan was 32% funded. The Actuarial Accrued Liability (AAL) for benefits was $48,226 thousand and the Actuarial Value of Plan Asset was $15,449 thousand resulting in an Unfunded Actuarial Accrued Liability (URAL) of $32,727 thousand. The covered payroll (annual payroll of active employees covered by the plan) was $32,906 thousand and the ratio of UAAL to the covered payroll was 99 percent. The schedule of funding progress presented immediately following the financial statements as required supplementary information, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. I NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS I The City participates in the jointly governed organizations discussed below through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each joint organization is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint organization, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of this joint organization are not the City's responsibility and the City does not have an equity interest in the assets of each joint organization except upon dissolution of the joint organization. A. The Marin County Integrated On -Line Library System (System) The MARINet Library Consortium was formed to provide for the procurement, ownership, operation, maintenance, and governance of shared library services among the libraries, public and academic, in Marin County. Current services shared and paid for on a consortial level through annual membership dues include an integrated library system including patron database, cataloging system, and online catalog of materials; delivery of items between libraries in Marin, a statewide library delivery service called Link+, numerous online resources, and more. The Governing Board of the System consists of the library director or designated alternate of each participant in the System. In accordance with the cost sharing formula developed by the library directors of the participants, the City's share of annual operating costs is 16.37% or $188,167 for the year ended June 30, 2016. Financial statements of the System can be obtained from the County Librarian, Marin County Free Library, Marin County Civic Center, 3501 Civic Center Drive, San Rafael, California 94903. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) B. The Marin General Services Authority (MGSA) The MGSA was formed by the County of Marin and twelve local agencies to acquire street light facilities, operate the facilities during an eminent domain action against PG&E, and coordinate the subsequent transfer of the facilities to the individual local agencies. Each of the local agency's share of contributions was based on the number of street lights to be acquired in the local agency's individual jurisdiction in relation to the total number of street lights to be acquired by the MSLAJPA. MGSA services now include street light maintenance, abandoned vehicle abatement, taxicab regulation and administrative responsibility for MarinMap. The City's contribution to MGSA was $3,226 for the year ended June 30, 2016. Financial statements of the MGSA can be obtained at 555 Northgate Drive, Suite 230, San Rafael, California 94903. C. The Marin Emergency Radio Authority (MERA) MERA was formed on February 28, 1998, by the County of Marin and 25 local agencies within the County to plan, finance, implement, manage, own, and operate a County -wide public safety and emergency radio system. The Governing Board consists of one representative from each member. On February 1, 1999, the Authority issued the 1999 Revenue Bonds in the amount of $26,940,000 with interest rates ranging from 4.75% to 5.01%, maturing on August 15, 2016, to finance the acquisition and installation of the system. The costs of maintenance, operation, and debt service are divided on a pro rata share based on an agreed-upon formula established by a majority of the Governing Board. The members entered into a Project Operating Agreement on February 1, 1999. Under the Operating Agreement, members are obligated to contribute service payments to cover the Authority's operation and debt service. The City's portion of the obligation is 16.913%. The first operating service payment was in July 1999. The first debt service payment was in August 2002. The City contributed $302,729 of the Authority's operation and debt service for the fiscal year ended June 30, 2016. The City has established a reserve in its internal service funds to pay future service payments. Financial statements of the MERA can be obtained at 95 Rowland Way, Novato, California 94945. D. The Countywide Planning Agency The Agency was established on October 16, 1990, by the County of Marin and the cities of Belvedere, Corte Madera, Fairfax, Larkspur, Mill Valley, Novato, Ross, San Anselmo, San Rafael, Sausalito, and Tiburon to implement countywide performance standards for traffic, housing, water and sewer facilities, and environmental protection to ensure that residential and commercial growth does not exceed local water, sewer and transportation capacities. The Governing Board of the Countrywide Planning Agency consists of one member of the County Board of Supervisors and one member of the City Council of each participating city. Financial statements of the Agency can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. E. The Marin Telecommunications Agency The Agency was established to regulate the rates for cable television service and equipment and to advise the participants of their license authority. The Governing Board of the Marin Telecommunications Agency consists of one member from each of the eleven participating agencies. The City's contribution to the Agency was $217,118 for the year ended June 30, 2016. Financial statements of the Agency can be obtained at 555 Northgate Drive, Suite 230, San Rafael, California 94903. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) I F. The Marin County Hazardous and Solid Waste Joint Powers Authority The Authority was established by the County, local cities, and waste franchising districts to finance, prepare and implement source reduction and recycling elements on a county -wide integrated waste management plan as required by State Assembly Bill 939. The City's contribution to the Authority was $15,750 for the year ended June 30, 2016. Financial statements of the Authority can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. I NOTE 13 - RISK MANAGEMENT I The City is exposed to various exposures related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City established the Risk Management Internal Service Fund to account for and finance its uninsured risks of loss. The City manages risk by participating in a public entity risk pool (described below), purchasing insurance and by retaining certain risks. A. Risk Coverage Liability Coverage The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims up to $40,000,000. The purpose of CJPRMA is to spread the adverse effects of general liability losses among the member agencies. The City also purchases commercial insurance for property damage claims with an insured amount of $99,471,049. The City is self-insured up to $500,000 for each general liability claim and $25,000 for each property damage claim. Once the self-insured retention is met CJPRMA becomes responsible for payment of all liability claims up to the limit. During the fiscal year ended June 30, 2016, the City contributed $249,299 for coverage during the current year and received a refund of $52,041 of prior year excess contributions. Five years after settlement of all claims for a program year, CJPRMA retroactively adjusts premium deposits for any excess or deficiency in deposits related to paid claims and reserves. Financial statements for the risk pools may be obtained from CJPRMA at 3201 Doolan Road, Suite 285, Livermore, California 94551. Workers' Compensation Coverage The City purchases insurance for workers' compensation through Safety National Casualty Corporation Excess Workers' Compensation and Employers Liability Insurance with coverage up to statutory limits. The City is self-insured up to $1,000,000 for each worker's compensation claim. B. Insurance Internal Service Funds and Financial Reporting The City records estimated liabilities for claims filed up to the amounts for which it retains risk in the General Liability and Workers Compensation Internal Service Funds. Charges to the General Fund and other funds are based on relative general liability and workers compensation risk associated with the activities of each fund. Charges are recorded in the funds as expenditures or expenses and as revenues in the respective internal service funds. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 13 - RISK MANAGEMENT (Continued) I The Governmental Accounting Standards Board (GASB) requires municipalities to record their liability for uninsured claims and to reflect the current portion of this liability as an expenditure in their financial statements. As discussed above, the City has coverage for such claims, but it has retained the risk for the deductible or uninsured portion of these claims. The City's liability for uninsured general liability claims and workers' compensation claims, including claims incurred but not reported, are reported in the Statements of Net Position. The liability is based on an actuarial valuation prepared as of June 30, 2016: Balance, beginning of year Current year claims and changes in estimates Claims paid Balance, end of year Due in one year Due in more than one year Total claim liabilities General Workers' Totals, as of June 30 Liability Compensation 2016 2015 $1,327,040 $5,992,378 $7,319,418 $6,589,706 1,712,534 1,398,675 3,111,209 (495,919) (1,346,142) (1,842,061) $2,543,655 $6,044,911 $8,588,566 $746,913 $1,382,212 $2,129,125 1,796,742 4,662,699 6,459,441 $2,543,655 $6,044,911 $8,588,566 The claims settlements have not exceeded insurance coverage for the past three years. I NOTE 14 - COMMITMENTS AND CONTINGENCIES I Litigation 2,737,445 (2,007,733) $7,319,418 $1,945,792 5,373,626 $7,319,418 The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City as of June 30, 2016. In August 2004, the City of San Rafael entered into a ten-year Settlement Agreement with the federal Department of Justice (DOJ) to bring City managed programs, activities, services and facilities into compliance with the Americans with Disabilities Act (ADA). At the City's request, the Settlement Agreement was revised in 2013, at which time the term was extended to February 2019. Since the commencement of the Settlement Agreement in August 2004, the City has been complying with the ADA requirements by submitting all support documentation to report the City's progress in fulfilling the terms of the Agreement. The DOJ has expressed satisfaction with the City's compliance and in June 2016 issued correspondence DJ# 204-11-272. The DOJ no longer requires the City to report on its progress and considers the file closed. The City's obligations to complete the remedial actions under the Agreement and to comply with Title II of the ADA still remain. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES A. Redevelopment Dissolution In an effort to mitigate its budget deficit, the State of California adopted ABx1 26 on June 28, 2011, amended by AB 1484 on June 27, 2012, which suspended all new redevelopment activities except for limited specified activities as of that date and dissolved redevelopment agencies on January 31, 2012. The suspension provisions prohibited all redevelopment agencies from a wide range of activities, including incurring new indebtedness or obligations, entering into or modifying agreements or contracts, acquiring or disposing of real property, taking actions to adopt or amend redevelopment plans and other similar actions, except actions required by law or to carry out existing enforceable obligations, as defined in ABx1 26. In addition, ABx1 26 and AB1484 directed the State Controller to review the activities of all redevelopment agencies and successor agencies to determine whether an asset transfer between an agency and any public agency occurred on or after January 1, 2011. If an asset transfer did occur and the public agency that received the asset is not contractually committed to a third party for the expenditure or encumbrance of the asset, the legislation requires the State Controller to order the asset returned to the redevelopment agency. This review was performed in May 2013, and a report issued on July 29, 2013 (see section B of this footnote). The City elected to become the Successor Agency to the Redevelopment Agency, and on February 1, 2012, the Redevelopment Agency's remaining net assets were distributed to the Successor Agency. ABx1 26 requires the establishment of an Oversight Board to oversee the activities of the Successor Agency and one was established on April 2, 2012. The activities of the Successor Agency are subject to review and approval of the Oversight Board, which is comprised of seven members. The activities of the Successor Agency are reported in the Successor Agency to the Redevelopment Agency Private -Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency. Pursuant to the dissolution of the City of San Rafael Redevelopment Agency, certain assets of the Redevelopment Agency were distributed to the Housing Successor and all remaining Redevelopment Agency assets and liabilities were distributed to the Successor Agency. The City elected to become the Housing Successor and on February 1, 2012. Assets and Liabilities relating to the Housing Successor are reported in the City's Low and Moderate Income Housing Special Revenue Fund. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) B. Redevelopment Property Tax Trust Fund (RPTTF) The Successor Agency's primary source of revenue comes from the RPTTF allocation distributed by the County. Property tax revenues for each Project Area are deposited into the RPTTF, which redistributes each Project Area's tax increment under specified formulas. The County Auditor administers the RPTTF and disburses twice annually from this fun pass-through payments to affected taxing entities, an amount equal to the total of obligation payments that are required to be paid from tax increment as denoted on the Recognized Obligation Payment Schedule ("ROPS"). The disbursements are established in the treasury of the Successor Agencies, and various allowed administrative fees and allowances. Any remaining balance is then distributed by the County Auditor back to affected taxing entities under a prescribed method that accounts for pass-through payments. The County Auditor is also responsible for the distributing other monies received from the Successor Agency (from sale of assets, etc.) to the affected taxing entities. Successor agencies in turn will use the amounts deposited into their respective funds for making payments on the principal and interest on loans, and monies advanced to or indebtedness incurred by the dissolved redevelopment agencies. C. Long -Term Debt 1999 Tax Allocation Bonds and Capital Appreciation Bonds On June 16, 1999, the former Agency issued Tax Allocation Bonds in the amount of $23,504,004. The bonds were issued as Current Interest Bonds in the aggregate principal amount of $21,115,000 and as Capital Appreciation Bonds in the original amount of $2,389,004. The proceeds of the bonds were used to finance certain redevelopment activities of benefit to the former Agency's Central San Rafael Redevelopment Project Area. In December, 2009 of the former Agency exercised the redemption option of the Current Interest Bonds. The outstanding balance of the Bonds was refunded, on a current basis, through the issuance of the 2009 Tax Allocation Refunding Bonds as discussed below. The Capital Appreciation Bonds mature annually after December 1 from 2018 to 2022, in amounts ranging from $1,440,000 to $2,070,000 and bear interest at rates from 5.58% to 5.60%. Interest on the Capital Appreciation Bonds will compound on each interest premium date and will be payable solely at maturity. The bonds are secured, on parity with the 1992 and 1995 bonds (refunded in 2002), by a pledge and a lien on tax revenues and amounts on deposit in certain funds and accounts held by the fiscal agent. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) 2002 Tax Allocation Refunding Bonds On October 9, 2002, the former Agency issued Tax Allocation Refunding Bonds in the amount of $25,020,000. The proceeds of the bonds were used to refund the 1992 Tax Allocation Refunding Bonds and the 1995 Tax Allocation Bonds. The Bonds mature annually each December 1 from 2002 to 2022, in amounts ranging from $540,000 to $1,920,000 and bear interest at rates ranging from 2.00% to 5.25%. Interest is payable semiannually on June 1 and December 1. The Bonds maturing on or after December 1, 2013, are subject to optional redemption prior to maturity, in whole or in part, and by lot within any one maturity, prior to their respective maturity dates, on any date on or after December 1, 2012, at a price equal to the principal amount, plus accrued interest on the redemption date. The bonds are payable from tax revenues to be derived from the redevelopment activities of the former Agency related to the Central San Rafael Redevelopment Project Area. 2009 Tax Allocation Refunding Bonds On December 14, 2009, the former Agency issued 2009 Tax Allocation Refunding Bonds in the amount of $14,660,000 bearing interest at rates from 3.00% to 5.00%. The proceeds of the Series 2009 Bonds were used to refund the former Agency's 1999 Tax Allocation Current Interest Bonds, to advance funds to the City to finance street and parking improvements for the benefit of the Agency's Central San Rafael Redevelopment Project. Principal payments are due annually on December 30 and interest payable semiannually on June 30 and December 30. The Series 2009 Bonds maturing on or before December 1, 2019, are not subject to optional redemption prior to their respective stated maturities. The Series 2009 Bonds maturing on or after December 1, 2020, are subject to optional redemption as a whole or in part either on a pro rata basis among maturities or in inverse order of maturity, and by lot within any one maturity, prior to their respective maturity dates, at the option of the Agency, on any date on or after December 1, 2019, at a price equal to the principal amount of such Series 2009 Bonds called for redemption, together with interest accrued on the date fixed for redemption, without premium. The former Agency pledged all future tax increment revenues for the repayment of the 1999 Capital Appreciation Bonds, and the 2002 and 2009 Tax Allocation Refunding Bonds. The pledge of all future tax increment revenues ends upon repayment of $25.1 million in remaining debt service on the Bonds, which is scheduled to occur in 2023. For fiscal year June 30, 2016, tax increment revenues amounted to $4.1 million which was used to make the debt service payments of $3.6 million. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) The following table summarizes the activity for the fiscal year ended June 30, 2016: Debt Service Requirements Annual debt service requirements are shown below: For the Year Authorized Balance Principal Balance Current $2,930,000 and Issued June 30, 2015 Additions Retirements June 30, 2016 Portion San Rafael Redevelopment Agency 370,676 2020 3,309,082 297,019 2021 1999 Tax Allocation Bonds 214,175 2022-2023 6,991,123 157,319 Totals Capital Appreciation Bonds $2,157,491 Reconciliation of longterm debt: Less unaccreted discount 5.58%-5.6%, due 12/1/2022 $2,389,004 $5,748,167 $325,930 $6,074,097 2002 Tax Allocation Refunding Bonds 2.00%-5.25%, due 12/1/2021 25,020,000 7,800,000 $1,740,000 6,060,000 $1,830,000 2009 Tax Allocation Refunding Bonds 3.00%-5.00%, due 12/1/2022 14,660,000 9,965,000 1,060,000 8,905,000 1,100,000 Add: deferred bond premium costs 638,883 79,860 559,023 Total Successor Agency Long-term Debt $24,152,050 $325,930 $2,879,860 $21,598,120 $2,930,000 Debt Service Requirements Annual debt service requirements are shown below: For the Year Governmental Activities Ended June 30 Principal Interest 2017 $2,930,000 $634,276 2018 3,080,000 484,026 2019 3,229,081 370,676 2020 3,309,082 297,019 2021 3,389,231 214,175 2022-2023 6,991,123 157,319 Totals $22,928,517 $2,157,491 Reconciliation of longterm debt: Less unaccreted discount ($1,889,420) Add deferred bond premium costs 559,023 $21,598,120 E:I: CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2016 NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE -PURPOSE TRUST FUND (SUCCESSOR AGENCY) ACTIVITIES (Continued) D. Other Long -Term Obligations During the fiscal year ending June 30, 2013, the San Rafael Successor Agency Oversight Board approved two personnel -related obligations of the former Redevelopment Agency. On August 30, 2012, the Oversight Board approved the inclusion of $1,904,431, representing the unfunded pension liability attributable to former Redevelopment Agency employees; the repayment is being made in ten equal, annual installments. On February 26, 2013, the Oversight Board approved the inclusion of $502,000, representing the unfunded OPEB (retiree medical) liability attributable to former Redevelopment Agency employees; the repayment is being made in nine equal, annual installments. The following table summarizes the activity for the fiscal year ended June 30, 2016: Approved Balance June 30 Balance Amount June 30, 2015 Additions Retirements June 30, 2016 Unfunded Pension Liability $1,904,431 $1,142,659 $190,443 $952,216 Unfunded OPEB Obligation 502,000 390,444 55,778 334,666 Total Long Term Obligations $1,533,103 $246,221 $1,286,882 Annual repayment requirements are shown below: For the Year Ended June 30 Principal 2017 $246,221 2018 246,221 2019 246,221 2020 246,221 2021 246,221 2022 55,777 Totals $1,286,882 E. Commitment and Contingencies State Approval of Enforceable Obligation The Successor Agency prepares a Recognized Obligation Payment Schedule (ROPS) semi- annually that contains all proposed expenditures for the subsequent six-month period. The ROPS is subject to the review and approval of the Oversight Board as well as the State Department of Finance. As of June 30, 2016, the Successor Agency had prepared ten ROPS, all of which have been approved by the Oversight Board and the California Department of Finance. The Department of Finance has stated that all items on a future ROPS are subject to a subsequent review. The amount, if any, of current obligations that may be denied by the Department of Finance cannot be determined at this time. The City expects such amounts, if any, to be immaterial. REQUIRED SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION Post -Employment Health Care Benefits Schedule of Funding Progress The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the last three actuarial studies is presented below: M Overfunded (Underfunded) Actuarial Liability as a Percentage of Covered Payroll (80%) (67%) (99%) Actuarial Unfunded Annual Value of Accrued Accrued Covered Valuation Assets Liability Liability Funded Payroll Date (000's omitted) (000's omitted) (000's omitted) Ratio (000's omitted) 6/30/2011 $9,861 $35,156 ($25,295) 28% $31,692 6/30/2013 12,505 33,549 (21,044) 37% 31,429 6/30/2015 15,499 48,226 (32,727) 32% 32,906 M Overfunded (Underfunded) Actuarial Liability as a Percentage of Covered Payroll (80%) (67%) (99%) CITY OF SAN RAFAEL REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2016 Schedule of the City's Proportionate Share of the Net Pension Liability Last 10 years* * - The fiscal year ended June 30, 2015 was the first year of implementation, therefore only two years are shown 6/30/2015 6/30/2016 City's proportionate share 30.0453% 36.7394% Proportionate share of total pension liability $677,753,565 $907,195,058 Proportionate share of fiduciary net position 603,499,779 764,871,931 Proportionate share of the net pension liability $74,253,786 $142,323,127 Plan fiduciary net position as a percentage of the total pension liability 89.04% 84.31% Covered employee payroll $31,429,178 $31,106,414 Net pension liability as a percentage of covered cmploycc payroll 236.26% 457.54% * - The fiscal year ended June 30, 2015 was the first year of implementation, therefore only two years are shown CITY OF SAN RAFAEL REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2016 Schedule of Contributions City of San Rafael, an Agent Multiple -Employer Defined Benefit Pension Last 10 years (subject to available information: first year of implementation was Fiscal Year ended June 30, 2015) 2015 Contractually required contribution $ 17,802,358 Contributions in Relation to the Level percentage ofpayroll with separate period for Extraordinary Actuarial Loss from2009 Contractually required contribution 17,802,358 Contribution Deficiency/ (Excess) $ - Covered employee payroll $ 31,073,560 Contributions as a percentage of 3.25% plus merit component based on employee classification and years of service covered employee payroll 57.29% Notes to Schedule Valuation Date / Timing 6/30/2013 (for contributions made in FY2014-2015) Kev Methods and Assumptions Used to Determine Contribution Rates (forFY2014-15): Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage ofpayroll with separate period for Extraordinary Actuarial Loss from2009 Remaining Amortization period Unfunded liability - 17 years / F2draordinary Actuarial Loss - 25 years Asset valuation method 5 -year smoothed market, 80% /1201/o corridor around market Inflation 3.25% Salary increases 3.25% plus merit component based on employee classification and years of service Investment Rate ofRetum 7.50% Retirement Age Classic Tiers: Safety - 50, Miscellaneous - 55; PEPRA Tiers: Safety - 57, Miscellaneous - 62 Healthy Mortality Sexdistinct RP -2000 Combined Mortality projected to 2010 using Scale AA with ages set back one year for male members / two years for female members Disabled Mortality Sexdistinct RP -2000 Combined Mortality projected to 2010 using Scale AA with ages set forward three years for all members 95 CITY OF SAN RAFAEL REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended June 30, 2016 Schedule of Contributions City of San Rafael, an Agent Multiple -Employer Defined Benefit Pension Last 10 years (subject to available information: first year of implementation was Fiscal Year ended June 30, 2015) (Continued) Contractually required contribution Contributions in Relation to the Contractually required contribution Contribution Deficiency/ (Excess) Covered employee payroll Contributions as a percentage of covered employee payroll Notes to Schedule Valuation Date / Timing 2016 19,339,577 19,339,577 31,106,414 62.17% 6/30/2014 (for contributions made in FY2015-2016) Kev Methods and Assunmtions Used to Determine Contribution Rates (for FY2015-16) Actuarial cost method Entry Age Normal Cost Method Amortization method level percentage of payroll with separate period for Fxtraordinary Actuarial loss from2009 Remaining Amortization period Unfunded liability - 16 years / Extraordinary Actuarial Loss - 24 years Asset valuation method 5 -year smoothed market, 80% /1201/o corridor around market Inflation 3.25% Salary increases 3.25% plus merit component based on employee classification and years of service Investment Rate of Return 7.25% Retirement Age Classic Tiers: Safety - 50, Miscellaneous - 55; PEPRA Tiers: Safety - 57, Miscellaneous - 62 Healthy Mortality CalPERS 2014 Pre -Retirement Non -Industrial Death rates (plus Duty -Related Death rates for Safety Members), with the 20 -year static projection used by CalPERS replaced by generational improvements from a base year of 2009 using Scale MP -2014 Disabled Mortality CalPERS 2014 Disability Mortality rates (Non -Industrial rates for Miscellaneous members and Industrial Disability rates for Safety members), adjusted by 90% for Males and Females (Miscellaneous and Safety) with the 20 -year static projection used by CalPERS replaced by generational improvements from a base year of 2009 using Scale MP -2014 061 GENERAL FUND AND MAJOR SPECIAL REVENUE FUND BUDGET -TO -ACTUAL STATEMENTS GASB Statement No. 34 dictates that budget -to -actual information in the basic financial statements should be limited to the General Fund and major Special Revenue Funds. This section is provided for the presentation of Budget -to -Actual Statements for the General Fund, Traffic and Housing Mitigation, and the Gas Tax Special Revenue Funds. Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles for the General Fund and Special Revenue Funds. 97 CITY OF SAN RAFAEL GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $59,322,000 $59,537,000 $60,217,831 $680,831 2,145,000 2,545,000 2,588,411 43,411 473,000 473,000 435,829 (37,171) 278,100 278,100 221,832 (56,268) 7,533,767 7,533,767 8,078,040 544,273 2,477,000 2,739,287 2,772,446 33,159 457,000 457,000 441,761 (15,239) 72,685,867 73,563,154 74,756,150 1,192,996 10,301,227 38,616,023 10,999,226 3,751,622 2,945,072 131,000 15,988 75,172 276,513 67,111,843 10,093,917 38,943,504 10,999,225 3,914,771 3,005,021 145,457 15,992 75,172 276,513 67,469,572 10,501,341 39,230,483 10,468,421 3,670,108 2,963,125 12,389 75,172 277,263 67,198,302 (407,424) (286,979) 530,804 244,663 41,896 145,457 3,603 (750) 271,270 5,574,024 6,093,582 7,557,848 1,464,266 1,357,349 (2,560,000) (1,202,651) $4,371,373 1,110,810 (4,340,655) (3,229,845) $2,863,737 1,110,809 (4,340,655) (3,229,846) 4,328,002 14,361,801 $18,689,803 (1) (1) $1,464,265 CITY OF SAN RAFAEL TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Use of money and properties Charges for services Total Revenues EXPENDITURES Current: General government Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 80,000 80,000 40,000 Variance with 2,031,947 657,378 Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $20,400 $20,400 $58,823 $38,423 10,000 10,000 355,394 345,394 30,400 30,400 414,217 383,817 80,000 80,000 40,000 40,000 2,031,947 657,378 1,374,569 80,000 2,111,947 697,378 1,414,569 (49,600) (2,081,547) (1,516,900) (1,516,900) ($49,600) ($3,598,447) (283,161) (1,516,900) (1,516,900) (1,800,061) 12,239,218 $10,439,157 1,798,386 $1,798,386 CITY OF SAN RAFAEL GAS TAX SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public works and parks Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Budgeted Amounts Original Final $10,300 $10,300 2,834,525 5,421,754 1,043,600 1,043,600 3,888,425 6,475,654 Actual Amounts $40,487 3,465,316 1,294,882 187,504 4,988,189 22,188 22,188 12,242 100,000 3,352,254 2,748,775 4,758,966 4,149,920 4,891,000 6,248,548 141,834 5,013,188 14,381,956 7,052,771 (1,124,763) (7,906,302) (2,064,582) (400,000) (400,000) ($1,524,763) 100 1,516,900 (400,000) 1,116,900 ($6,789,402) 1,516,900 (400,000) 1,116,900 (947,682) 7,600,945 $6,653,263 Variance with Final Budget Positive (Negative) $30,187 (1,956,438) 251,282 187,504 (1,487,465) 9,946 603,479 609,046 6,106,714 7,329,185 5,841,720 $5,841,720 SUPPLEMENTARY INFORMATION NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Recreation Revolving Fund — Established to administer the Community Services Department's program and facility rental charge and accounts for the Recreation Memorial Fund. Baypoint Lagoons Assessment District Fund — The Baypoint Lagoons Lighting and Landscape District was formed to protect and enhance wildlife habitat and water quality in Baypoint (Spinnaker) Lagoon and the adjacent diked salt marsh. Household Hazmat Facility Fund - Established to account for State mandated hazardous materials information, collection, and reporting. Expenditures include inspection of businesses for compliance with regulations. This fund also serves as the depository for countywide Household Hazardous Waste Program. Childcare Fund — Established to administer and account for childcare programs at ten sites throughout the City. Loch Lomond Assessment District Fund — Established to provide maintenance for stormwater and geotechnical mitigation facilities. A Mello Roos District was formed to fund this maintenance. Library Fund — Established to account for restricted library activities that are intended to be self - funding. Library Assessment Fund — Established to account for a special parcel tax dedicated to public library services and facilities, equipment, and technology improvements. Public Safety Fund — Established for special police services, which are intended to be self -funding. Stormwater Fund — Established to provide for self -funding storm drain maintenance program plus separate programs through the County and Bay Area to educate residents about urban runoff pollution. Development Services Fund — Established to account for development activities that are supported by external sources of funds. This fund does not account for the operating costs of building, planning, and engineering, which are located in the General Fund. Grants Fund — Established to account for grants for the Library, Childcare, Police and Falkirk Cultural Center. Parkland Dedication Fund — Established to account for long-term developer deposits used to enhance and maintain the park structure within City limits. Emergency Medical Services Fund — Established to account for the Emergency Medical Services and Transportation program that provides services to all segments of the community. Business Improvement Fund — Established to account for activities held in Downtown San Rafael, such as the Farmers Market. Pt. San Pedro Maintenance Portion Special Revenue Fund — Established to account for ongoing maintenance needs within the Pt. San Pedro assessment district. 103 NON -MAJOR GOVERNMENTAL FUNDS (Continued) Low and Moderate Income Housing Special Revenue Fund — Established to account for the activities related to the assets assumed by the City as Housing Successor to the San Rafael Redevelopment Agency for the housing activities of the former Redevelopment Agency. Measure A Open Space Special Revenue Fund — Established to account for the use of proceeds distributed by the County of Marin from Measure A, as well as other supplementary matching or City -funding for the operation or maintenance of open space, park or recreation lands. DEBT SERVICE FUNDS Peacock Gap Assessment District Fund — Established to accumulate funds for the payment of principal and interest for the 1993 Bonds which matured in 2005. The proceeds were used to refund the 1984 Bonds, which provided for the construction of public improvements in the project area. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. Mariposa Assessment District Fund - Established to accumulate funds for the payment of principal and interest for the 1993 Bond, which matured in 2008. The proceeds were used to finance the grading and paving of Mariposa Road. 1997 Financing Authority Revenue Bonds Fund — Established to accumulate funds for the payment of principal and interest for the 1997 Revenue Bonds which matured in 2011. The proceeds were used to purchase the previously issued special assessment bonds. Financing is to be provided by property tax increments generated within the specific geographic region described by the bond assessment district. CAPITAL PROJECTS FUNDS Capital Improvement Fund — Established for the costs associated with major capital improvement projects not tied to specific funds elsewhere. Improvements could include medians, parkways, sidewalks, and other public assets. Bedroom Tag Fund — Established to collect funds from multiple -unit housing used to pay for maintaining and developing parks within local neighborhoods. Assessment Districts Fund — Established to account for ongoing construction and improvement needs within the following assessment districts: Peacock Gap, Kerner Boulevard, Sun Valley/Lucas Valley Open Space, East San Rafael Drainage Assessment District 1. Park Capital Projects Fund — Established to account for capital improvements for all City owned parks, whether paid for by City funds, grants, donations, or partnership with the community. Open Space Fund — Established for the acquisition of open space. San Rafael Essential Facilities Fund — Established to account for major capital improvements to public safety facilities. 104 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Interest Loans Prepaids Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable Developer deposits payable Deferred revenue Total Liabilities Fund Balances: Nonspendable Restricted Committed Assigned Total Fund Balances Total Liabilities and Fund Balances CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS FOR THE YEAR ENDED JUNE 30, 2016 $192,148 312,556 504,704 26,379 $217,920 26,379 217,920 $531,083 $217,920 I $219,749 $29,635 238 219,749 29,873 1,695 248,639 1,152,149 $690,944 248,639 1,153,844 690,944 $468,388 $1,183,717 $690,944 SPECIAL REVENUE FUNDS Baypoint Lagoons Household Loch Lomond Recreation Assessment Hazmat Assessment Revolving District Facility Childcare District $429,342 $217,730 $221,563 $1,159,769 $690,827 101,741 246,825 190 117 22,253 1,695 $531,083 $217,920 $468,388 $1,183,717 $690,944 $192,148 312,556 504,704 26,379 $217,920 26,379 217,920 $531,083 $217,920 I $219,749 $29,635 238 219,749 29,873 1,695 248,639 1,152,149 $690,944 248,639 1,153,844 690,944 $468,388 $1,183,717 $690,944 4,884 $636,081 $704,722 $174,018 $1,482,892 $1,051,628 $785,703 $554,743 $193 SPECIAL REVENUE FUNDS $521,733 Library Public Development Parkland Library Assessment Safety Stormwater Services Grants Dedication $636,081 $698,422 $138,572 $1,482,892 $1,006,378 $365,892 $554,743 35,446 45,250 50,000 1,416 193 463 369,811 4,884 $636,081 $704,722 $174,018 $1,482,892 $1,051,628 $785,703 $554,743 $193 $463 $521,733 $3,926 $40,834 $63,020 44,925 130,565 1,500 193 463 521,733 50,351 171,399 63,020 4,884 635,888 699,375 $174,018 961,159 1,001,277 614,304 491,723 635,888 704,259 174,018 961,159 1,001,277 614,304 491,723 $636,081 $704,722 $174,018 $1,482,892 $1,051,628 $785,703 $554,743 (Continued) 107 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS FOR THE YEAR ENDED JUNE 30, 2016 108 SPECIAL REVENUE FUNDS Low and Emergency Pt. San Pedro Moderate Medical Business Maintenance Income Measure A Services Improvement Portion Housing Open Space ASSETS Cash and investments $902,947 $29,638 $171,516 $314,621 $187,597 Restricted cash and investments Receivables: Accounts 596,263 Taxes 548 213,653 Grants 139,373 Interest 196 Loans 615,066 Prepaids 2,870 Total Assets $1,641,453 $29,638 $172,064 $929,883 $401,250 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $76,926 $29,638 $5,393 $326 $38,994 Deposits payable Developer deposits payable Deferred revenue Total Liabilities 76,926 29,638 5,393 326 38,994 Fund Balances: Nonspendable 2,870 Restricted 1,561,657 166,671 929,557 362,256 Committed Assigned Total Fund Balances 1,564,527 166,671 929,557 362,256 Total Liabilities and Fund Balances $1,641,453 $29,638 $172,064 $929,883 $401,250 108 973 CAPITAL PROJECTS FUNDS DEBT SERVICE FUNDS Park Bedroom Assessment 1997 Tax Districts Peacock Gap Mariposa Financing 76,675 Assessment Assessment Authority Capital District District Revenue Bonds Improvement $2,875 $16,573 $147,304 $2,886,744 902,419 973 CAPITAL PROJECTS FUNDS Park Bedroom Assessment Capital Tax Districts Projects $58,740 $223,742 $32,869 76,675 $2,875 $16,573 $147,304 $3,790,136 $58,740 $300,417 $32,869 $23,584 23,584 $2,875 $16,573 $147,304 $58,740 $300,417 3,766,552 $32,869 2,875 16,573 147,304 3,766,552 58,740 300,417 32,869 $2,875 $16,573 $147,304 $3,790,136 $58,740 $300,417 $32,869 (Continued) 109 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEETS FOR THE YEAR ENDED JUNE 30, 2016 CAPITAL PROJECTS FUNDS LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $4,811 $597,038 $1,848,411 Deposits payable 175,490 Developer deposits payable 1,500 Deferred revenue 312,794 Total Liabilities 4,811 597,038 2,338,195 Total San Rafael Non -Major 9,449 Open Essential Governmental Committed Space Facilities Funds ASSETS 119,183 Total Fund Balances 119,183 Cash and investments $123,994 $597,038 $13,298,409 Restricted cash and investments 979,094 Receivables: Accounts 1,075,525 Taxes 215,924 Grants 531,437 Interest 1,169 Loans 615,066 Prepaids 9,449 Total Assets $123,994 $597,038 $16,726,073 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $4,811 $597,038 $1,848,411 Deposits payable 175,490 Developer deposits payable 1,500 Deferred revenue 312,794 Total Liabilities 4,811 597,038 2,338,195 Fund Balances: Nonspendable 9,449 Restricted 10,459,825 Committed 3,799,421 Assigned 119,183 119,183 Total Fund Balances 119,183 14,387,878 Total Liabilities and Fund Balances $123,994 $597,038 $16,726,073 110 CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2016 Recreation Revolving REVENUES 160,953 Taxes and special assessments Use of money and properties $46,124 Intergovernmental 17,413 Charges for services 2,665,294 Other revenue 10,729 Total Revenues 2,739,560 EXPENDITURES Facility Current: District General government 54 Public safety $15,606 Public works and parks $833 Culture and recreation 4,342,509 Capital outlay Capital improvement/special projects 23,666 Total Expenditures 4,366,175 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,626,615) OTHER FINANCING SOURCES (USES) 2,756 Transfers in 1,625,000 Transfers out 21,980 Total Other Financing Sources (Uses) 1,625,000 Net Change in Fund Balances (1,615) Fund Balance, Beginning 27,994 Fund Balance, Ending $26,379 SPECIAL REVENUE FUNDS 160,953 Baypoint 27,524 Lagoons Household Loch Lomond Assessment Hazmat Assessment District Facility Childcare District $25,368 54 8 $15,606 1,150 $833 $6,027 3,618 100,000 329,123 (325,000) 149,206 3,954,126 1,014 12,196 2,756 27,532 150,039 4,301,472 21,980 112 160,953 27,524 54 3,834,436 205 27,524 161,158 3,834,436 54 8 (11,119) 467,036 21,926 100,000 (325,000) (225,000) 8 (11,119) 242,036 21,926 217,912 259,758 911,808 669,018 $217,920 $248,639 $1,153,844 $690,944 113 SPECIAL REVENUE FUNDS Library Public Development Parkland Library Assessment Safety Stormwater Services Grants Dedication $864,158 $3,183 $3,338 1,826 $202 $8,717 $36,406 $2,134 5,261 1,000 86,334 1,027,238 6,322 2,105 847,293 8,752 82,839 4,847 1,000 19,412 865,984 171,480 860,857 36,406 1,029,372 9,444 34,524 670,964 258,295 575,523 823,489 19,433 818,907 22,821 1,125 792,066 282,212 1,061,260 20,558 818,907 258,295 1,615,555 34,524 1,528,699 1,084,081 (1,146) 47,077 (86,815) (754,698) 1,882 (499,327) (1,074,637) 90,000 91,250 150,000 90,000 91,250 150,000 (1,146) 47,077 3,185 (754,698) 1,882 (408,077) (924,637) 637,034 657,182 170,833 1,715,857 999,395 1,022,381 1,416,360 $635,888 $704,259 $174,018 $961,159 $1,001,277 $614,304 $491,723 (Continued) 113 CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Taxes and special assessments Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending 377,251 SPECIAL REVENUE FUNDS (15,523) 16,944 1,187,276 3,484 168,660 Low and 345,312 Emergency $166,671 Pt. San Pedro - Moderate Medical Business Maintenance Income Measure A Services Improvement Portion Housing Open Space $4,226,020 $73,076 $433,326 7,748 $1,619 1,474 275,772 2,319,676 270,335 69,382 7,099,551 73,076 71,001 434,800 $3,484 86,524 6,722,300 123,612 75,065 247,371 46,873 6,722,300 3,484 75,065 86,524 417,856 377,251 (3,484) (1,989) (15,523) 16,944 377,251 (3,484) (1,989) (15,523) 16,944 1,187,276 3,484 168,660 945,080 345,312 $1,564,527 $166,671 $929,557 $362,256 114 115 DEBT SERVICE FUNDS CAPITAL PROJECTS FUNDS 1997 Peacock Gap Mariposa Financing Park Assessment Assessment Authority Capital Bedroom Assessment Capital District District Revenue Bonds Improvement Tax Districts Projects $7,650 $780 $10,986 $164 404,767 2,110,514 $5,120 780 2,526,267 7,650 164 5,120 663,837 225 663,837 225 780 1,862,430 7,650 (61) 5,120 1,000,000 1,000,000 780 2,862,430 7,650 (61) 5,120 $2,875 $16,573 146,524 904,122 51,090 300,478 27,749 $2,875 $16,573 $147,304 $3,766,552 $58,740 $300,417 $32,869 (Continued) 115 CITY OF SAN RAFAEL COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2016 REVENUES Taxes and special assessments Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balance, Beginning Fund Balance, Ending CAPITAL PROJECTS FUNDS Total San Rafael Non -Major Open Essentials Governmental Space Facilities Funds $5,648,387 $657 139,064 2,141,647 9,944,022 2,579,484 657 20,452,604 795,496 7,840,683 1,173,503 9,084,979 663,837 4,811 $1,849,405 4,014,975 4,811 1,849,405 23,573,473 (4,154) (1,849,405) (3,120,869) 1,849,405 4,905,655 (325,000) 1,849,405 4,580,655 (4,154) 1,459,786 123,337 12,928,092 $119,183 $14,387,878 116 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvementispecial projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) FUND BALANCES, BEGINNING OF YEAR AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR CITY OF SAN RAFAEL 30,386 BUDGETED NONMAJOR GOVERNMENTAL FUNDS 2,862 4,376,186 4,342,509 COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 23,666 (23,666) BUDGET AND ACTUAL 4,376,186 FOR THE YEAR ENDED JUNE 30, 2016 10,011 30,386 27,524 SPECIAL REVENUE FUNDS (1,626,615) (100,741) Recreation Revolving Baypoint Lagoons Assessment District Variance 1,625,000 1,625,000 Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $25,500 $25,368 ($132) $25,400 $46,124 $20,724 280 1,150 870 17,332 17,413 81 217,912 2,803,830 2,665,294 (138,536) $26,379 3,750 10,729 6,979 $217,920 1,014 2,850,312 2,739,560 (110,752) 25,780 27,532 738 118 30,386 27,524 2,862 4,376,186 4,342,509 33,677 23,666 (23,666) 4,376,186 4,366,175 10,011 30,386 27,524 2,862 (1,525,874) (1,626,615) (100,741) (4,606) 8 4,614 1,625,000 1,625,000 1,625,000 1,625,000 $99,126 (1,615) ($100,741) ($4,606) 8 $4,614 27,994 217,912 $26,379 $217,920 118 119 SPECIAL REVENUE FUNDS Household Hazmat Facility Childcare Loch Lomond Assessment District Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $15,610 $15,606 ($4) $270 $833 $563 $700 $6,027 $5,327 800 3,618 2,818 315,751 329,123 13,372 149,724 149,206 (518) 4,007,700 3,954,126 (53,574) 1,000 (1,000) 12,196 12,196 2,756 2,756 150,994 150,039 (955) 4,324,151 4,301,472 (22,679) 16,410 21,980 5,570 169,167 160,953 8,214 37,836 54 37,782 3,990,698 3,834,436 156,262 20,000 20,000 1,000 205 795 170,167 161,158 9,009 4,010,698 3,834,436 176,262 37,836 54 37,782 (19,173) (11,119) 8,054 313,453 467,036 153,583 (21,426) 21,926 43,352 100,000 100,000 (325,000) (325,000) (225,000) (225,000) ($19,173) (11,119) $8,054 $88,453 242,036 $153,583 ($21,426) 21,926 $43,352 259,758 911,808 669,018 $248,639 $1,153,844 $690,944 (Continued) 119 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 SPECIAL REVENUE FUNDS Library Library Assessment Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and special assessments $885,000 $864,158 ($20,842) Licenses and permits Fines and forfeitures Use of money and properties $2,100 $3,338 $1,238 850 1,826 976 Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvementispecial projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 1,000 1,000 6,322 6,322 8,752 8,752 2,100 19,412 17,312 885,850 865,984 (19,866) 100,000 19,433 80,567 30,000 1,125 28,875 130,000 20,558 109,442 (127,900) (1,146) 126,754 ($127,900) (1,146) 637,034 $635,888 120 870,628 818,907 51,721 870,628 818,907 51,721 15,222 47,077 31,855 $126,754 $15,222 47,077 657,182 $704,259 $31,855 121 SPECIAL REVENUE FUNDS Public Safety Stormwater Development Services Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $5,000 ($5,000) $100 $202 $102 2,700 $8,717 6,017 $31,600 $36,406 $4,806 70,000 86,334 16,334 2,105 2,105 841,800 847,293 5,493 4,800 (4,800) 75,000 82,839 7,839 5,000 4,847 (153) 145,100 171,480 26,380 854,500 860,857 6,357 36,400 36,406 6 117,000 34,524 82,476 261,834 258,295 3,539 719,956 823,489 (103,533) 340,000 340,000 1,947,145 792,066 1,155,079 261,834 258,295 3,539 2,667,101 1,615,555 1,051,546 457,000 34,524 422,476 (116,734) (86,815) 29,919 (1,812,601) (754,698) 1,057,903 (420,600) 1,882 422,482 90,000 90,000 90,000 90,000 ($26,734) 3,185 $29,919 ($1,812,601) (754,698) $1,057,903 ($420,600) 1,882 $422,482 170,833 1,715,857 999,395 $174,018 $961,159 $1,001,277 (Continued) 121 122 CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 SPECIAL REVENUE FUNDS Grants Parkland Dedication Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and special assessments $3,183 $3,183 Licenses and permits Fines and forfeitures $10,000 ($10,000) Use of money and properties 1,280 $2,134 854 $1,200 5,261 4,061 Intergovernmental 929,843 1,027,238 97,395 Charges for services Other revenue 1,000 1,000 Total Revenues 941,123 1,029,372 88,249 1,200 9,444 8,244 EXPENDITURES Current: General government 972,258 670,964 301,294 Public safety 579,450 575,523 3,927 Public works and parks Culture and recreation 22,821 (22,821) Capital outlay Capital improvement/special projects 368,320 282,212 86,108 1,113,081 1,061,260 51,821 Total Expenditures 1,920,028 1,528,699 391,329 1,113,081 1,084,081 29,000 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (978,905) (499,327) 479,578 (1,111,881) (1,074,637) 37,244 OTHER FINANCING SOURCES (USES) Transfers in 91,250 91,250 150,000 150,000 Transfers out Total Other Financing Sources (Uses) 91,250 91,250 150,000 150,000 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES ($887,655) (408,077) $479,578 ($961,881) (924,637) $37,244 FUND BALANCES, BEGINNING OF YEAR 1,022,381 1,416,360 FUND BALANCES, END OF YEAR $614,304 $491,723 122 6,723,980 6,722,300 1,680 3,484 3,484 86,000 75,065 10,935 290,769 377,251 86,482 (3,484) (3,484) (5,760) (1,989) 3,771 $290,769 377,251 $86,482 ($3,484) (3,484) ($5,760) (1,989) $3,771 1,187,276 3,484 168,660 $1,564,527 $166,671 (Continued) 123 SPECIAL REVENUE FUNDS Emergency Medical Services Business Improvement Pt. San Pedro -Maintenance Portion Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $4,213,999 $4,226,020 $12,021 $80,000 $73,076 ($6,924) 750 7,748 6,998 240 (240) 75,000 275,772 200,772 2,525,000 2,319,676 (205,324) 200,000 270,335 70,335 7,014,749 7,099,551 84,802 80,240 73,076 (7,164) $3,484 $3,484 6,723,980 6,722,300 1,680 86,000 75,065 10,935 6,723,980 6,722,300 1,680 3,484 3,484 86,000 75,065 10,935 290,769 377,251 86,482 (3,484) (3,484) (5,760) (1,989) 3,771 $290,769 377,251 $86,482 ($3,484) (3,484) ($5,760) (1,989) $3,771 1,187,276 3,484 168,660 $1,564,527 $166,671 (Continued) 123 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and properties Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR CITY OF SAN RAFAEL 69,382 (618) BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULES OF REVENUES, EXPENDITURES, 71,001 201 AND CHANGES IN FUND BALANCES 434,800 34,590 BUDGET AND ACTUAL 86,524 218,476 FOR THE YEAR ENDED JUNE 30, 2016 SPECIAL REVENUE FUNDS Low and Moderate Income Housing Measure A Open Space 61,418 Variance Variance Final Positive Final 247,371 Positive Budget Actual (Negative) Budget Actual (Negative) $400,000 $433,326 $33,326 $800 $1,619 $819 210 1,474 1,264 70,000 69,382 (618) 70,800 71,001 201 400,210 434,800 34,590 305,000 86,524 218,476 185,030 123,612 61,418 262,967 247,371 15,596 186,500 46,873 139,627 305,000 86,524 218,476 634,497 417,856 216,641 (234,200) (15,523) 218,677 (234,287) 16,944 251,231 ($234,200) (15,523) $218,677 ($234,287) 16,944 $251,231 945,080 345,312 $929,557 $362,256 124 DEBT SERVICE FUNDS Mariposa Assessment District Variance Final Positive Budget Actual (Negative) $16,573 $16,573 1997 Financing Authority Revenue Bonds Variance Final Positive Budget Actual (Negative) $200 $780 $580 200 780 580 200 780 580 $200 780 $580 146,524 $147,304 125 INTERNAL SERVICE FUNDS Internal service funds account for department services and financing performed for other departments within the same governmental jurisdiction. Funding comes from charges assessed to the departments benefiting from the service. Building Maintenance Fund - Established to account for construction projects and cyclical large dollar maintenance tasks (roof, painting) completed on City owned buildings. Vehicle Replacement Fund — Established to provide for the replacement of vehicles. Equipment Replacement Fund — Established to provide for the replacement of computers and equipment. Employee Benefits Fund - This fund is utilized for the payment of retiree benefits, unemployment insurance, accumulated leave requirements and other negotiated benefits not tied to a specific department. Liability Insurance Fund - Established to maintain sufficient reserves for outstanding claims. All costs associated with liability premiums are paid from this fund. Workers' Compensation Fund - Established to maintain sufficient reserves for injury claims. All costs associated with workers compensation, including safety training, wellness programs, claim expenses and insurance premiums are paid from this fund. Dental Insurance Fund - Set up to maintain sufficient reserves for dental claims. All costs associated with dental claims and administrations are paid from this fund. Employee Retirement Fund — Established to maintain sufficient reserves to fund debt service payments on the 2010 Taxable Pension Obligation Bonds and other pension related obligations. OPEB/Retiree Medical Fund — Established to account for activities related to the funding, administration and procurement of retiree medical benefits. Radio Replacement Fund - Established to meet radio system operating costs, capital acquisition and replacement, and operating lease obligations for the Public Works, Fire, Community Development and Police Departments. The Marin Emergency Radio Authority (MERA) is a countywide JPA that has taken the roll in procurement and installation of a new digital radio system. This fund supports San Rafael's portion of the MERA efforts and related contractual obligations. Telephone Replacement Fund — Established to provide ongoing support services for telephone equipment and usage throughout the organization. Sewer Maintenance Fund — Established to record both the cost of providing services to the San Rafael Sanitation District and the charges for those services. 127 ASSETS Current Assets: Cash and investments Accounts receivable Loans receivable Prepaids Capital assets: Nondepreciable assets Depreciable assets, net Total Assets LIABILITIES Current Liabilities: Accounts payable Claims payable - due in one year Non-current Liabilities: Claims payable - due in more than one year OPEB liability Total Liabilities NET POSITION: Net investment in capital assets Unrestricted Total Net Position CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF NET POSITION JUNE 30, 2016 Building Vehicle Equipment Employee Maintenance Replacement Replacement Benefits $1,317,341 $1,188,389 $2,985,400 $1,089,185 140 10,938 1,083,036 61,964 1,426,056 5,025,360 743,555 2,805,361 7,307,863 3,728,955 1,089,185 36,814 36,814 1,488,020 5,025,360 1,280,527 2,282,503 $2,768,547 $7,307,863 128 141,695 40,440 141,695 40,440 743,555 2,843,705 1,048,745 $3,587,260 $1,048,745 Liability Insurance $2,567,357 2,567,357 1,125 746,913 1,796,742 2,544,780 22,577 $22,577 129 OPEB/ Workers' Dental Employee Retiree Radio Telephone Sewer Compensation Insurance Retirement Medical Replacement Replacement Maintenance Total $6,157,944 $133,913 $2,454,376 $629,786 $383,206 $359,399 $2,959 $19,269,255 75,980 13,487 89,607 10,938 1,083,036 61,964 7,194,971 6,157,944 133,913 2,454,376 705,766 383,206 359,399 16,446 27,709,771 7,450 3,705 3,775 21,475 16,446 272,925 1,382,212 2,129,125 4,662,699 6,459,441 9,101,000 9,101,000 6,052,361 3,705 9,104,775 21,475 16,446 17,962,491 7,256,935 105,583 130,208 2,454,376 (8,399,009) 383,206 337,924 2,490,345 $105,583 $130,208 $2,454,376 ($8,399,009) $383,206 $337,924 $9,747,280 129 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION FOR THE YEAR ENDED JUNE 30, 2016 OPERATING REVENUES Charges for current services Other operating revenues Total Operating Revenues OPERATING EXPENSES Personnel Insurance premiums and claims Maintenance and repairs General and administrative Depreciation expense Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Investment income Miscellaneous Income Total Nonoperating Revenues (Expenses) Net income (loss) before transfers TRANSFERS OUT Change in Net Position NET POSITION, BEGINNING OF YEAR, AS ADJUSTED NET POSITION, END OF YEAR Building Vehicle Equipment Employee Liability Maintenance Replacement Replacement Benefits Insurance $680,000 $1,187,329 $2,059,008 $973,252 $2,098,700 26,748 67,041 680,000 1,187,329 2,059,008 1,000,000 2,165,741 259,556 498,498 183,908 1,961,833 187,144 149,568 1,144,984 165,892 112,203 29,704 927,216 124,378 216,848 1,076,784 1,528,918 664,390 2,257,944 463,152 110,545 530,090 335,610 (92,203) 5,720 8,393 14,777 12,933 9,364 41,405 5,720 49,798 14,777 12,933 9,364 468,872 160,343 544,867 348,543 (82,839) (150,000) (60,064) 318,872 100,279 544,867 348,543 (82,839) 2,449,675 7,207,584 3,042,393 700,202 105,416 $2,768,547 $7,307,863 $3,587,260 $1,048,745 $22,577 130 131 OPEB/ Workers' Dental Employee Retiree Radio Telephone Sewer Compensation Insurance Retirement Medical Replacement Replacement Maintenance Total $1,458,221 $401,767 $450,000 $2,491,431 $648,660 $594,519 $2,636,356 $15,679,243 6,868 937,622 5,970 1,044,249 1,458,221 408,635 450,000 3,429,053 648,660 594,519 2,642,326 16,723,492 57,994 102,970 2,568,149 3,671,075 1,572,557 404,044 3,170,806 7,109,240 336,712 171,739 3,342 661,627 349,610 89,926 2,699,323 1,081,298 1,802,290 404,044 3,342 3,170,806 661,627 452,580 2,658,075 14,897,648 (344,069) 4,591 446,658 258,247 (12,967) 141,939 (15,749) 1,825,844 34,237 963 1 1,063 1,622 89,073 41,405 34,237 963 1 1,063 1,622 130,478 (309,832) 5,554 446,658 258,248 (11,904) 143,561 (15,749) 1,956,322 (276,520) (15,747) (502,331) (309,832) 5,554 170,138 258,248 (11,904) 143,561 (31,496) 1,453,991 415,415 124,654 2,284,238 (8,657,257) 395,110 194,363 31,496 8,293,289 $105,583 $130,208 $2,454,376 ($8,399,009) $383,206 $337,924 $9,747,280 131 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds Cash payments to suppliers for goods and services Cash payments to employees for salaries and benefits Other operating revenues Payment to OPEB Trust Cash Flows from Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund payments Cash Flows from Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from sale of property Cash Flows from Investing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Cash Flows from Investing Activities Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income to cash flows from operating activities: Depreciation Net change in assets and liabilities: Accounts receivable Loans receivable Prepaids and deposits Net OPEB Liability Accounts payable Claims payable Net Cash Provided by (Used in) Operating Activities 132 Building Vehicle Equipment Employee Maintenance Replacement Replacement Benefits $680,000 $1,242,302 $2,059,773 $973,252 (404,459) (2,148,161) (1,310,633) (625,948) (140,248) (6,323) 26,748 275,541 (905,859) 608,892 367,729 (150,000) (60,064) (150,000) (60,064) (66,239) (1,259,101) (1) 41,405 (66,239) (1,217,696) (1) 5,721 8,393 14,776 12,934 5,721 8,393 14,776 12,934 65,023 (2,175,226) 623,667 380,663 1,252,318 3,363,615 2,361,733 708,522 $1,317,341 $1,188,389 $2,985,400 $1,089,185 $463,152 $110,545 $530,090 $335,610 29,704 927,216 124,378 44,035 10,938 (1,083,036) 765 (217,315) (915,557) (46,341) 32,119 $275,541 ($905,859) $608,892 $367,729 ($92,203) ($344,069) $4,591 $446,658 $258,247 44,876 2,849 1,122 (3,504) 92 1,216,615 52,533 $1,173,259 ($295,040) $4,683 $446,658 1,012 (63,000) 3,776 $200,035 133 ($12,967) $141,939 ($15,749) $1,825,844 1,081,298 (13,487) 76,436 10,938 (1,079,422) (63,000) (4,989) (134,911) (1,285,508) 1,269,148 ($12,967) $136,950 ($164,147) $1,835,734 OPEB/ Liability Workers' Dental Employee Employee Radio Telephone Sewer Insurance Compensation Insurance Retirement Retirement Replacement Replacement Maintenance Total $2,146,425 $1,458,221 $401,767 $450,000 $2,492,443 $648,660 $594,519 $2,622,869 $15,770,231 (1,040,207) (1,753,261) (403,952) (3,342) (3,167,030) (661,627) (457,569) (2,792,986) (14,769,175) (146,571) 67,041 6,868 937,622 5,970 1,044,249 (63,000) (63,000) 1,173,259 (295,040) 4,683 446,658 200,035 (12,967) 136,950 (164,147) 1,835,734 (276,520) (15,746) (502,330) (276,520) (15,746) (502,330) (1,325,341) 41,405 (1,283,936) 9,367 34,238 963 1,063 1,621 89,076 9,367 34,238 963 1,063 1,621 89,076 1,182,626 (260,802) 5,646 170,138 200,035 (11,904) 138,571 (179,893) 138,544 1,384,731 6,418,746 128,267 2,284,238 429,751 395,110 220,828 182,852 19,130,711 $2,567,357 $6,157,944 $133,913 $2,454,376 $629,786 $383,206 $359,399 $2,959 $19,269,255 ($92,203) ($344,069) $4,591 $446,658 $258,247 44,876 2,849 1,122 (3,504) 92 1,216,615 52,533 $1,173,259 ($295,040) $4,683 $446,658 1,012 (63,000) 3,776 $200,035 133 ($12,967) $141,939 ($15,749) $1,825,844 1,081,298 (13,487) 76,436 10,938 (1,079,422) (63,000) (4,989) (134,911) (1,285,508) 1,269,148 ($12,967) $136,950 ($164,147) $1,835,734 AGENCY FUNDS Agency Funds account of assets held by the City as agent for individuals, governmental entities, and non-public organizations. Pt. San Pedro Road Assessment District Fund - Established to accumulate funds for payment of principal and interest for Pt. San Pedro Road Median Landscaping Assessment District bonds. 135 CITY OF SAN RAFAEL AGENCY FUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2016 Pt. San Pedro Road Assessment District Assets Restricted cash and investments Taxes receivable Total Assets Liabilities Interest payable Due to bondholders Total Liabilities Total Agency Fund Assets Restricted cash and investments Taxes receivable Total Assets Liabilities Interest payable Due to bondholders Total Liabilities Balance Balance June 30, 2015 Additions Deductions June 30, 2016 $294,330 $234,514 $237,733 $291,111 1,134 1,134 1,134 1,134 $295,464 $235,648 $238,867 $292,245 $28,726 $56,424 $57,453 $27,697 266,738 179,224 181,414 264,548 $295,464 $235,648 $238,867 $292,245 Balance Balance June 30, 2015 Additions Deductions June 30, 2016 $294,330 $234,514 $237,733 $291,111 1,134 1,134 1,134 1,134 $295,464 $235,648 $238,867 $292,245 $28,726 $56,424 $57,453 $27,697 266,738 179,224 181,414 264,548 $295,464 $235,648 $238,867 $292,245 136 t � F Ile, , y � a • A 1 Rl 11 OfA wo-I 2" 110 STATISTICAL SECTION This part of the City's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit. Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well- being have changed over time: 1. Net Position by Component 2. Changes in Net Position 3. Fund Balances of Governmental Funds 4. Changes in Fund Balance of Governmental Funds Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax: 1. Assessed and Estimated Actual Value of Taxable Property 2. Property Tax Rates, All Overlapping Governments 3. Principal Property Taxpayers 4. Property Tax Levies and Collections Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future: 1. Ratio of Outstanding Debt by Type 2. Computation of Direct and Overlapping Debt 3. Computation of Legal Bonded Debt Margin 4. Revenue Bond Coverage Parking Facility Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place: 1. Demographic and Economic Statistics 2. Principal Employers Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs: 1. Full -Time Equivalent City Government Employees by Function 2. Operating Indicators by Function/Program 3. Capital Asset Statistics by Function/Program Sources Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 139 $260,000 $210,000 y $160,000 $110,000 0 F $60,000 $10,000 ($40,000) ($90,000) CITY OF SAN RAFAEL NET POSITION BY COMPONENT Last Ten Fiscal Years (accrual basis of accounting) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ENet of Related Debt ■Restricted NUt-stlicted Primary government Net investments in capital assets $181,566,650 $186,855,149 As of June 30 $184,486,969 Restricted 31,124,935 2007 2008 2009 2010 Governmental activities 1,235,973 (2,613,922) Total primary government net position $219,417,559 $220,449,103 Net investment in capital assets $171,849,149 $176,724,820 $178,744,119 $173,536,144 Restricted 31,124,935 26,848,900 25,721,231 26,150,254 Unrestricted 4,499,136 4,273,937 (700,985) (4,631,276) Total governmental activities net position $207,473,220 $207,847,657 $203,764,365 $195,055,122 Business -type activities Net investment in capital assets $9,717,501 $10,130,329 $11,243,637 $10,950,825 Unrestricted 2,226,838 2,471,117 1,936,958 2,017,354 Total business -type activities net position $11,944,339 $12,601,446 $13,180,595 $12,968,179 Primary government Net investments in capital assets $181,566,650 $186,855,149 $189,987,756 $184,486,969 Restricted 31,124,935 26,848,900 25,721,231 26,150,254 Unrestricted 6,725,974 6,745,054 1,235,973 (2,613,922) Total primary government net position $219,417,559 $220,449,103 $216,944,960 $208,023,301 (a) The City adjusted certain beginning balances during fiscal years 2013-2014 and 2014-2015. Financial data shown for proceeding years were not adjusted for the presentation. 140 2011 2012 2013 2014 2015 2016 $174,281,922 $192,361,245 $193,222,791 $190,286,275 $190,621,085 $193,707,175 21,322,937 24,693,205 35,780,412 37,339,141 33,389,224 31,286,725 (8,170,324) 10,652,263 11,151,318 (196,824) (82,336,534) (93,273,480) $187,434,535 $227,706,713 $240,154,521 $227,428,592 $141,673,775 $131,720,420 $10,793,592 $10,650,558 $10,670,190 $10,786,591 $10,744,952 $10,958,058 1,948,447 2,495,889 2,501,498 2,049,957 (938,519) (1,136,050) $12,742,039 $13,146,447 $13,171,688 $12,836,548 $9,806,433 $9,822,008 $185,075,514 $203,011,803 $203,892,981 $201,072,866 $201,366,037 $204,665,233 21,322,937 24,693,205 35,780,412 37,339,141 33,389,224 31,286,725 (6,221,877) 13,148,152 13,652,816 1,853,133 (83,275,053) (94,409,530) $200,176,574 $240,853,160 $253,326,209 $240,265,140 $151,480,208 $141,542,428 141 CITY OF SAN RAFAEL CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual Basis of Accounting) Business -Type Activities Parking services 3,110,254 Fiscal Year Ended June 30, 3,563,235 4,016,198 2007 2008 2009 2010 Expenses Total Primary Government Expenses $86,586,284 $92,955,744 $96,556,089 Governmental Activities: Component Unit: $1,201,484 $1,275,669 $1,423,670 General government $8,908,433 $8,621,079 $8,075,344 $8,396,759 Public safety 37,271,272 40,845,347 42,708,538 42,752,033 Public works and parks 20,998,749 22,105,367 23,036,676 17,401,923 Community development 4,384,408 5,811,866 5,759,171 6,738,873 Culture and recreation 9,729,485 10,300,230 11,505,896 11,139,225 Interest on long-term debt and fiscal charges 2,183,683 1,989,620 1,907,229 2,200,024 Total Governmental Activities Expenses 83,476,030 89,673,509 92,992,854 88,628,837 Business -Type Activities Parking services 3,110,254 3,282,235 3,563,235 4,016,198 Total Business -Type Activities Expenses 3,110,254 3,282,235 3,563,235 4,016,198 Total Primary Government Expenses $86,586,284 $92,955,744 $96,556,089 $92,645,035 Component Unit: $1,201,484 $1,275,669 $1,423,670 $2,472,195 San Rafael Sanitation District $6,656,432 $8,090,636 $9,143,977 $9,087,354 Program Revenues Governmental Activities: Charges for services: General government $1,512,814 $1,494,784 $1,738,685 $1,665,460 Public safety 5,279,785 5,562,072 5,906,445 6,308,912 Public works and parks 4,030,060 4,983,288 4,753,817 3,916,874 Community development 2,815,009 3,247,024 2,915,872 2,830,179 Culture and recreation 4,521,004 4,870,884 5,253,683 5,280,458 Operating grants and contributions 3,701,901 3,463,616 3,544,248 3,721,055 Capital grants and contributions 2,786,761 3,239,509 7,311,173 2,116,906 Total Government Activities Program Revenues 24,647,334 26,861,177 31,423,923 25,839,844 Business -Type Activities: Charges for services: Parking services 3,242,046 4,161,936 4,454,490 4,244,404 Total Business -Type Activities Program Revenues 3,242,046 4,161,936 4,454,490 4,244,404 Total Primary Government Program Revenues $27,889,380 $31,023,113 $35,878,413 $30,084,248 Component Unit: Charges for services: San Rafael Sanitation District $7,857,916 $9,366,305 $10,567,647 $11,559,549 Net (Expense)/Revenue Governmental Activities ($58,828,696) ($62,812,332) ($61,568,931) ($62,788,993) Business -Type Activities 131,792 879,701 891,255 228,206 Total Primary Government Net Expense ($58,696,904) ($61,932,631) ($60,677,676) ($62,560,787) Component Unit Activities $1,201,484 $1,275,669 $1,423,670 $2,472,195 142 2011 2012 2013 2014 2015 2016 $8,269,846 $10,171,332 $10,202,530 $9,085,672 $9,099,858 $12,952,983 44,735,486 39,876,910 41,966,065 43,800,158 39,968,631 55,399,798 17,408,038 17,423,033 17,695,164 22,125,336 16,893,164 22,929,289 7,804,650 4,587,557 3,403,158 3,451,244 3,128,373 4,307,269 11,487,999 11,020,663 11,330,058 11,846,818 11,198,151 15,026,680 1,621,605 1,224,991 283,805 327,350 284,288 277,263 91,327,624 84,304,486 84,880,780 90,636,578 80,572,465 110,893,282 3,785,751 3,446,482 3,545,387 4,125,476 4,249,597 4,762,851 3,785,751 3,446,482 3,545,387 4,125,476 4,249,597 4,762,851 $95,113,375 $87,750,968 $88,426,167 $94,762,054 $84,822,062 $115,656,133 $9,677,630 $10,185,779 $10,169,082 $11,378,055 $11,375,239 $11,654,767 $1,636,542 $1,986,791 $2,655,749 $2,838,940 $1,379,523 $526,495 6,167,925 7,122,396 6,478,321 6,014,034 4,966,251 4,939,658 4,141,103 5,214,267 7,837,472 6,101,460 3,078,267 5,157,289 2,676,663 3,255,367 3,984,204 3,279,251 3,796,684 4,004,178 5,362,497 5,873,147 6,075,129 6,417,003 6,537,646 6,683,059 3,651,902 3,158,281 4,085,073 4,698,142 4,185,450 4,678,338 1,857,670 2,705,696 5,876,993 762,719 1,308,027 1,470,953 25,494,302 29,315,945 36,992,941 30,111,549 25,251,848 27,459,970 4,011,333 3,901,175 3,990,706 4,485,394 5,173,557 5,212,181 4,011,333 3,901,175 3,990,706 4,485,394 5,173,557 5,212,181 $29,505,635 $33,217,120 $40,983,647 $34,596,943 $30,425,405 $32,672,151 $12,223,779 $12,368,889 $12,413,123 $13,732,496 $14,629,758 $15,414,530 ($65,833,322) ($54,988,541) ($47,887,839) ($60,525,029) ($55,320,617) ($83,433,312) 225,582 454,693 445,319 359,918 923,960 449,330 ($65,607,740) ($54,533,848) ($47,442,520) ($60,165,111) ($54,396,657) ($82,983,982) $2,546,149 $2,183,110 $2,244,041 $2,354,441 $3,254,519 $3,862,215 143 CITY OF SAN RAFAEL CHANGES IN NET POSITION (continued) Last Ten Fiscal Years (Accrual Basis of Accounting) General Revenues and Other Changes in Net Position Governmental Activities: Taxes: Property Sales Special assessments Paramedic Motor vehicles Transient occupancy Franchise Business license Other Investment earnings Gain (Loss) on disposal of assets Miscellaneous Special item - Court fines repayment Transfers Total Government Activities Business -Type Activities: Investment earnings Aid from other government agencies Transfers Total Business -Type Activities Total Primary Government Component Unit: San Rafael Sanitation District Property Taxes Investment earnings Miscellaneous Aid from other governmental agencies Total Component Unit Special Item Governmental Activities Component Unit Activities Change in Net Position Governmental Activities Business -Type Activities Total Primary Government Change in Net Position Component Unit Activities 2007 $20,360,475 24,484,356 2,998,925 331,620 8,830,955 1,669,181 491,488 (1,133,458) 212,170 58,245,712 91,623 (212,170) (120,547) $58,125,165 $755,763 367,887 340,642 $1,464,292 Fiscal Year Ended June 30, 2008 2009 2010 $22,195,606 $21,978,859 $21,684,131 25,764,457 21,970,262 19,055,124 3,503,555 (212,416) ($571,739) $1,031,544 3,210,317 3,489,494 257,320 197,989 171,518 $3,804,047 1,678,912 1,558,243 2,941,149 2,868,332 2,405,934 2,317,664 9,242,241 1,561,835 1,411,583 1,583,056 717,968 302,180 221,791 296,454 461,224 541,390 344,080 361,190 458,300 63,186,769 57,485,639 54,079,750 121,486 49,084 17,678 (344,080) (361,190) (458,300) (222,594) (312,106) (440,622) $62,964,175 $57,173,533 $53,639,128 $803,071 $855,511 $823,187 341,032 206,752 93,274 3,546 3,540 577,860 381,144 415,391 $1,725,509 $1,446,947 $1,331,852 ($582,984) $374,437 ($4,083,292) ($8,709,243) 11,245 657,107 579,149 (212,416) ($571,739) $1,031,544 ($3,504,143) ($8,921,659) $2,665,776 $3,001,178 $2,870,617 $3,804,047 144 2011 2012 2013 2014 2015 2016 $21,632,733 $20,107,637 $17,317,772 $18,439,619 $19,039,443 $19,998,567 21,623,445 22,355,749 24,262,282 27,758,971 32,269,915 34,348,089 3,661,064 3,807,545 3,804,985 3,816,070 3,820,240 4,226,020 297,425 1,644,262 1,866,575 2,185,287 2,332,277 2,661,878 3,063,263 2,990,539 3,076,094 3,331,160 3,260,958 3,272,390 3,418,277 2,296,460 2,332,146 2,507,785 2,588,728 2,670,071 2,824,664 1,930,531 3,574,918 2,929,915 3,452,171 3,295,751 3,465,193 176,502 205,413 991,762 184,171 216,066 300,091 1,496,174 542,816 2,580,882 1,140,743 2,254,901 1,387,315 463,600 57,960 423,817 449,917 432,630 448,478 58,212,735 57,926,853 60,335,647 63,423,625 69,933,285 73,479,957 11,878 7,675 3,739 4,375 7,008 14,723 (463,600) (57,960) (423,817) (449,917) (432,630) (448,478) (451,722) (50,285) (420,078) (445,542) (425,622) (433,755) $57,761,013 $57,876,568 $59,915,569 $62,978,083 $69,507,663 $73,046,202 $1,214,519 $1,192,566 $1,177,469 $1,345,018 $1,319,852 $1,367,172 59,265 38,191 25,591 151,729 171,804 46,225 6,499 9,613 56,589 22,125 35,090 $1,280,283 $1,240,370 $1,259,649 $1,518,872 $1,526,746 $1,413,397 $4,462,815 ($4,462,815) ($7,620,587) $2,938,312 $12,447,808 $2,898,596 $19,075,483 ($9,953,355) (226,140) 404,408 25,241 (85,624) 498,338 15,575 ($7,846,727) $3,342,720 $12,473,049 $2,812,972 $19,573,821 ($9,937,780) $3,826,432 $3,423,480 $3,503,690 $3,873,313 $318,450 $5,275,612 145 $55,000 $45,000 $35,000 $25,000 F $15,000 $5,000 ($5,000) 2007 CITY SAN RAFAEL FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 2008 2009 2010 2011 2012 2013 2014 2015 ■Total Fund Balance As of June 30 2007 2008 2009 General Fund Pre -GASB 54 Presentation: Reserved $905,068 $2,196,153 $2,225,775 Unreserved 5,016,929 4,022,612 1,670,455 GASB 54 Presentation: Nonspendable Restricted Committed Assigned Unassigned Total General Fund $5,921,997 $6,218,765 $3,896,230 All Other Governmental Funds Pre -GASB 54 Presentation: Reserved $20,773,760 $17,599,142 $16,680,568 Unreserved, reported in: Special Revenue Funds 8,107,477 7,413,808 8,641,239 Capital Project Funds 35,430 (1,030,293) Debt Service Funds 4,734,986 3,315,764 3,360,540 Expendable Trust Fund GASB 54 Presentation: Nonspendable Restricted Committed Assigned Total all other governmental funds $33,616,223 $28,364,144 $27,652,054 (a) The change in total fund balance for the General Fund and other governmental funds is explained in Management's Discussion and Analysis. (b) The City adjusted certain beginning balances during fiscal years 2013-2014, 2014-2015 and 2015-2016. Financial data shown for preceding years were not adjusted for the presentation. 146 2016 2010 $1,763,622 5,038,173 $6,801,795 $15,352,723 8,778,027 4,527,627 $28,658,377 2011 2012 2013 2014 2015 2016 (a) $589,833 $527,509 $527,235 $503,338 $399,299 $476,316 200,238 76,188 16,856,959 20,769,546 30,185,064 555,561 651,121 800,876 5,135,257 8,447,495 5,439,879 1,516,644 2,476,676 6,866,149 12,374,002 16,440,910 6,511,850 4,959,533 712,810 1,588,500 1,772,577 $6,785,511 $2,771,462 $3,804,787 $7,369,487 $14,361,801 $18,689,803 $377,180 $788,031 $51,521 $8,719 $2,359 $9,449 19,289,367 16,856,959 20,769,546 30,185,064 31,742,184 27,552,245 3,864,322 5,135,257 8,447,495 2,185,825 931,871 3,799,421 4,124,029 5,283,559 6,511,850 4,959,533 712,810 119,183 $27,654,898 $28,063,806 $35,780,412 $37,339,141 $33,389,224 $31,480,298 147 CITY OF SAN RAFAEL CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 148 Fiscal Year Ended June 30, 2007 2008 2009 2010 2011 Revenues Taxes and special assessments $52,472,246 $56,129,195 $51,019,143 $47,678,541 $51,448,130 Licenses and permits 1,157,981 1,489,748 1,472,913 1,518,819 1,416,772 Fines and forfeitures 515,528 797,081 660,338 787,411 862,820 Use of money and properties 1,744,688 1,584,508 847,120 433,874 380,720 Intergovernmental 12,760,496 12,081,968 17,518,670 13,001,703 11,864,127 Charges for services 13,504,621 15,607,460 16,384,265 15,787,325 15,888,750 Other revenue 1,468,743 815,704 759,320 716,760 1,026,845 Total Revenues 83,624,303 88,505,664 88,661,769 79,924,433 82,888,164 Expenditures Current: General government 8,188,999 8,288,170 8,059,526 7,997,067 6,863,142 Public safety 36,264,321 40,299,862 41,209,972 39,574,091 40,967,352 Public works and parks 11,972,537 13,641,665 12,926,646 10,731,669 10,666,176 Community development 4,319,042 5,786,661 5,572,079 4,398,594 4,527,351 Culture and recreation 9,005,370 9,820,365 10,233,361 9,605,684 10,067,822 Capital outlay 6,716,630 6,243,517 5,048,044 1,890,559 1,745,483 Capital improvement / special projects 1,189,613 5,124,091 6,606,857 3,436,608 6,240,861 Debt service: Capitalized lease obligation Principal 2,287,255 2,504,370 2,714,358 2,804,258 2,530,338 Interest and fiscal charges 1,829,091 1,776,354 1,683,240 1,979,372 1,448,910 Total Expenditures 81,772,858 93,485,055 94,054,083 82,417,902 85,057,435 Excess (deficiency) of revenues over (under) expenditures 1,851,445 (4,979,391) (5,392,314) (2,493,469) (2,169,271) Other Financing Sources (Uses) Issuance of debt 14,660,000 Payment to refunded bonds (14,315,000) Bond premiums 1,038,185 Capital lease for equipment acquisition 318,000 Proceeds from PG&E loans Proceeds from sale of capital asset 221,791 Transfers in 6,812,260 6,353,216 8,972,495 7,494,560 5,806,834 Transfers (out) (6,958,046) (6,329,136) (6,614,806) (6,411,150) (4,657,326) Total other financing sources (uses) 172,214 24,080 2,357,689 2,688,386 1,149,508 Extraordinary Item Transfer to Successor Agency Net Change in fund balances $2,023,659 ($4,955,311) ($3,034,625) $194,917 ($1,019,763) Debt service as a percentage of noncapital expenditures 5.6% 5.2% 5.3% 6.2% 5.2% 148 2012 2013 2014 2015 2016 $51,395,116 $51,549,306 $56,686,142 $61,804,228 $65,866,218 1,648,890 1,929,387 1,934,755 2,456,820 2,588,411 801,758 734,005 669,553 556,076 435,829 315,561 325,043 363,089 444,757 460,206 10,537, 396 11,869, 889 11,953,308 13,233,503 13,685,003 19,649,433 23,575,374 19,949,333 15,346,794 14,366,744 870,957 4,092,411 2,045,407 1,777,003 3,208,749 85,219,111 94,075,415 93,601,587 95,619,181 100,611,160 8,783,873 10,529,480 8,678,833 10,203,687 11,349,079 39,311,551 41,377,062 41,900,762 43,954,515 47,071,166 11,518, 822 12,002,448 13, 697,957 12,758,643 14,390, 699 3,755,504 2,961,275 3,296,375 3,416,859 3,670,108 10,345,673 10,591,057 11,106,367 11,616,777 12,048,104 1,312,383 4,009,454 2,154,900 4,498,924 4,813,757 3,604,171 5,284,720 7,168,776 2,186,986 4,826,576 2,518,320 208,642 75,172 75,172 735,221 283,805 327,350 284,288 277,263 81,885,518 87,039,301 88,539,962 88,995,851 98,521,924 3,333,593 7,036,114 5,061,625 6,623,330 2,089,236 149 568,481 4,539,646 8,425,474 3,655,302 4,348,149 7,533,364 (4,864,293) (6,711,657) (3,053,865) (3,051,499) (6,582,555) (324,647) 1,713,817 1,169,918 1,296,650 950,809 (2,352,584) $3,008,946 $6,397,347 $6,231,543 $7,919,980 $3,040,045 4.2% 0.4% 0.7% 0.4% 0.4% 149 $14,000 $12,000 $10,000 $8,000 - i 0 $6,000 $4,000 $2,000 CITY OF SAN RAFAEL ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Unsecured Property —0—Secwed Property (a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over -rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at I% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. Data Source: Marin County Assessor 2006/07 - 2015/16 Combined Tax Rolls 150 Real Property Total Real Total Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b) 2007 $6,544,841,348 $1,745,483,576 $197,040,979 $122,977,950 $8,610,343,853 $376,890,454 $8,987,234,307 $8,987,234,307 0.18087% 2008 7,024,610,641 1,824,656,505 214,341,528 105,409,028 9,169,017,702 362,727,209 9,531,744,911 9,531,744,911 0.17718% 2009 7,357,121,277 1,941,927,620 234,669,841 129,177,656 9,662,896,394 374,976,613 10,037,873,007 10,037,873,007 0.17951% 2010 7,335,863,721 2,052,276,292 244,857,019 130,177,994 9,763,175,026 401,201,906 10,164,376,932 10,164,376,932 0.19215% 2011 7,215,965,203 2,056,985,417 247,409,955 124,426,487 9,644,787,062 383,414,952 10,028,202,014 10,028,202,014 0.17851% 2012 7,317,280,602 2,036,262,351 247,485,238 118,579,648 9,719,607,839 384,950,872 10,104,558,711 10,104,558,711 0.17827% 2013 7,265,617,525 1,987,170,644 245,917,096 115,453,836 9,614,159,101 384,534,108 9,998,693,209 9,998,693,209 0.17456% 2014 7,558,708,224 2,009,718,415 245,674,195 130,594,237 9,944,695,071 402,261,887 10,346,956,958 10,346,956,958 0.11985% 2015 7,991,224,952 2,120,065,908 249,864,918 115,675,852 10,476,831,630 417,217,272 10,894,048,902 10,894,048,902 0.11657% 2016 8,511,358,216 2,221,843,976 263,830,302 108,982,883 11,106,015,377 400,942,059 11,506,957,436 11,506,957,436 0.11672% (a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over -rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at I% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. Data Source: Marin County Assessor 2006/07 - 2015/16 Combined Tax Rolls 150 Notes: (1) Like other cities, San Rafael includes several property tax rate areas with different rates. A mean average is indicated. Data Source: Marin County Assessors Office 2006/07 - 2015/16 Tax Rate Tables 151 CITY OF SAN RAFAEL PROPERTY TAX RATES ALL OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Fiscal School Misc. Special Year City County (1) Districts Districts Total 2007 0.154 0.295 0.7160 0.0461 1.2107 2008 0.154 0.295 0.7225 0.0461 1.2172 2009 0.154 0.295 0.7192 0.0461 1.2139 2010 0.154 0.295 0.7402 0.0461 1.2349 2011 0.154 0.295 0.7542 0.0461 1.2489 2012 0.154 0.295 0.7831 0.0461 1.2779 2013 0.154 0.295 0.7743 0.0461 1.2691 2014 0.154 0.295 0.7890 0.0461 1.2838 2015 0.154 0.295 0.7651 0.0461 1.2599 2016 0.154 0.295 0.7846 0.0695 1.3028 Notes: (1) Like other cities, San Rafael includes several property tax rate areas with different rates. A mean average is indicated. Data Source: Marin County Assessors Office 2006/07 - 2015/16 Tax Rate Tables 151 CITY OF SAN RAFAEL PRINCIPAL PROPERTY TAX PAYERS CURRENT FY 2015/16 AND FY 2006/07 Taxpayer California Corporate Center ACQ LLC Northgate Mall Associates Sutter Health MPB Associates LLC Regency Center II Associates LP Northbay Properties II Bay Apartment Communities Inc Barbara Fasken 1995 Trust Etal Marin Sanitary Service 33 North Associates LLC Hines San Rafael LLC San Rafael Associates NF 4040 Civic Center LLC Rafael Town Center Investors LLC BIT Holdings Forty Five Inc Subtotal Total Net Assessed Valuation: Fiscal Year 2015-2016 Fiscal Year 2006-2007 FY 2015-2016 Percentage of Total City Taxable Taxable Assessed Assessed Value Value 138,587,517 137,532,142 51,869,712 51,207,486 44,763,767 44,273,257 42,312,980 41,837,131 40,629,687 38,331,984 $631,345,663 $11,506,957,436 $8,987,234,307 152 1.20% FY 2006-2007 Percentage of Total City Taxable Taxable Assessed Assessed Value Value 1.20% 117,666,836 1.31% 0.45% 0.45% 0.39% 39,356,320 0.44% 0.38% 32,555,995 0.36% 0.37% 33,174,554 0.37% 0.36% 0.35% 31,353,188 0.35% 0.33% 75,556,120 59,475,000 35,707,914 31,305,752 30,630,633 5.49% $486,782,312 0.84% 0.66% 0.40% 0.35% 0.34% 5.42% CITY OF SAN RAFAEL PROPERTY TAX LEVIES AND COLLECTIONS (1) LAST TEN FISCAL YEARS $25 0 $22 • $19 $16 $12 $9 +Allocations f Apportionments $6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Delinquent taxes Fiscal as a Percent of Year Rate Levies Allocations Collections ApportionmentsDelinquencies Allocations 2007 1.00 (2) $20,360,475 (2) $20,360,475 (2) 0.0% 2008 1.00 (2) 22,195,606 (2) 22,195,606 (2) 0.0% 2009 1.00 (2) 21,978,859 (2) 21,978,859 (2) 0.0% 2010 1.00 (2) 21,702,536 (2) 21,702,536 (2) 0.0% 2011 1.00 (2) 21,632,731 (2) 21,632,731 (2) 0.0% 2012 1.00 (2) 20,704,368 (2) 20,704,368 (2) 0.0% 2013 1.00 (2) 20,883,041 (2) 20,883,041 (2) 0.0% 2014 1.00 (2) 22,001,357 (2) 22,001,357 (2) 0.0% 2015 1.00 (2) 22,376,457 (2) 22,376,457 (2) 0.0% 2016 1.00 (2) 23,636,093 (2) 23,636,093 (2) 0.0% Notes: (1) Includes deductions for County property tax administration. (2) Information not applicable. All general purpose property taxes are levied by the county and allocated to other governmental entities. 153 e$45 O $40 $35 $30 $25 $20 $15 $10 $5 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fiscal Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CITY OF SAN RAFAEL RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS ■Total Cm -mW 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Notes : Debt amounts exclude any premiums, discounts, or other amortization amounts. In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds. Data Sources: City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data. 154 Pension Governmental Activities RDA Tax Financing Total Court Fine Capitalized Allocation Authority Note Promissory Lease Bonds Revenue Bonds Payable Note Obligations $ 39,217,501 $ 950,000 $ 169,000 $ 1,029,717 $ 596,927 $ 37,537,161 780,000 169,000 816,119 401,155 35,793,692 455,000 169,000 594,100 198,816 35,355,988 - 169,000 363,328 135,330 33,298,499 - 169,000 124,222 69,098 - - 169,000 - - - 169,000 - 528,839 - 453,667 - 378,495 - Business -Type Activities Parking Total Percentage Services Note Primary of Personal Bonds Payable Total Government Income (a) $ 7,300,000 $ - $ 7,300,000 $ 49,263,145 1.85% 7,140,000 - 7,140,000 46,843,435 1.73% 6,975,000 - 6,975,000 44,185,608 1.67% 6,805,000 - 6,805,000 42,828,646 1.85% 6,630,000 - 6,630,000 44,780,819 1.87% 6,445,000 - 6,445,000 11,104,000 0.46% 6,445,000 - 6,445,000 11,104,000 0.44% 6,186,403 61,836 6,248,239 11,267,078 0.43% 5,942,128 55,020 5,997,148 10,940,815 n/a 5,692,853 48,204 5,741,057 10,609,552 n/a Notes : Debt amounts exclude any premiums, discounts, or other amortization amounts. In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds. Data Sources: City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data. 154 Pension Obligation Bonds Total - $ 41,963,145 - 39,703,435 - 37,210,608 36,023,646 4,490,000 38,150,819 4,490,000 4,659,000 4,490,000 4,659,000 4,490,000 5,018,839 4,490,000 4,943,667 4,490,000 4,868,495 Per Capita (a) $848.68 804.39 757.08 728.11 770.28 190.45 190.85 192.38 184.77 175.13 CITY OF SAN RAFAEL COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2016 2015-16 Assessed Valuation: $11,506,957,436 Redevelopment Incremental Valuation: 2,483,249,776 Adjusted Assessed Valuation: $9,023,707,660 Total Debt City's Share of OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2016 % Applicable (1) Debt 6/30/2016 Marin Community College District $218,950,000 17.310% 37,900,245 San Rafael High School District 74,565,315 78.145% 58,269,065 Tamalpais Union High School District 124,435,000 0.079% 98,304 Dixie School District 19,825,810 65.998% 13,084,638 Ross School District 19,366,993 1.509% 292,248 Ross Valley School District 46,120,476 0.013% 5,996 San Rafael School District 72,551,224 83.496% 60,577,370 Marin Healthcare District 170,000,000 20.870% 35,479,000 Marin Emergency Radio Authority Parcel Tax Obligations 33,000,000 17.282% 5,703,060 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $211,409,926 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Marin County Certificates of Participation $92,087,468 17.282% $15,914,556 Marin County Pension Obligation Bonds 99,675,000 17.282% 17,225,834 Marin County Transit District General Fund Obligations 131,511 17.282% 22,728 Marin Municipal Water District General Fund Obligations 106,992 22.091% 23,636 Marin Community College District Certification of Participation 2,515,834 17.310% 435,491 San Rafael School District Certificates of Participation 3,530,000 83.496% 2,947,409 City of San Rafael General Fund Obligations 8,004,172 100.000% 8,004,172 (2) City of San Rafael Pension Obligations 4,490,000 100.000% 4,490,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $49,063,825 Less: City of San Rafael lease revenue bonds supported by parking revenues 5,741,057 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 43,322,768 OVERLAPPING TAX INCREMENT DEBT (Successor Agenc} 17,354,004 100.000% 17,354,004 TOTAL GROSS DIRECT DEBT $12,494,172 TOTAL NET DIRECT DEBT $6,753,115 TOTAL OVERLAPPING DEBT $265,333,584 GROSS COMBINED TOTAL DEBT $277,827,756 (3) NET COMBINED TOTAL DEBT $272,086,699 (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Include city's share of Marin Emergency Radio Authority refunding revenue bonds and $426,699 PG&E notes. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease obligations. Ratios to 2015-16 Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.84% Total Gross Direct Debt ($13,009,376) 0.11% Total Net Direct Debt ($7,102,228) 0.06% Gross Combined Total Debt 2.41% Net Combined Total Debt 2.37% Ratios to Redevelopment Incremental Valuation ($2,483,249,77( Total Overlapping Tax Increment Debt 0.70% Data Source: MuniServices 155 CITY OF SAN RAFAEL COMPUTATION OF LEGAL BONDED DEBT MARGIN June 30, 2016 ASSESSED VALUATION: BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) LESS AMOUNT OF DEBT SUBJECT TO LIMIT: LEGAL BONDED DEBT MARGIN $11,506,957,436 431,510,904 4,868,495 $426,642,409 NOTE: (a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth Source: City of San Rafael's Finance Department 156 Total net debt Total Net Debt Legal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2007 $ 337,021,287 $ 41,963,145 $ 295,058,142 14.22% 2008 357,440,434 39,703,435 317,736,999 12.50% 2009 376,420,238 37,210,608 339,209,630 10.97% 2010 381,164,135 36,023,646 345,140,489 10.44% 2011 376,057,576 38,150,819 337,906,757 11.29% 2012 378,920,952 4,659,000 374,261,952 1.24% 2013 374,950,995 4,659,000 370,291,995 1.26% 2014 388,010,886 5,018,839 382,992,047 1.31% 2015 408,526,834 4,943,667 403,583,167 1.22% 2016 431,510,904 4,868,495 426,642,409 1.14% NOTE: (a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth Source: City of San Rafael's Finance Department 156 4.00 3.00 2.00 1.00 - 0.00 1 2007 2008 CITY OF SAN RAFAEL REVENUE BOND COVERAGE PARKING FACILITY LAST TEN FISCAL YEARS 2009 2010 2011 2012 2013 t Coverage N 2014 2015 2016 Debt Service Requirements Net Revenue Fiscal Gross Operating Available for Year Revenue (1) Expenses (2) Debt Service Principal Interest Total Coverage 2007 $3,331,754 $2,344,285 $987,469 $155,000 $339,904 $494,904 2.00 2008 4,089,112 2,692,086 1,397,026 160,000 335,216 495,216 2.82 2009 4,425,813 2,980,083 1,445,730 165,000 330,379 495,379 2.92 2010 4,262,082 3,343,680 918,402 170,000 325,285 495,285 1.85 2011 4,023,211 3,101,411 921,800 175,000 319,391 494,391 1.86 2012 3,908,664 2,870,718 1,037,946 185,000 312,291 497,291 2.09 2013 3,994,446 3,121,964 872,481 310,000 240,012 550,012 1.59 2014 4,489,769 3,716,552 773,217 245,000 210,063 455,063 1.70 2015 5,180,554 4,031,161 1,149,393 245,000 205,163 450,163 2.55 2016 5,226,904 3,739,321 1,487,583 250,000 199,613 449,613 3.31 Notes: On March 26, 2003, the City Financing Authority issued lease revenue bonds for the design and construction of a new parking facility. On August 12,2012 , the City Financing Authority refunded the series 2003 lease revenue bonds with series 2012 lease revenue refunding bonds to take advantage of lower interest rates. (1) Includes all Parking Facility Operating Revenues and Non-operating Interest Revenue (2) Includes all Parking Facility Operating Expenses less Depreciation and Interest Data Source: San Rafael Finance Department Revenue and Expenditure Status Reports CITY OF SAN RAFAEL DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 23.00% 22.50% 22.00% 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H $50 v c H $45 3 O s ~ $40 $35 $30 ■ City Population as a % of County Population ,0, ti�� ti�� ti�� ti�� ti�� tis", ti�� 4" 's" --4-- Per Capita Personal Income (2) $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 10.00% 7.50% 5.00% 2.50% ■ Personal Income (2) (in thousands 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Unemployment Rate (%) Source: (1) State of California, Department of Finance -Demographic Research Unit. The data represents the City's population as of January 1, of each year. (2) 2007-2009 Income Data --Demographic Estimates are based on the last available census. Projections are developed by incorporating all of the prior census data released to date. 2010 and later- Income - US Census Bureau, most recent American Community Survey (3) Unemployment Data: California Employment Development Department 158 Personal Per Capita Average Marin City Fiscal City Income (2) Personal Unemployment County Population Year Population (1) (in thousands Income (2) Rate (3) Population % of County 2007 58,047 $2,663,922 $46,152 4.40% 255,982 22.68% 2008 58,235 2,703,213 46,557 5.60% 257,406 22.62% 2009 58,363 2,642,978 45,288 9.30% 258,618 22.57% 2010 58,822 2,317,704 39,402 9.80% 260,651 22.57% 2011 58,136 2,389,222 40,978 8.80% 254,692 22.83% 2012 58,305 2,438,291 41,908 5.50% 254,790 22.88% 2013 58,182 2,538,895 43,351 4.70% 254,007 22.91% 2014 58,566 2,621,228 44,531 4.50% 255,846 22.89% 2015 59,214 2,699,436 44,558 3.70% 258,972 22.87% 2016 60,582 n/a n/a n/a 262,274 22.87% Source: (1) State of California, Department of Finance -Demographic Research Unit. The data represents the City's population as of January 1, of each year. (2) 2007-2009 Income Data --Demographic Estimates are based on the last available census. Projections are developed by incorporating all of the prior census data released to date. 2010 and later- Income - US Census Bureau, most recent American Community Survey (3) Unemployment Data: California Employment Development Department 158 CITY OF SAN RAFAEL PRINCIPAL EMPLOYERS FISCAL YEAR 2015-2016 LAST EIGHT CALENDAR YEARS # Number of FTE employees in Marin locations (A) Percentage of total employment Note: From the EDD website, it shows that the Total 2016 Employment in the City of San Rafael was 32,800 of which it is used as the denominator for the 2016 percentages are calculated. * The number of total employment for the City is available for the last eight fiscal yews only. Data Sources: State of California, Employment Development Department, Labor Market Information Division & North Bay Business Journal (Annual Book of Lists) 159 2016* 2015* 2014* 2013* 2012* 2011* 2010* 2009* Employer # (A) # (A) # (A) # (A) # (A) # (A) # (A) # (A) Autodesk, Inc. 748 2.28% 763 2.33% 1,095 3.52% 1,000 3.27% 878 3.25% 928 3.44% 1,028 3.83% 1,200 4.32% Kaiser Permanente 662 2.02% 1,575 4.82% 1,637 5.26% 1,756 5.74% 1,803 6.68% 1,330 4.93% 1,311 4.88% 2,267 8.15% San Rafael Elementary/High Schools Disl 650 1.98% 650 1.99% 600 1.93% 600 1.96% 600 2.22% 600 2.22% 600 2.23% 575 2.07° City of San Rafael 577 1.76% 581 1.78% 666 2.14% 643 2.10% 521 1.93% 592 2.19% 630 2.34% 633 2.28% MHN - - - - - - 350 1.14% 350 1.30% 350 1.30% 350 1.30% - - Dominican University of California 485 1.48% 422 1.29% 354 1.14% 347 1.13% 346 1.28% 336 1.24% 370 1.38% 508 1.83% Bradley Real Estate 435 1.33% 418 1.28% 385 1.24% 369 1.21% 376 1.39% 350 1.30% - - - - Macy's - - 380 1.16% 380 1.22% 380 1.24% 380 1.41% 450 1.67% 445 1.66° Wells Fargo Bank 326 0.99% 306 0.94% 308 0.99% 334 1.09% - - - - - - FICO 300 0.91% Fair Issac Corp - - 300 0.92% 300 0.96% - - 350 1.26% Community Action Marin 220 0.67% 225 0.69% 300 0.96% 300 0.98% - - Safeway - - - - - - - - 841 3.11% 452 1.67% 452 1.68° Comcast - - 620 2.30% 619 2.29% 619 2.30% Guide Dogs for the Blind 225 0.69% - - - - 287 1.07% Bernard Osher Marin JCC 200 0.61° Buckelew Programs 186 0.57° Ghilotti Bros. 150 0.46% 240 0.86% Golden Gate Bridge Highway & Transp. Dist. 828 2.98% YMCA 348 1.25% San Rafael City High School District 250 0.90° Urban Painting, Inc. 150 0.46% - - Totals 5,314 16.20% 5,620 17.19% 6,025 19.37% 6,079 19.87% 6,715 24.87% 6,007 22.25% 6,092 22.67% 7,199 25.90% # Number of FTE employees in Marin locations (A) Percentage of total employment Note: From the EDD website, it shows that the Total 2016 Employment in the City of San Rafael was 32,800 of which it is used as the denominator for the 2016 percentages are calculated. * The number of total employment for the City is available for the last eight fiscal yews only. Data Sources: State of California, Employment Development Department, Labor Market Information Division & North Bay Business Journal (Annual Book of Lists) 159 21 w F� w LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 ■ General Government ■ Public Safety ■ Public Works and Parks ■ Community Development ■ Culture and Recreation * Includes 2 police officer positions who are on extended leave of absence, without pay Data Source: City of San Rafael's Finance Department 160 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Function General Government 59.38 59.88 58.88 56.88 54.35 55.23 53.23 55.11 58.11 60.61 Public Safety 189.00 186.00 183.00 165.00 166.00 162.00 163.00 168.00 171.75 175.75 Public Works and Parks 76.80 78.80 78.80 60.80 62.80 62.00 60.00 61.00 62.00 62.00 Community Development 31.00 34.50 34.50 26.75 26.75 18.25 18.25 17.80 17.80 19.80 Culture and Recreation 80.22 85.90 85.90 83.49 89.82 81.56 80.76 83.66 84.23 84.25 Total 436.40 445.08 441.08 392.92 399.72 379.04 375.24 385.57 393.89 402.41 * Includes 2 police officer positions who are on extended leave of absence, without pay Data Source: City of San Rafael's Finance Department 160 CITY OF SAN RAFAEL OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program Public safety: Fire: Inspection permit issued Police: Police calls for service Law violations: Part I crimes Physical arrests (adult and juvenile) Traffic violations Parking violations Public works Street resurfacing (miles) (Eng Div) Potholes repaired (square miles) Asphalt used for street repairs (tons) Culture and recreation: Recreation class participants Items in collection (thousands) Library: Items in collection (thousands) Total items borrowed (thousands) Note: N/A denotes information not available. 2007 2008 2009 2010 143 217 196 307 43,480 43,488 42,227 42,227 2,557 2,314 2,352 2,352 3,809 4,182 4,487 4,487 5,197 9,241 5,777 5,777 36,228 42,481 44,913 42,806 N/A 4.95 2.77 2.77 N/A N/A N/A N/A N/A N/A N/A N/A 8,000 8,000 8,000 9,524 124.46 N/A 124.40 151.88 359.41 N/A N/A 371.12 162 2011 2012 2013 2014 2015 2016 294 282 307 261 282 198 39,512 39,537 42,707 51,261 55,805 57,026 2,180 2,101 2,523 2,289 2,533 2,523 3,102 2,981 2,951 3,227 3,450 3,453 8,190 4,048 3,448 4,498 4,168 3,252 34,590 32,492 30,881 38,814 36,398 34,803 7.40 N/A 2.70 9.00 6.40 6.76 N/A N/A N/A N/A N/A N/A 10,809 178.9 7,500 10,700 11,000 7,195 9,000 12,075 7,082 9,857 10,023 12,725 158.30 159.18 125.92 168.62 127.76 227.89 435.66 366.46 392.23 478.96 443.64 469.79 163 CITY OF SAN RAFAEL CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Data Source: City of San Rafael's Finance Department 164 2007 2008 2009 2010 Function/Program Public safety: Fire stations 6 6 6 6 Police stations 1 1 1 1 Police Fleet Public works Miles of streets 173 173 173 173 Street lights 4,435 4,435 4,435 4,435 Parking District lights Traffic Signals 89 89 89 89 Culture and recreation: Community services: City parks 19 20 20 20 City parks acreage 41 42 42 42 Playgrounds 13 14 14 14 City trails 20 20 20 20 Community gardens 1 1 1 1 Community centers 4 4 4 4 Senior centers 0 0 0 0 Sports centers 0 0 0 0 Performing arts centers 0 0 0 0 Swimming pools 1 1 1 1 Tennis courts 10 10 10 10 Basketball Courts 5 5 5 5 Baseball/softball diamonds 5 5 5 5 Soccer/football fields 2 2 2 2 Library: City Libraries 1 1 2 2 Wastewater: Miles of sanitary sewers 179 179 179 179 Data Source: City of San Rafael's Finance Department 164 2011 2012 2013 2014 2015 2016 6 6 6 6 6 6 1 1 1 1 1 1 173 173 173 173 173 173 4,435 4,435 4,435 4,435 4,435 4,435 89 89 89 89 89 89 20 20 20 20 20 20 42 42 42 42 42 42 14 14 14 14 14 14 20 20 20 20 20 20 1 1 1 1 1 1 4 4 4 4 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 10 10 10 10 10 10 5 5 5 5 5 5 5 5 5 5 5 5 2 2 2 2 2 2 2 2 2 2 2 2 179 179 179 145 145 145 165 ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval by the City Council. Save staff report (including this cover sheet) along with all related attachments in the Team Drive (T:) --> CITY COUNCIL AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT - AGENDA TOPIC] Agenda Item # Date of Meeting: 11/7/2016 From: Mark Moses Department: Finance Date: 11/7/2016 Topic: CITY'S YEAR-END FINANCIAL STATEMENTS AND RELATED AUDIT REPORTS Subject: FISCAL YEAR 2015-2016 ANNUAL FINANCIAL REPORT; GANN APPROPRIATIONS LIMIT; MEMORANDUM ON INTERNAL CONTROL; CHILD DEVELOPMENT PROGRAM; AND TRANSPORTATION DEVELOPMENT ACT Type: ❑ Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Other: APPROVALS ® Finance Director Remarks: need to check links before going to print ® City Attorney Remarks: LG -10/27/16 -N/A ® Author, review and accept City Attorney / Finance changes Remarks: ready for City Manager Review ® City Manager Remarks: