HomeMy WebLinkAboutFin Financial Reports FY2016-17____________________________________________________________________________________
FOR CITY CLERK ONLY
File No.: 8-1 x 8-9 x 9-3-20
Council Meeting: 12/18/2017
Disposition: Accepted Reports
Agenda Item No: 4.g
Meeting Date: December 18, 2017
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 2016-2017 ANNUAL FINANCIAL REPORT; GANN
APPROPRIATIONS LIMIT; MEMORANDUM ON INTERNAL
CONTROL; CHILD DEVELOPMENT PROGRAM; AND SINGLE AUDIT
FOR FEDERAL GRANTS
RECOMMENDATIONS: ACCEPT THE FISCAL YEAR 2016-2017 ANNUAL
FINANCIAL REPORT, THE GANN APPROPRIATIONS
LIMIT REPORT, THE MEMORANDUM ON INTERNAL
CONTROL, CHILD DEVELOPMENT PROGRAM
REPORT, AND THE SINGLE AUDIT 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 2016-2017. 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 Organizations.
The requirements of Section 1.5 of Article XIIIB 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, 2018. A Memorandum on Internal Control is also prepared by the auditors to
address the City’s 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.
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 2016-2017.
These reports were presented to the City Council Finance Committee on October 31, 2017 at
which time it was agreed that staff would bring the reports forward to the full City Council.
ANALYSIS:
Overview
The Fiscal Year 2016-2017 saw a leveling off in the economic recovery. Although property tax
revenues remained strong, sales tax revenues and hotel tax revenues stalled for the first time
since the recession. 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, 2017
has been dedicated to one-time initiatives such as the continuation of two additional police
officers through June 20, 2018, and the funding of the fixed-term director to manage homeless
planning and outreach.
Fiscal year 2016-2017 marks the third year of implementation of the 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, 2017 by $110.5 million from a reporting perspective.
The net pension liability as of this date was measured to be $167.1 million. The full funding of
the City’s pension costs have been incorporated into the adopted fiscal year 2017-2018 budget;
therefore, there is no negative impact on City operations or services resulting from the
implementation of this new reporting standard.
Fiscal year 2016-2017 marks the first year of implementation of the new Other Postemployment
Benefits (OPEB) accounting standard issued by the Governmental Accounting Standards Board
(GASB) known as GASB 75. The requirements, which will affect all public agencies with
defined benefit programs other than pension (e.g., retiree medical, vision, etc.), are very similar
to those of GASB 68. The City has elected to implement GASB 75 one year early, in order to
improve transparency and to achieve reporting parity with GASB 68. The net impact of
implementing GASB 75 lowers the City’s net position as of June 30, 2017 by $28.6 million from
a financial/GASB reporting perspective. The net pension liability as of this date was measured to
be $33.8 million. The full funding of the City’s OPEB costs have been incorporated into the
adopted fiscal year 2017-2018 budget; therefore, there is no negative impact on City operations
or services resulting from the implementation of this new reporting standard.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
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. From the
accumulated balance of $6,336,377 as of July 1, 2016, $1,572,491 was combined with the
$3,844,963 in revenues received during the current year and $635,387 in County reimbursements
for Fire Station 57 to fund $6,052,841 in project expenditures. As a result of this activity,
$4,763,886 remained set aside for Measure E as of June 30, 2017. Approximately half of the
expenditures during the fiscal year went to the Public Safety Center, with the other half split
between Fire Stations 52 and 57. Total project-to-date spending is approximately $7.9 million.
Fiscal Year 2016-17 Annual Financial Report – Citywide 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
governmental activities was $115.5 million, a decrease of $4.1 million from the prior year
adjusted balance. This decrease is largely attributable to the spending down of accumulated funds
that had been set aside for the public safety facilities construction and improvements. The
Parking Fund, reported as a business-type activity, ended the fiscal year with a net position of
$10.1 million, or $0.6 million more than that of the previous fiscal year. Cash contributes
approximately 32% of this net position, with the remainder contributed by parking infrastructure.
Additional explanatory information is provided in the Management’s Discussion and Analysis
(MD&A) section beginning on page five of the attached CAFR. The MD&A provides key
highlights and a summary view of financial activities for the year.
Financial Results: General Fund
Although the final operating results for the General Fund registered a strong $3.8 million, they
fell short of the projections made at the time the budget was adopted for fiscal year 2016-2017 by
approximately $1.2 million. This variance was driven by a leveling off of sales tax which
recorded the lowest level since fiscal year 2013-2014. In addition, transient occupancy tax (hotel
tax) dropped by 2.5% after recording several years of strong growth.
Most of the positive General Fund operating results were used to fund capital transfers. Those
capital transfers, coupled with use of funds accumulated for the public safety facilities projects
drove the $2.0 million drop in fund balance. There were sufficient funds available to maintain the
10% Emergency and Cashflow Reserve.
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 2017-2018 Appropriations Limit calculation.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
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, the City successfully completed its implementation of actions
taken to address prior year internal control issues. No additional issues were raised during this
audit.
Child Development Program (Childcare) Audit
The Childcare Program had positive operating results, with $4.1 million in total revenues and
$3.9 million in expenditures for the fiscal year. The fund balance increased from $1.2 million to
$1.4 million. Approximately half of the residual funds have been accumulated for capital
improvements, most of which are planned for fiscal year 2017-2018. The audit resulted in no
adverse findings.
Single Audit
The City incurred a total of $1,060,526 in federal expenditures during fiscal year 2016-2017 that
fell under the parameters of this audit. The auditor identified the following major program to be
audited:
U.S Department of Transportation-Highway Planning and Construction – $564,538 supported
street improvements, Southern Heights bridge replacement, transit center connector, and
downtown transit/parking studies.
As required under the Single Audit Act, a number of separate reports are contained within the
document. Most of these reports comment on either compliance with Federal assistance
regulations or recommendations regarding the City's accounting practices. With respect to
compliance, the auditors found no material instances of noncompliance with laws, regulations,
contracts or grants applicable to our programs.
FISCAL IMPACT: No fiscal impact occurs by the City Council’s acceptance of these reports.
The fiscal year 2016-2017 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: http://docs.cityofsanrafael.org/Finance/reporting/FY16-17-CAFR.pdf
http://docs.cityofsanrafael.org/Finance/reporting/FY16-17-GANN.pdf
http://docs.cityofsanrafael.org/Finance/reporting/FY16-17-MOIC.pdf
http://docs.cityofsanrafael.org/Finance/reporting/FY16-17-Childcare.pdf
http://docs.cityofsanrafael.org/Finance/reporting/FY16-17-SingleAudit.pdf
W:\Council Material\Staff Reports\2017\City\YE-Financial-Audit Reports FY16-17.doc
SAN RAFAEL
THE CITY WITH A MISSION
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDING JUNE 30, 2017
San CRg,fae{ Corporate Center
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2017
City of San Rafael, California
1400 Fifth Avenue
San Rafael, California 94901
Prepared by the Finance Department of the City of San Rafael
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INTRODUCTORY
SECTION
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2017
I INTRODUCTORY SECTION I
TABLE OF CONTENTS
Table of Contents
Letter of TransmittaL .................................................................................................................................... v
Mission Statement and Vision Statement. ................................................................................................. xii
City Council and Staff .............................................................................................................................. xiii
Location Map ........................................................................................................................................... xiv
Organizational Chart ............................................................................................ ~ ..................................... xv
Certificate of Achievement for Excellence in Financial Reporting ......................................................... xvi
I FINANCIAL SECTION I
Independent Auditor's Report .................................................................................................................. 1
Management's Discussion and Analysis ................................................................................................... 5
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position .............................................................................................................. 23
Statement of Activities .................................................................................................................. 24
Fund Financial Statements:
Major Governmental Funds:
Balance Sheet ............................................................................................................................ 28
Balance Sheet -Reconciliation of Governmental Fund Balances to
Net Position of Governmental Activities .............................................................................. .3 0
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 3 1
Reconciliation of the Net Change in Fund Balances -Total Governmental
Funds with the Statement of Activities ................................................................................. .3 2
Proprietary Funds:
Statement of Net Position .......................................................................................................... 35
Statement of Revenues, Expenses, and Changes in Fund Net Position ..................................... 36
Statement of Cash Flows ........................................................................................................... 37
CITY OF SAN RAFAEL, CALIFORNIA
COlVlPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2017
Table of Contents
I FINANCIAL SECTION (Continued) I
Fiduciary Funds:
Statement of Fiduciary Net Position ......................................................................................... .41
Statement of Changes in Fiduciary Net Position ...................................................................... .42
Notes to Basic Financial Statements ................................................................................................. .43
Required Supplementary Information:
Schedule of the City's Proportionate Share of the Net Pension Liability ..................................... 99
Schedule of Contributions -Pension .......................................................................................... l 00
Schedule of Changes in Net OPEB Liability and Related Ratio ................................................ .103
Schedule of Contributions -OPEB ............................................................................................. 1 04
Schedules of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual -
Budgetary Basis
General Fund ............................................................................................................................ 1 06
Traffic and Housing Mitigation Special Revenue Fund .......................................................... l 07
Gas Tax Special Revenue Fund ............................................................................................... 108
Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual
Budgetary Basis
Essential Facilities Capital Projects Fund ................................................................................ ll0
Non-major Governmental Funds:
Combining Balance Sheets .......................................................................................................... 114
Combining Statements of Revenues, Expenditures, and Changes
in Fund Balance ................................................................................................................... 120
Budgeted Non-major Governmental Funds:
Combining Schedules of Revenues, Expenditures, and Changes
in Fund Balances -Budget and Actual.. ..................................................................... 126
11
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2017
Table of Contents
FINANCIAL SECTION (Continued)
Internal Service Funds:
Combining Statements of Net Position ....................................................................................... 136
Combining Statements of Revenues, Expenses and Changes in Fund Net Position ................... 138
Combining Statements of Cash Flows ........................................................................................ 140
Agency Funds:
Combining Statements of Changes in Assets and Liabilities ...................................................... 144
I STATISTICAL SECTION I
Financial Trends:
Net Position by Component -Last Ten Fiscal Years ....................................................................... 148
Changes in Net Position Last Ten Fiscal Years ............................................................................. 150
Fund Balances of Governmental Funds -Last Ten Fiscal Years ..................................................... 154
Changes in Fund Balance of Governmental Funds -Last Ten Fiscal Years .................................... 156
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years ..................... 158
Property Tax Rates -All Overlapping Governments-Last Ten Fiscal Years .................................. 159
Principal Property Tax Payers -Current Year and Nine Years Ago ................................................ 160
Property Tax Levies and Collections -Last Ten Fiscal Years ......................................................... 161
Debt Capacity:
Ratio of Outstanding Debt by Type -Last Ten Fiscal Years .......................................................... 162
Computation of Direct and Overlapping Debt .................................................................................. 163
Computation of Legal Bonded Debt Margin ..................................................................................... 164
Revenue Bond Coverage Parking Facility -Last Ten Fiscal Years ................................................. 165
iii
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2017
Table of Contents
I STATISTICAL SECTION (Continued)
Demographic and Economic Information:
Demographic and Economic Statistics -Last Ten Fiscal Years ....................................................... 166
Principal Employers -Last Nine Calendar Years ............................................................................. 167
Operating Information:
Full-Time Equivalent City Government Employees by Function
-Last Ten Fiscal Years ................................................................................................................. 168
Operating Indicators by FunctionlProgram -Last Ten Fiscal Years ................................................ 170
Capital Asset Statistics by FunctionlProgram -Last Ten Fiscal Years ............................................ 172
iv
October 12,2017
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, 2017, 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 fmancial statements for the fiscal year ended
June 30, 2017.
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 fmancial 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 fmancial 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 fmancial 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.
CITY OF SAN RAFAEL I 1400 FIFTH AVENUE. SAN RAFAEL, CALIFORNIA 94901 I CITYOFSANRAFAEL.ORG
Gary O. Phillips , Mayor' Maribeth Bushey, Vice Mayor· Kate Colin, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough. Councilmember
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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, fmancial, 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 1,2017 was
61,187, an increase of 0.1 % from the January 1,2016 population of60,582 .
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 WonderlandlParade of
Lights, and now one of 14 state Cultural Arts Districts. 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
progranuning; 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,
stonn 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.
The City and California Municipal Finance Authority compose the San Rafael Joint
Powers Financing AUth0l1ty, originally established by the City and former Redevelopment
CITY OF SAN RAFAEL i 1400 FIFTH AVENUE, SAN RAFAEL, CALIFORNIA 94901 : CITYOFSANRAFAEL.ORG
Gary O. Phillips, Mayor • Maribeth Bushey, Vice Mayor· Kate Colin, Council member • John Gamblin, Council member • Andrew Cuyugan McCullough, Councilmember
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Agency for the purpose of fmancing redevelopment and other proj ects. 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 2016-2017 marks the first year of implementation of Governmental Accounting
Standards Board Statement No. 75 (GASB 75), Accounting and Financial Reportingfor
Postemployment Benefits Other Than Pensions (OPEB). The purpose of this reporting
requirement is to improve the decision-making usefulness of information in fmancial
reports and enhance its value for assessing accountability and inter-period equity by
requiring recognition of the entire net OPEB liability and a more comprehensive measure
of OPEB expense, much as GASB 68 provided a similar approach for defined benefit
pension obligations. The net OPEB liability of$33.8 million reported as of June 30, 2017,
is based on the most recent actuarial valuation as of June 30,2015. The City's
implementation of this new requirement is one year early, in order to increase transparency
and achieve parity with the reporting methodology used for defmed benefit pensions.
The City's net pension liability under GASB 68 reported as of June 30, 2017 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, 2016. The next
annual report is anticipated to be completed within the upcoming 30 days. The City is
aware of factors that may have an impact on the future measurement of the net pension
liability. For example, the investment returns of 11.73% for the fiscal year ended
June 30, 2017 well exceeded the target of 7.25%. In addition, the MCERA Board is
scheduled to consider a reduction in the discount rate in the preparation of its next actuarial
valuation, as of June 30, 2017. The City does not expect these factors to result in a net
material difference in the measurement of its net pension obligation of$167.1 million
reported in this year's financial reports.
During fiscal year 2016-2017, the City made significant progress towards improving our
essential facilities. Building from over a decade of community efforts to address San
Rafael's aging essential public safety facilities, the Essential Facilities project includes a
total of seven projects recommended for either replacement or renovation, including a new
CITY OF SAN RAFAEL ! 1400 FIFTH AVENUE, SAN RAFAEL, CALIFORNIA 94901 I CITYOFSANRAFAEL.ORG
Gary O. Phillips, Mayor' Maribeth Bushey, Vice Mayor' Kate Colin, Councilmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember
vii
public safety center across the street from City Hall. These new buildings will be
seismically-safe and provide modem facilities for our firefighters, police officers,
paramedics and dispatchers. They will include an upgraded dispatch and communications
center, and a new classroom and training tower for emergency preparedness. Construction
for both Fire Station 57, located at 3530 Civic Center Drive, and Fire Station 52, located at
210 3rd Street, began in June 2017 and are expected to be completed in the summer of
2018. The Public Safety Center demolition work is underway, and construction of the
building will begin within the next few months.
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 72% of overall sales tax revenues.
The California economy continues to recover from the recession. Although the 4.9%
unemployment rate remains above the national average of 4.4%, it continues on a path
towards convergence 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. Over the past year, State revenues
have lagged behind expectations. The recent surge in the stock market has breathed new
life into the revenue forecast; however, capital gains are the State's most volatile and
unpredictable revenue source.
Notwithstanding the State's $10.1 billion in projected reserves, the Governor's revised
budget for the upcoming year includes a $400 million deficit and major challenges
persist. The "wall of debt", which when pension and retiree medical liabilities are
considered, reaches into the hundreds of billions of dollars.
Locally, the 3.0% Marin County unemployment rate is among the lowest in the State.
According to the Marin Economic Forum, the County added 4,000 payroll jobs and
gained approximately 250 payroll businesses in 2016. Real personal income is projected
to grow at an average rate of2.5% over the next few years after inflation, and Marin
County's taxable sales per capita are the third highest in the State. Marin County median
home prices are over $1.3 million and continue to rise, while the recovery of commercial
real estate has led to average rents increasing to $2.80 per square foot.
CITY OF SAN RAFAEL i 1400 FIFTH AVENUE. SAN RAFAEL. CALIFORNIA 94901 I CITYOFSANRAFAEL.ORG
Gary O. Phillips. Mayor' Maribeth Bushey. Vice Mayor· Kate Colin, Councllmember· John Gamblin, Councilmember • Andrew Cuyugan McCullough, Councilmember
viii
Demographic Data
The following is a sample of demographic and economic attributes that make San Rafael an
exceptional place to live and work.
[2S] Economic development organizations in San Rafael include the San Rafael Chamber of
Connnerce, Downtown Business Improvement District, and the Marin Economic
Forum.
[29 Marin County's top 10 employers include Kaiser PeImanente, Marin General Hospital,
BioMarin Pharmaceutical, Autodesk, Dominican University of California, Bradley
Real Estate, Novato Community Hospital, Wells Fargo, FICO, and W Bradley Electric.
[2S] 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).
[2S] 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%).
[2S] Several hotels and motels support tourism activity, led by a combined 235 rooms in the
Embassy Suites and Four Points Sheraton. Citywide, the total number of hotel rooms
is 787.
~ 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 $2,300 to $2,700, while two bedroom apartments go
for $3,000 to $3,600. The median home value in San Rafael is $955,000.
Recent growth and economic vibrancy:
• San Rafael ranked No.3 on Milken Institute Best-Perfonning Cities Index. This
index provides an objective benchmark for examining the underlying factors and
identifying unique characteristics of economic growth in metropolitan areas. The
index uses metrics such as job creation, wage gains, and technology developments
to evaluate the relative growth of metropolitan areas. California secured six of the
Top 25 spots among large metros, led by four metros in the San Francisco Bay
Area. Additionally, two Bay Area metros were in the Top 10 of small metros. San
Rafael ranks fourth in one-year high-tech GDP growth and concentration and has
maintained the fastest five-year high-tech growth. Five-year high-tech GDP growth
was 67 percent greater than the national average. Key strengths highlighted
included our educated workforce and cluster of biotech employers.
• San Rafael ranked No.3 on the SMU National Center for Arts Research Vibrancy
Index the overall index is composed of three dimensions: supply, demand, and
government support. Supply is assessed by the total number of arts providers in the
community, including the number of arts and culture organizations and employees,
independent artists, and entertainment flnns. Demand is gauged by the total
CITY OF SAN RAFAEL ! 1400 FIFTH AVENUE , SAN RAFAEL, CALIFORNIA 94901 ; CITYOFSANRAFAEL .ORG
Gary O. Phillips, Mayor' Maribeth Bushey, Vice Mayor' Kate Colin, Councllmember • John Gamblin, Councilmember • Andrew Cuyugan McCullough. Councilmember
ix
nonprofit arts dollars in the community, including program revenue, contributed
revenue, total expenses, and total compensation. Lastly, the level of government
support is based on state and federal arts dollars and grants.
• San Rafael served as the host city and basecamp for production of the Netflix
Paramount Television Series 13 Reasons Why bringing in over $130,000 in
transient occupancy tax dollars and pennitting fees.
• San Rafael welcomed Sonoma Marin Area Rail Transit Service in August 2017 and
San Rafael is the nl0st population destination on the connnuter rail service line.
Construction of the Larkspur extension which will complete the southern end of the
commuter rail line is set to commence in Fall 2017.
• Vacancy rates are maintaining all-time lows for retail and office space and
industrial space in San Rafael. Asking rents have increased throughout all market
types.
• Andy's Market relocated to the new Loch Lomond Marina Village Development.
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 accolU1ting data is collected so as to prepare
reports in confonnance 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 offmancial 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.
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.
CITY OF SAN RAFAEL ! 1400 FIFTH AVENUE. SAN RAFAEL, CALIFORNIA 94901 ! CITYOFSANRAFAEL.ORG
Gary O. Phill ips, Mayor· Marlbeth Bushey, Vice Mayor • Kate Colin, Councilmember· John Gamblin, Councilmember· Andrew Cuyugan McCullough, Councllmember
x
ACKNOWLEDGMENTS
The preparation of this City-wide document would not have been possible without the
assistance of each of the City's departments. In addition, Finance support staff Helena
Mufioz, Karen Landesman and Whitney Fry, led by Accounting Manager Van Bach were
key to the timely issuance of this report. 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 detennine its
eligibility. If accepted, this will mark the sixth consecutive year for which the City received
the award.
Lastly, we appreciate the ongoing leadership and support from the Mayor, City
Councihnembers and the City Council Finance Committee. Their strong commitment to
financial accountability and stewardship provide inspiration to the organization and
motivate a high level of achievement.
Respectfully submitted,
Mark Moses
Finance Director
CITY OF SAN RAFAEL I 1400 FIFTH AVENUE, SAN RAFAEL, CALIFORNIA 94901 1 CITYOFSANRAFAEL.ORG
Gary O. Phillips, Mayor' Maribeth Bushey, Vice Mayor· Kate Colin, Councllmember • John Gamblin, Councllmember • Andrew Cuyugan McCullough, Council member
xi
SAN 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
environnient 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
xii
SAN RAFAEL
THE CITY WITH A MISSION
City Council aIld Staff
City COlUlcil
Gary O. Phillips, Mayor
Maribeth Bushey, Vice Mayor
Andrew McCullough, COlUlciJmember
Kate Colin, COlUlcilmember
John Gamblin, COlUlcilmember
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
Deborah Younkin, Interim Community Services Director
Mark Moses, Finance Director
Doris Toy, District Manager I Engineer-SRSD
Xlll
Greater San Francisco
Bay-Area 4 · s
LOCATION
xiv
....-:::;;-=---'~A::~ SAN RAFAEL
~ THE CITY WITH A MISSION
Organizational Chart
Information
Technology
Parking
Services
I Finance
I
Assistant City
Manager
r----
f----
f--
f----
I~
Police I I
Human
Resources
Volunteer &
Sustainability
I
Fire
Electorate
City Attorney
Mayor
& City Council
City Manager
I
I
Community Community
Services Development
City Clerk
Boards &
Commissions
I
Public Works I
I I
Library I Economic
Development
~ I
..
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 30,2016
Executi ve Director/CEO
XVI
.. L[
.
roE =1
... ............ .r.-...
1Wya{ qrouncf Coffee Shop 4th and (]3 Street
FINANCIAL SECTION
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, 2017, and the related notes to the financial statements,
which collectively comprise the City's basic fmancial statements as listed in the Table of Contents.
Management's Responsibility f~r 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 19%, 35%,
and 15%, respective, of the assets, net position, and revenues of the entity-wide reporting entity. These
component unit fmancial 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 fmancial 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 fmancial 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.
1
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, 2017, 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.
Emphasis of Matters
Management adopted the prOVIsIOns of the following Governmental Accounting Standards Board
Statement during the year ended June 30, 2017 that had material effects on the financial statements, as
discussed in Note 1 to the financial statements:
• Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions.
The emphasis of this matter does not constitute a modification to our opinion.
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, as listed in the Table of Contents, be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The 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.
2
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 infonnation 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 infonnation
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
Infonnation 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 28,
2017 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. 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 perfonned in
accordance with Government Auditing Standards in considering the City's internal control over financial
reporting and compliance.
/Wl(;\ ~ ~ i ~SSO~
Pleasant Hill, California
September 28,2017
3
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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, 2017. Please read it in conjunction with the basic financial statements
and the accompanying notes to those basic financial statements.
FINANCIAL HIGHLIGHTS
Government-wide:
In the fiscal year ended June 30, 2017, the City of San Rafael implemented Governmental Accounting
Standards Board Statement No. 75, Accounting and Financial Reportingfor Postemployment Benefits Oher
Than Pensions. The implementation of this pronouncement required a prior period adjustment and reduced
the City's net position as of July 1, 2016, by $20.6 million, of which $20.3 million was for governmental
activities and $0.3 million was for business-type activities.
• Net Position -The assets of the City exceeded its liabilities as of June 30, 2017 by $125.6 million.
• Activities -During the fiscal year the City's total revenues of $102.7 were greater than expenses of
$98.0 million for governmental and business-type activities.
• Changes in Net Position -The City's total net position increased by $4.7 million in fiscal year 2016-2017
as compared to the adjusted net position of the previous year. Net position of governmental activities
increased by $4.1 million, while net position of the business-type activities increase by $556 thousand.
Fund Level:
• Governmental Funds -As of the close of fiscal year 2016-2017, the City's governmental funds reported
combined ending fund balances of $46.1 million, a decrease of $4.1 million from fund balance of the prior
year. Of this total amount, $0.5 million is nonspendable, $25.8 million is restricted, $3.5 million is
committed, $15.0 million is assigned, and $1.3 million is unassigned.
• Governmental fund revenues were $97.8 million, a decrease of $2.8 million from the previous fiscal year.
The decrease is attributable to a number of one-time revenues that occurred during the previous year
coupled with a slowdown in sales tax-related revenues and third party emergency transport services
billings. Aside from these items, the City experienced modest to moderate growth in revenues.
• Governmental fund expenditures increased by $4.2 million to $102.7 million, from $98.5 million in the
prior year, due primarily to public safety infrastructure and other capital improvement program
expenditures.
• Enterprise fund operating revenue grew slightly by $57 thousand to $5.3 million. Enterprise operating
expenditures totaled $3.8 million, a decrease of $0.8 million over the previous year. The expenditure
decrease was attributable primarily to the pension-related accounting adjustments in 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
5
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30,2017
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 23 through 25 of this report.
6
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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 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 114 through 144 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 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 on the page immediately following each governmental fund financial statement.
The City has twenty-nine governmental funds, of which four 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 four major funds are: the General
Fund, Traffic and Housing Mitigation, Gas Tax and Essential Facilities Capital Projects. Data from the other
twenty-five governmental funds are combined into a single, aggregated presentation. The basic governmental fund
financial statements can be found on pages 28 through 32 of this report. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements on pages 114 through 133 of this report.
Proprietary Funds The City maintains two different types of proprietary funds -enterprise funds and internal
service funds. 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.
7
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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 35 through 37 of this report.
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 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
41 through 42 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 95 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, traffic and housing mitigation, and essential facilities capital projects). 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 99 through 108 of
this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Statement of Net Position
Net position is one measurement of the City's financial position. During this fiscal year, the net position of the
City was $115.5 million from Governmental Activities and $10.1 million from Business-type Activities, for a total
of$125.6 million. This represents an increase of$4.7 million from the prior year net position.
8
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
The following is the condensed Statement of Net Position for the fiscal years ended June 30, 2017 and 2016:
Summary of Net Position
(in thousands)
Governmental Activities Increase Business-Type Activities Increase
2017 2016 (Decrease) 20li 2016 (Decrease)
Current and other assets $83,145 586,543 ($3,398) 53,267 $3,050 S217
Capital assets 199,506 194,086 5,420 16,444 16,699 (255)
Total assets 282,651 280,629 2,022 19,711 19,749 (38)
Deferred outflows (Notes 9 and 11) 76,869 57,287 19,582 2,394 1,939 455
Current and other liabilities 12,923 11,843 1,080 432 500 (68)
Noncurrent liabilities 209,678 161,643 48,035 10,882 10,259 623
T otalliabilities 222,601 173,486 49,115 11,314 10,759 555
Deferred inflmvs (Notes 9 and 11) 21,403 32,710 (11,307) 693 1,107 (414)
Net Position:
Net investment in capital assets 199,203 193,707 5,496 10,969 10,958 11
Restricted 29,225 31,287 (2,062) 0 0 0
Umestricted (112,913) (93,274) (19,639) (872) (1,136) 264
Change due to implementation of (20,340) 20,340 (280) 280
GASB 75 (See Note 1 Q)
Total net position $115,515 $111,380 $4,135 510,097 $9,542 $555
Current Governmental assets decreased by $3.4 million, primarily due to the use of funds set aside for public safety
facility construction and improvements. The $5.4 million increase in Capital assets reflects this use of resources.
Current and other liabilities increased by approximately $1.1 million, primarily due to an increase in accounts
payable due to a higher level of construction activity. Noncurrent governmental liabilities increased by $48.0
million, mostly attributable to the increase in net pension and OPEB liabilities (Notes 9 and 11). Of this amount,
$20.3 million is attributable to prior year OPEB liabilities. These liabilities are incorporated into the restated net
position of the previous year.
The net position in business-type activities reflects the fiscal activity of the Parking Services program and increased
by $555 thousand from the previous year. The $623 thousand increase in noncurrent liabilities is driven by the
increase in net pension and OPEB liabilities, although this is partially offset by the $280 thousand restatement of
net position prompted by the first year implementation of GASB 75. Increases to deferred outflows and decreases
to deferred inflows under the reporting requirements of GASB 68 and GASB 75 offset the liability increase, thus
contributing to the positive impact on net position.
9
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
At June 30, 2017, the largest portion of net position in the amount of $210.2 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.
A portion of the City's net position, $29.2 million, is subj ect to external restrictions, and their use is determined by
those restrictions whether legal or by covenant. The remaining portion, unrestricted negative $113.8 million,
represents the extent to which the net investment in capital assets and restricted net position exceed total assets.
:Ket Position as of 6/3012017
Total = $ 125,612 (in thousands)
Invested in Capital Assets (net)
Restricted
Unrestricted
Total Net Position
10
$210,172
29,225
(113 ,785)
$125,612
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
Statement of Activities -Governmental
The following is the condensed Statement of Activities and Changes in Net Position for the fiscal years ended
June 30, 2017 and 2016:
Summary of Changes in Net Position
[in thousands)
Governmental Activities Increase
2017 2016 [Decrease]
REVENUES
Program revenues:
Charges for servi ces $17282 $21,3"10 [$4,028]
Operating grants and contributions 3,965 4,678 [713]
Capi tal grants and contri buti ons 1,703 1,471 232
Total program revenues 22,950 27,459 [4,509]
General revenues:
Property taxes 23,343 19,999 3,344
Sales taxes 31,819 34,348 [2,529]
Paramedic tax 5,486 4,226 1,260
Transient occupancy tax 2,985 3,063 [78]
Franchi se tax 3,611 3,418 193
Business license tax 2,860 2,825 35
Other taxes 1,739 3,465 [1,726]
Investment earni ngs 211 300 (89)
Mi scell aneous 2,449 1,387 1,062
Total general revenues 74,503 73,031 1,472
TOTAL REVENUES 97,453 "100,490 [3,037)
EXPENSES
G ener al government "10,996 12,953 [1,957)
Publ i c safety 44,367 55,400 [11,033)
Public works and parks 19,846 22,929 [3,083)
Communit)Xeconomic development 4243 4,307 (64)
Cui tLlre and recreati on 14,131 15,027 (896)
I nterest on long-term debt 271 277 (6)
TOTAL EXPENSES 93,854 110,893 [17,039)
EXCESS [DEFICIENCY) OF REVENUES
oVER[UNDE~EXPENSES 3,599 [10,403) 14,002
Transfers in 536 449 87
Net Change in Net Position 4,135 [9,954) 14,089
Beginning Net Position 111,380 141,674 [30,294)
Change due to implementation of
G ASB 75 [See Note 10) [20,340) 20,340
Ending Net Position, June 30 $115,515 $111,380 $4,135
11
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
The City's governmental activities net position increased by $4.1 million during fiscal year 2016-2017. Charges for
services were approximately $4.1 million lower than those of the previous year. Most of this decrease, $2.6 million,
stems from a change in the reporting of reimbursements to the City from SRSD. (In the previous year, the
reimbursements were reported as a charge for services. Going forward, these charges are eliminated because their
source is a component unit of the City.) The City also experienced a decline in third-party billings for emergency
medical transport services.
Approximately half of the $3.3 million increase in property tax revenues results from a reporting change in which
property transfer tax revenues are now being accounted for within the property tax category. In the prior year, it
was reported under "Other taxes." The remainder of the growth reflects economic growth (approximately five
percent) coupled with some one-time distributions from prior year activity. The year-over-year $2.5 million
decrease in sales taxes is attributable to a leveling off in sales tax-related growth in the current year combined with
a $1.2 million one-time sales tax revenue in the previous year.
Other taxes dropped from $3.5 million to $1. 7 million in the current year because of the change in reporting of the
property transfer tax, as described previously. Finally, Miscellaneous revenues increased by just under
$1.1 million, with most of the increase attributable to County of Marin payments toward the Fire Station 57
construction, one of the active Essential Facilities Capital projects.
The fiscal year 2016-2017 governmental expenses were $17.0 million less than those of the previous fiscal year.
This decrease is driven by $26.7 million of pension expense adjustments recorded under GASB 68. The remaining
year-over-year increase is attributable to other operating costs, which increased by approximately $9.7 million.
The following graph shows governmental revenues by source:
Revenues by Source
Governmental Activities
Total-$97AS3
(in thousands)
12
• Charges for se rvices
• Operating grants and
contri butions
Capital grants and
contri butions
• Taxes
Investment earnings
• Miscellaneous
$50
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
Expenses and Program Revenues
Governmental Activities
$45 -----------===------
$40
$35
$30
$25
$20
$15
$10
$5
$0
~ ... ~q;
~o~
",'li
()'l,
~(,
o
• program Revenues ~(,o~. Expenses
Total expenses for governmental activities were $93.6 million (excluding interest on long-term debt of $271
thousand). Program revenues offset total expenditures as follows:
• Those who directly benefited from programs contributed $17.3 million in charges for services.
• A total of $5.7 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 $70.6 million.
Functional expenses for the year ended June 30, 2017 were as follows:
Expenses by Function
(in thousands)
Function Amount Percent of Total
General government $10,996 11.6%
Public safety 44,367 47.3%
Public works and parks 19,846 21.0%
Community development 4,243 4.5%
Culture and recreation 14,131 15.1%
Interest on debt 271 0.3%
Total expenses $93,854 100%
13
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
Statement of Activities -Business-type
Summary of Cbang,es in N,et Position
For t he periods ended June 30, (in thousands)
Revenues
Program revenues:
Charges for services
Total program revenues
General revenues:
rvIiscenaneous
Total general revenues
TOTAL REVENUES
Expenses
General government
TOTAL EXPENSES
EXCESS (DEFICIENCY) OF REVEJ\TU'ES
OVER (UNTIER) EXPENSES
OTHER FINANCING SOIJRCES (USES)
Transfers out
Total Other Financing sources (uses)
Net Change in Net Position
Fund Balance, Begimung as of 7/1116
Change due to nnplementation of
GASB 75 (See Note 1Q)
Net Position, Endttlg as of 6/30/17
Busmess-Type Activities
2017 2016
$5,268
5,268
11
11
5,279
4,188
4,188
1,091
(536)
555
9,5 42
$10,097
$5,212
5,212
15
15
5227
4,763
4,763
464
(448)
16
9,806
(280)
$9,542
Increase
(Decrease)
$56
56
(4)
(4)
52
(575)
(575 )
627
(88)
539
(264)
280
$555
The net position for business-type activities was increased by $555 thousand in fiscal year 2016-2017 from the
prior fiscal year.
• Parking services is the City's only business-type activity with income derived from program revenues of
$5.3 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 $2.1 million. Total expenses for parking services were $4.2 million and transfers out to
general fund and non-major governmental fund for support totaled $536 thousand during the fiscal year
2016-2017. The year-over-year decrease in expenditures was driven by routine pension-related accounting
adjustments in the parking fund.
14
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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, 2017, the City reported a combined ending fund balance of $46.1 million of all its governmental
funds (a decrease of 4.0 million from the prior year): $0.5 million is non-spendable, $25.8 million is restricted,
$3.5 million is committed, $15.0 million is assigned and $1.3 million is unassigned.
General Fund -The General Fund is the primary operatingfund of the City.
General Fund -The fund balance of the General Fund as of June 30, 2017 was $16.7 million (a decrease of
$2.0 million from the prior year balance): $0.5 million is non-spendable, $14.9 million is assigned, and $1.3 million
is unassigned. The assigned portion of the balance includes $7.2 million for emergency and cash flow needs.
General Fund Budgetary Highlights:
The original adopted General Fund budget projected total revenue of $74.9 million and transfers-in of $1.2 million
for total resources of $76.1 million. This budget appropriated expenditures of $69.9 million and transfers-out of
$6.0 million for total appropriations of $75.9 million. Transfers-out were later increased to $7.2 million in order 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 $73.4 million, were lower than the original budgeted revenues by $1.5 million. This negative
performance was primarily due to a decline in sales tax revenues. Actual expenditures of $69.5 million were less
than the original budgeted expenditures by $0.4 million, primarily due to staffing vacancies.
Fiscal year 2016-2017 General Fund revenues and transfers of $74.8 million exceeded expenditures and operating
transfers out of $71.3 million by $3.5 million. Capital transfers to the Essential Facilities Capital Projects fund
reduced the net results by $5.4 million. Net operating results were sufficient to ensure that the General Fund
Emergency and Cash Flow Reserve maintained its target level of 10 percent of actual expenditures.
15
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30,2017
Summary of General Fund Budget and Actual
For the fiscal year ended June 30,2017 (in thousands)
Adopted Budget Revised Budget
Revenues $74,942 $74,117
Transfers in 1,213 1,382
Total resources 76,155 75 ,499
Expenditures 69,901 $70,526
Transfers out (operating) 1,936 1,796
Total uses 71,837 72,322
Net Operating Results $4,318 $3,177
Transfers out (capital) 4,040 5,417
Net Results after capital transfers $278 ($2,240)
Actual
$73,366
1,382
74,748
69,520
1,796
71,316
$3,432
5,417
($1,985)
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
$10.4 million to $9.l million. Revenues totaled $0.2 million, while $1.8 million was charged against this fund to
support the maintenance of the City-wide traffic model, including the Tamalpais Avenue queue cutter and Freitas-
Las Gallinas Intersection Improvement. The balance in the fund is being held in anticipation of maj or 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 proj ects. Gas tax revenues exceeded expenditures and net transfers by $70 thousand in fiscal year
2016-2017 leaving the ending fund balance effectively unchanged at $6.7 million.
Expenditures during fiscal year 2016-2017 totaled $4.6 million. In addition to routine street-related maintenance,
expenditures include $703 thousand for Downtown Rail Readiness, $1.6 million for miscellaneous street
resurfacing, $580 thousand for Grand Avenue Pathway Connector, $232 thousand for Brookdale Avenue Retaining
Wall Repair and $146 thousand for Emergency Slide Repair and Road Repair.
The largest sources of revenues were $1.1 million in development impact fees, $1.2 million from State gasoline
taxes, $635 thousand in local Measure A and $492 thousand in Measure B funding.
Essential Facilities Capital Projects Fund -The City uses this fund to account for major capital improvements to
public safety facilities. The currently active construction projects are Fire Station 57, Fire Station 52 and the Public
Safety Center. Expenditures during fiscal year 2016-2017 totaled $6.1 million, of which $5.4 million was
transferred from the General Fund from an allocation of Measure E Transaction and Use Tax, and the remainder
from reimbursements from the County of Marin for its share of Fire Station 57 costs.
Non-major Governmental Funds -The City's non-major funds are presented in the basic financial statements in
the aggregate. At June 30, 2017, non-major funds had a total fund balance of$13.6 million, a $0.8 million decrease
from the previous year. While the Childcare and Grants funds reported increases of $216 thousand and $139
thousand, respectively; the Stormwater Fund spent down $772 thousand as it completed major work on the Rossi
Pump Station, and the State Lands Fund (reported under Development Services) expended a net $318 thousand in
support of a right-of-way purchase.
16
CITY OF SAN RAE1IEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
Of the ending total non-major fund balances of $13.6 million: $10.0 million (74%) is legally restricted for specific
purposes by external funding source providers, $3.5 million (25%) 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.
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 $764 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 $57 thousand in fiscal year 2016-2017 to $5.269 million.
The Enterprise fund operating expenses were $3.8 million in fiscal year 2016-2017, a decrease of $0.8 million over
the prior fiscal year.
The City's Internal Service Funds are also reported in this Proprietary Fund classification. In
fiscal year 2016-2017, the Internal Services Funds were comprised of: Building Maintenance, Vehicle
Replacement, Equipment Replacement, Employee Benefits, Liability Insurance, Workers' Compensation, Dental
Insurance, Employee Retirement, OPEBlRetiree Medical, Radio Replacement, Telephone Replacement and Sewer
Maintenance. The net position of the Internal Service Funds increased by $2.2 million, $1.9 million of which was
in the building maintenance fund reflecting the growth in depreciable City infrastructure-related assets. The other
Internal Service Funds reported small-to-moderate changes to their respective net positions.
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, 2017
amounts to $216.0 million, net of accumulated depreciation of $167.9 million. This investnlent 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 $12.0 million, offset by accumulated depreciation of
$6.9 million.
Additions to capital assets during fiscal year 2016-201 7 included:
• Building and structures
• Terra Linda Recreation Center Pool House
~ Infrastructure: $9.8 million
• Downtown Rail Readiness -$3.8 million
• Tamalpais Avenue Queue Cutter Improvement -$1.9 million
• Rossi Pump -$1.7 million
• H Street Drainage Improvement -$2.4 million
17
~lll' OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
The City's Capital Assets for the fiscal years ending June 30, 2017 and 2016 were as follows:
Governmental Activities
Land
Construction in progress
Land improvements
Buildings and structures
Machinery and equipment
Infrastructure
Less accumulated depreciation
Subtotal Governmental Activities
Business-type Actil>ities
Land
Buildings and structures
Machinery and equipment
Less accumulated depreciation
Subtotal Business-type Activities
Total Capital Assets
Summary of Capital Assets
(in thousands)
2017
$83,662
11.847
9,020
42.896
18,841
197.025
(163,785)
199.506
8,621
10,714
1,212
(4.103)
16,444
$215.950
2016
$83,261
11.520
9~020
41.667
18.477
187,2.13
(157.072)
194.c~86
8,621
10.114
1,267
(3,902)
16)00
$210,786
Additional infonnation on the City's capital assets can be found in Note 5 on pages 63 through 64 of this report.
Debt Administration
The City's debt obligations were stable year-over year, and reflect payments of principal made during the year. The
debt of the fonner 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 6 of the financial statements for
additional infonnation on the debt obligations of the City and Note 15 for additional information on the Successor
Agency.) The City's long-tenn obligations for the fiscal years ending June 30, 2017 and 2016 were as follows:
Summary ofL-ang-Term Debt
(in thousands)
Governmental Activity Debt:
2010 Ta..xable Pension Obligation Bonds
PG & E City Hall HV AC Retrofit Note Payable
PG & E Street Light Retrofit Note Payable
Subtotal Governmental Activity Debt
Business-type Debt:
PG & E Parking Lot Lighting Retrofit Note Payable
2012 Authority Lease Revenue refunding Bon~ as adjusted
Subtotal Busmess-type Debt
Tot.al Long-Term Obligations
18
2017
$4,390
213
91
4,694
41
5,434
5,475
$10)69
2016
$4,490
246
133
4,869
48
5,693
5,741
$10,610
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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, although sales tax revenues have experienced a leveling off. As the City
looks ahead to fiscal year 2017-2018, 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 4.9% unemployment rate remains above
the national average of 4.4%, 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 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 3.0% Marin County unemployment rate is the second lowest in the State. According to the Marin Economic
Forum, the County added 4,000 payroll jobs and gained approximately 250 payroll businesses in 2016. Real personal
income is projected to grow at an average rate of just over 2.5% over the next year, and Marin County's taxable sales per
capita are the third highest in the State. Marin County median home prices now exceed $1.3 million and continue to rise,
while the recovery of commercial real estate has led to stable rents increasing to an average of $2.80 per square foot.
The City's general fund is fueled by the momentum of five 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 2017-2018 with approximately $4.8 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 2017-2018, these taxes are proj ected to
increase by approximately three percent.
The City's second largest tax generator is property tax. The City is expecting the fiscal year 2016-2017 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.
19
CITY OF SAN RAFAEL
Management's Discussion and Analysis
Fiscal Year Ended June 30, 2017
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 three-year contract terminating on
October 31, 2019, the City's labor units are all operating under two-year 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 fiscal 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 fmancial 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.
20
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.
21
CITY OF SAN RAP AEL
STATEMENT OF NET POSITION
JlJNE 30, 2017
Component
Unit
San Rafael
Sanitation
Activities Activities Total District
ASSETS
Cash and investments available for operations (Note 2) $64,866,135 $3,217,411 $68,083,546 $24,536,913
Restricted cash and investments (Note 2) 702,161 702,161
Receivables:
Accounts 2,333,440 50,543 2,383,983 48,157
Taxes 7,481,603 7,481,603
Grants 123,581 6,507 130,088
Interest 169,010 169,010
Loans (Note 4) 654,612 654,612
Long-term receivable from the Successor Agency (Note 15D) 761,773 761,773
Long-term receivable from San Rafael Sanitation District (Note 4G) 4,527,836 4,527,836
Internal balances (Note 3B) 162,051 (162,051)
Prepaid expenses and others 1,362,605 154,835 1,517,440 54,842
Capital assets (Note 5):
Nondepreciable 95,509,234 8,620,853 104,130,087 387,361
Depreciable, net 103,996,931 111,819,685 48,004,957
Total Assets 282,650,972 19,710,852 302,361,824 73,032,230
DEFERRED OUTFLOWS
Deferred outflows related to pension (Note 9) 72,653,722 2,353,734 75,007,456
Deferred outflows related to OPEB (Note 11) 4,214,824 40,176 4,255,000
Total Deferred Outflows 76,868,546 2,393,910 79,262,456
LIABILITIES
Accounts payable 8,416,779 90,048 8,506,827 620,794
Deposits payable 101,146 101,146
Interest payable 46,547 46,547
Developer deposits payable 547,699 547,699
Unearned revenue 367,589 367,589
Claims payable (Note 13):
Due in one year 2,653,288 2,653,288
Due in more than one year 6,094,050 6,094,050
Compensated absences (Note 1K):
Due in one year 556,116 17,703 573,819
Due in more than one year 3,892,816 123,922 4,016,738
Long-term debt (Note 6):
Due in one year 280,172 276,816 556,988
Due in more than one year 4,413,151 5,198,149 9,611,300
Long-term payable to the City of San Rafael (Note 4G) 4,527,836
Net OPEB liability (Note 11) 33,466,002 318,998 33,785,000
Net pension liability (Note 9) 5,242,181
Total Liabilities 11,314,364 233,915,841 5,148,630
DEFERRED INFLOWS
Deferred inflows related to pension (Note 9) 21,402,737 693,376 22,096,113
Total Deferred Inflows 21,402,737 693,376 22,096,113
NET POSITION (Note 8):
Net investment in capital assets 199,202,842 10,968,642 210,171,484 48,392,318
Restricted for:
Special revenue projects:
Housing and street improvements 16,575,903 16,575,903
Stormwater 189,087 189,087
Emergency medical services 1,744,530 1,744,530
Other 6,564,442 6,564,442
Capital projects 3,984,436 3,984,436
Debt service 167,245 167,245
Total Restricted Net Position 29,225,643 29,225,643
Umestricted 012,913,181) (871,620) 0 13 ,784,801 2 19,491,282
Total Net Position $10,097,022
See accompanying notes to financial statements
23
FunctionslPrograms
Primary Government
Governmental Activities:
General government
Public safety
Public works and parks
Community development
Culture and recreation
CITY OF SAN RAFAEL
STA TEMENT OF ACTIVITIES
FOR THE YEAR ENDED JU]'ffi 30, 2017
Expenses
Charges for
Services
$421,393
4,264,939
1,804,698
3,850,107
6,941,013
Program Revenues
Operating
Grants and
Contributions
$168,782
996,507
2,452,581
347,481
Interest on long-term debt and fiscal charges
$10,996,269
44,366,734
19,845,719
4,242,743
14,131,000
271,263
Total Governmental Activities
Business-type Activities
Parking services
Total Business-type Activities
Total Primary Government
Component Unit
San Rafael Sanitation District
93,853,728
4,188,152
4,188,152
$98,041,880
$11,255,194
General revenues:
Taxes:
Property
Sales:
Sales and Use
17,282,150
5,268,991
5,268,991
$22,551,141
$16,014,016
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
3,965,351
$3,965,351
$ 36,945
Net Position, beginning of year, as adjusted (Note 1Q)
Net Position, end of year
See accompanying notes to financial statements
24
$
Capital
Grants and
Contributions
$1,702,993
1,702,993
$1,702,993
79,245
Net (Expenses) Revenues and Changes in Net Position
Component
Primary Government Unit
San Rafael
Governmental Business-type Sanitation
Activities Activities Total District
($10,406,094) ($10,406,094 )
(39,105,288) (39,105,288)
(13,885,447) (13,885,447)
(392,636) (392,636)
(6,842,506) (6,842,506)
(271,263) (271,263)
(70,903,234) (70,903,234)
$1,080,839 1,080,839
1,080,839 1,080,839
(70,903,234 ) 1,080,839 (69,822,395)
$4,875,012
23,343,140 23,343,140 1,528,047
20,255,493 20,255,493
7,689,925 7,689,925
3,844,963 3,844,963
28,878 28,878
5,485,637 5,485,637
2,984,758 2,984,758
3,610,824 3,610,824
2,774,803 2,774,803
1,824,830 1,824,830
210,628 10,810 221,438 97,090
2,448,604 2,448,604
536,000 (536,000)
75,038,483 (525,190) 74,513,293 1,625,137
4,135,249 555,649 4,690,898 6,500,149
111,380,055 9,541,373 120,921,428 61,383,451
$115,515,304 $10,097,022 $125,612,326 $67,883,600
25
FUND FINANCIAL STATEMENTS
Major funds are defmed 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 2016-2017:
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.
ESSENTIAL FACILITIES CAPITAL PROJECTS FUND
Established to account for major capital improvements to public safety facilities.
27
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
Compensated absences
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
CITY OF SAN RAP AEL
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2017
Special Revenue Funds
Traffic and
Housing
General Mitigation Gas Tax
$13,434,043 $9,227,743 $7,009,256
1,257,061 46,441
7,109,197 109,688
167,018
230,973 193,573
761,773
277,473
$23,237,538 $9,421,316 $7,165,385
$4,144,408 $270,227 $441,689
79,411 15,659
387,085
64,189
4,675,093 285,886 441,689
1,096,240
761,773
1,858,013
508,446
9,135,430 6,723,696
14,900,945
1,295,041
16,704,432 9,135,430 6,723,696
$23,237,538 $9,421,316 $7,165,385
See accompanying notes to basic financial statements
28
Essential
Facilities Capital
Projects Fund
$1,950,002
183,106
$2,133,108
$2,133,108
2,133,108
$2,133,108
Other
Governmental
Funds
$12,734,480
702,161
846,832
262,718
123,581
1,992
230,066
$812,035
6,076
160,614
367,589
9,953,279
3,491,708
115,103
13,560,090
Total
Governmental
Funds
$44,355,524
702,161
2,333,440
7,481,603
123,581
169,010
654,612
761,773
$56,863,751
$7,801,467
101,146
547,699
367,589
64,189
1,096,240
761,773
1,858,013
508,446
25,812,405
3,491,708
15,016,048
1,295,041
29
CITY OF SAN RAFAEL
GOVERNMENTAL FUNDS
BALANCE SHEET -RECONCILIATION OF GOVERNMENTAL
FUND BALANCES TO NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2017
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 the cost of management of
building, workers' compensation, employee insurance, and post-retirement healthcare benefits
to individual funds. The assets and liabilities are included in Governmental Activities in the Statement
of Net Position.
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
Deferred outflow related to OPEB
Net OPEB liability
. Net position of governmental activities
See accompanying notes to financial statements
30
$46,123,648
190,678,334
21,218,401
(4,693,323)
(4,384,743)
1,858,013
4,527,836
72,653,722
(161,812,669)
(21,402,737)
4,214,824
CITY OF SAN RAFAEL
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2017
Traffic and Essential Other
Housing Facilities Capital Governmental
General Fund Funds
REVENUES
Taxes and special assessments $64,242,440 $6,924,451
Licenses and pennits 2,559,841
Fines and forfeitures 400,283
Use of money and properties 229,791 $31,267 $24,527 63,764
Intergovernmental 2,767,092 3,728,982 1,567,082
Charges for services 2,459,680 204,210 1,149,022 9,612,249
Other revenue $635,387 437,695
Total Revenues 73,365,784 635,387 18,605,241
EXPENDITURES
Current:
General government 10,190,580 22,450 344,386
Public safety 40,844,246 8,173,907
Public works and parks 11,201,655 1,745,154 2,643,991 1,162,161
Community development 3,759,564
Culture and recreation 3,077,435 9,569,293
Capital outlay 1,641,317 459,609
Capital improvement I special projects 305,704 6,052,841 1,044,704
Debt service:
Principal 175,172
Interest and fiscal charges
Total Expenditures 4,591,012 6,052,841 20,754,060
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES ( 1,532,127) 373,833 (5,417,454)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3A) 1,382,303 228,400 325,000 5,417,454 1,933,850
Transfers out (Note 3A) (628,400)
Total Other Financing Sources (Uses) 228,400 (303,400) 5,417,454
Net Change in Fund Balances (1,985,371) (1,303,727) 70,433 (827,788)
FUND BALANCES, BEGINNING OF YEAR 10,439,157 6,653,263
FUND BALANCES, END OF YEAR $9,l35,430 $6,723,696
See accompanying notes to financial statements
31
Total
Governmental
Funds
$71,166,891
2,559,841
400,283
349,349
8,063,156
l3,425,161
1,842,053
97,806,734
10,557,416
49,018,153
16,752,961
3,759,564
12,646,728
2,100,926
7,403,249
175,172
9,287,007
(4,046,453)
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 30,2017
NET CHANGE TI\T FUND BALANCES -TOTAL GOVERNMENTAL FUNDS
Amounts reported for Governmental Activities in the Statement of Activities are
different because ofthe 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
Non-capitalized capital outlay expenditures were reclassified to various governmental activities
Loss on disposal of capital assets is deducted from fund balance
Transfer of capital assets to Internal Service Funds is deducted from fund balance
Depreciation expense is deducted from fund balance
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.
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
Unavailable revenue
Long-term receivable from San Rafael Sanitary District
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.
Net OPEB Liability Transactions
Governmental funds record OPEB 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 OPEB liability.
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.
Change in Net Position of Governmental Activities
See accompanying notes to financial statements
32
($4,046,453)
9,504,175
2,003,366
(207,188)
(1,228,402)
(6,222,352)
175,172
(126,623)
(516,972)
(331,171)
2,524,957
190,187
2,416,553
$4,135,249
PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary funds account for City operations fmanced 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 maj or fund.
P~GSERVICESFUND
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.
33
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2017
ASSETS
Current Assets:
Cash and investments available for operations (Note 2)
Receivable:
Accounts
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)
Deferred outflows related to OPEB (Note II)
Total Deferred Outflows
LIABILITIES
Current Liabilities:
Accounts payable
Interest payable
Compensated absences, due in one year (Note 1 K)
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 lK)
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
35
Business-type
Activities
Parking
$3,217,411
50,543
6,507
8,620,853
2,353,734
90,048
46,547
17,703
276,816
431,114
123,922
5,198,149
318,998
5,242,181
10,883,250
11,314,364
693,376
693,376
10,968,642
(709,569)
10,259,073
(162,051)
$10,097,022
Governmental
Activities
Internal
Service Funds
$20,510,611
530,301
8,297,530
8,827,831
30,419,000
615,312
2,653,288
6,094,050
8,827,831
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2017
OPERATING REVENUES
Charges for current services
Other operating revenues
Total Operating Revenues
OPERATING EXPENSES
Personnel
Insurance premiums and claims
Maintenance and repairs
Depreciation (Note 5)
General and administrative
Total Operating Expenses
Operating Income
NONOPERATING REVEN1JES (EXPENSES)
Investment income
Interest expense
Miscellaneous income
Loss on sale of capital assets
Total Nonoperating Revenues (Expenses)
Income Before Transfers
CAPITAL CONTRIBUTIONS
TRANSFERS IN (Note 3A)
TRANSFERS OUT (Note 3A)
Change in Net Position
NET POSITION, BEGINNING OF YEAR, AS ADJUSTED (Note 1Q)
NET POSITION, END OF YEAR
* 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 flllancia1 statements
36
Business-type
Activities -
Enterprise Funds
Parking
Services
$3,103,420
2,165,571
5,268,991
2,097,898
71,875
255,508
1,362,350
3,787,631
1,481,360
10,810
(192,038)
(181,228)
1,300,132
(536,000)
764,132
9,494,941
$10,259,073
$764,132
(208,483)
$555,649
Governmental
Activities
Internal
Service Funds
$15,206,988
962,296
16,169,284
2,775,670
6,614,379
288,700
1,067,900
4,289,993
15,036,642
1,132,642
68,951
94,264
(19,944)
143,271
1,275,913
1,228,402
80,275
(376,520)
2,208,070
18,848,280
$21,056,350
CITY OF SAN RAFAEL
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
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
Cash Flows from Operating Activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Interfund receipts
Interfund payments
Cash Flows from Noncapital
Financing Activities
CASH FLOWS FROM CAPITAL
AND RELATED FINANCING ACTIVITIES
Principal payments on revenue bonds and note payable
Interest expenses and fiscal charges
Acquisition of capital assets
Proceeds from sale of property
Cash Flows from Capital and
Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Cash Flows from Investing Activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
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
Increase (decrease) in due to OPEB system
Accounts payable
Compensated absence obligations
(Decrease) in due to retirement system
Claims payable
Net Cash Provided by Operating Activities
NON-CASH TRANSACTIONS:
Amortization of bond discount
Contributions of capital assets
Business-type
Activities
Funds
Parking
Services
$3,103,420
(1,665,543)
(2,346,766)
(536,000)
(266,817)
(193,263)
(460,080)
10,810
10,810
375,719
2,841,692
$3,217,411
$1,481,360
255,508
104,307
(154,835)
(1,813)
(76,483)
(1,100)
(245,955)
$1,360,989
See accompanying notes to basic financial statements
37
Governmental
Activities
Internal
Service Funds
$15,307,819
(13,509,146)
(164,292)
962,010
2,596,391
80,275
(376,520)
(296,245)
(1,222,005)
94,264
1,241,356
$1,132,642
1,067,900
89,607
10,938
2,478
134,054
FIDUCIARY FUND FINANCIAL STATEMENTS
Fiduciary funds are used to account for assets held by the City as an 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
ASSETS
CITY OF SAN RAFAEL
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2017
Successor Agency
to the
Redevelopment
Agency
Private-Purpose
Trust Fund
Cash and investments (Note 2)
Restricted cash and investments (Note 2)
Receivable:
$87,344
Ta,xes
LIABILITIES
Accounts payable
Interest payable
Total Assets
Other long-term obligations (Note 15D)
$3,447,857
$1,697
46,747
761,773
Agency
Funds
$289,768
951
$290,719
$26,614
Due to bondholders 264,105
Long-term debt 15C):
Due within one year
Due more than one year
Total Liabilities
NET POSITION
Held in trust for private purpose
3,080,000
See accompanying notes to financial statements
41
$290,719
CITY OF SAN RAFAEL
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30,2017
ADDITIONS
P",n"''''r1n.l taxes
Total Additions
DEDUCTIONS
General government
Interest expense
Total Deductions
SPECIAL ITEM
OPEB liability adjustment (Note 15D)
Total Special Item
in Net Position
NET POSITION HELD IN TRUST FUND
FOR OTHER PURPOSES
tle~;mnllng of year
End
Successor Agency
to the
Redevelopment Agency
Private-Purpose
Trust Fund
$4,137,246
4,137,246
261,850
886,612
1,148,462
278,888
278,888
3,267,672
(19,562,702)
($16,295,030)
See accompanying notes to financial statements
42
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Financial Reporting Entity
As required by generally accepted accounting principles, the fmancial statements present the City of
San Rafael (the City) as the Primary Government, with its component units for which the City is
considered fmancially 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 refmancing 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
(CMF A) 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.
C. 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. The employees also participate in the
City's healthcare benefits plan which includes a provision for postemployment benefits. These
costs are the obligation of the District and not the City. As discussed in Note 4G, a receivable
from the District has been established.
43
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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,
intergoven1Illental 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.
44
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
Essential Facilities Capital Projects Fund -Established to account for major capital
improvements to public safety facilities.
The City reported its only enterprise fund as a maj or 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, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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-reirrlbursement 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.
46
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In addition to liabilities, the statement of financial position or balance sheet will sometimes repoti
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 defelTed inflow of resources, is reported in the
governmental funds balance sheet. The governmental funds repoti 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.
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
F or 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.
47
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. Capital Assets
Contributed capital assets are valued at their estimated fair market value on the date contributed.
Donated capital assets, donated works of art and similar items, and capital assets received in a
service concession arrangement are recorded at acquisition value. All other capital assets are
valued at historical cost or estimated historical cost if actual historical cost is not available.
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.
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
Machinery and equipment
Infrastructure
District
20 -50 years
4 -20 years
15 -50 years
Collection systems and facilities purchased or constructed are stated at cost. Assets contributed
have been recorded at the fair market value at the date received. Interest is capitalized for assets
constructed when applicable. The costs of normal repairs and maintenance that do not add to the
value of an asset or materially extend asset lives are not capitalized. Improvements are capitalized
and depreciated over the remaining useful lives of the related capital assets, as applicable.
Applicable capital assets must be capitalized for amounts $1,000 or above and may be capitalized
for amounts from $500 to $1,000 if determined to be sensitive. Depreciation is provided by the
straight-line method over the estimated useful lives of capital assets as follows:
Subsurface lines
Sewer collection facilities
General plant & administrative
facilities
48
50-80 years
5-50 years
3-15 years
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 fmancial 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:
Cbvemmenta1 Business-Type
Activities Activities Total
Beginning Balance $4,258,120 $142,725 $4,400,845
Additions 4,436,330 113,870 4,550,200
Payments (4,245,518) (114,970) (4,360,488)
Ending Balance $4,448,932 $141,625 $4,590,557
Current Portion $556,116 $17,703 $573,819
49
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Property Tax Levy, Collection and Maximum Rates
State of California Constitution Article XllI 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 1000/0 of market
value as defined by Article XllI A and may be adjusted by no more than 20/0 per year unless the
property is sold, transferred, or substantially in1proved. The State Legislature has determined the
method of distribution of receipts from a 1 % 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:
Valuationllien dates
Levy dates
Due dates (delinquent as of)
Secured
January 1
July 1
50% on November 1 (December 10)
50% on February 1 (April 10)
Unsecured
January 1
July 1
July 1 (August 31)
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:
District
55% remitted on December 15
40% remitted on April 15
5% remitted on June 15
The County of Marin levies taxes and places liens on real property as of January 1 on behalf of the
District. Unsecured property taxes are levied throughout the year.
M. Sewer Charges
Sewer charges are billed and collected on behalf of the District by the County of Marin as a
special assessment on annual property tax billings. Property taxes are levied on January 1 and are
due in two equal installments on November 1 and February 1. In accordance with the Teeter
Plan, the County remits to the District all charges which are assessed and the county retains
responsibility for collecting past due amounts.
50
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Teeter Plan provides that the County advance the District its share of the annual gross levy of
secured property taxes and special assessments. In consideration, the District gives the County of
Marin its rights to penalties and interest on delinquent secured property tax receivables and actual
proceeds collected.
N. Connection Fees
Connection fees represent a one-time contribution of resources to the District imposed on
contractors and developers for the purpose of financing capital improvements. Connection fees
are recognized after non-operating revenues (expenses) in the statement of revenues, expenses
and changes in net position. The District utilizes connection fees received on a first-in-first-out
basis to finance current year capital projects. Accordingly, if there is a balance of connection fees
available at year-end, it is classified as restricted net position.
o. Use of Estimates
The preparation of fmancial 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 fmancial
statements and the reported amounts of revenues and expenditures/expenses during the reporting
periods. Actual results could differ from those estimates.
P. Implementation of Accounting Standards
Significant Accounting Standards Adopted in the Current Year
GASB Statement No. 75 -In June 2015, GASB issued Statement No. 75, Accounting and
Financial Reporting for Postemployment Benefits other than Pensions. The objective of this
Statement is to improve accounting and fmancial reporting by state and local governments for
postemployment benefits other than pensions (OPEB). The Statement replaces the requirements of
Statements No. 45 Accounting and Financial Reporting for Postemployment Benefits Other than
Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-
Employer Plans, for OPEB. The Statement is effective for periods beginning after June 15, 2017;
however, the City has elected to implement effective July 1,2016.
Q. Prior Period Adjustments
The early implementation of GASB Statement No. 75 required the City to make prior period
adjustments. As a result, the beginning net positions of the Governmental Activities and Business-
Type Activities were reduced by $20,340,365 and $280,365, respectively. The beginning net position
of the Parking Services Fund was also reduced by $280,365 and the OPEBlRetiree Medical Fund
increased by $9,101,000 as part of this implementation. See Note 11 for additional information.
51
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
R. 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
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 forn1.
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.
52
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
B. Classification
Cash and investments as of June 30,2017, 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
Restricted cash and investments
Total Primary Government Cash and Investments
San Rafael Sanitation District (Component Unit)
Cash and investments available for 0 perations
Total San Rafael Sanitation District Cash and Investments
Statement of Fiduciary Net Position (separate statement):
Successor Agency to the Redevelopment Agency:
Cash and investments available for operations
Restricted cash and investments
Cash and Investments
Pt. San Pedro RoadAssessment District Agency Fund
Total Fiduciary Cash and Investments
Total Cash and Investments
$68,083,546
68,785,707
24,536,913
87,344
°
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.
53
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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:
Minimum Maximum Maximum
Maximum Credit Percentage Investment in
of
Authorized Investment T~e Maturi!2' Quality Portfolio One Issuer
U.S. Government Obligation 5 years N/A No limit No limit
U.S. Agency Securities and Instruments 5 years AAA No limit No limit
Repurchase Agreements 1 year A-I No limit No limit
Prime Commercial Paper 270 days A-I 25% 10% of total outstanding
commercial paper
Bankers' Acceptances 180 days A-I 40% $2,000,000
Medium-Term Corporate Notes 5 years A 30% 5% of portfolio
Negotiable Certificates of Deposit 5 years A-I 30% 5% of portfolio
N on-negotiable Certificates of Deposit 5 years N/A 30% 5% of portfolio
Local Agency Investment Fund N/A N/A N/A N/A
Money Market Mutual Funds N/A AAA 10% N/A
Limited Obligation Improvement Bonds related to
30 years N/A N/A N/A
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.
54
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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:
Maximum
Maximum Percentage of
Authorized Investment T~Ee 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-I 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 No Limit
Guaranteed Investment Contracts (fully N/A Highest No Limit collateralize d)
Municipal Obligations N/A Two Highest 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 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.
55
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
The following is a summary of the fair value hierarchy of the fair value of investments of the
City as of June 30,2017:
City:
Money Market Mutual Funds
U.S. Treasury Notes
U.S. Agency Securities and Instruments
Medium-Term Corporate Notes
Investment in Pt. San Pedro Bonds
Total Investments
Local Agency Investment Fund
County Investment Pool
Cash in banks and on hand
Total City and Investments
Fiduciary:
Total Investments
Cash in banks and on hand
Total Fiduciary Cash and Investments
Total City and Fiduciary Cash and Investments
San Rafael Sanitary District:
County Investment Pool
Total District's Cash and Investments
Total Cash and Investments
(a)
Levell
$4,389,785
$4,389,785
°
(b)
Level 2
$70,094
14,565,516
4,054,295
$18,689,905
(c)
Level 3 Total
$70,094
4,389,785
14,565,516
4,054,295
$1,520,800 (d) __ -,1,,--,52_0.]...,8_00_
$1,520,800 24,600,490
34,171,960
77,038
9,936,219
68,785,707
°
377,112
377,112
69,162,819
24,536,913
24,536,913
$93,699,732
Source: The above GASB 72 classifications into the different Input Levels are provided by the US Bank Institutional Trust & Custody.
(a) Levell 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 for the asset is a market in which transactions for the asset occur with sufficient frequency and volume
to provide pricing information on an ongoing basis.
(b) Level 2 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 extent 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 participants would use in pricing the asset including assumptions about risk.
(d) This pertains to the City-owned bonds of its 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.
56
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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:
City:
Money Market Mutual Funds
Local Agency Investment Fund
County Investment Pool
U.S. Treasury Notes
U.S. Agency Securities and Instruments
Medium-Term Corporate Notes
Investment in Pt. San Pedro Bonds
Total Investments
Cash in banks and on hand
Total City and Investments
Fiduciary:
Total Investments
Cash in banks and on hand
Total Fiduciary Cash and Investments
Total City and Fiduciary Cash and Investments
San Rafael Sanitary District:
County Investment Pool
Total District's Cash and Investments
Total Cash and Investrrents
57
12 Months
or Less
$70,094
34,171,960
77,038
2,495,880
5,998,990
1,502,835
More than
$1,893,905
8,566,526
2,551,460
1,520,800
$14,532,691
$70,094
34,171,960
77,038
4,389,785
14,565,516
4,054,295
58,849,488
68,785,707
o
24,536,913
24,536,913
$93,699,732
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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, 2017, these investments matured in an average of 194 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, 2017.
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 "AAAN1." 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.
58
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 2 -CASH AND INVESTMENTS (Continued)
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, 2017, 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 ofInvestment
City (except Fiduciary Funds):
Money Market Mutual Funds
County Investment Pool
U.S. Treasury Notes
U.S. Agency Securities and Instruments
Medium-Term Corporate Notes
Total rated investments
Not rated:
Local Agency Investment Fund
Investment in PI. San Pedro Bonds
Cash in banks and on hand
Total City Cash and Investments
Fiduciary:
Money Market Mutual Funds
Total rated investments
Not rated:
Local Agency Investment Fund
Cash in banks and on hand
Total Fiduciary Cash and Investments
Total City and Fiduciary Cash and Investments
Component Unit
San Rafael Sanitary District:
Investment in County Pool (Rated AANVl)
Total District's Cash and Investments
Total Cash and Investments
H. Concentration Risk
A A+ AA-AA
$495,895 $2,061,665 $500,340 $498,205
$2,061,665 $500,340 $498,205
AA+
$4,389,785
14,565,516
498,190
$19,453,491
MalAM
$70,094
77,038
$0
$0
AANV1
AIIPI Total
$70,094
77,038
4,389,785
14,565,516
4,054,295
$0 23,156,728
34,171,960
1,520,800
9,936,219
68,785,707
377,112
377,112
69,162,819
Included in the table at Note G above are the following significant investments in anyone issuer
other than U. S. Treasury securities, mutual funds, and external investment pools.
Reporting Unit
Entity-wide
Issuer
Federal Home Loan Bank
Federal Farm Credit Bank
59
Investment TyPe
Federal Agencies Obligation
Federal Agencies Obligation
Amount
$5,748,348
3,726,430
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 3 -INTER-FUND TRANSACTIONS
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, 2017, were as follows:
From Fund To Fund Amount
General Fund Non-Major Governmental Funds $1,796,089
General Fund Essential Facilities Capital Projects Fund 5,417,454
Gas Tax Fund General Fund 400,000
Traffic and Housing Mitigation Fund 228,400
Parking Services Enterprise Fund General Fund 436,000
Non-Major Governmental Funds 100,000
Internal Service Fund General Fund 376,520
Non-Major Governmental Funds General Fund 169,783
Non-M£tior Governmental Funds 37,761
Building Maintenance Internal Service Fund 80,275
Gas Tax Fund 325,000
$9,367,282
(A) Transfer to the non-Major Governmental Funds were for administrative costs, grant matching, recreation and other program
support.
(A)
(B)
(C)
(D)
(C)
(A)
(C)
(E)
(F)
(F)
(G)
(B) Transfer to the Essential Facilities Capital Projects Fund were for the Fire Station 52 and 57, and Public Safety Center projects.
(C) Transfers to the General Fund were for street maintenance support, administrative costs and pension obligation bond debt
service principal and interest payment.
(D) Transfer to Traffic Mitigation for Freitas-Las Gallinas Intersection Improvement.
(E) Transfer residual funds in programs now reported in General Fund.
(F) Transfer Measure A Open Space to Victor Jones Park Improvements and Albert Park Improvements.
(G) Transfer from State Land Fund to Gas Tax Fund for right of way purchase.
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.
60
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 4 -LOANS RECEIVABLE
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, 2017, these loans totaled:
B. Employee Loans
Employee Loans
Centertown Associates
One "H" Street Associates
Fire Chief Loan
Marin Housing Authority
Total
$6,350
230,066
48,573
224,623
145,000
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. loans are interest-free, have maximum terms of one year, and are repaid through
automatic payroll deductions. As of June 30, 2017, the balance of the employee loans receivable
was $6,350.
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, 2017, 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,
2017, the balance of this loan was $48,573.
61
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 4 -LOANS RECEIVABLE (Continued)
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, 2017, the balance
of the loan was $224,623.
F. Marin Housing Authority Loans
On April 19, 2016, the City made a loan to the Marin Housing Authority for a low and moderate
income unit, in the amount of $145,000. As with other loans made under this program, this loan is
due upon the sale of the unit. As of June 30,2017, the balance of this loan was $145,000.
G. 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, 2017 is
$4,527,836, and is composed of the following:
Long-tenn receivable from San Rafael Sanitation District:
Defined benefit pension liability allocation (GASB 68)
Other post-employment benefit liability allocation (GASB 75)
Totallong-tennreceivable from San Rafael Sanitation District
62
$3,623,716
904,120
$4,527,836
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 5 -CAPITAL ASSETS
Changes in capital assets during the fiscal year consisted of:
Governmental Activities
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Land improvements
Buildings and structures
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Land improvements
Buildings and structures
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total net capital assets being depreciated
Total governmental activity capital assets
Business-type Activities
Capital assets not being depreciated:
Land
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and structures
Machinery and equipment
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and structures
Machinery and equipment
Total accumulated depreciation
Total net capital assets being depreciated
Total business-type activity capital assets
Balance
June 30,2016
$83,261,168
9,020,097
41,667,102
18,476,428
187,212,938
256,376,565
(5,800,084 )
(17,086,815)
(12,126,787)
(122,058,098)
{157,071z784~
99,304,781
$194,085,670
Balance
June 30, 2016
$8,62°2 853
8,620,853
10,713,814
1,266,865
11,980,679
(2,894,596)
(1,007,821 1
(3,902,4172
$16,699,115
63
$401,191
961,998
961,998
(270,055)
(1,203,468)
(1,142,308)
(4,674,418)
{7,290,249}
{6,328,251 ~
$5.647,627
Additions
($205,363)
(50,1452
(255,508 2
(255,508~
{$255,5082
Retirements
{$20721892
(207,189)
(597,431)
577,488
(19,943)
($227.132)
Retirements
($54,795)
(54,795 2
54,795
54,795
Balance
Transfers June 30,2017
$83,662,359
($11,040,3442 11,846,875
(11,040,344 ) 95,509,234
9,020,097
1,228,402 42,895,504
18,840,995
9,811,942 197,024,880
11,040,344 267,781,476
(6,070,139)
( 18,290,283)
(12,691,607)
(126,732,516}
Balance
Transfers
10,713,814
(3,099,959)
(1,003,171 2
(4,103 213 °1
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 5 -CAPITAL ASSETS (Continued) I
San Rafael Sanitation District
Capital assets not being depreciated:
Land and easements
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Subsurface lines
Sewage collection facilities
General plant and administration
Total capital assets being depreciated
Less accumulated depreciation for:
Subsurface lines
Sewage collection facilities
General plant and administration
Total accumulated depreciation
Total net capital assets being depreciated
Total District's capital assets
Balance
June 30,2016
$115,329
3,204,067
3,319,396
28,364,238
39,499,143
1,649,897
69,513,278
(10,812,495)
(17,631,349)
(963,773)
(29,407,617)
40,105,661
$43,425,057
Additions Retirements
$6,393,082
6,393,082
70,932
49,533
3,213
123,678
(485,276)
(931,117)
(133,105)
(1,549,498)
(1,425,820)
$4,967,262
Transfers &
Adjustments
($9,325,117)
(9,325,117)
6,745,103
2,580,013
9,325,116
9,325,116
($1)
Balance
June 30, 2017
$115,329
272,032
387,361
35,180,273
42,128,689
1,653,110
78,962,072
(11,297,771)
(18,562,466)
(1,096,878)
(30,957,115)
48,004,957
$48,392,318
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
Public safety
Public works and parks
Community develop ment/redevelop ment
Culture and recreation
Total Governmental Activities
Business-type Activities
Parking services
Total Business-type Activities
64
$141,713
857,493
5,480,853
53,342
756,848
$7,290,249
$255,508
$255,508
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
INOTE6-LONGTERMDEBT I
A.
The City generally incurs long-tenn debt to [mance projects or purchase assets which will have
useful lives equal to or greater than the related debt.
A summary of govenunental and business-type activities transactions for the fiscal year ended
June 30, 2017, are as follows:
Authorized Balance Balance Current
and Issued June 30, 2016 Additions Retirements June 30, 2017 Portion
Governmental Activities:
2010 Taxable Pension Obligation Bonds
6.00%-6.25%, due 7/112025 $4,490,000 $4,490,000 $100,000 $4,390,000 $205,000
Total Pension Obligation Bonds 4,490,000 100,000 4,390,000 205,000
PG & E City Hall HV AC Retrofit Note Payable
0.00%, due 11130/2023 334,585 245,838 33,280 212,558 $33,280
PG & E Street Light Retrofit Note Payable
0.00%, due 8/31/2019 233,896 132,657 41,892 90,765 41,892
Total Governmental Long-term Debt $4,868,495 $4,693,323 $280,172
Business-type Activities
PG & E Parking Lot Lighting Retrofit Note Payable
0.00%, due 1113012023 $66,380 $48,204 $6,816 $41,388 $6,816
2012 Authority Lease Revenue Refimding Bonds
2.00-4.00%, due 4/112033 6,750,000 5,705,000 260,001 5,444,999 270,000
Less: unamortized bond discount ~12,147~ !725~ P 1,4222
Total Enterprise Fund Debt $5,741,057 $276,816
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%. Principal payments are due annually on
July 1 and interest is payable semiannually on January 1 and July 1. 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 (HV AC) 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 HV AC 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.
65
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 6 -LONG-TERM 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 4.000/0. 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 subj ect 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 an10unt 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, 2017, are as follows:
For the Year
Ended June 30
2018
2019
2020
2021
2022
2023 -2027
2028 -2032
2033
Totals
Reconciliation of Long-term debt:
Less: unamortized discount
Governmental Activities
Princip al Interest
$280,172 $264,362
495,172 245,612
485,261 219,662
508,280
538,280
2,386,158
$4,693,323
66
192,062
162,031
303,443
$1,387,172
Business-type Activities
Princip al Interest
$276,816 $186,188
281,816 178,088
291,816 169,838
296,816 161,288
306,816 152,588
1,652,307 617,982
1,945,000 314,412
435,000 17,400
5,486,387 $1,797,784
(11,422)
$5,474,965
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 7 -DEBT WITHOUT CITY COMMITMENT I
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:
San Rafael Redevelopment Agency
Multifamily Housing Revenue Bonds-2000A
California Statewide Communities
Development Authority Revenue Bonds-2002
San Rafael Redevelopment Agency
Variable Rate Demand Multifamily
Housing Revenue Bonds-200 lA
San Rafael Redevelopment Agency
Multifamily Housing Revenue Bonds-200!
San Rafael Redevelopment Agency
Multifamily Housing Revenue Bonds-200? Series A
Multifamily Housing Revenue Bonds-2007 Series B
Pt. San Pedro Road Median Landscaping
Assessment District Limited Obligation Bonds-20l2
NOTE 8 -NET POSITION AND FUND BALANCE
A. Net Position
Project
Description
162-175 Belvedere
Apartments
S1. Marks School
55 Fairfax
Apartments
San Rafael Commons
Apartments
Martinelli House
Project
Martinelli House
Pt. San Pedro Road
Median Landscaping
Original
Amount
$3,590,529
5,605,000
3,000,000
6,100,000
6,000,000
1,000,000
1,750,000
Outstanding
June 30, 2017
$1,084,330
3,695,000
2,200,000
4,880,000
1,944,047
205,575
1,520,800
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, 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.
67
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I 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 Pennanent 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
Councilor 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 restricted, committed, or
assigned. This includes the residual General Fund balance and residual fund deficits, if any, of
other governmental funds
68
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 8 -NET POSITION AND FUND BALANCE (Continued) I
Detailed classifications of the City's fund balances, as of June 30, 2017, are below:
SEecial Revenue Funds
Traffic and Essential Facilities Other
Housing Capital Projects Governmental
General Fund Mitigation Gas Tax Fund Funds
Fund balances:
Nonspendable:
Loans receivable $230,973
Prepaids 277,473
Total Nonspendable 508,446
Restricted for:
Assessment District capital projects $300,780
Baypoint Lagoons Assessment District 238,326
Bedroom tax capital projects 76,845
Childcare 1,370,144
Development services 683,286
Emergency medical services 1,744,530
1997 financing authority revenue bonds debt service 147,797
Gas tax $6,723,696
Grants 753,121
Household hazmat facility 313,365
Library 632,065
Library assessment 667,572
Loch Lomond Assessment District 660,266
Low and Moderate Income Housing 910,350
Mariposa Assessment District debt service 16,573
Measure A Open Space 369,235
Parkland dedication 449,188
Peacock Gap Assessment District debt service 2,875
Public safety 158,500
Pt. San Pedro -Maintenance Portion 151,283
Recreation revolving 118,091
Storm water 189,087
Traffic and housing mitigation $9,135,430
Total Restricted 9,135,430 6,723,696 9,953,279
69
Total
$230,973
277,473
508,446
300,780
238,326
76,845
1,370,144
683,286
1,744,530
147,797
6,723,696
753,121
313,365
632,065
667,572
660,266
910,350
16,573
369,235
449,188
2,875
158,500
151,283
118,091
189,087
9,135,430
25,812,405
(Continued)
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 8 -NET POSITION AND FUND BALANCE (Continued) I
SEecial Revenue Funds
Traffic and Essential Facilities Other
Housing Capital Projects Governmental
General Fund Mitigation Gas Tax Fund Funds Total
Committed to:
Capital improvement capital projects $3,463,772 $3,463,772
Park capital projects 27,936 27,936
Total Committed 3,491,708 3,491,708
Assigned to:
Contractual commitments $50,581 50,581
MOU -One time payment 500,000 500,000
Emergency and cash flow 7,200,000 7,200,000
Infrastructure reserve 600,000 600,000
General plan / long range planning 1,786,478 1,786,478
Measure E -Public Safety Facility 4,763,886 4,763,886
Open space capital projects 115,103 115,103
Total Assigned 14,900,945 115,103 15,016,048
Unassigned to:
General Fund 1,295,041 1,295,041
1,295,041 1,295,041
Total Fund Balances $16,704,432 $9,135,430 $6,723,696 $13,560,090 $46,123,648
I NOTE 9 -PENSION PLANS
A. Plan Description
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 defmed 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 fmancial 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.
70
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I 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 frrst 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.
71
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I 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, 2017 were as follows:
Employer
Contribution Rate Basis
City of San Rafael Mise Tier I 50.40% Highest year
City of San Rafael Mise Tier 2 46.81% Average three highest years
City of San Rafael Fire Tier I 75.67% 0.00%-19.79% 3.0%@55 Highest year
City of San Rafael Fire Tier 2 72.59% IlJ4% 17.69% 3.0%@55 Average three highest years
City of San Rafael Safety Police Tier 74.79% 00.00% -19.79% 3.0%@55 Highest year
City of San Rafael Safety Police Tier: 75.53% 11.34';10 -17.69% 3.0%@55 A verage three highest years
PEPRA Mise 42.11% 9.18%-10.18% 2.0%@62 AVerage three highest years
PEPRA Safety 64.88% 14.53% 2.1%@ 57 Average three highest years
These rates were determined by MCERA, based on the actuarial valuation dated June 30,2015.
The actual rate of return on investments during that year was 4.990/0 on a market value basis net
of investment expenses, as compared to the 7.25% assumption.
The City uses the actuarially determined percentages of payroll to calculate and pay contributions
to MCERA. Contributions to the plan from the City were $20,003,002 for the year ended June 30,
2017, based on a total payroll of $41 ,553,242, of which $32,885,135 represented the basis for the
plan contributions. Of the total payroll subject to plan contributions, $1,305,530 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 am0l1ized over a closed 17-year period (15 years remaining as of June 30,
2015), except for the additional UAL attributable to the outstanding unfunded actual'ialloss from
2009, which is being am0l1ized over a separate closed period (currently 23 years).
Effective with the June 30, 2014 valuation, any new sources of UAL due to actuarial gains and
losses or method changes are am0l1ized over a closed 24-year period (23 years remaining as of
June 30, 2015, with a 5-year ramp up peripd at the beginning of the period, a 4-year ramp down at
the end of the period, and 15 years of level payments as a percentage of payroll between the
ramping periods. This new amortization method for gains and losses is similar to a 20-year
amoliization period with level payments as a percentage of payroll, in conjunction with a
traditional 5-year asset smoothing.
Assumption changes are amortized over a closed 22-year period, with a 3-year ramp up period, 2-
year ramp down period, and 17 years of level payments as a percentage of payroll.
72
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued) I
D. Pension Liability and Pension Expense
The City's net pension liability (NPL) has been determined for the fmancial reporting period
ended June 30, 2017 based on the following methodology: The City's NPL as of June 30,2015
was updated to the measurement date of June 30, 2016, using the actual City's plan assets as of
June 30,2016 and estimating the change in the City's liabilities between July 1,2015 and June
30, 2016. This estimate is based on a projection of the City's long term contributions to the
pension plan relative to the projected contributions of all participating employers.
The resulting NPL for the City under this calculation is $167,054,850, or 34.9538% of the total
MCERA NPL of $477,930,440 (reference MCERA's GASB 67/68 report as of June 30, 2016).
This compares to the previous year's NPL of $142,323,127, or 36.7394% of the total MCERA
NPL of $387,385,550 (reference MCERA's GASB 67/68 report as of June 30, 2015).
In addition to the reporting of the NPL as of June 30, 201 7, the City reported deferred inflows of
$22,096,113 and deferred outflows of $55,004,455 as of the measurement date June 30, 2016.
The City reported post-measurement date outflows of $20,003,001 from actual fiscal year 2016-
2017 pension contributions. Deferred inflows include deferred investment gains and adjustments
to assumptions based on actual positive results. Deferred inflows have a positive impact on net
assets (offsetting the NPL) and will be recognized in future reporting periods. Deferred outflows
include deferred investment losses, adjustments to assumptions based on actual negative results,
and contributions made after the measurement date. Deferred outflows have a negative impact on
net assets (similar to the NPL) and will be recognized in future reporting periods. The net impact
of these pension liability related entries on the City's Statement of Net Position before allocations
to the San Rafael Sanitation District is $114,143,507. After allocations to the San Rafael
Sanitation District, the net impact on the City's Statement of Net Position is $110,519,791.
Under GASB 68, the City's pension expense is based on the Plan's pension expense, adjusted for
the City's actual contributions and net pension liability. MCERA reported the Plan's pension
expense to be $85,290,611, of which $30,799,273, or 34.9538%, is the City's annual pension
expense for the reporting year.
Three components are used to calculate pension expense: (1) changes in the net pension liability;
(2) changes in benefit terms (if any): and (3) changes in actuarial assumptions and experience.
Pension expense is calculated using a different methodology than that used to derive the
actuarially determined annual contribution to the Plan. Actual pension contributions during the
reporting year were $20,003,001. Because pension expense is affected by annual changes in the
net pension liability, volatility is to be expected. For the current measurement period, investment
returns below the assumed rate were responsible for the increase in net pension liability and had a
corresponding impact on pension expense.
73
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued) I
The table below provides a summary of the key results during the reporting period:
Summary of Results
Measurement Date
Description 6/30/2016
Net Pension Liability $167,054,850
Deferred Inflows 22,096,113
Deferred Outflows (55,004455)
Impact on Net Position before Deferred Outflows from Contributions 134,146,508
Additional Deferred Outflows -Contributions Subsequent to Measurement Date (20,003 001 \
Impact on Statement of Net Position before Allocations 114,143507
Allocation ofNPL to SRSD 5,320,236
Allocation of Deferred Inflows (measurement date) to SRSD 703,700
Allocation of Deferred Outflows (measurement date) to SRSD (1 751 740'1
Impact on Net Position before Allocation of Deferred Outflows
from Contributions to SRSD 4,272,196
Allocation of Additional Deferred Outflows (Contributions) to SRSD (648480)
Long-Term Receivable from SRSD, due to pension obligations (see Note 4H) 3623716
Impact on Statement of Net Position, net of receivable from SRSD 110,519,791
Pension Expense ($ Amount) 30,799,273
Projection of Total Pension Liability and Net Pension Liability
Measurement Date
6/30/2015
$142,323,127
33,817,086
(39,886216)
136,253,997
(19,339,577)_
116,914,420
4,695,240
1,115,626
(1315846)
4,495,020
(638013)
3857007
113 057,413
19107,673
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, 2016. The beginning of year measurement ofTPL is based on the
actuarial valuation as of June 30, 2015. The TPL at the end of the measurement year, June 30,
2016, is also measured as of the valuation date of June 30, 2015, and projected to June 30, 2016.
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, 2015. The FNP at the end
of the measurement year, June 30, 2016, is also measured as of the valuation date of June 30,
2015, and projected to June 30,2016.
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.
74
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued) I
Actuarial assumptions:
The total pension liability as of June 30, 2016 was determined by an actuarial valuation as of June
30, 2015, using the following actuarial assumptions applied to all prior periods included in the
measurement. The key assumptions in the valuation were:
Actuarial assumptions:
Expected Return on Assets
Discount Rate
Price Inflation
Salary Increases
Administrative Expenses
Post-Retirement COLA
Mortality Rates for
Healthy Members
and Inactives
7.25 percent per year, net of investment expenses
7.25 percent per year
2.75% per year
3% per year plus merit component based on employee classification
and years of service.
Administrative expenses in the actuarial valuation are assumed to be
$4.635 million for FY 2015-16, to be split between employees and
employers based on their share of the overall contributions.
Administrative expenses shown in this report are based on the actual
FY 2015-16 amounts.
Post-retirement COLAs are assumed at a rate of 2. 7% for members
with a 4% COLA cap, 2.6% for members with a 3% COLA cap, and
1.9% for members with a 2% COLA cap.
Rates of mortality for active members are specified by 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.
These assUlllptions constitute a slight change from those used in prior actuarial valuations: The
investment rate of return assumption of7.25% coupled with an inflation assumption of3.00%.
75
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued)
Asset Allocation Policy and Expected Long-term Rate of Return by Asset Class
The 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 defmes 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, 2016:
Asset Class
Domestic Equity
International Equity
Fixed Income
Real Estate
Real Assets
Private Equity
Total
Target
Allocation
32%
22%
23%
8%
7%
Long-Term Expected
Real Rate of Return
5.10%
5.30%
0.75%
3.75%
3.55%
5.90%
Long-Term
Expected Rate
of Return
(with the effect ofintlation)
7.35%
7.55%
3.00%
6.00%
5.80%
8.15%
The Long-Term returns are calculated using a 10-year geometric return derived from arithmetic
returns and the associated risk (standard deviation).
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 (23 years remaining as of the June
30, 2015 actuarial valuation) and an amount necessary to amortize the remaining Unfunded
Actuarial Liability as a level percentage of payroll over a closed period (15 years remaining as of
the June 30, 2015 actuarial valuation).
A change in the discount rate would affect the measurement of the TPL. A lower discount rate
reslJlts 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 71%. A one
percent increase in the discount rate decreases the TPL by approximately 11 % and decreases the
NPL by approximately 59%.
76
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued)
The table below shows the sensitivity of the NFL to a one percent decrease and a one percent
increase in the discount rate:
Sensithity of Net Pension Liability to Changes in Discount Rate
Description
Total Pension Liability
Fiduciary Net Position
Net Pension Liability
Fiduciary Net Position as a Percentage of the Total Pension Liability
1%
Decrease
$1,019,941,989
71.9%
Discount
Rate
7.25%
$900,629,287
733,574,437
$167,054,850
81.5%
1%
Increase
8.25%
$802,536,748
733,574,437
$68,962,311
91.4%
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.
The following tables show the current balance and sources of deferred outflows and inflows related
to the City's defmed benefit retirement pian, and the scheduled recognition of these deferred
amounts:
Description
Differences between expected and actual experience
Changes in assumptions
Change in proportion
Changes in proportion and difference between City
contributions and proportionate share of contributions
Actual FY 16-17 contributions (post measurement date)
Net difference between projected and actual earnings
on pension plan investments
Deferred Inflows and Outflows Before Allocations
Allocation to SRSD
Allocation of Deferred Inflows (measurement date)
Allocation of Deferred Outflows (measurement date)
Net Deferred Inflows and Outflows
77
Deferred Deferred
Outflows of Inflows of
$5,483,071
$25,298,450
14,629,279 4,966,639
11,646,403
20,003,001
$22,096,113
$703,700 $1,751,740
648,480
$19,695,893
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 9 -PENSION PLANS (Continued)
The $20,003,001 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, 2018. 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
2018
2019
2020
2021
Thereafter
Amortization
Amount
$9,222,804
8,905,878
7,294,038
7,485,622
NOTE 10 -PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION
RETIREMENT PLANS)
The City contributes to the Public Agency Retirement System (PARS), which administers a defmed
contribution retirement plan. A defmed 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 $98,186. The total covered payroll of
employees participating in the plan for the year ended June 30, 2017, was $2,618,290. The total
payroll for the year was $41,553,242.
78
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE II-POST-EMPLOYMENT HEALTH CARE BENEFITS
At June 30, 2017, net OPEB liability and related deferred outflows of resources and deferred
inflows of resources are as follows:
Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:
Net difference between projected and
actual earnings on plan investments $772,668 $7,332 $780,000
Employer contributions made subsequent
to the measurement date 3,442,156 32,844 3,475,000
Total deferred outflows of resources $4,214,824 $40,176 $4,255,000
Net OPEB liabilities: $33,466,002 $318,998 $33,785,000
Total net OPEB liabilities $33,466,002 $318,998 $33,785,000
Plan Description
The City provides certain health care benefits for retired employees and their spouses under a cost
sharing defmed 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
30,2017, 684 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,
2017, are summarized as follows:
Elected Officials, Mid-Management, &
I Unrepresented Management All other Bargaining Units
Eligibility Retire directly from the City:
-Age 50 (age 55 ifhired 2: 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 < 111109 Full premium/cap I Hired < 1/1110 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 I None
Hired> 4/1/07 None
Other No DentaL Vision, or Life Benefrrs
79
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 11-POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)
Membership in the plan consisted of the following at June 30,2017, the date of the latest actuarial
valuation:
Active plan members
Inactive employees or beneficiaries currently
receiving benefit payments
Inactive employees entitled to but not yet
receiving benefit payments
Total
Funding Policy and Actuarial Assumptions
336
°
348
684
During the fiscal year ended June 30, 2017, the City elected to early implement GASB 75,
''Accounting and Financial Reporting For Postemployment Benefits Other Than Pensions". This
Statement replaces the requirements of Statement No. 45 and establishes new accounting and
fmancial reporting requirements for OPEB plans. As a result, the funding policy and actuarial
assumptions presented include elements of both the historical approach and the revised approach
under GASB 75.
Under GASB 45, the City's funding policy requires a minimum annual contribution equivalent to
the annual required contribution (ARC). Under GASB 75, this changes to an actuarial determined
contribution which is made up of additional components including deferred outflows of resources
and deferred inflows of resources.
The ARC was determined as part of a June 30, 2015 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) 4.5% investment rate of return and (b) 2.75% of general inflation increase,
and (c) a healthcare trend of declining annual increases ranging from 6.7% in 2015 to 4.5% 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 fmancial 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 19-
year fixed (closed) period for June 30,2016 in its June 30, 2015 actuarial valuation.
80
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 11-POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)
The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an
actuarial experience study for the period July 1, 2014 through June 30, 2015.
The long-term expected rate of return on OPEB plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns,
net of OPEB plan investment expense and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighing the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic real rates of return for each major asset class
are summarized in the following table:
Target
Asset Class Allocation
Public Equity 57%
Fixed Income 27%
TIPS 5%
Commodities 3%
REITs 8%
Total 100%
Assumed Long-Term Rate of Intlation
Assumed Long-Term Investment Expenses
Expected Long-Term Net Rate of Return
Discount Rate
Long-Term
Expected
Real Rate of Return
5.96%
2.65%
2.50%
5.20%
8.13%
2.75%
nla
7.28%
7.25%
Long-Term
Expected
Rate of Return
(with the effect
of inflation}
8.71%
5.40%
5.25%
7.95%
10.88%
The Expected Long-Term Rate of Return is provided by CalPERS' Strategic Asset Allocation
Overview in August 2011 -Strategy 1.
Discount Rate
The discount rate used to measure the total OPEB liability was 7.25 percent. The projection of cash
flows used to determine the discount rate assumed that City contributions will be made at rates
equal to the actuarially determined contribution rates. Based on these assumptions, the OPEB plan's
fiduciary net position was projected to be sufficient to make projected benefit payments and the
plan assets are expected to be invested using the strategy to achieve the expected return.
81
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 11-POST-EMPLOYMENTHEALTH CARE BENEFITS (Continued)
Change in Net OPEB Liability
TotalOPEB
Liability
Plan Fiduciary Net
Position
NetOPEB
Liability/(As set)
Balance at June 30,2015 (Valuation Date)
Changes Recognized for the Measurement Period:
Service Cost
Interest on the total OPEB liability
Changes in benefrt terms
Difference between expected and actual experience
Changes of assumptions
ContrIbutions from the employer
Net investment income
Administrative expenses
Benefrt payments and refunds
Net Changes during July 1,2015 to June 30,2016
Balance at June 30, 2016 (Measurement Date)
$48,226,000
766,000
3,447,000
$15,608,000
766,000
3,447,000
(2,896,000)
(157,000)
7,000
The benefit payments and refunds includes implied subsidy benefit payments in the amount of
$702,000.
Sensitivity of the net OPEB liability to changes in the discount rate
The following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using a discount rate that is I-percentage-point lower
(6.25 percent) or I-percentage-point higher (8.25 percent) than the current discount rate:
Plan's Net OPEB Liability/(Asset)
Discount Rate ~1 %
(6.25%)
$39,500,000
Current Discount
Rate (7.250/0)
$33,785,000
Discount Rate +1 %)
(8.25%)
Sensitivity of the net OPEB liability to changes in the health care cost trend rates
Plan's Net OPEB Liability/(Asset)
Discount Rate ~1 %
$30,786,000
Healthcare Cost
Trend Rates
$33,785,000
Discount Rate +1 %
Detailed infonnation about the OPEB plan's fiduciary net position is available in the separately
issued plan financial report.
82
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 11-POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
related to OPEB
Components ofOPEB Expense for fiscal year 2016-2017 were as follows:
Service Cost
Interest on Total OPEB Liability
Projected earning on investments
Employee contributions
Administrative expense
Change in benefits
Recognition of deferred outflows/inflows:
Experience
Assumptions
Asset Returns
OPEB Expense
$766,000
3,447,000
(1,132,000)
7,000
$3,283,000
Components of deferred outflows of resources and deferred inflows of resources related to OPEB at
June 30, 2017 were as follows:
Net difference between projected and actual earnings on
OPEB plan investments
Employer contributions made subsequent to the measurement date
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$780,000
3,475,000
$4,255,000
The difference between projected OPEB plan investment earnings and actual earnings is amortized
over a five year period. The remaining gains and losses are amortized over the expected average
remaining service life. The expected average remaining service life for the 2015-16 measurement
period is 4.0 years.
$3,475,000 reported as deferred outflows of resources related to contributions subsequent to the
measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30,
2018. Amounts reported as deferred outflows of resources and deferred inflows of resources related
to OPEB will be recognized as future OPEB expense as follows:
Measurement Period
Ended June 30
2018
2019
2020
2021
Thereafter
Deferred Outflows Deferred Inflows
of Resources of Resources
83
$195,000
195,000
195,000
195,000
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 11 -POST -El\1PLOYMENT HEALTH CARE BENEFITS (Continued)
The table below provides a summary of the key results during this reporting period.
Summary of Results
Measurement Date
Description June 30, 2016
NetOPEB Liability $33,785,000
Deferred Inflows -
Deferred Outflows (780,000)
Impact on Net Position before deferred contributions 33,005,000
Additional Deferred Outflows -Contributions subsequent to measurement date (3,475,000)
Impact on Statement of Net Position before Allocations 29,530,000
Allocation ofNOL to SRSD 1,034,395
Allocation of Deferred Inflows (measurement date) to SRSD -
Allocation of Deferred Outflows (measurement date) to SRSD (23,881)
Impact on Net Position before deferred contributions to SRSD 1,010,514
Allocation of Additional Deferred Outflows (contributions) to SRSD (106,394)
Long-Term Receivable from SRSD, due to OPEB obligations (see Note 4H) 904,120
Impact on Statement of Net Positions, net of receivable from SRSD 28,625,880
OPEB Expense ($ Amount) 3,283,000
Covered Payroll ($ Amount) 31,106,000
Measurement Date
June 30,2015
$32,618,000
-
-
32,618,000
-
32,618,000
1,002,000
-
-
1,002,000
-
1,002,000
31,616,000
2,148,000
32,906,000
Actuarial data is comprised from a variety of complex inputs. It is therefore subject to change
between measurement dates. As a result, the Net OPEB Liability used to calculate the SRSD
allocation percentage in fiscal year ended June 30, 2016 ($32,727,000) varies slightly from the
figure reported in the actuarial report dated June 30, 2017 ($32,618,000) by $109,000.
I NOTE 12 -JOINTLY GOVERNED ORGANIZATIONS
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.
84
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 12 -JOINTLY GOVERNED ORGANIZATIONS (Continued)
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 consortiallevel 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 16.44% or $221,318 for
the year ended June 30, 2017. 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.
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 MSLAJP A. MGSA services now include street light maintenance, abandoned vehicle
abatement, taxicab regulation and administrative responsibility for MarinMap. The City's
contribution to MGSA was $3,134 for the year ended June 30, 2017. 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, fmance, 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 $314,161 of the Authority's operation and debt service for the fiscal
year ended June 30, 2017. 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.
85
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 12 -JOINTLY GOVERNED ORGANIZATIONS (Continued)
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
menlber 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 $32,134 for the year ended June 30, 2017.
Financial statements of the Agency can be obtained at 555 Northgate Drive, Suite 230, San
Rafael, California 94903.
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
fmance, 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 $17,849 for the year ended June 30, 2017. Financial statements
of the Authority can be obtained at 3501 Civic Center Drive, San Rafael, California 94903.
G. Central Marin Sanitation Agency (CMSA)
In October 1979, the District entered into a joint powers agreement with three neighboring
sanitation agencies in central Marin County forming the Central Marin Sanitation Agency
(CMSA). CMSA serves as a regional wastewater treatment plant for its four member agencies
and San Quentin Prison (SQ) and is governed by a six-member Board of Commissioners, two
appointed by the Board of Directors of the San Rafael Sanitation District (SRSD), two appointed
by the Board of Directors of the San Rafael Sanitation District No.1 (SD 1), one appointed by the
governing board of Sanitary District No.2 (SD 2), and one appointed by the City Council of the
City of Larkspur (Larkspur).
Total project costs for the joint venture were funded from federal (75%) and state (12.5%) clean
water grants and from local shares (12.0/0 total) allocated among the member agencies and SQ
based upon the weighted average of the strength and volume of sewage flows per member at
inception of the project. Final individual local shares of total project costs were approximately
$7.6 million for SRSD, $6.3 million for SD 1, $1.6 million for SD 2, $1 million for Larkspur, and
$1.4 million for SQ. CMSA derives its annual funding for its operations and capital programs
almost exclusively from service charges to member agencies. The joint powers agreement does
not provide an explicit measurable right as required to establish an equity interest for any of the
joint venture participants, and in addition to, stipulates that all excess capital funds, if any, and all
excess administration, operations and maintenance funds from whatever source, if any, are the
property of CMSA.
86
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 12 -JOINTLY GOVERNED ORGANIZATIONS (Continued) I
The financial statements of the Agency are available at the CMSA office. Condensed financial
information for the Agency is presented below for June 30, 2016 and 2015, the most recent
information available.
Total assets
Deferred outflows of resources
Total liabilities
Deferred inlows of resources
Net position
Total revenues
Total expenses
Total contributions and adjustments
Prior period adjustment -GASB 68
Change in net position
I NOTE 13 -RISK MANAGEMENT
A. City
2016
$106,391,299
2,092,186
(60,370,523)
(2,487,504)
$45,625,458
$16,952,527
(16,834,929)
162,705
$280,303
2015
$109,050,874
936,613
(62,387,928)
(2,254,404)
$45,345,155
$17,873,113
(16,220,247)
415,845
(7,278,030)
(5,209,319)
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 Fundto account for and fmance 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.
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 $119,773,465. 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, 2017, the City
contributed $278,096 for coverage during the current year and received a refund of $49,910 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.
87
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 13 -RISK MANAGEMENT (Continued) I
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.
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.
General Workers' Totals, as of June 30
Liability * Compensation ** 2017
Balance, beginning of year $2,543,655 $6,044,911 $8,588,566
Current year claims and changes
in estimates 696,685 1,181,591 1,878,276
Claims paid (658,811) (1,060,693) (1,719,504)
Balance, end of year $2,581,529 $6,165,809 $8,747,338
Due in one year $1,226,194 $1,427,094 $2,653,288
Due in more than one year 1,355,335 4,738,715 6,094,050
Total claim liabilities $2,581,529 $6,165,809 $8,747,338
* Liability based on an actuarial valuation as of December 31,2015, extrapolated to June 30, 2016
* * Liability based on an actuarial valuation as of February 29,2016, extrapolated to June 30, 2016
The claims settlements have not exceeded insurance coverage for the past three years.
B. District
2016
$7,319,418
3,111,209
(1,842,061)
$8,588,566
$2,129,125
6,459,441
$8,588,566
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; errors and omissions; injuries to employees and natural disaster. The District
participates in a joint powers agreement with other entities forming the California Sanitation Risk
Management Authority (CSRMA), a public entity risk pool operating as a common risk
management and insurance program for 60 member entities. CSRMA is governed by a Board of
Directors composed of one representative from each member agency and meets three times per
year in conjunction with conferences of the California Association of Sanitation Agencies. The
Board controls the operations of CSRMA including selection of management and approval of
operating budgets, independent of any influence by member entities.
88
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 13 -RISK MANAGEMENT (Continued) I
The District pays annual premiums to CSRMA for its primary insurance and property insurance
programs. Primary and property insurance programs are fully insured wherein CSRMA
purchases insurance as a group thereby reducing its costs. CSMRA provides both fully insured
and pooled insurance programs for its participating member entities. Because all employees of
the District are contracted employees from the City of San Rafael, workers' compensation
insurance is not carried by the District but is provided through the City.
The District's primary and property insurance programs transfer risk to commercial insurance
policies for claims above deductibles, while the District retains risk for claims to the extent of
deductibles. Settled claims for CSRMA have not exceeded coverage in any of the past three
fiscal years.
The following summarizes active insurance policies as of June 30, 2017 together with coverage
limits for each insured event:
Insurance Program Limits Coverage Description
CSRMA -Allied Wodd Ins. $3,000,000 GenlMgt liability -aggregate
CSRMA -Allied Wodd Ins. $1,000,000 GenlMgt liability -occurrence
CSRMA -Allied Wodd Ins. $1,000,000 Auto liability - accident
CSRMA -Allied Wodd Ins. $4,000,000 Excess liability
CSRMA -Public Entity Property
Insurance Program (P .E.P .I.P.) $12,157,866 Special form property
CSRMA -Illinois Union Ins. $25,000,000 Pollution liability -tier 1
CSRMA -Illinois Union Ins. $2,000,000 Pollution liability -tier 2
CSRMA -Lloyds of London $2,000,000 Cyber liability -third party
CSRMA -Lloyds of London $2,000,000 Cyber liability -third party
CSRMA -Travelers Ins. $25,000 Identity theft
The fmancial statements of CSRMA are available at their office: 100 Pine Street, 11th Floor, San
Francisco, CA 94111. Condensed fmancial information for CSRMA is presented below for the years
ended June 30, 2016 and 2015 (latest information available).
2016 2015
Assets $28,336,567 $27,418,098
Liabilities (16,735,609) (16,714,638)
Net assets $11,600,958 $10,703,460
Revenues $11,843,583 $10,895,632
Expenses (10,946,085) (11,157,866)
Increase (decrease) in net assets $897,498 ($262,234)
89
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30,2017
I NOTE 14 -COl\1MITMENTS AND CONTINGENCIES
A. City
Litigation
The City is subj ect 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
fmancial position of the City as of June 30, 2017.
Major Contracts
In April 2017, the City entered into a construction contract for $19,940,000 for the major
construction and renovation of two fire stations. The contract amount was reduced shortly
thereafter to its current sum of $19,098,834. The funding for this project comes from a
combination of funds set aside in the General Fund and future General Fund revenues attributable
to the Measure E Transactions and Use Tax. It is highly likely that some form of debt financing
will be required during fiscal year 2017-2018 to meet the cashflow requirements of this project.
B. District
As of June 30, 2017, SRSD had several contracts for sewer improvement projects with remaining
obligations of approximately $1,300,000, with the majority expected to be completed within the
2017118 fiscal year.
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 AB 1484 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).
90
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
NOTE 15 -SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE-PURPOSE
TRUST FUND (SUCCESSOR AGENCy) ACTIVITIES (Continued)
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.
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 fund 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 tum 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.
91
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
NOTE 15 -SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE-PURPOSE
TRUST FUND (SUCCESSOR AGENCy) ACTIVITIES (Continued)
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.
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 anyone 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
Proj ect 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 anyone 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 $18.9 million in remaining
debt service on the Bonds, which is scheduled to occur in 2023. For fiscal year June 30, 2017,
tax increment revenues amounted to $4.2 million which was used to make the debt service
payments of $3.6 million.
92
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
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, 2017:
San Rafael Redevelopment Agency
1999 Tax Allocation Bonds
Capital Appreciation Bonds
Authorized
and Issued
5.58%-5.6%, due 12/112022 $2,389,004
2002 Tax Allocation Refunding Bonds
2.00%-5.25%, due 12/1/2021 25,020,000
2009 Tax Allocation Refunding Bonds
3.00%-5.00%, due 12/112022 14,660,000
Add: deferred bond premium costs
Total Successor Agency Long-tenn Debt
Debt Service Requirements
Balance
$6,074,097 $344,411
6,060,000
8,905,000
Annual debt service requirements are shown below:
For the Year
Ended June 30
2018
2019
2020
2021
2022
2023
Totals
Reconciliation of long-term debt:
Less unaccreted discount
Add deferred bond premium costs
93
$1,830,000
1,100,000
Balance
June 30,2017
$6,418,508
4,230,000
7,805,000
479,162
$18,932,670
Current
Portion
$1,920,000
1,160,000
$3,080,000
Governmental Activities
Principal Interest
$3,080,000 $484,026
3,229,081 370,676
3,309,082 297,019
3,389,231 214,175
3,404,749 120,819
3,586,374
$19,998,517
($1,545,009)
479,162
$18,932,670
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
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.
On March 27,2017, the California State Department of Finance notified the Successor Agency of its
determination that Other Post Employment Benefit Obligations (OPEB) would not be allowed. The
last approved payment of $55,778, which was received in June 2017, brought the remaining balance
to $298,888. This amount was removed from the schedule of obligations of the Successor Agency as
of June 30,2017.
The following table summarizes the activity for the fiscal year ended June 30, 2017:
Approved Balance
Amount June 30, 2016
Unfunded Pension Liability $1,904,431 $952,216
Unfunded OPEB Obligation 502,000 354,666
Total Long-Term Obligations $1,306,882
Annual repayment requirements are shown below:
E. Commitment and Contingencies
For the Year
Ended June 30
2018
2019
2020
2021
Totals
State Approval of Enforceable Obligation
Additions
Principal
$190,443
190,443
190,443
190,444
$761,773
Retirements
$190,443
55,778
$246,221
Debt
Cancelled
$298,888
$298,888
Balance
June 30, 2017
$761,773
$761,773
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, 2017, 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.
94
CITY OF SAN RAFAEL
NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2017
I NOTE 16-SUBSEQUENTEVENT
Energy Efficiency Loan and Master Service Agreement
On September 5, 2017, the City Council authorized a loan agreement with the California Energy
Commission for various energy efficient system upgrades to City facilities and street lights. At the
same time, the City Council approved a master services agreement with Pacific Gas and Electric
Company to perform these system upgrades in a total amount not to exceed $1,178,813. The loan
terms provide for annual interest of 1 % on the outstanding balance. Disbursement of the loan is
expected in July 2019, with semi-annual repayment beginning in December 2020 and terminating in
December 2027. The planned source of repayment will be energy cost savings that result from the
improvements.
95
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
Schedule of the City's Proportionate Share oftbe Net Pension liability
Last 10 years'"
6/30/2015 6/30/2016
City's proportionate share
Proportionate share of total pension liability
Proportionate share of fiduciary net position
Proportionate share of the net pension liability
Plan fiduciruy net position as a percentage ofthe total pension liability
Covered payroll
Net pension liability as a percentage of covered payroll
30.0453%
$677,753,565
89.04%
$31,429,178
236.26%
'" -The fiscal year ended June 30,2015 was the first year of implementation, therefore only three years are shown
99
36.7394%
$907,195,058
764,871,931
$142,323,127
84.31%
$31,106,414
457.54%
6/30/2017
34.9538%
$900,629,287
81.45%
$32,126,272
519.99%
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
Schedule of Contributions
Defined Benefit Pension
Last 10 years (subject to available information: first year ofimplementation was Fiscal Year ended June 30, 2015)
Contractually required contribution
Contributions in Relation to the
Contractually required contribution
Contribution Deficiencyl (Excess)
Covered payroll
Contnbutions as a percentage of
covered payroll
Notes to Schedule
Valuation Date 1 Timing
$
$
2015
17,802,358
17,802,358
31,106,414
57.23%
6/30/2013 (for contributions made in FY2014-2015)
Key Methods and Assumptions Used to Detennine Contribution Rates (for FY2014-15):
Actuarial cost method
Amortization method
Remaining Amortization period
Asset valuation method
Inflation
Salary increases
Investment Rate ofRetum
Retirement Age
Healthy Mortality
Disabled Mortality
Entry Age Normal Cost Method
Level percentage of payroll with separate period for Extraordinary Actuarial Loss from2009
Unfunded liability -17 years / Extraordinary Actuarial Loss -25 years
5-year smoothed market, 8oolo /12oolo corridor around market
3.25%
3.25% plus merit component based on employee classification and years of service
7.5oolo
Classic Tiers: Safety -50, Miscellaneous -55; PEPRA Tiers: Safety -57, Miscellaneous -62
Sex distinct RP-2000 Combined Mortality projected to 2010 using Scale AA
with ages set back one year for male members / two years for female members
Sex distinct RP-2000 Combined Mortality projected to 2010 using Scale AA
with ages set forward three years for all members
100
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
Schedule of Contributions
Defined Benefit Pension
Last 10 years (subject to available infonnation: first year of impleme ntation was Fiscal Year ended June 30,2015)
(Continued)
Contractually required contribution
Contributions in Relation to the
Contractually required contribution
Contribution Deficiency 1 (Exces s)
Covered payroll
Contributions as a percentage of
covered payroll
Notes to Schedule
Valuation Date 1 Timing
$
$
$
2016
19,339,577
19,339,577
32,126,272
60.20%
6/30/2014 (for contributions made in FY2015-2016)
Key Methods and Assumptions Used to Detennine Contribution Rates (for FY2015·16):
Actuarial cost method
Amortization method
Remaining Amortization period
Asset valuation method
Inflation
Salary increases
Investment Rate ofRetum
Retirement Age
Healthy Mortality
Disabled Mortality
Entry Age Normal Cost Method
Level percentage of payroll with separate period for Extraordinary Actuarial Loss from 2009
Unfunded liability -16 years 1 Extraordinary Actuarial Loss -24 years
5-year smoothed market, 80% 1120% corridor around market
3.25%
3.25% plus merit component based on employee classification and years ofservice
7.25%
Classic Tiers: Safety -50, Miscellaneous -55; PEPRA Tiers: Safety -57, Miscellaneous -62
CalPERS 2014 Pre-Retirement Non-Industrial Death rates (plus Duty-Related Death rates for
Safety Members), with the 20-year static projection used by CaIPERS replaced by
generational improvements from a base year of 2009 using Scale MP-2014
CalPERS 2014 Disability Mortality rates (Non-Industrial rates for Miscellaneous members
and Industrial Disability rates for Safety members), adjusted by 90010 for Males and Females
(Miscellaneous and Safety) with the 20-year static projection used by CaIPERS replaced by
generational improvements from a base year of 2009 using Scale MP-2014
101
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
Schedule of Contributions
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 Deficiencyl (Excess)
Covered payroll
Contributions as a percentage of
covered payroll
Notes to Schedule
Valuation Date 1 Timing
$
$
$
2017
20,003,001
20,003,001
32,885,135
60.83%
6/30/2015 (for contributions made in FY2016-2017)
Key Methods and Assumptions Used to Determine Contribution Rates (for FY2016-17):
Actuarial cost method
Amortization method
Remaining Amortization period
Asset valuation method
Inflation
Salary increases
Investment Rate of Return
Retirement Age
Healthy Mortality
Disabled Mortality
Entry Age Normal Cost Method
Level percentage of payroll with separate period for Extraordinary Gains or Losses
(24 years remaining as of 6/30/14), the remaining UAL as of June 30,2013
(16 years as of6/30114), and additional layers for unexpected changes in UAL after
6/30113 (24 years for gains and losses with a 5~year phase-inlout and 22 years for
assumption changes with a 3-year phase-inlout).
19 years remaining as of June 30,2016
Market Value
2.75% per year
3.00% plus merit component based on employee classification and years of service
7.25%
Classic Tiers: Safety -50, Miscellaneous -55; PEPRA Tiers: Safety -57, Miscellaneous -62
Sex distinct RP-2000 combined mortality prqiected to 2010 using Scale AA with ages
set back one year for male members/two years for female members
Sex distinct RP-2000 combined mortality prqiected to 2010 using Scale AA with ages
set forward three years for all members
102
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
Other Post-Employment Benefits (OPEB)
Measurement period
TotalOPEB liability
Service cost
Interest
Differences between expected and actual experience
Assumption changes
Benefit payments, including refimds of employee contnbutions
Net change in total OPEB liability
TotalOPEB liability -beginning
TotalOPEB liability -ending (a)
OPEB fiduciary net position
Contnbutions -employer
Net investment income
Benefit payments, including refimds of employee contnbutions
Administrative expense
Net change in plan fiduciary net position
Plan fiduciary net position -beginning
Plan fiduciary net position -ending (b)
Plan net OPEB liability -ending (a) -(b)
Plan fiduciary net position as a percentage
of the total OPEB liability
Covered-employee payroll
Plan net OPEB liability as a percentage ofcovered-employee payroll
$
$
Historical information is required only for the measurement periods for which GASB 75 is applicable.
103
2015-16
766,000
3,447,000
(2,896,000)
1,317,000
2,896,000
157,000
(2,896,000)
150,000
CITY OF SAN RAFAEL
REQUIRED SUPPLEMENTARY INFORMATION
For the Year Ended June 30, 2017
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
Other Post-Employment Benefits (OPEB)
Actuarially determined contribution
Contributions in relation to
the actuarially determined contribution
Contribution deficiency (excess)
Covered-employee payroll
Contributions as a percentage of
covered-employee payroll
$
$
$
2016-17
3,450,000
{3,475,000}
{25,000}
32,885,000
10.49%
GASB 75 requires this information for plans funding with OPEB trusts be reported in the employer's Required Supplementary
Information for 10 years or as many years as are available upon implementation.
The June 30, 2017 actuarial valuation provided the Actuarially Determined Contributions for fiscal years ending 06/30/17.
Notes to Schedule:
Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in
which contributions are reported.
Methods and assumptions used to determine contribution rates:
Valuation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization
Asset Valuation Method
Discount Rate
Contribution Policy
General Inflation
Mortality, Retirement, Disability, Termination
Mortality Improvement
Expected Long-Term Rate of Return on Investments
Salary Increases
Medical Trend
Healthcare participation for future retirees
Cap Increases
June 30, 2015
Entry Age Normal, Level Percentage of Payroll
Level dollar amount, over approximate lO-year period
19 years remaining as ofJune 30, 2016
Investment gains and losses spread over 5-year rolling period
7.25%
City contributes full ADC
2.75% per annum
Same as June 30, 2015 actuarial valuation
Mortality projected fully generational with Scale MP-14, modified
to converge to ultimate improvement rates in 2022
Same as discount rate -expected City contributions projected to
keep sufficient plan assets to pay all benefits from trust
Aggregate - 3 %
Merit -6/30/14 MCERA assumptions
Non-Medicare -6.5% for 2017, decreasing 0.5% per year to an ultin
rate of 4.50% for 2021 and Medicare -6.7% for 2017, decreasing to
ultimate rate of 4.5% for 2021 and later years
Capped benefit: 100% currently covered, 80% currently waived
PEMHCA minimum -60%
None
104
GENERAL FUND AND MAJOR SPECIAL REVENUE FUND
BUDGET-TO-ACTUAL STATEMENTS
GASB Statement No. 34 dictates that budget-to-actual infonnation in the basic [mancial 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.
105
CITY OF SAN RAFAEL
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
B1JDGET AND ACTUAL
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
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, El\ID OF YEAR
FOR THE YEAR ENDED JUNE 30,2017
Budgeted Amounts Actual
Original Final Amounts
$65,690,000 $64,563,000 $64,242,440
2,361,000 2,511,000 2,559,841
483,000 448,000 400,283
288,000 288,000 229,791
3,104,005 3,042,000 2,767,092
2,550,000 2,869,000 2,459,680
466,000 396,000 706,657
74,942,005 74,117,000 73,365,784
9,512,718 10,941,401 10,190,580
41,610,680 40,958,109 40,844,246
11,144,863 10,943,588 11,201,655
4,013,962 4,154,885 3,759,564
3,076,042 3,076,042 3,077,435
90,690
175,172 175,172 175,172
276,513 276,513 271,263
69,900,640 70,525,710 69,519,915
5,041,365 3,591,290 3,845,869
1,212,520 1,382,303 1,382,303
(5,976,091 ) (7,213,543 2 (7,213,543 2
(4,763,571 2 (5,831,240 2 (5,831,240 2
$277,794 {$2,239,950 2 (1,985,371)
18,689,803
$16,704,432
106
Variance with
Final Budget
Positive
O~egative)
($320,560)
48,841
(47,717)
(58,209)
(274,908)
(409,320)
310,657
(751,216)
750,821
113,863
(258,067)
395,321
(1,393)
5,250
1,005,795
254,579
$254,579
CITY OF SAN RAFAEL
TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FlJND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2017
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 In
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
Budgeted Amounts
Original Final
$36,400 $36,400
600,000 715,000
636,400 751,400
80,000 80,000
4,570,733
80,000 4,650,733
556,400 (3,899,333)
228,400
228,400
$556,400 ($3,670,933)
107
Actual
Amounts
$31,267
204,210
235,477
22,450
1,745,154
1,767,604
(1,532,127)
228,400
228,400
(1,303,727)
10,439,157
$9,135,430
Variance with
Final Budget
Positive
(Negative)
($5,133)
(510,790)
(515,923)
57,550
2,825,579
2,883,129
2,367,206
$2,367,206
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, 2017
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
$23,000 $23,000
1,903,385 4,028,385
1,043,600 1,043,600
5,094,985
43,676 43,676
3,109,442 3,781,238
5,508,565
309,102 481,702
3,462,220 9,815,181
(492,235) (4,720,196)
325,000
(400,000) (628,400)
(303,400)
($5,023,596)
108
Actual
Amounts
$24,527
3,728,982
1,149,022
62,314
4,964,845
2,643,991
1,641,317
373,833
325,000
(628,400)
(303,400)
70,433
6,653,263
$6,723,696
Variance with
Final Budget
Positive
$1,527
(299,403)
105,422
(130,140)
43,676
1,137,247
3,867,248
175,998
5,224,169
5,094,029
$5,094,029
SUPPLEMENTARY INFORMATION
CITY OF SAN RAFAEL
ESSENTIAL FACILITIES CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2017
REVENUES
Other revenue
Total Revenues
EXPENDITURES
Capital improvement/special projects
Total Expenditures
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
Budgeted Amounts
Final
$4,040,000 $6,052,841
4,040,000 6,052,841
(4,040,000) (6,052,841)
4,040,000
4,040,000 5,417,454
($635,387)
110
Actual
Amounts
(5,417,454)
5,417,454
5,417,454
Variance with
Final Budget
Positive
(Negative)
$635,387
635,387
635,387
$635,387
NON-MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Recreation Revolving Fund -Established to administer the Community Services Department's
program and facility rental charge and a.ccounts 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 adj acent 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.
Pt. San Pedro Maintenance Portion Special Revenue Fund -Established to account for ongoing
maintenance needs within the Pt. San Pedro assessment district.
111
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 Tax 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 ValleylLucas
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.
112
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:
Restricted
Committed
Assigned
Total Fund Balances
CITY OF SAN RAFAEL
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
FOR THE YEAR ENDED JUNE 30,2017
SPECIAL REVENUE FUNDS
Baypoint
Lagoons Household
Recreation Assessment Hazmat
Revolving District Facility Childcare
$556,856 $238,169 $294,058 $1,374,316
169,289 296,864
157
40,594
472 3,670
$726,617 $238,326 $590,922 $1,418,580
$240,937 $118,443 $48,436
159,114
367,589
608,526 277,557 48,436
118,091 $238,326 313,365 1,370,144
118,091 238,326 313,365 1,370,144
Total Liabilities and Fund Balances $726,617 $238,326 $590,922 $1,418,580
114
Loch Lomond
Assessment
District
$701,449
97
$701,546
$41,280
41,280
660,266
660,266
$701,546
Library
Library Assessment
$641,059 $687,806
432
$641,491 $687,806
$9,426 $20,234
9,426 20,234
632,065 667,572
632,065 667,572
$641,491 $687,806
SPECIAL REVENUE FUNDS
Public
Safety
$138,261
21,000
$159,261
$761
761
$158,500
158,500
$159,261
Stormwater
$212,794
17,829
$230,623
$41,536
41,536
189,087
189,087
$230,623
115
Development
Services
$703,392
$703,392
$12,530
6,076
1,500
20,106
683,286
683,286
$703,392
Parkland
Grants Dedication
$702,855 $457,538
53,152
$756,007 $457,538
$2,886 $8,350
2,886 8,350
753,121 449,188
753,121 449,188
$756,007 $457,538
(Continued)
ASSETS
Cash and investments
Restricted cash and investments
Receivables:
Accounts
Taxes
Grants
Interest
Loans
Prep aids
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Deposits payable
Developer deposits payable
Deferred revenue
Total Liabilities
Fund Balances:
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, 2017
SPECIAL REVENUE FUNDS
Emergency Pt. San Pedro
Medical Business Maintenance
Services Improvement Portion
$1,494,455 $22,958 $153,108
359,679
25,903 459
$1,880,037 $22,958 $153,567
$135,507 $22,958 $2,284
135,507 22,958 2,284
1,744,530 151,283
1,744,530 151,283
$1,880,037 $22,958 $153,567
116
Low and
Moderate
Income Measure A
Housing Open Space
$679,950 $199,727
218,273
334
230,066
$910,350 $418,000
$48,765
48,765
910,350 369,235
910,350 369,235
$910,350 $418,000
DEBT SERVICE FUNDS
1997
Peacock Gap Mariposa Financing
Assessment Assessment Authority
District District Revenue Bonds
$2,875 $16,573 $147,797
$2,875 $16,573 $147,797
$2,875 $16,573 $147,797
2,875 16,573 147,797
$2,875 $16,573 $147,797
Capital
Improvement
$2,864,858
625,123
29,835
1,658
$3,521,474
$57,702
57,702
3,463,772
3,463,772
$3,521,474
117
CAP IT AL PROJECTS FUNDS
Park
Bedroom Assessment Capital
Tax Districts Projects
$76,845 $223,742 $27,936
77,038
$76,845 $300,780 $27,936
$76,845 $300,780
$27,936
76,845 300,780 27,936
$76,845 $300,780 $27,936
(Continued)
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:
Restricted
Committed
Assigned
Total Fund Balances
CITY OF SAN RAFAEL
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
FOR THE YEAR ENDED JUNE 30,2017
CAPITAL
PROJECTS
FUNDS
Total
Non-Major
Open Governmental
$115,103
$115,103
115,103
Funds
$12,734,480
702,161
846,832
262,718
123,581
1,992
230,066
4,574
$14,906,404
$812,035
6,076
160,614
367,589
1,346,314
9,953,279
3,491,708
1
13,560,090
Total Liabilities and Fund Balances $115,103 $14,906,404
118
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2017
SPECIAL REVENUE FUNDS
Baypoint
Lagoons Household
Recreation Assessment Hazmat
Revolving District Facility Childcare
REVENUES
Taxes and special assessments $25,368
Use of money and properties $1,477 760 $180 $4,177
Intergovernmental 10,097 329,232
Charges for services 3,129,356 156,434 3,724,353
Other revenue 16,149 1,125 11,939
Total Revenues 3,157,079 26,128 157,739 4,069,701
EXPENDITURES
Current:
General government
Public safety 93,013
Public works and parks 5,722
Culture and recreation 4,798,373 3,853,401
Capital outlay
Capital improvement/special projects 16,994
Total Expenditures 4,815,367 5,722 93,013 3,853,401
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,658,288) 20,406 64,726 216,300
OTHER FINANCING SOURCES (USES)
Transfers in 1,750,000
Transfers out
Total Other Financing Sources (Uses) 1,750,000
Net Change in Fund Balances 91,712 20,406 64,726 216,300
Fund Balance, Beginning 26,379 217,920 248,639 1,153,844
Fund Balance, Ending $118,091 $238,326 $313,365 $1,370,144
120
Loch Lomond
Assessment
District
$15,606
2,334
17,940
48,618
48,618
(30,678)
(30,678)
690,944
$660,266
SPECIAL REVENUE FUNDS
Library Public Development Parkland
Library Assessment Safety Stormwater Services Grants Dedication
$868,481
$2,135 2,302 $130 $548 $33,615 $1,592 $1,620
1,000 89,053 1,002,826
7,067 1,860 903,910 39,360
3,020 74,762 20,228 23,106 1,500
13,222 870,783 165,805 924,686 33,615 1,027,524 42,480
5,997 26,606 182,778
276,387 582,235
782,590 30,072
10,049 907,470
6,996 4,936 908,171 92,704
17,045 907,470 281,323 1,696,758 26,606 765,013 122,776
(3,823) (36,687) (115,518) (772,072) 7,009 262,511 (80,296)
100,000 46,089 37,761
(325,000) (169,783)
100,000 (325,000) (123,694) 37,761
(3,823) (36,687) (15,518) (772,072) (317,991) 138,817 (42,535)
635,888 704,259 174,018 961,159 1,001,277 614,304 491,723
$632,065 $667,572 $158,500 $189,087 $683,286 $753,121 $449,188
(Continued)
121
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2017
SPECIAL REVENUE FUNDS
Low and
Emergency Pt. San Pedro -Moderate
Medical Business Maintenance Income
Improvement Portion
REVENUES
Taxes and special assessments $5,485,637 $74,084
Use of money and properties 7,729 508 $2,445
Intergovernmental 121,517
Charges for services 1,506,437
Other revenue 220,984 59,375
Total Revenues 74,592
EXPENDITURES
Current:
General government 47,978 81,027
Public safety 7,114,323
Public works and parks 89,980
Culture and recreation
Capital outlay
Capital improvement/special projects
Total Expenditures 7,162,301 89,980 81,027
EXCESS (DEFICIENCy) OF REVENUES
OVER (UNDER) EXPENDITURES 180,003 (15,388) (19,207)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances 180,003 (15,388) (19,207)
Fund Balance, Beginning 1,564,527 166,671 929,557
Fund Balance, Ending $1,744,530 $151,283 $910,350
122
Measure A
Open Space
$437,170
973
438,143
107,949
205,179
125,015
6,979
362,256
DEBT SERVICE FUl'IDS CAPITAL PROJECTS FUl'IDS
1997
Peacock Gap Mariposa Financing Park
Assessment Assessment Authority Capital Bedroom Assessment Capital
District District Revenue Bonds Improvement Tax Districts Projects
$18,105
$493 $363
$13,357
143,472
$5,507
493 156,829 18,105 363 5,507
459,609
10,440
459,609 10,440
493 (302,780) 18,105 363 (4,933)
493 (302,780) 18,105 363 ( 4,933)
$2,875 $16,573 147,304 3,766,552 58,740 300,417 32,869
$2,875 $16,573 $147,797 $3,463,772 $76,845 $300,780 $27,936
(Continued)
123
CITY OF SAN RAFAEL
COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
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
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2017
CAPITAL
PROJECTS
FUNDS
Total
Non-Major
Open Governmental
Space Funds
$383
383
4,463
4,463
(4,080)
(4,080)
119,183
$115,103
124
$6,924,451
63,764
1,567,082
9,612,249
437,695
18,605,241
344,386
8,173,907
1,162,161
9,569,293
459,609
1,044,704
20,754,060
(2,148,819)
1,933,850
(612,819)
1,321,031
(827,788)
14,387,878
$13,560,090
CITY OF SAN RAFAEL
BlJDGETED NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULES OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2017
SPECIAL REVENUE FUNDS
Recreation Revolving Baypoint Lagoons Assessment District
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Taxes and special assessments $25,500 $25,368 ($132)
Use of money and properties $26,309 $1,477 ($24,832) 700 760 60
Intergovernmental 10,000 10,097 97
Charges for services 2,962,330 3,129,356 167,026
Other revenue 2,750 16,149 13,399
Total Revenues 3,001,389 3,157,079 155,690 26,200 26,128 (72 2
EXPENDITURES
Current:
General government
Public safety
Public works and parks 6,000 5,722 278
Culture and recreation 4,809,085 4,798,373 10,712
Capital outlay
Capital improvement/special projects 10,000 16,994 (6,994)
Total Expenditures 4,819,085 4,815,367 3,718 6,000 5,722 278
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,817,696) (1,658,288) 159,408 20,200 20,406 206
OTHER FINANCING SOURCES (USES)
Transfers in 1,750,000 1,750,000
Transfers out
Total Other Financing Sources (Uses) 1,750,000 1,750,000
FUND BALANCES, BEGINNING OF YEAR
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES ($67,696) 91,712 $159,408 $20,200 20,406 $206
FUND BALANCES, BEGINNING OF YEAR 26,379 217,920
FUND BALANCES, END OF YEAR $118,091 $238,326
126
SPECIAL REVENUE FUNDS
Household Hazmat Facility Childcare Loch Lomond Assessment District
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual Actual (Negative) Actual (Negative)
$15,610 $15,606 ($4)
$550 $180 ($370) $2,000 $4,177 $2,177 2,000 2,334 334 /
312,200 329,232 17,032
156,515 156,434 (81) 3,775,000 3,724,353 (50,647)
1,125 1,125 11,939 11,939
157,065 157,739 674 4,089,200 4,069,701 (19,499) 330
169,361 93,013 76,348
50,054 48,618 1,436
4,099,128 3,853,401 245,727
169,361 4,099,128 3,853,401 50,054 48,618
(12,296) 64,726 77,022 (9,928) __ 2_1--,6';....30_0 ___ ---''---_ (32,444) (30,678)
($12,296) 64,726 $77,022 ($9,928) 216,300 ($32,444) (30,678)
248,639 1,153,844 690,944
$313,365 $1,370,144 $660,266
(Continued)
127
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, 2017
SPECIAL REVENUE FUNDS
Library Library Assessment
Variance Variance
Final Positive Final Positive
Actual (Negative) Actual (Negative)
REVENUES
Taxes and special assessments $875,000 $868,481 ($6,519)
Use of money and properties $600 $2,135 $1,535 1,800 2,302 502
Intergovernmental 1,000 1,000
Charges for services 6,000 7,067 1,067
Other revenue 1,000 3,020
Total Revenues 7,600 13,222 5,622 876,800 870,783 (6,017)
EXPENDITURES
Current:
General government
Public safety
Public works and parks
Culture and recreation 10,000 10,049 (49) 995,819 907,470 88,349
Capital outlay
Capital improvement/special projects 15,000 8,004
Total Expenditures 25,000 995,819 907,470 88,349
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (17,400) (3,823) 13,577 (119,019) (36,687)
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 ($17,400) (3,823) $13,577 ($119,019) (36,687)
FUND BALANCES, BEGINNING OF YEAR 635,888 704,259
FUND BALANCES, END OF YEAR $667,572
128
Final
Budget
$240
70,000
1,500
75,000
146,740
276,322
5,000
281,322
(134,582)
100,000
100,000
($34,582)
Public Safety
Variance
Positive
Actual (Negative)
$130 ($110)
89,053 19,053
1,860 360
74,762 (238)
165,805 19,065
276,387 (65)
4,936 64
281,323 (1)
(115,518) 19,064
100,000
100,000
(15,518) $19,064
174,018
$158,500
SPECIAL REVENUE FUNDS
Final
Budget
$5,000
772,800
5,000
782,800
10,412
734,711
1,525,867
2,270,990
(1,488,190)
($1,488,190)
Stormwater
Variance
Positive
Actual (Negative)
$548 ($4,452)
903,910 131,110
20,228 15,228
924,686 141,886
5,997 4,415
782,590 (47,879)
908,171 617,696
1,696,758 574,232
(772,072) 716,118
(772,072) $716,118
961,159
$189,087
129
Development Services
Final
Budget
$33,000
33,000
117,000
340,000
457,000
(424,000)
(325,000)
(325,000)
($749,000)
Variance
Positive
Actual (Negative)
$33,615 $615
33,615 615
26,606 90,394
340,000
26,606 430,394
7,009 431,009
(325,000)
(325,000)
(317,991) $431,009
1,001,277
$683,286
(Continued)
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, 2017
SPECIAL REVENUE
Grants Parkland Dedication
Variance Variance
Final Positive Final Positive
Bud~et Actual (Negative) Actual (Negative}
REVENUES
Taxes and special assessments
Use of money and properties $2,800 $1,592 ($1,208) $4,000 $1,620 ($2,380)
Intergovernmental 369,250 1,002,826 633,576
Charges for services 39,360 39,360
Other revenue 23,106 23,106 1,500 1,500
Total Revenues 372,050 1,027,524 655,474 42,480 38,480
EXPENDITURES
Current:
General government 235,961 182,778 53,183
Public safety 563,091 582,235 (19,144)
Public works and parks 37,301 30,072 7,229
Culture and recreation
Capital outlay 330,000 92,704 237,296
Capital improvement/special projects
Total Expenditures 799,052 765,013 34,039 367,301 122,776
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (427,002) 689,5l3 (363,301) (80,296)
OTHER FINANCING SOURCES (USES)
Transfers in 46,089 46,089 37,761 37,761
Transfers out (169,783 l (169,783)
Total Other Financing Sources (Uses) (123,694! (123,694) 37,761 37,761
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES ($550,696) l38,817 $689,513 ($325,540) (42,535)
FUND BALANCES, BEGINNING OF YEAR 614,304
FUND BALANCES, END OF YEAR $449,188
130
Emergency Medical Services
Final
Budget
$5,216,424
2,000
125,000
2,598,000
247,819
8,189,243
83,288
7,178,379
7,261,667
927,576
$927,576
Actual
$5,485,637
7,729
121,517
1,506,437
220,984
7,342,304
47,978
7,114,323
7,162,301
180,003
1,564,527
$1,744,530
Variance
Positive
(Negative)
$269,213
5,729
(3,483)
(1,091,563)
35,310
64,056
99,366
SPECIAL REVENUE FUNDS
Business Improvement
Variance
Final Positive
Actual
131
Pt. San Pedro-Maintenance Portion
Final
$80,000
500
80,500
90,250
90,250
(9,750)
($9,750)
Actual
$74,084
508
74,592
89,980
89,980
(15,388)
Variance
Positive
(Negative)
($5,916)
8
270
(5,638)
(15,388) =:::::::::::===
166,671
$151,283
(Continued)
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, 2017
SPECIAL REVENUE FUNDS
Low and Moderate Income Housing Measure A Open Space
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Taxes and special assessments $430,300 $437,170 $6,870
Use of money and properties $8,300 $2,445 ($5,855) 600 973 373
Intergovernmental
Charges for services
Other revenue 70,000 59,375 (10,625)
Total Revenues 78,300 61,820 (16,480) 430,900 438,143 7,243
EXPENDITURES
Current:
General government 210,000 81,027 128,973
Public safety 199,123 107,949 91,174
Public works and parks 155,000 205,179 (50,179)
Culture and recreation 460,000 460,000
Capital outlay
Capital improvement/special projects
Total Expenditures 210,000 81,027 128,973 814,123 313,128 500,995
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (131,700) (19,207) 112,493 (383,223) 125,015 508,238
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (118,036) (118,036)
Total Other Financing Sources (Uses) (118,036) (118,036)
EXCESS (DEFICIENCY) OF REVENUES
AND OTHER SOURCES AND USES OVER
(UNDER) EXPENDITURES ($131,700) (19,207) $112,493 ($501,259) 6,979 $508,238
FUND BALANCES, BEGINNING OF YEAR 929,557 362,256
FOND BALANCES, END OF YEAR $910,350 $369,235
132
DEBT SERVICE FUNDS
Mariposa Assessment District 1997 Financing Authority Revenue Bonds
Final
Budget Actual
$16,573
Variance
Positive
(Negative)
Final
Budget
$430
430
430
$430
$493
493
493
147,304
$147,797
133
Variance
Positive
(Negative)
$63
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.
OPEBlRetiree 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 provid.ing services to the San
Rafael Sanitation District and the charges for those services.
135
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:
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF NET POSITION
JUNE 30, 2017
Building Vehicle Equipment
Maintenance Replacement Replacement
$1,617,858 $1,673,326 $2,845,878
1,080,558
530,301
2,615,538 5,044,661 637,331
4,763,697 7,798,545 3,483,209
129,423 208,333 196,005
Claims payable -due in more than one year
Total Liabilities 129,423 208,333 196,005
NET POSITION:
Net investment in capital assets 3,145,839 5,044,661 637,331
Unrestricted 1,488,435 2,545,551 2,649,873
Total Net Position $4,634,274 $7,590,212 $3,287,204
136
Employee Liability
Benefits Insurance
$810,716 $2,967,749
810,716 2,967,749
501
1,226,194
1,355,335
501 2,581,529
810,215 386,220
$810,215 $386,220
Workers'
Compensation
$6,663,771
6,663,771
304
1,427,094
4,738,715
6,166,113
497,658
$497,658
Dental
Insurance
$152,927
3,624
3,624
149,303
$149,303
Employee
Retirement
$2,281,906
2,281,906
2,281,906
$2,281,906
OPEBI
Retiree
Medical
$711,122
711,122
16,487
694,635
$694,635
137
Radio Telephone Sewer
Replacement Maintenance
$358,889 $398,256 $28,213
358,889 28,213
32,422 28,213
32,422
358,889 365,834
$358,889 $365,834
Total
$20,510,611
1,080,558
530,301
8,297,530
30,419,000
615,312
2,653,288
6,094,050
9,362,650
8,827,831
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2017
Building Vehicle Equipment Employee
Maintenance Replacement Benefits
OPERATING REVENUES
Charges for current services $800,000 $1,213,282 $1,910,808 $551,519
Other operating revenues 286 606
Total Operating Revenues 1,911,094 552,125
OPERATING EXPENSES
Personnel 161,876 2,416
Insurance premiums and claims
Maintenance and repairs 201,103 87,597
General and administrative 18,243 1,952,354 796,874
Depreciation expense 106,224
Total Operating Expenses 1,010,352 2,220,454 799,290
Operating Income (Loss) 551,733 202,930 (309,360)
NONOPERATING REVENUES (EXPENSES)
Investment income 5,317 5,099 9,304 8,635
Miscellaneous Income 94,264
Loss on sale of capital assets (19,944)
Total Nonoperating
Revenues (Expenses) 5,317 79,419
Net income (loss) before transfers 557,050 282,349 (300,056)
CAPITAL CONTRIBUTIONS 1,228,402
TRANSFERS IN 80,275
TRANSFERS OUT
Change in Net Position 1,865,727 282,349 (300,056) (238,530)
NET POSITION, BEGINNING OF YEAR, AS ADmSTED 2,768,547 7,307,863 1,048,745
NET POSITION, END OF YEAR $4,634,274 $7,590,212 $3,287,204
138
Liability
Insurance
$1,552,880
49,910
1,602,790
1,063,453
184,656
1,248,109
8,962
8,962
363,643
22,577
$386,220
OPEBI
Workers' Dental Employee Retiree Radio Telephone Sewer
Compensation Insurance Retirement Medical Replacement Replacement Maintenance Total
$1,974,595 $399,028 $200,000 $2,775,000 $648,660 $571,223 $2,609,993 $15,206,988
7,910 892,199 1,385 962,296
1,974,595 406,938 200,000 3,667,199 648,660 571,223 2,611,378 16,169,284
2,611,378 2,775,670
1,487,865 388,506 3,674,555 6,614,379
288,700
116,474 3,342 673,499 544,551 4,289,993
1,067,900
1,604,339 388,506 3,342 3,674,555 673,499 544,551 2,611,378 15,036,642
370,256 18,432 196,658 (7,356) (24,839) 26,672 1,132,642
21,819 663 7,392 522 1,238 68,951
94,264
(19,944)
21,819 663 7,392 522 1,238 143,271
392,075 19,095 204,050 (7,356) (24,317) 27,910 1,275,913
1,228,402
80,275
(376,520) (376,520)
392,075 19,095 (172,470) (7,356) (24,317) 27,910 2,208,070
105,583 130,208 2,454,376 701,991 383,206 337,924 18,848,280
$497,658 $149,303 $2,281,906 $694,635 $358,889 $365,834 $21,056,350
139
CITY OF SAN RAFAEL
INTERNAL SERVICE FUNDS
COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2017
Building Vehicle Equipment Employee Liability
Maintenance Replacement Replacement Benefits Insurance
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers/other funds $800,000 $1,224,360 $1,911,094 $551,519 $1,552,880
Cash payments to suppliers for goods and services (126,737) (85,119) (1,898,044) (836,813) (1,211,360)
Cash payments to employees for salaries and benefits (161,876) (2,416)
Other operating revenues 10,000 606
Cash Flows from Operating Activities 683,263 1,139,241 (148,826) (287,104)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Interfund receipts 80,275
Interfund payments
Cash Flows from Noncapital
Financing Activities 80,275
'CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and construction of capital assets (468,338) (753,667)
Proceeds from sale of property 94,264
Cash Flows from Investing Activities (468,338) (659,403)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 5,317 5,099 9,304
Cash Flows from Investing Activities 5,317 5,099 9,304 8,962
Net increase (decrease) in cash and cash equivalents 300,517 484,937 (139,522) (278,469) 400,392
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,317,341 1,188,389 2,985,400 2,567,357
CASH AND CASH EQUIVALENTS, END OF YEAR $1,617,858 $1,673,326 $2,845,878 $2,967,749
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) $551,733 $202,930 ($309,360) ($247,165) $354,681
Adjustments to reconcile operating income
to cash flows from operating activities:
Depreciation 38,921 922,755 106,224
Net change in assets and liabilities:
Accounts receivable 140
Loans receivable 10,938
Prep aids and deposits 2,478
Accounts payable 92,609 54,310 (39,939) (1,125)
Claims payable 37,874
Net Cash Provided by (Used in) Operating Activities $683,263 $1,139,241 ($287,104) $391,430
NON-CASH TRANSACTIONS:
Contributions of capital assets $1,228,402
140
Workers'
$1,974,595
(1,490,587)
484,008
21,819
21,819
505,827
6,157,944
$6,663,771
$370,256
(7,146)
120,898
$484,008
Dental
Insurance
$399,028
(388,587)
7,910
18,351
663
663
19,014
133,913
$152,927
$18,432
(81)
$18,351
OPEB/
Employee Employee Radio Telephone Sewer
Retirement Retirement Replacement Maintenance
$200,000 $2,850,980 $648,660 $571,223 $2,623,480
(3,342) (3,661,843) (673,499) (533,604) (2,599,611)
1,385
196,658 81,336 25,254
(376,520)
(376,520) ___________________ _
(172,470)
$196,658
81,336
629,786
$711,122
($7,356)
75,980
12,712
$81,336
141
522
522
(24,317)
383,206
$358,889
($24,839)
($24,839)
1,238
1,238
38,857
359,399
$398,256
$26,672
10,947
25,254
$13,487
11,767
Total
$15,307,819
(13,509,146)
(164,292)
962,010
2,596,391
80,275
(376,520)
(296,245)
(1,222,005)
94,264
68,951
1,241,356
19,269,255
$20,510,611
$1,132,642
1,067,900
89,607
10,938
2,478
134,054
158,772
$2,596,391
$1,228,402
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.
143
CITY OF SAN RAFAEL
AGENCY FUNDS
COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2017
Balance Balance
June 30,2016 Additions Deductions June 30, 2017
Pt. San Pedro Road Assessment District
Assets
Restricted cash and investments $291,111 $206,708 $208,051 $289,768
Taxes receivable 1,134 1,134
Total Assets $292,245 $209,185
Liabilities
Interest payable $27,697 $26,614 $27,697 $26,614
Due to bondholders 264,548 181,488
Total Liabilities $292,245 $209,185
Balance Balance
June 30,2016 Additions Deductions
Total Agency Fund
Assets
Restricted cash and investments $291,111 $206,708 $208,051 $289,768
Taxes receivable 1,134 951 1,134 951
Total Assets $292,245 $207,659 $209,185
Liabilities
Interest payable $27,697 $26,614 $27,697 $26,614
Due to bondholders 264,548 181,045 181,488 264,105
Total Liabilities $292,245 $207,659 $209,185 $290,719
144
~c :Nears (Beach (Par/(
STATISTICAL SECTION
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 fmancial 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 FunctionlProgram
3. Capital Asset Statistics by FunctionlProgram
Sources
Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports
for the relevant year.
147
<on
"0 = tIS <on = 0 ..=
~
$270,000
$220,000
$170,000
$120,000
$70,000
$20,000
($30,000)
($80,000)
($130,000)
CITY OF SAN RAFAEL
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
IJNet of Related Debt • Restricted • Unrestricted
2008 2009 2010
Governmental activities
Net investment in capital assets $176,724,820 $178,744, 119 $173,536,144
Restricted 26,848,900 25,721,231 26,150,254
Unrestricted 4,273,937 (700,985) (4,63L276)
Total governmental activities net position $207,847,657 $203,764,365 $195,055,122
Business-type activities
Net investment in capital assets $10,130,329 $11,243,637 $10,950,825
U nrestri cted 2,471,117 1,936,958 2,017,354
Total business-type activities net position $12,601,446 $13,180,595 $12,968,179
Primary government
Net investments in capital assets $186,855,149 $189,987,756 $184,486,969
Restricted 26,848,900 25,721,231 26,150,254
U nrestri cted 6,745,054 1,235,973 (2,613,922)
Total primary government net position $220,449,103 $216,944,960 $208,023,301
2011
$174,281,922
21,322,937
(8,170,324)
$187,434,535
$10,793,592
1,948,447
$12,742,039
$185,075,514
21,322,937
(6,221,877)
$200,176,574
(a) The City adjusted certain beginning balances during fiscal years 2013-2014, 2014-2015 and 2016-2017. Financial data
shown for proceeding years were not adjusted for the presentation.
148
2012
$192,361,245
24,693,205
10,652,263
$227,706,713
$10,650,558
2,495,889
$203,011,803
24,693,205
13,148,152
160
2013
$193,222,791
35,780,412
11,151,318
$240,154,521
$10,670,190
2,501,498
$13,171,688
$203,892,981
35,780,412
13,652,816
$253,326,209
2014
$190,286,275
37,339,141
(196,824)
$227,428,592
$10,786,591
2,049,957
$12,836,548
$201,072,866
37,339,141
1,853,133
$240,265,140
2015
$190,621,085
33,389,224
$10,744,952
(938,519)
$201,366,037
33,389,224
(83,275,053)
$151,480,208
149
2016
$193,707,175
31,286,725
(93,273,480)
$10,958,058
(1,136,050)
$204,665,233
31,286,725
2017
$199,202,842
29,225,643
(112,913,181)
$115,515,304
$10,968,642
(871,620)
$10,097,022
$210,171,484
29,225,643
(113,784,801)
Expenses
Governmental Activities:
General government
Public safety
Public works and parks
Community development
Culture and recreation
Interest on long-term debt and fiscal charges
Total Governmental Activities Expenses
Business-Type Activities:
Parking services
Total Business-Type Activities Expenses
Total Primary Government Expenses
Component Unit:
San Rafael Sanitation District
Program Revenues
Governmental Activities:
Charges for services:
General government
Public safety
Public works and parks
Community development
Culture and recreation
Operating grants and contributions
Capital grants and contributions
Total Government Activities Program Revenues
Business-Type Activities:
Charges for services:
Parking services
Total Business-Type Activities Program Revenues
Total Primary Government Program Revenues
Component Unit:
San Rafael Sanitation District
Charges for service
Operating grants and contributions
Capital grants and contributions
Total Component Unit Program Revenues
Net (Expense)/Revenue
Governmental Activities
Business-Type Activities
Total Primary Government Net Expense
Component Unit Activities
CITY OF SAN RAFAEL
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009
$8,621,079 $8,075,344
40,845,347 42,708,538
22,105,367 23,036,676
5,811,866 5,759,171
10,300,230 11,505,896
1,989,620 1,907,229
89,673,509 92,992,854
3,282,235 3,563,235
3,282,235 3,563,235
$92,955,744 $96,556,089
$8,090,636 $9,143,977
$1,494,784 $1,738,685
5,562,072 5,906,445
4,983,288 4,753,817
3,247,024 2,915,872
4,870,884 5,253,683
3,463,616 3,544,248
3,239,509 7,311,173
26,861,177 31,423,923
4,161,936 4,454,490
4,161,936 4,454,490
$31,023,113 $35,878,413
$9,366,305 $10,567,647
$9,366,305 $10,567,647
($62,812,332) ($61,568,931 )
879,701 891,255
($61,932,631~ ($60,677 ,67 6~
$1,275,669 $1,423,670
150
2010 2011
$8,396,759 $8,269,846
42,752,033 44,735,486
17,401,923 17,408,038
6,738,873 7,804,650
11,139,225 11,487,999
2,200,024 1,621,605
88,628,837 91,327,624
4,016,198 3,785,751
4,016,198 3,785,751
$92,645,035 $95,113,375
$9,087,354 $9,677,630
$1,665,460 $1,636,542
6,308,912 6,167,925
3,916,874 4,141,103
2,830,179 2,676,663
5,280,458 5,362,497
3,721,055 3,651,902
2,116,906 1,857,670
25,839,844 25,494,302
4,244,404 4,011,333
4,244,404 4,011,333
$30,084,248 $29,505,635
$11,559,549 $12,223,779
$11,559,549 $12,223,779
($62,788,993) ($65,833,322)
228,206 225,582
($62,560, 7 87~ ($65,607,7402
$2,472,195 $2,546,149
2012 2013 2014 2015 2016 2017
$10,171,332 $10,202,530 $9,085,672 $9,099,858 $12,952,983 $10,996,269
39,876,910 41,966,065 43,800,158 39,968,631 55,399,798 44,366,734
17,423,033 17,695,164 22,125,336 16,893,164 22,929,289 19,845,719
4,587,557 3,403,158 3,451,244 3,128,373 4,307,269 4,242,743
11,020,663 11,330,058 11,846,818 11,198,151 15,026,680 14,131,000
1,224,991 283,805 327,350 284,288 277,263 271,263
84,304,486 84,880,780 90,636,578 80,572,465 110,893,282 93,853,728
3,446,482 3,545,387 4,125,476 4,249,597 4,762,851 4,188,152
3,446,482 3,545,387 4,125,476 4,249,597 4,762,851 4,188,152
$87,750,968 $88,426,167 $94,762,054 $84,822,062 $115,656,133 $98,041,880
$10,185,779 $10,169,082 $11,378,055 $11,375,239 $11,654,767 $11,255,194
$1,986,791 $2,655,749 $2,838,940 $1,379,523 $526,495 $421,393
7,122,396 6,478,321 6,014,034 4,966,251 4,939,658 4,264,939
5,214,267 7,837,472 6,101,460 3,078,267 5,157,289 1,804,698
3,255,367 3,984,204 3,279,251 3,796,684 4,004,178 3,850,107
5,873,147 6,075,129 6,417,003 6,537,646 6,683,059 6,941,013
3,158,281 4,085,073 4,698,142 4,185,450 4,678,338 3,965,351
2,705,696 5,876,993 762,719 1,308,027 1,470,953 1,702,993
29,315,945 36,992,941 30,111,549 25,251,848 27,459,970 22,950,494
3,901,175 3,990,706 4,485,394 5,173,557 5,212,181 5,268,991
3,901,175 3,990,706 4,485,394 5,173,557 5,212,181 5,268,991
$33,217,120 $40,983,647 $34,596,943 $30,425,405 $32,672,151 $28,219,485
$12,368,889 $12,413,123 $13,732,496 $14,629,758 $15,414,530 $16,014,016
36,945
79,245
$12,368,889 $12,413,123 $13,732,496 $14,629,758 $15,414,530 $16,130,206
($54,988,541 ) ($47,887,839) ($60,525,029) ($55,320,617) ($83,433,312) ($70,903,234)
454,693 445,319 359,918 923,960 449,330 1,080,839
($54,533,848) ($47,442,5202 {$60,165,1112 ($54,396,6572 ($82,983,9822 ($69,822,395)
$2,183,110 $2,244,041 $2,354,441 $3,254,519 $3,862,215 $4,875,012
151
CITY OF SAN RAFAEL
CHANGES IN NET POSITION
(continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Year Ended June 30,
2008 2009 2010
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 fmes 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
$22,195,606
25,764,457
3,503,555
257,320
9,242,241
1,583,056
296,454
344,080
63,186,769
121,486
(344,080)
(222,594)
$62,964,175
$803,071
341,032
3,546
577,860
$1,725,509
$374,437
657,107
$1,031,544
$3,001,178
152
$21,978,859
21,970,262
3,210,317
197,989
1,678,912
2,941,149
2,405,934
1,561,835
717,968
461,224
361,190
57,485,639
49,084
(361,190)
(312,106)
$57,173,533
$855,511
206,752
3,540
381,144
$1,446,947
($4,083,292)
579,149
($3,504,143)
$2,870,617
$21,684,131
19,055,124
3,489,494
171,518
1,558,243
2,868,332
2,317,664
1,411,583
302,180
221,791
541,390
458,300
54,079,750
17,678
(458,300}
{440,622}
$53,639,128
$823,187
93,274
415,391
$1,331,852
($8,709,243)
(212,416}
($8,921,659}
$3,804,047
2011
$21,632,733
21,623,445
3,661,064
297,425
1,644,262
2,990,539
2,296,460
1,930,531
176,502
1,496,174
463,600
58,212,735
11,878
(463,600}
(451,722}
$57,761,013
$1,214,519
59,265
6,499
$1,280,283
($7,620,587)
(226, 140}
($7,846,727}
$3,826,432
2012 2013 2014 2015 2016 2017
$20,107,637 $17,317,772 $18,439,619 $19,039,443 $19,998,567 $23,343,140
22,355,749 24,262,282 27,758,971 32,269,915 34,348,089 31,819,259
3,807,545 3,804,985 3,816,070 3,820,240 4,226,020 5,485,637
1,866,575 2,185,287 2,332,277 2,661,878 3,063,263 2,984,758
3,076,094 3,331,160 3,260,958 3,272,390 3,418,277 3,610,824
2,332,146 2,507,785 2,588,728 2,670,071 2,824,664 2,774,803
3,574,918 2,929,915 3,452,171 3,295,751 3,465,193 1,824,830
205,413 991,762 184,171 216,066 300,091 210,628
542,816 2,580,882 1,140,743 2,254,901 1,387,315 2,448,604
57,960 423,817 449,917 432,630 448,478 536,000
57,926,853 60,335,647 63,423,625 69,933,285 73,479,957 75,038,483
7,675 3,739 4,375 7,008 14,723 10,810
(57,960) (423,817) {449,917) (432,630) (448,4782 (536,00°2
(50,285) (420,078 2 (445,542) (425,622) (433,755) (525,190)
$57,876,568 $59,915,569 $62,978,083 $69,507,663 $73,046,202 $74,513,293
$1,192,566 $1,177,469 $1,345,018 $1,319,852 $1,367,172 $1,528,047
38,191 25,591 151,729 171,804 46,225 97,090
9,613 56,589 22,125 35,090
$1,240,370 $1,259,649 $1,518,872 $1,526,746 $1,413,397 $1,625,137
$4,462,815
($4,462,815 2
$2,938,312 $12,447,808 $2,898,596 $19,075,483 ($9,953,355) $4,135,249
404,408 25,241 (85,624) 498,338 15,575 555,649
$3,342,720 $12,473,049 $2,812,972 $19,573,821 ($9,937,780) $4,690,898
$3,423,480 $3,503,690 $3,873,313 $318,450 $5,275,612 $6,500,149
153
CITY SAN RAFAEL
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
$55,000
$45,000
$35,000
$25,000
$15,000
$5,000
(Modified Accrual Basis of Accounting)
($5,000) JL:::===================================="=7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General Fund
Pre-GASB 54 Presentation:
Reserved
Unreserved
GASB 54 Presentation:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total General Fund
All Other Governmental Funds
Pre-GASB 54 Presentation:
Reserved
Unreserved, reported in:
Special Revenue Funds
Capital Project Funds
Debt Service Funds
Expendable Trust Fund
GASB 54 Presentation:
Nonspendable
Restricted
Committed
Assigned
Total all other governmental funds
CJ Total Fund Balance
2008
$2,196,153
4,022,612
$6,218,765
$17,599,142
7,413,808
35,430
3,315,764
$28,364,144
2009
$2,225,775
1,670,455
$3,896,230
$16,680,568
8,641,239
(1,030,293)
3,360,540
$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.
2010
$1,763,622
5,038,173
$6,801,795
$15,352,723
8,778,027
4,527,627
$28,658,377
(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.
154
2011
$589,833
200,238
555,561
5,439,879
$6,785,511
$377,180
19,289,367
3,864,322
4,124,029
$27,654,898
2012 2013 2014 2015 2016 2017 (a) ------
$527,509 $527,235 $503,338 $399,299 $476,316 $508,446
76,188
651,121 800,876
1,516,644 2,476,676 6,866,149 12,374,002 16,440,910 14,900,945
1,588,500 1,772,577 1,295,041
$2,771,462 $3,804,787 $7,369,487 $14,361,801 $18,689,803 $16,704,432
$788,031 $51,521 $8,719 $2,359 $9,449
16,856,959 20,769,546 30,185,064 31,742,184 27,552,245 25,812,405
5,135,257 8,447,495 2,185,825 931,871 3,799,421 3,491,708
5,283,559 6,511,850 4,959,533 712,810 119,183 115,103
$28,063,806 $35,780,412 $37,339,141 $33,389,224 $31,480,298 $29,419,216
155
CITY OF SAN RAFAEL
CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year Ended June 30,
2008 2009 2010 2011
Revenues
Taxes and special assessments $56,129,195 $51,019,143 $47,678,541 $51,448,130
Licenses and permits 1,489,748 1,472,913 1,518,819 1,416,772
Fines and forfeitures 797,081 660,338 787,411 862,820
Use of money and properties 1,584,508 847,120 433,874 380,720
Intergovernmental 12,081,968 17,518,670 13,001,703 11,864,127
Charges for services 15,607,460 16,384,265 15,787,325 15,888,750
Other revenue 815,704 759,320 716,760 1,026,845
Total Revenues 88,505,664 88,661,769 79,924,433 82,888,164
Expenditures
Current:
General government 8,288,170 8,059,526 7,997,067 6,863,142
Public safety 40,299,862 41,209,972 39,574,091 40,967,352
Public works and parks 13,641,665 12,926,646 10,731,669 10,666,176
Community development 5,786,661 5,572,079 4,398,594 4,527,351
Culture and recreation 9,820,365 10,233,361 9,605,684 10,067,822
Capital outlay 6,243,517 5,048,044 1,890,559 1,745,483
Capital improvement / special projects 5,124,091 6,606,857 3,436,608 6,240,861
Debt service:
Capitalized lease obligation
Principal 2,504,370 2,714,358 2,804,258 2,530,338
Interest and fiscal charges 1,776,354 1,683,240 1,979,372 1,448,910
Total Expenditures 93,485,055 94,054,083 82,417,902 85,057,435
Excess (deficiency) of revenues over
(under) expenditures (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
Proceeds from PG&E loans
Proceeds from sale of capital asset 221,791
Transfers in 6,353,216 8,972,495 7,494,560 5,806,834
Transfers (out) (6,329,136) (6,614,806) (6,411,150) (4,657,326)
Total other fmancing sources (uses) 24,080 2,357,689 2,688,386 1,149,508
Extraordinary Item
Transfer to Successor Agency
Net Change in fund balances ($4,955,311) ($3,034,625) $194,917 ($1,019,763)
Debt service as a percentage of
noncapital expenditures 5.2% 5.3% 6.2% 5.2%
156
2012
$51,395,116
1,648,890
801,758
315,561
10,537,396
19,649,433
870,957
85,219,111
8,783,873
39,311,551
11,518,822
3,755,504
10,345,673
1,312,383
3,604,171
2,518,320
735,221
81,885,518
3,333,593
4,539,646
(4,864,293)
(324,647)
$3,008,946
4.2%
2013
$51,549,306
1,929,387
734,005
325,043
11,869,889
23,575,374
4,092,411
94,075,415
10,529,480
41,377,062
12,002,448
2,961,275
10,591,057
4,009,454
5,284,720
283,805
87,039,301
7,036,114
8,425,474
(6,711,657)
1,713,817
(2,352,584)
$6,397,347
0.4%
2014
$56,686,142
1,934,755
669,553
363,089
11,953,308
19,949,333
2,045,407
93,601,587
8,678,833
41,900,762
13,697,957
3,296,375
11,106,367
2,154,900
7,168,776
208,642
327,350
88,539,962
5,061,625
568,481
3,655,302
(3,053,865)
1,169,918
$6,231,543
0.7%
157
2015
$61,804,228
2,456,820
556,076
444,757
13,233,503
15,346,794
1,777,003
95,619,181
10,203,687
43,954,515
12,758,643
3,416,859
11,616,777
4,498,924
2,186,986
75,172
284,288
88,995,851
6,623,330
4,348,149
(3,051,499)
1,296,650
$7,919,980
0.4%
2016
$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
2,089,236
7,533,364
(6,582,555)
950,809
$3,040,045
0.4%
2017
$71,166,891
2,559,841
400,283
349,349
8,063,156
13,425,161
1,842,053
97,806,734
10,557,416
49,018,153
16,752,961
3,759,564
12,646,728
2,100,926
7,403,249
175,172
271,263
102,685,432
(4,878,698)
9,287,007
(8,454,762)
832,245
($4,046,453)
0.5%
$14,000
$12,000
$10,000
<n $8,000
c
S
~ $6,000
$4,000
$2,000
$0
Fiscal Residential
Year ProEe~
2008 $ 7,024,610,641
2009 7,357,121,277
2010 7,335,863,721
2011 7,215,965,203
2012 7,317,280,602
2013 7,265,617,525
2014 7,558,708,224
2015 7,991,224,952
2016 8,511,358,216
2017 9,025,896,811
!!I I!I
2008 2009
I!I
2010
CITY OF SAN RAFAEL
ASSESSED AND ESTIMATED ACTUAL
V ALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
• • •
I!I I!I I!I I!I
2011 2012 2013 2014
_Unsecured P,·operty _Secured Property
Real ProEer~ Total Real
Commercial Industrial Secured
ProEer~ ProEe~ Other ProEe!:!r
1,824,656,505 214,341,528 105,409,028 9,169,017,702
1,941,927,620 234,669,841 129,177,656 9,662,896,394
2,052,276,292 244,857,019 130,177,994 9,763,175,026
2,056,985,417 247,409,955 124,426,487 9,644,787,062
2,036,262,351 247,485,238 118,579,648 9,719,607,839
1,987,170,644 245,917,096 115,453,836 9,614,159,101
2,009,718,415 245,674,195 130,594,237 9,944,695,071
2,120,065,908 249,864,918 115,675,852 10,476,831,630
2,221,843,976 263,830,302 108,982,883 11,106,015,377
2,390,814,514 267,468,956 135,689,202 11,819,869,483
I!I I!I I!I
2015 2016 2017
Total
Unsecured Total Estimated Direct
ProEer~ Assessed {a} Full Market {a} Tax Rate {b}
$ 362,727,209 $ 9,531,744,911 $ 9,531,744,911 0.17718%
374,976,613 10,037,873,007 10,037,873,007 0.17951%
401,201,906 10,164,376,932 10,164,376,932 0.19215%
383,414,952 10,028,202,014 10,028,202,014 0.17851%
384,950,872 10,104,558,711 10,104,558,711 0.17827%
384,534,108 9,998,693,209 9,998,693,209 0.17456%
402,261,887 10,346,956,958 10,346,956,958 0.11985%
417,217,272 10,894,048,902 10,894,048,902 0.11657%
400,942,059 11,506,957,436 11,506,957,436 0.11672%
423,545,667 12,243,415,150 12,243,415,150 0.11693%
(a) The State Constitution requires property to be assessed at one htmdred 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 2007/08 -2016/17 Combined Tax Rolls
158
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
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
2017 0.154 0.295 0.7988 0.0553 1.3028
Notes:
(l) 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 2007/08 -2016/17 Tax Rate Tables
159
Tax~a;yer
CITY OF SAN RAFAEL
PRINCIPAL PROPERTY TAXPAYERS
CURRENT FY 2016/17 AND FY 2007/08
FY 2016-2017
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Value Value
California Corporate Center ACQ LLC $ 235,592,917 1.92%
MGP Xl Northgate LLC 141,854,871 1.16%
Professional Financial Investors Inc 52,469,836 0.43%
South Valley Apartments LLC 51,976,039 0.42%
Kaiser 47,890,626 0.39%
BRE Piper MF 33 North CA LLC 45,652,854 0.37%
Regency Center II Assoc 45,430,182 0.37% $
Northbay Properties II 44,976,649 0.37%
Bay Apartment Communities Inc 42,857,370 0.35%
Barbara Fasken 1995 Trust ETAL 42,474,774 0.35%
Northgate Mall Associates
Hines San Rafael LLC
San Rafael Associates NF
Marin Sanitary Service
4040 Civic Center LLC
Rafael Town Center Investors LLC
Bit Holdings Forty-Five Inc
Subtotal $ 751,176,118 6.14% $
Total Net Assessed Valuation:
Fiscal Year 2016-2017 $ 12,243,415,150
Fiscal Year 2007-2008 $ 9,531,744,911
160
FY 2007-2008
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Value Value
40,116,943 0.42%
33,229,690 0.35%
33,826,191 0.35%
119,980,919 1.26%
78,065,660 0.82%
63,225,500 0.66%
39,405,212 0.41%
36,206,743 0.38%
32,696,979 0.34%
31,243,240 0.33%
507,997,077 5.33%
$28
CITY OF SAN RAFAEL
PROPERTY TAX LEVIES AND COLLECTIONS (1)
LAST TEN FISCAL YEARS
---. $2~
$22 .. --
~~
--~ ~ ..... ------~ ..-~
~ $19 = :5
~ $16
$12 -+-Allocations
$9 ~ Apportionments
$6
2008 2009 2010 2011 2012 2013 2014 2015 2016
Fiscal
Year Rate Levies Allocations Collections A1212ortionments Delinguencies
2008 1.00 (2) $ 22,195,606 (2) $ 22,195,606 (2)
2009 1.00 (2) 21,978,859 (2) 21,978,859 (2)
2010 1.00 (2) 21,702,536 (2) 21,702,536 (2)
2011 1.00 (2) 21,632,731 (2) 21,632,731 (2)
2012 1.00 (2) 20,704,368 (2) 20,704,368 (2)
2013 l.00 (2) 20,883,041 (2) 20,883,041 (2)
2014 1.00 (2) 22,001,357 (2) 22,001,357 (2)
2015 1.00 (2) 22,376,457 (2) 22,376,457 (2)
2016 1.00 (2) 23,636,093 (2) 23,636,093 (2)
2017 1.00 (2) 25,173,651 (2) 25,173,651 (2)
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 govenunental entities.
161
f----
r----
2017
Delinquent taxes
as a Percent of
Allocations
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$45
CITY OF SAN RAFAEL
RATIO OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
$40 +--=~-----------------------------------------1 DTotalGovemmental
$35
$30
'" $25 = .S
::: $20 ~
$15
$10
$5
$-
2008 2009 2010 2011 2012 2013
Governmental Activities
RDA Tax Financing Court Fine
Fiscal Allocation Authority Note Promissory
Year Bonds Revenue Bonds Payable Note
2008 $ 37,537,161 $ 780,000 $ 169,000 $ 816,119
2009 35,793,692 455,000 169,000 594,100
2010 35,355,988 169,000 363,328
2011 33,298,499 169,000 124,222
2012 169,000
2013 169,000
2014 528,839
2015 453,667
2016 378,495
2017 303,323
Business-Type Activities
Parking Total
Fiscal Services Note Primary
Year Bonds Payable Total Government
2008 $ 7,140,000 $ 7,140,000 $ 46,843,435
2009 6,975,000 6,975,000 44,185,608
2010 6,805,000 6,805,000 42,828,646
2011 6,630,000 6,630,000 44,780,819
2012 6,445,000 6,445,000 11,104,000
2013 6,445,000 6,445,000 11,104,000
2014 6,186,403 $ 61,836 6,248,239 11,267,078
2015 5,942,128 55,020 5,997,148 10,940,815
2016 5,692,853 48,204 5,741,057 10,609,552
2017 5,433,577 41,388 5,474,965 10,168,288
Notes: Debt amounts exclude any premiums, discounts, or other amortization amounts.
---------1 II Total Business
2014
Capitalized
Lease
Obligations
$ 401,155
198,816
135,330
69,098
Percentage
of Personal
Income (a)
1.73%
1.67%
1.85%
1.87%
0.46%
0.44%
0.43%
0.41%
0.38%
nla
2015
Pension
Obligation
2016
Bonds Total
$ 4,490,000
4,490,000
4,490,000
4,490,000
4,490,000
4,490,000
4,390,000
$ 39,703,435
37,210,608
36,023,646
38,150,819
4,659,000
4,659,000
5,018,839
4,943,667
4,868,495
4,693,323
Per
Capita (a)
804.39
757.08
728.11
770.28
190.45
190.85
192.38
184.77
175.13
167.13
In August 2012, the series 2003 parking services bonds were refunded with series 2012 refunding bonds.
Data Sources: City of San Rafael
State of Cali fomi a, 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.
162
2017
CITY OF SAN RAFAEL
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
June 30,2017
2016-17 Assessed Valuation:
OVERLAPPING TAX AND ASSESSJVIENT DEBT:
Marin Community College District
San Rafael High School District
Tamalpais Union High School District
Dixie School District
Ross School District
Ross Valley School District
San Rafael School District
Marin Healthcare District
Marin Emergency Radio Authority Parcel Tax Obligations
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
$
$
12,243,415,150
Total Debt
6/30/2017 % Applicable (1)
313,510,000 17.315%
71,215,315 78.283%
117,095,000 0.081%
18,065,810 65.888%
18,894,143 1.554%
44,891,171 0.013%
69,670,289 83.694%
157,385,000 20.831%
33,000,000 17.289%
City's Share of
Debt 6/30/2017
$ 54,284,257
55,749,485
94,847
11,903,201
293,615
5,836
58,309,852
32,784,869
5,705,370
$ 219,131,331
Marin County Certificates of Participation $ 90,392,081
95,475,000
111,628
17.289% $ 15,627,887
16,506,673
19,299
20,014
Marin County Pension Obligation Bonds
Marin County Transit District General Fund Obligations
Marin Municipal Water District General Fund Obligations
Marin Community District Certification of Participation
San Rafael School District Certificates of Participation
City of San Rafael General Fund Obligations
City of San Rafael Pension Obligations
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT
90,816
2,420,834
3,405,000
7,377,975
4,390,000
Less: City of San Rafael lease revenue bonds supported by parking revenues
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
OVERLAPPING TAX INCREMENT DEBT (Successor Agency) $
TOTAL GROSS DIRECT DEBT
TOTAL NET DIRECT DEBT
TOTAL OVERLAPPING DEBT
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
14,424,004
17.289%
17.289%
22.038%
17.315%
83.694%
100.000%
100.000%
100.000%
(1) Percentage of overlapping assessed valuation located within boundaries of the city.
$
$
419,167
2,849,781
7,377,975 (2)
4,390,000
47,210,796
5,474,966
41,735,830
14,424,004
11,767,975
6,293,009
268,998,157
280,766,132
275,291,166
(3)
(2) Include city's share of Marin Emergency Radio Authority refunding revenue bonds and $344,711 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 2016-17 Assessed Valuation:
Total Overlapping Tax and Assessment Debt
Total Gross Direct Debt ($11,767,975)
Total Net Direct Debt ($6,293,009)
Gross Combined Total Debt
Net Combined Total Debt
Total Overlapping Tax Increment Debt
Data Source: MuniServices
163
1.79%
0.10%
0.05%
2.29%
2.25%
0.53%
Fiscal
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
CITY OF SAN RAFAEL
COMPUTATION OF LEGAL BONDED DEBT MARGIN
June 30, 2017
ASSESSED VALUATION: $ 12,243,415,150
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) 459,128,068.13
LESS AMOUNT OF DEBT SUBJECT TO LIMIT: 4,693,323.00
LEGAL BONDED DEBT MARGIN $ 454,434,745
Total net debt
Total Net Debt Legal applicable to the limit
Debt Applicable to Debt as a percentage
Limit of debt
$ 357,440,434 $ 39,703,435 $ 317,736,999 12.50%
376,420,238 37,210,608 339,209,630 10.97%
381,164,135 36,023,646 345,140,489 10.44%
376,057,576 38,150,819 337,906,757 11.29%
378,920,952 4,659,000 374,261,952 1.24%
374,950,995 4,659,000 370,291,995 1.26%
388,010,886 5,018,839 382,992,047 1.31%
408,526,834 4,943,667 403,583,167 1.22%
431,510,904 4,868,495 426,642,409 1.14%
459,128,068 4,693,323 454,434,745 1.03%
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
164
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2008 2009 2010
Fiscal Gross Operating
Year Revenue (1) Expenses (2)
2008 $ 4,089,112 $ 2,692,086
2009 4,425,813 2,980,083
2010 4,262,082 3,343,680
2011 4,023,211 3,101,411
2012 3,908,664 2,870,718
2013 3,994,446 3,121,964
2014 4,489,769 3,716,552
2015 5,180,554 4,031,161
2016 5,226,904 3,739,321
2017 5,279,801 2,425,281
2011
CITY OF SAN RAFAEL
REVENUE BOND COVERAGE
PARKING FACILITY
LAST TEN FISCAL YEARS
2012 2013 2014
--+-Coverage
2015
Debt Service Reguirements
Net Revenue
Available for
Debt Service Principal Interest
$ 1,397,026 $ 160,000 $ 335,216 $
1,445,730 165,000 330,379
918,402 170,000 325,285
921,800 175,000 319,391
1,037,946 185,000 312,291
872,481 310,000 240,012
773,217 245,000 210,063
1,149,393 245,000 205,163
1,487,583 250,000 199,613
2,854,520 260,000 192,038
2016 2017
Total Coverage
495,216 2.82
495,379 2.92
495,285 1.85
494,391 1.86
497,291 2.09
550,012 1.59
455,063 1.70
450,163 2.55
449,613 3 .31
452,038 6.31
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 oflower 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 Revel/ue and Expenditure Status Reports
165
23 .50%
23 .00%
22.50%
22.00%
CITY OF SAN RAFAEL
DEMOGRAPIDC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
It
~ __ ."r
r-4 -
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
I'
...... I ............ _-,
• City Population
as a % of County
Population
2007200820092010201120122013 2014 2015 2016 2017
$500,000
$0
• Personal Income (2) (in thousands)
$50
If)
"0
I: ra $45 If)
:::J
0
..I: $40 I-
$35
$30
~'\
ry<;::5
~'b
ry<;::5
~~
ry<;::5
~<;:')
ry<;:') ~'\-ry<;:')
~ry ~ ~'? ry<;:') ~ ry<;:')
~';
ry<;:')
~i'o
ry<;:')
-+---Per Capita Personal Income (2) • Unemployment Rate (%)
Personal Per Capita Average Marin
Fiscal City Income (2) Personal Unemployment County
Year Population (1) (in thousands) Income (2) Rate (3) Population
2008 $ 58,235 $ 2,703,213 $ 46,557 5.60% $ 257,406
2009 58,363 2,642,978 45,288 9.30% 258,618
2010 58,822 2,317,704 39,402 9.80% 260,651
2011 58,136 2,389,222 40,978 8.80% 254,692
2012 58,305 2,438,291 41,908 5.50% 254,790
2013 58,182 2,538,895 43,351 4.70% 254,007
2014 58,566 2,621,228 44,531 4.50% 255,846
2015 59,214 2,699,436 44,558 3.70% 258,972
2016 60,582 2,817,497 46,308 3.40% 262,274
2017 60,842 nla nla nla 263,604
Source: (I) State of California, Department of Finance -Demographic Research Unit. The data represents the City's population as of
Jan uary I, 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.
20 I 0 and later-Income -US Census Bureau, most recent American Community Survey
(3) Unemployment Data: California Employment Development Department
166
City
Population
% of County
22.62%
22.57%
22.57%
22.83%
22.88%
22.91%
22.89%
22.87%
23.10%
23.08%
CITY OF SAN RAFAEL
PRINCIPAL EMPLOYERS
FISCAL YEAR 2016-2017
LAST NINE CALENDAR YEARS
2017" 2016-2015-201-1-2013" 2012" 2011' 2010" 2009-
EmJlloyer (Al # (Al # {Al # (Al # (Al # (Al # (Al # (Al # {Al
Autodesk, Inc. 719 228% 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 2061 6.52% 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 ElementarylHigh Schools Dist(! 700 2.22% 650 1.98% 650 1.99% 600 1.93% 600 1.96% 600 2.22% 600 2.22% 600 2.23% 575 2.07%
Cily of San Rafael 454 1.44% 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 456 1.44% 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 280 0.89% 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 Baok 310 0.98% 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 255 0.81% 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 203 0.64% 225 0.69% 287 1.07%
Bernard Osher Marin lCC 200 0.61%
Buckelew Programs 240 0.76% 186 0.57%
Ghilotti Bros. 175 0.55% 150 0.46% 240 0.86%
Golden Gate Bridge Highwav & Transp. DisL 828 2.98%
YMCA 348 1.25%
San Rafael City High School District 250 0.90%
Urban Painting, Inc. 150 0.46%
Totals 5,853 18.52% 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 FIE employees in Marin locations
(Al Percentage of total employment
Note: From the EDD website, it shows that the Total 2017 Employment in the City of San Rufael was 31,600 of which it is used as the denominator lor the 2017 percentages are calculated. , The number ortotnl employment lor the Cityis available for the lust nine fiscal years only.
Data Sources: State ofCaUfomlu, Emplo)went Development Department, Labor Market InformnHon Dh15lon & North Bay Business Journal (Annual Book ofUsts)
167
Function
CITY OF SAN RAFAEL
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
~r-------------------------r 450.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
o General Government
o Public Works and Parks
Culture and Recreation
2008 2009 2010
o Public Safety
III Community Development
2011 2012 2013 2014
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00
2015
General Government 59.88 58.88 56.88 54.35 55.23 53.23 55.11 58.11
2016
60.61
Public Safety 186.00 183.00 165.00 166.00 162.00 163.00 168.00 171.75 175.75
Public Works and Parks 78.80 78.80 60.80 62.80 62.00 60.00 6l.00 62.00 62.00
Community Development 34.50 34.50 26.75 26.75 18.25 18.25 17.80 17.80 19.80
Culture and Recreation 85.90 85.90 83.49 89.82 8l.56 80.76 83.66 84.23 84.25
Total 445.08 441.08 392.92 399.72 379.04 375.24 385.57 393.89 402.41
Data Source: City of San Rafael's Finance Department
168
2017
62.11
176.55
63.00
20.00
84.35
406.01
CITY OF SAN RAFAEL
OPERATING INDICATORS BY FUNCTIONIPROGRAM
LAST TEN FISCAL YEARS
2008
FunctionlProgram
Public safety:
Fire:
Inspection permit issued 217 196
Police:
Police calls for service 43,488 42,227
Law violations:
Part I crimes 2,314 2,352
Physical arrests (adult and juvenile) 4,182 4,487
Traffic violations 9,241 5,777
Parking violations 42,481 44,913
Public works
Street resurfacing (miles) (Eng Div) 4.95 2.77
Potholes repaired (square miles) N/A N/A
Asphalt used for street repairs (tons) N/A N/A
Culture and recreation:
Recreation class participants 8,000 8,000
Items in collection (thousands)
Library:
Items in collection (thousands) N/A 124.40
Total items borrowed (thousands) N/A N/A
Note: NIA denotes information not available.
170
2010 2011
307 294
42,227 39,512
2,352 2,180
4,487 3,102
5,777 8,190
42,806 34,590
2.77 7.40
N/A N/A
N/A 10,809
9,524 9,000
151.88 158.30
371.12 435.66
2012 2013 2014 2015 2016 2017
282 307 261 282 198 233
39,537 42,707 51,261 55,805 57,026 53,567
2,101 2,523 2,289 2,533 2,523 2,392
2,981 2,951 3,227 3,450 3,453 2,526
4,048 3,448 4,498 4,168 3,252 3,341
32,492 30,881 38,814 36,398 34,803 36,169
N/A 2.70 9.00 6.40 6.76 2.32
N/A N/A N/A N/A N/A N/A
178.9 7,500 10,700 11,000 7,195 5,800
12,075 7,082 9,857 10,023 12,725 13,493
159.18 125.92 168.62 127.76 227.89 117,354
366.46 392.23 478.96 443.64 469.79 327,297
171
CITY OF SAN RAFAEL
CAPITAL ASSET STATISTICS BY FUNCTIONIPROGRAM
LAST TEN FISCAL YEARS
2008 2009 2010
FunctionlProgram
Public safety:
Fire stations 6 6 6
Police stations
Police Fleet
Public works
Miles of streets 173 173 173
Street lights 4,435 4,435 4,435
Parking District lights
Traffic Signals 89 89 89
Culture and recreation:
Community services:
City parks 20 20 20
City parks acreage 42 42 42
Playgrounds 14 14 14
City trails 20 20 20
Community gardens 1 1 1
Community centers 4 4 4
Senior centers 0 0 0
Sports centers 0 0 0
Performing arts centers 0 0 0
Swimming pools 1 1
Tennis courts 10 10 10
Basketball Courts 5 5 5
Baseball/softball diamonds 5 5 5
Soccer/football fields 2 2 2
Library:
City Libraries 2 2
Wastewater:
Miles of sanitary sewers 179 179 179
Data Source: City of San Rafael's Finance Department
172
6
173
4,435
89
20
42
14
20
4
0
0
0
10
5
5
2
2
179
2012
6
173
4,435
89
20
42
14
20
1
4
0
0
0
1
10
5
5
2
2
179
2013
6
173
4,435
89
20
42
14
20
1
4
0
0
0
10
5
5
2
2
179
2014
6
173
4,435
89
20
42
14
20
1
4
0
0
0
10
5
5
2
2
145
2015
6
1
173
4,435
89
20
42
14
20
1
4
0
0
0
1
10
5
5
2
2
145
2016
6
1
173
4,435
89
20
42
14
20
4
0
0
0
1
10
5
5
2
2
145
173
2017
6
173
4,435
89
20
42
14
20
1
4
0
0
0
1
10
5
5
2
2
145
M
INDEPENDENT ACCOUNTANT'S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2017-2018 APPROPRIATIONS LIMIT INCREMENT
Honorable Mayor and Members of the City Council
City of San Rafael, California
MAZE
&ASSOCIATES
We have performed the procedures below, which were agreed to by the City of San Rafael, on the
Appropriations Limit Worksheet (Worksheet) for the year ended June 30, 2017. The City's management is
responsible for the Worksheet. These procedures, which were suggested by the League of California Cities
and presented in their Article XnIB Appropriations Limitation Uniform Guidelines, were performed solely
to assist you in meeting the requirements of Section 1.5 of Article Xlrrn of the California Constitution. The
sufficiency of these procedures is solely the responsibility of the City. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
The procedures and associated findings were as follows:
A. We obtained the Worksheet and determined that the 2017-2018 Appropriations Limit of
$128,732,737 and annual adjustment factors were adopted by Resolution of the City Council. We
also determined that the population and inflation options were selected by a recorded vote of the
City Council.
B. We recomputed the 2017-2018 Appropriations Limit by mUltiplying the 2016-2017 Prior Year
Appropriations Limit by the Total Growth Factor. We recomputed the Total Growth Factor by
multiplying the population option by the inflation option.
C. For the Worksheet, we agreed the Per Capita Income Factor, City PopUlation Factor and County
Population Factor to California State Department of Finance Worksheets.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. We were not engaged to and did
not conduct an examination or review, the objective of which would be the expression of an opinion or
conclusion, respectively, on the Worksheet. Accordingly, we do not express such an opinion or conclusion.
Had we performed additional procedures, other matters might have come to our attention that would have
been reported to you.
This report is intended solely for the information and use of management and the City Council and is not
intended to be and should not be used by anyone other than those specified parties; however, this
restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
September 28, 2017
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hi ll, CA 94523
T 925.930.0902
F 925 .930.0135
E maze@mazeassociates.com
w mazeassociates.com
CITY OF SAN RAFAEL
MEMORANDUM ON JNTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED JUNE 30, 2017
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
AND
REQUIRED COMMUNICATIONS
For The Year Ended June 30, 2017
Table of Contents
Memorandum on Internal Control ................................................................................................... 1
Schedule of Other Matters ....................................................................................................... 3
Status of Prior Year Significant Deficiencies ......................................................................... 5
Required Communications ................................................................................................................ 7
Significant Audit Findings ............................................................................................................ 7
Accounting Policies ................................................................................................................ 7
Unusual Transactions, Controversial or Emerging Areas .................................................... 8
Accounting Estimates ............................................................................................................. 8
Disclosures ............................................................................................................................... 9
Difficulties Encountered in Performing the Audit.. .............................................................. 9
Corrected and Uncorrected Misstatements ............................................................................ 9
Disagreements with Management .......................................................................................... 9
Management Representations .................................................................................................. 9
Management Consultations with Other Independent Accountants ...................................... 9
Other Audit Findings or Issues .............................................................................................. 10
Other Information Accompanying the Financial Statements ..................................................... 10
This Page Left Intentionally Blank
M MAZE
& ASSOCIATES
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of San Rafael, California
We have audited the basic financial statements of the City of San Rafael for the year ended June 30, 2017,
and have issued our report thereon dated September 28, 2017. Our opinions on the basic financial
statements and this report, insofar as they relate to San Rafael Sanitation District (District), are based
solely on the report of other auditors. In planning and performing our audit of the basic financial
statements of the City of San Rafael, in accordance with auditing standards generally accepted in the
United States of America, we considered the City's internal control over financial reporting (internal
control) as a basis for designing our auditing procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on
the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City's financial statements will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was
not designed to identify all deficiencies in internal control that might be material weaknesses. In addition,
because of inherent limitations in internal control, including the possibility of management override of
controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these
limitations during our audit, we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we
believe are opportunities for strengthening internal controls and operating efficiency.
This communication is intended solely for the information and use of management, City Council, others
within the organization, and agencies and pass-through entities requiring compliance with Government
Auditing Standards, and is not intended to be and should not be used by anyone other than these specified
parties.
t){l a~~ j ~o~
Pleasant Hill, California
September 28, 2017
Accountancy Corporation
3478 Buskirk Avenue, Suite 215
Pleasant Hill, CA 94523
T 925.930.0902
F 925.930.0135
E maze@mazeassociates.com
w mazeassociates.com
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE
The following comment represents new pronouncements taking effect in the next two years. We have
cited them here to keep you abreast of developments:
Effective in fiscal year 2017-18:
GASB 81 -Irrevocable Split-Interest Agreements
This Statement requires that a government that receives resources pursuant to an irrevocable split-interest
agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the
agreement. Furthermore, this Statement requires that a government recognize assets representing its
beneficial interests in irrevocable split-interest agreements that are administered by a third party, if the
government controls the present service capacity of the beneficial interests. This Statement requires that a
government recognize revenue when the resources become applicable to the reporting period.
GASB 85-Omnibus 2017
The objective of this Statement is to address practice issues that have been identified during
implementation and application of certain GASB Statements. This Statement addresses a variety of topics
including issues related to blending component units, goodwill, fair value measurement and application,
and postemployment benefits (pensions and other postemployment benefits [OPEBD.
GASB 86-Certain Debt Extinguishment Issues
The primary objective of this Statement is to improve consistency in accounting and financial reporting
for in-substance defeasance of debt by providing guidance for transactions in which cash and other
monetary assets acquired with only existing resources-resources other than the proceeds of refunding
debt-are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also
improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes
to financial statements for debt that is defeased in substance.
Effective in fiscal year 2018-19:
GASB 83 -Certain Asset Retirement Obligations
This Statement addresses accounting and financial reporting for certain asset retirement obligations
(AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital
asset. A government that has legal obligations to perform future asset retirement activities related to its
tangible capital assets should recognize a liability based on the guidance in this Statement.
3
This Page Left Intentionally Blank
2016 -01:
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR SIGNIFICANT DEFICIENCIES
Internal Controls over Revenue at Community Center
Current Year Status: Recommendation implemented.
2016 -02: Timely Preparation and Review of Bank Reconciliations
Current Year Status: Recommendation implemented.
2015 -1: Accuracy of Special Assessment Tax Rolls
Current Year Status: Recommendation implemented.
2015 --2: Internal Control over Employee Benefits and Claims Activities
Current Year Status: Recommendation implemented.
5
This Page Left Intentionally Blank
M MAZE
&ASSOCIATES
REQUIRED COMMUNICATIONS
To the City Council of
the City of San Rafael, California
We have audited the basic financial statements of the City of San Rafael for the year ended June 30, 2017.
We did not audit the financial statements of the San Rafael Sanitation District, as of and for the year
ended June 30, 2017, which represent 19%, 35%, and 15% of the assets, net position and revenues,
respectively, of the entity-wide reporting entity. These component unit financial statements were audited
by another auditor, whose report thereon has been furnished to us, and our opinion, insofar as it relates to
the amounts included for this entity, is based solely on the report of the other auditor.
Professional standards require that we communicate to you the following information related to our audit
under generally accepted auditing standards and Government Auditing Standards and the Uniform
Guidance.
Significant Audit Findings
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of San Rafael are described in Note 1 to the financial statements . No
new accounting policies were adopted and the application of existing policies was not changed during the
year, except as follows:
The following Governmental Accounting Standards Board (GASB) pronouncements became
effective, but did not have a material effect on the financial statements:
GASB 73-
GASB 74-
GASB 77-
GASB 80-
GASB 82-
Accountancy Corporation
3478 Buskirk Avenue , Suite 2 15
Pleasant Hill , CA 94523
Accounting and Financial Reporting (or Pensions and Related Assets
That A re Not within the Scope of GASB Statement 68, and
Amendments to Certain Provisions of GASB Statements 67 and 68
Financial Reporting for Post-employment Benefit Plans Other Than
Pension Plans
Tax Abatement Disclosures
Blending Requirements for Certain Component Units-an amendment
of GASB Statement No. 14
Pension Issues-an amendment of GASB Statements No. 67 , No. 68,
and No. 73
7
T 925 .930.0902
F 925 .930.0135
E maze@ mazeassociat es .com
w mazeassociates.com
~'
I -
The following GASB pronouncement becomes effective in fiscal year 2018. However, the City
elected to adopt the provisions of this statement in fiscal year 2017. As disclosed in Note 1 to the
financial statements, this statement required a prior period adjustment for the cumulative effect on
the financial statements.
GASB Statement No. 75 -Accounting and Financial Reporting (or Postemployment
Benefits Other Than Pensions
The objective of this Statement is to improve accounting and financial reporting by state and
local governments for postemployment benefits other than pensions (OPEB). The Statement
replaces the requirements of Statements No. 45 Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions, as amended, and No. 57, OPEB
Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB.
Unusual Transactions, Controversial or Emerging Areas
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimate(s) affecting the City's financial statements
was (were):
• Estimated Net Pension Liabilities and Pension-Related Deferred Outflows and Inflows of
Resources: Management's estimate of the net pension liabilities and deferred outflows/inflows of
resources are disclosed in Note 9 to the financial statements and are based on actuarial studies
detennined bya consultant, which are based on the experience of the City. We evaluated the key
factors and assumptions used to develop the estimate and determined that it is reasonable in
relation to the basic financial statements taken as a whole.
• Estimated Net OPEB Liability: Management's estimate of the net OPEB liability is disclosed in
Note 11 to the financial statements and is based on actuarial study determined by a consultant,
which is based on the experience of the City. We evaluated the key factors and assumptions used
to develop the estimate and determined that it is reasonable in relation to the basic financial
statements taken as a whole.
• Management's estimate of the depreciation: is based on useful lives determined by management.
These lives have been determined by management based on the expected useful life of assets as
disclosed in Note 1 to the financial statements. We evaluated the key factors and assumptions
used to develop the depreciation estimate and determined that it is reasonable in relation to the
basic financial statements taken as a whole.
8
• Estimated Fair Value of Investments: As of June 30, 2017, cash and investments were measured
by fair value. Fair value is essentially market pricing in effect as of June 30, 2017. These fair
values are not required to be adjusted for changes in general market conditions occurring
subsequent to June 30, 2017.
Disclosures
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. Management has corrected all/certain such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material, either
individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified
during the audit, other than those that are trivial, and communicate them to the appropriate level of
management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included m a management
representation Jetter dated September 28, 2017.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City's financial statements or a determination of the type of
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
9
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were
not a condition to our retention.
Other Information Accompanying the Financial Statements
We applied certain limited procedures to the required supplementary information that accompanies and
supplements the basic financial statements. Our procedures consisted of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We did not audit the required supplementary information
and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information which accompany the financial statements,
but are not required supplementary information. With respect to this supplementary information, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections which accompany the fmancial
statements, but are not required supplementary information. Such information has not been subjected to the
auditing procedures applied in the audit of the basic fmancial statements, and accordingly, we do not express
an opinion or provide any assurance on it.
******
This information is intended solely for the use of City Council and management and is not intended to be,
and should not be, used by anyone other than these specified parties.
Very truly yours,
tWl",~e ~ ~~~
Pleasant Hill, California
September 28, 2017
10
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2017
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
CBILDDEVELOPMENTPROGRAM
FOR THE YEAR ENDED JUNE 30, 2017
Table of Contents
INTRODUCTORY SECTION:
Table of Contents ........................................................................................................................................... .i
FINANCIAL SECTION:
Independent Auditor's Report ................................................................................................................... 1
Basic Financial Statements
Balance Sheet. ......................................................................................................................................... 3
Statement of Revenue, Expenditures and Changes in
Fund Balance ........................................................................................................................................ 4
Notes to Basic Financial Statements ...................................................................................................... 5
Supplementary Information
Schedule of Awards ..... '" ....................................................................................................... , .............. 1 0
Combining Statement of Revenues, Expenditures and Changes in
Fund Balance ................................................................................................................................ 11
Schedule of Expenditures by State Categories ..................................................... : .............................. 12
Schedule of Reimbursable Administrative Costs ................................................................................ 13
Schedule of Equipment Expenditures Utilizing Contract Funds ...................................................... 14
Schedule of Renovation and Repair Expenditures Utilizing Contract Funds ..................................... 14
Audited Attendance and Fiscal Reports/Audited Fiscal Reports:
CSPP6261 -California State Preschool Programs ............................................................................ 15
Audited Reserve Account Activity Report ....................................................................................... 17
Compliance Report
Independent Auditor's Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ........................................................................ 19
This Page Left Intentionally Blank
INDEPENDENT AUDITOR'S REPORT
To the Honorable Members of the City Council
City of San Rafael, California
Report on the Financial Statements
We have audited the accompanying financial statements of the City of San Rafael Child Development
Program (Program) of the City of San Rafael as of and for the year ended June 30, 2017 , and the related
notes to the financial statements, which collectively comprise the Program'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 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 Program'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 Program'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 opinion.
Accountancy Corporation
3478 Buski rk Aven ue , Suite 215
Pleasant Hill , CA 94523
T 925 .930 .0902
F 925.930.0135
E maze@mazeassociates.com
w mazeassociates.com
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Program as of June 30, 2017, and changes in financial position for the year then
ended in conformity with accounting principles generally accepted in the United States of America.
Other Matters
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Program's basic financial statements as a whole. The Supplementary Infonnation 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 as listed in the Table of Contents 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 in conformity with the CDE Audit Guide, issued by the
California Department of Education, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the Supplementary Information is
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 28,
2017 on our consideration of the Program'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 Program's internal control over
financial reporting and compliance.
IYVl Ct 1, e-i" f)OO~
Pleasant Hill, California
September 28, 2017
2
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
BALANCE SHEET
JUNE 30,2017
ASSETS
Cash (Note 3)
Grants receivable (Note 4)
Prepaid expense
Total Assets
LIABILITIES AND FUND BALANCE
Accounts payable
Total Liabilities
Fund balance, unassigned (Note 5)
Total Liabilities and Fund Balance
See accompanying notes to financial statements
3
$1,374,316
40,594
3,670
$1,418,580
$48,436
48,436
1,370,144
$1,418,580
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2017
REVENUES
State grants:
Current year grants
CDBG preschool grant
First five school readiness grants
Local grant
Interest
Parent fees
Other
Total Revenues
EXPENDITURES
Certified salaries
Classified Salaries
Employee benefits
Training and instruction
Office supplies
Books and supplies
Utilities and housekeeping services
Travel and conference
Rentals
Services and other operating expenditures
Equipment
Insurance
Renovation and repair
Total Expenditures
CHANGE IN FUND BALANCE
FUND BALANCE,
Beginning of year
End of year
See accompanying notes to financial statements
4
$196,122
16,467
95,163
21,500
4,177
3,724,333
11,939
4,069,701
1,940,680
46,237
1,313,842
297
1,553
145,220
34,865
2,862
18,130
286,893
29,888
32,234
700
3,853,401
216,300
1,153,844
$1,370,144
I NOTE 1-ORGANIZATION
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2017
The City of San Rafael operates the Child Development Program encompassing nine childcare
centers within the City of San Rafael. One of these centers provides day care services to subsidized
families under the Child Development Program funded by the California Department of Education,
which includes the Preschool program. The City is financially accountable for the activities of the
Program. The Program has no employees and substantially all staff services which it requires are
performed by the City's personnel. Costs incurred by the City to provide such services including
compensation, retirement, and other benefit costs are reimbursed by the Program. These basic
financial statements present only the activities of the Program and are not intended to present the
financial position of the City of San Rafael, California, or the results of its operations. The
financial statements of the Program are included as a Special Revenue Fund in the City's financial
statements.
I NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Accounting
The accounting and reporting treatment applied to a fund is determined by its measurement focus.
Governmental funds are accounted for on a spending or "current financial resources" measurement
focus. Accordingly, only current assets and current liabilities generally are included on the balance
sheets. Operating statements of governmental funds present increases (revenues and other financial
sources) and decreases (expenditures and other financial uses) in net current assets.
The Program's financial activities are accounted for using the modified accrual basis of accounting.
Under this method, revenues are recognized when measureable 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. Expenditures are recorded when the related fund liability is incurred.
Revenues considered susceptible to accrual include charges for services, federal and state grants,
and interest. Expenditures are recognized in the accounting period in which the liability is incurred,
if measurable.
B. Fund Balance
Fund Balance is the excess of all the Program's assets over all its liabilities.
5
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30, 2017
INOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. 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) m 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 3 -CASH AND INVESTMENTS
The Program's cash is included in a City-wide cash and investment pool, the details of which are
presented in the City's basic financial statements. The Program pools cash from all sources with the
City of San Rafael so that it can be invested at the maximum yield, consistent with safety and
liquidity, while individual funds can make expenditures at any time. The City's investment policy
and the California Government Code permit investments in Securities of the U.S. Government or its
agencies, Certificates of Deposit, Negotiable Certificates of Deposit, Banker's Acceptances,
Commercial Paper, the State of California Local Authority Investment Fund (LAIF Pool), Repurchase
Agreements, Medium-Term Corporate Notes, Limited Obligation Improvement Bonds related to
special assessment districts and special tax districts, and Money MarketlMutual Funds.
The City categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure 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. The City of San Rafael pooled investments is an uncategorized input not defmed
as Levell, Level 2, or Level 3 input.
6
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30,2017
I NOTE 4 -GRANTS RECEIVABLE
The Program has the following grants receivable at June 30, 2017:
Agency Grant
Marin County First 5 Grant
Total
I NOTE 5 -FUND BALANCES
Amount
$40,594
$40,594
Governmental 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 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 to indicate items 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 ofthe 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 formal action of the City Council which may
be altered only by formal action 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 to be used for a specific
purpose, but are neither restricted nor committed. Intent is expressed by the City Councilor its
designee and may be changed at the discretion of the City Councilor its designee. 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.
7
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financials Statements
For the Year Ended June 30,2017
I NOTE 6 -CONTINGENCIES AND COMMITMENTS
The Program participates in Federal, State and County grant programs that are fully or partially
funded by grants received from other governmental units. Expenditures financed by grants are
subject to audit by the appropriate grantor government. If expenditures are disallowed due to
noncompliance with grantor program regulations, the City may be required to reimburse the grantor
government. As of June 30,2017, some amounts of grant expenditures have not been audited, but
the City believes that disallowed expenditures, if any, based on subsequent audits will not have a
material effect on any individual governmental funds or the overall financial condition of the City.
8
SUPPLEMENTARY INFORMATION
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF AWARDS
FOR THE YEAR ENDED JUNE 30, 2017
Pass-Through Grantor Award
Program CFDA# # Amount
Federal Awards
US Department of Housing and Urban Development,
Pass-through the County of Marin
Community Development Block Grant 14.218 HUD-04527-01-15 $16,477
Total Federal Awards $16,477
State Awards
State of California Department of Education
Child Development Division
State Preschool Program FY2017 CSPP-6261 $196,122
Total State A wards $196,122
County Award
County of Marin
First Five -Preschool CSRl-21-009-1O $95,163
Local Awards
Marin Child Care Council N/A $16,000
Marin County Office of Education N/A 5,500
Total Local Awards $21,500
Total State, Federal Awards, and Local $329,262
10
Revenue Expenditures
$16,477 $16,477
$16,477 $16,477
$196,122 $244,294
$196,122 $244,294
$95,163 $95,163
$16,000 $16,000
5,500 5,500
$21,500 $21,500
$329,262 $377,434
CITY OF SAN RAP AEL CHILD DEVELOPMENT PROGRAM
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30,2017
State Preschool
Program Total CDE Non-CDE
(CSPP 6261) CD Contracts Programs
REVENUES
State grants:
Current year grants $196,122 $196,122
CDBG preschool grant $16,467
First Five school readiness grants 95,163
Local grants 21,500
Interest 4,177
Parent fees -noncertified children 3,724,333
Other 11,939
Total Revenues 196,122 196,122 3,873,579
EXPENDITURES
Certified salaries 69,905 69,905 1,870,775
Classified salaries 46,237 46,237
Employee benefits 96,443 96,443 1,217,399
Training and instruction 297
Office supplies 1,553
Books and supplies 14,849 14,849 130,371
Utilities and housekeeping services 34,865
Travel and conference 2,862
Rentals 18,130
Services and other operating expenditures 16,860 16,860 270,033
Equipment 29,888
Insurance 32,234
Renovation and repair 700
Total Expenditures 244,294 244,294 3,609,107
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (48,172) (48,172) 264,472
TRANSFERS
Transfers in from other programs 100,000 100,000
Transfers out to other programs (100,000)
CHANGE IN FUND BALANCE $51,828 $51,828 $164,472
11
Total
$196,122
16,467
95,163
21,500
4,177
3,724,333
11,939
4,069,701
1,940,680
46,237
1,313,842
297
1,553
145,220
34,865
2,862
18,130
286,893
29,888
32,234
700
3,853,401
216,300
100,000
(100,000)
$216,300
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EXPENDITURES BY STATE CATEGORIES
FOR THE YEAR ENDED JUNE 30, 2017
CSPP-6261
State Preschool
Program Totals
EXPENDITURES:
/1000 Certified personnel salaries $69,905
1100 Teachers' salaries 69,905
1200 Administration
1300 Supervisors' salaries
1600 Infant educators
/2001 Classified personnel salaries $46,237
2100 Instructional aides' salaries 46,237
2300 Clerical and other office salaries
2400 Maintenance and operations salaries
2500 Food services salaries
2600 Transportation salaries
/3000 Employee benefits $96,443
3200 Payroll taxes (Medicare) 1,727
3300 Other benefits 66,736
3400 Health and welfare 26,177
3600 Workers' compensation insurance 1,803
/4000 Books and supplies $14,849
4200 Other books
4300 Instructional materials and supplies 14,849
4500 Other supplies
4600 Food supplies
/5000 Services and other operating expenditures $16,860
5100 Lecturer
5200 Travel and conferences
5300 Memberships and dues
5400 Insurance 1,575
5500 Utilities and housekeeping services 1,268
5600 Rentals, leases and repairs 3,011
5700 Audit expense
5800 Other direct services & admin. 11,006
/6000 Capital Outlay
6100 Sites and improvements of sites
6200 Buildings and improvements of buildings
6400 Equipment (prograrri-related)
6500 Equipment replacement (program related)
I Depreciation
Costs ca italized as Fixed Assets
ONREIMBURSABLE EXPENDITURES $244,294
We have examined the claims filed for reimbursement and the original records supporting the transactions
recorded under the contracts listed above to an extent considered necessary to assure ourselves that the
amounts claimed by the contractor were eligible for reimbursement, reasonable, necessary, and adequately
supported, according to governing laws, regulations, and contract provisions.
12
$69,905 /
69,905
$46,237 /
46,237
$96,443 /
1,727
66,736
26,177
1,803
$14,849 I
14,849
$16,860 I
1,575
1,268
3,011
11,006
I
$244,294
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF REIMBURSABLE ADMINISTRATIVE COSTS
FOR THE YEAR ENDED JUNE 30, 2017
Administrative Costs (Audit Fees)
Total Administrative Costs
13
CSPP-6261
State Preschool
Program
$7,210
$7,210
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EQUIPMENT EXPENDITURES UTILIZING CONTRACT FUNDS
FOR THE YEAR ENDED JUNE 30, 2017
Expenditures Under $7,500
Unit Cost
Expenditures Over $7,500
Unit Cost with CDD Approval
Expenditures Over $7,500
Unit Cost Without CDD Approval
Cost Item Cost Item Cost Item
None None None
SCHEDULE OF RENO V A TION AND REP AIR EXPENDITURES UTILIZING CONTRACT FUNDS
FOR THE YEAR ENDED JUNE 30, 2017
Expenditures Under $10,000
Unit Cost
Cost Item
None
Expenditures Over $10,000
Unit Cost with CDD Approval
Cost Item
None
14
Expenditures Over $10,000
Unit Cost Without CDD Approval
Cost Item
None
AUDITED ATTENDANCE AND FISCAL REPORT
for California State Preschool Programs
Agency Name: City of San Rafael Child Development Program Vendor No. 21-2193
June 30,2017 Contract No. CSPP 6261
Iindependent Auditor's Name: Maze & Associates
r.nIIIMN.A COLUMN B COLUMN C r.nI IIMIII D COLUMN E
SECTION I -CERTIFIED CHILDREN DAYS OF ~~J~NRnl ~~~~ ENROLLMENT FISCAL PER AUDIT CUMULATIVE FISCAL ADJUSTMENT
FORM CDFS 8501 ADJUSTMENTS YEAR PER AUDIT FACTOR
Three and Four Year Olds
Full-time-plus --1.1800 -
Full-time --1.0000 -
Three-quarters-time -0.7500 -
UI,e','o"-u,,,e 8,398 8,398 0.6196 5,203.401
Exceptional Needs
FuJl-ti m .... nlo ,~ --1.4160 -
Full-time --1.2000 -
Three-quarters-time --0.9000 -
One-half-time --0.6196 -
Limited and f\,,)r-~nylish )roficit:l,f
1=, oIU;m"_nlo,~ --1.2980 -
FUll-time --1.1000 -
Th, ee-'-!uo"e, "-,;,,,e --0.8250 -
One-half-time --0.6196
At Risk of Abuse or Neglect
"""IU;, III~ --1.2980 -
Full-time --1.1000 -
Three-n' --0.8250 -
un""""I,-,;,,,e 0.6196
Severely Disabled
Full-tin,,,-pluQ --1.7700 -
Full-\Lme_ --1.5000 -
Thre",-n, 'i' --1.1250
0.6196
iTOTAL DAYS OF ENROLLMENT 8,398 8,398 &; ?m .d./")1
iDAYS OF OPERATION 175 175
'DAYS OF ATTENn.t.N~E 8,3~8 8~39~
0 NO NONCERTIFIED CHILDREN -Check this box, omit page 2, and continue to Section III if no non certified
CUll '" ,e, "" -If """"QQO' y, attach additional sheets to explain adjustment!>.
AUD 8501, Page 1 of 4 (FY 2016-17) California Department of Education
15
AUDITED ATTENDANCE AND FISCAL REPORT
for California State Preschool Programs
Agency Name: Ci!l of San Rafael Child Develoement Program Vendor No. 21-2193
Fiscal Year End: June 30,2017 Contract No. CSPP 6261
COLUMN A COLUMN B COLUMN C
CUMULATNE FISCAL AUDIT
YEAR PER FORM ADJUSTMENT CUMULATNE FISCAL YEAR PER
CDFS 8501 INCREASE DR AUDIT
SECTION III -REVENUE (DECREASE)
RESTRICTED INCOME
Child Nutrition Programs $0
County Maintenance of Effort (EC ~ 8279) a
Uncashed Checks to Providers a
Other (Specify): 0
OtheUSjJecify): a
Subtotal $0 $0 $0
Transfer from Reserve -General 0
Transfer from Reserve -Professional Development a
Subtotal $0 $0 $0
Family Fees for Certified Children 0
Interest Earned on Apportionments 0
UNRESTRICTED INCOME
Family Fees for Noncertified Children 0
Head Start Pro~ram (EC ~ 8235(b)) a
Other (Specify): 0
Other (Specify): 0
TOTAL REVENUE $0 $0 $0
SECTION IV -REIMBURSABLE EXPENSES
Direct Payments to Providers_(FCCH Only) $0
1 000 Certificated Salaries 69,905 69,905
2000 Classified Salaries 46,237 46,237
3000 Employee Benefits 96,443 96,443
4000 Books and Supplies 14,849 14,849
5000 Services and Other Operating Expenses 16,860 16,860
6100/6200 Other Approved Capital Outlay 0
6400 New EquijJment (program-related) 0
6500 Replacement Equipment (program-related) 0
Depreciation or Use Allowance 0
Start-Up Expenses (service level exemption) 0
Bud~et Impasse Credit 0
Indirect Costs Rate: 0.00% (Rate is Self-Calculating) 0
TOTAL EXPENSES CLAIMED FOR REIMBURSEMENT $244,294 $0 $244,294
TOTAL ADMINISTRATIVE COSTS lin,'"d.din""onIV.b~.) $7,210 $7,210
FOR CDE-A&I USE ONLY:
Independent Auditor's Assurances on Agency's compliance with Contract Funding Terms and Conditions and Program
Requirements of the California Department of Education, Earty Education and Support Division:
Eligibility, enrollment, and attendance records are being maintained as
required (check YES or NO): COMMENTS -If necessary. attach additional sheets to explain adjustments:
1-'1 Adjustments identified in Column B are adjustments made to report audit fees as
administrative costs. o NO -Explain any discrepancies.
Reimbursable expenses claimed above are eligible for reimbursement,
reasonable, necessary. and adequately supported (check YES or NO):
1-'1 YES
I I NO -Explain any discrepancies.
1-'1 NO SUPPLEMENTAL REVENUES OR EXPENSES -Check this box and omit paoe 4 if thene are no supplemental revenues
AUD 8501, Page 3 of 4 (FY 2016·17) California Department of Education
16
AUDITED RESERVE ACCOUNT ACTIVITY REPORT
Agency Name: City of San Rafael Child Development Program
Fiscal Year End: June 30,2017 Vendor No. 21-2193
Independent Auditor's Name: Maze & Associates
RESERVE ACCOUNT TYPE (Check One): COLUMNA COLUMN B COLUMN C
0 Center Based AUDIT
PER AGENCY ADJUSTMENT PER AUDIT 0 Resource and Referral INCREASE OR
0 Altemative Payment (DECREASE)
LAST YEAR:
1. Beginning Balance (must equal ending balance from Last Year's AUD 9530-A) $0
2. Plus Transfers from Contracts to Reserve Account
(based on last year's post-audit CDFS 9530, Section IV):
Contract No. CSPP 5253 $0
Contract No. 0
Contract No. 0
Contract No. 0
Contract No. 0
Contract No. 0
Total Transferred from Contracts to Reserve Account $0 $0 $0
3. Less Excess Reserve to be Billed (enter
as a positive amount any excess amount calculated by CDFS on last year's post-audit
CDFS 9530) $0
4. Ending Balance on Last Year's Post-Audit CDFS 9530 $0 $0 $0
THIS YEAR:
5. Plus Interest Earned This Year on Reserve Funds
(column A must agree with this year's CDFS 9530-A, Section II) $0
6. Less Transfers to Contracts from Reserve Account
(column A amounts must agree with this year's CDFS 9530-A, Section III; and column C
amounts must be reported on this year's AUD forms for respective contracts):
CSPP -General
Contract No. CSPP 6261 $0
Contract No. 0
CSPP -Professional Development
Contract No. $0
Contract No. 0
Subtotal $0 $0 $0
Other Contracts
Contract No. $0
Contract No. 0
Contract No. 0
Contract No. 0
Contract No. 0
Subtotal $0 $0 $0
Total Transferred to Contracts from Reserve Account $0 $0 $0
7. Ending Balance or June 30, 2017
(column A must agree with this year's CDFS 9530·A, Section IV) $0 $0 $0
COMMENTS· If necessary, attach additional sheets to explain adjustments:
AUD 9530·A, Page 1 of 1 (FY 2016-17) 17 California Department of Education
This Page Left Intentionally Blank
MAZE
& ASSOCIATES
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT A UDITING STANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the basic financial statements of the City of San
Rafael Child Development Program (Program), as of and for the year ended June 30,2017, and the related
notes to the financial statements, and have issued our report thereon dated September 28, 2017.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Program's internal control
over financial reporting (internal control) to detennine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of Program's internal control. Accordingly, we do
not express an opinion on the effectiveness of Program's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the Program's financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
Compliance and Otlter Matters
As part of obtaining reasonable assurance about whether the Program's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Accountancy Corporation
3478 Buskirk Avenue, Su ite 215
Pl easant Hill , CA 94523
19
T 925.930.0902
F 925.930.0135
E maze@mazeassoc iates.com
w mazeassociates.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Program's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Program's internal control and compliance.
Accordingly, this communication" is not suitable for any other purpose.
'ht~{>1~~
Pleasant Hill, California
September 28, 2017
20
CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
FOR THE YEAR ENDED JUNE 30, 2017
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
SINGLE AUDIT REPORT
For The Year Ended June 30, 2017
TABLE OF CONTENTS
Schedule of Findings and Questioned Costs .............................................................................. 1
Section I -Summary of Auditor's Results ........................................................................... 1
Section II -Financial Statement Findings ........................................................................... 2
Section III -Federal Award Findings and Questioned Costs ............................................. 2
Schedule of Expenditures of Federal Awards ............................................................................ 3
Notes to Schedule of Expenditures of Federal Awards ............................................................. 5
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards ...................... 7
Independent Auditor's Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the
Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ........... 9
This Page Left Intentionally Blank
CITY OF SAN RAFAEL
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
For The Year Ended June 30, 2017
SECTION I-SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued on whether the financial
statements were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
• Material weakness( es) identified? Yes
• Significant deficiency(ies) identified? Yes
Noncompliance material to financial statements noted? Yes
Federal Awards
Type of auditor's report issued on compliance for major
programs: Unmodified
Internal control over major programs:
• Material weakness( es) identified? Yes
• Significant deficiency(ies) identified? Yes
Any audit findings disclosed that are required to be reported
in accordance with 2 CFR 200.5 l 6(a)? Yes
Identification of major programs:
CFDA#(s) Name of Federal Program or Cluster
20.205 Highway Planning and Construction
x
x
x
x
x
x
Dollar threshold used to distinguish between type A and type B programs: $750,000
Auditee qualified as low-risk auditee? x Yes
No
None
Reported
No
No
None
Reported
No
No
SECTION II -FJNANCIAL STATEMENT FINDJNGS
Our audit did not disclose any significant deficiencies, or material weaknesses or instances of
noncompliance material to the basic fmancial statements. We have also issued a separate
Memorandum on Internal Control dated September 28, 2017 which is an integral part of our audits
and should be read in conjunction with this report.
SECTION ill -FEDERAL AWARD FJNDJNGS AND QUESTIONED COSTS
Our audit did not disclose any fmdings or questioned costs required to be reported in accordance
with Uniform Guidance.
2
CITY OF SAN RAFAEL
SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
For the Fiscal Year Ended June 30, 2017
Federal Grantor/
Pass-Through Grantor/Program or Cluster Title
U.S. Department of Housing and Urban Development
Pass-Through County of Marin, California
Community Development Block Grants/ Entitlement Grants
Childcare
ADA I DOJ Compliance Curb Ramps
Total U.S. Department of Housing and Urban Development
U.S. Department of Health and Human Services
Pass-Through the California Health and Human Services Agency
Medical Assistance Program
Department of Health Care Services -Ground Emergency Medical Transportation
Pass-Through County of Marin, California
Special Programs for the Aging Title III,
Part B -Grants for Supportive Services and Senior Centers
Total U.S. Department of Health and Human Services
U.S. Department of Transportation, Pass-Through Programs
Pass-Through State of California Department of Transportation
Highway Planning and Construction
Downtown Rail Readiness Project
Southern Heights Bridge Replacement
Del Presidio Blvd. -Pt. San Pedro Resurfacing
SR Downtown Integrated Transit Center Study
SR Downtown Parking and Wayfinding Study
Subtotal for Highway Planning and Construction
State and Community Highway Safety
2nd Street at Grand Ave Intersection Modification
Pass-Through California Office of Traffic Safety
State and Community Highway Safety
Selective Traffic Enforcement Program FY2016
Selective Traffic Enforcement Program FY2017
Subtotal for State and Community Highway Safety
Pass-Through California Office of Traffic Safety
Minimum Penalties for Repeat Offenders for Driving While Intoxicated
Avoid Grant FY 15-16
Total U.S. Department of Transportation
3
Federal
CFDA
Number
14.218
14.218
93.778
93.044
20.205
20.205
20.205
20.205
20.205
20.600
20.600
20.600
20.608
Pass-Th rough
Identifying
Number
HUD-04527-01-15
HUD-4536-01-16
SFY 2013-14
10-204
CML-5043(036)
BRL0-5043(038)
STPL-5043 (035)
RSTPL-6406(014)
RSTPL-6406(014)
HISPL 5043 (037)
PT1673
PT17115
AL1628
Federal
Expenditures
$ 16,447
190,373
206,820
55,306
9,994
65,300
308,014
182,302
20,897
41,771
11,554
564,538
3,845
67,408
48,365
119,618
58,030
742, 186
(Continued)
CITY OF SAN RAFAEL
SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
For the Fiscal Year Ended June 30, 2017
Federal Grantor/
Pass-Through Grantor/Program or Cluster Title
U.S. Department of Justice, Direct Program
Bulletproof Vest Partnership Program
PD Vest Grant 2017
Total U.S. Department of Justice
U.S. Department of Homeland Security, Pass-Through Programs
Pass-Through County of Marin, California
Homeland Security Grant Program
Marin County CERT FY 2015
Total U.S. Department of Homeland Security
Total Federal Expenditures
Federal
CFDA
Number
16.607
97.067
Pass-Through
Identifying
Number
SHSGP-2015
See Accompanying Notes to Schedule of Expenditures of Federal Awards
4
Federal
Expenditures
18,570
18,570
27,650
27,650
$ 1,060,526
CITY OF SAN RAFAEL
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS
For The Year Ended JUNE 30, 2017
NOTE 1 -REPORTING ENTITY
The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal
awards for the City of San Rafael, California, and its component units as disclosed in the notes to
the Basic Financial Statements, except for federal awards of the San Rafael Sanitation District
(District). Federal awards expended by this entity, if any, are excluded from the schedule and are
subject to a separate Single Audit performed by other auditors.
NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the
accounts and reported in the financial statements, regardless of the measurement focus applied. All
governmental funds and agency funds are accounted for using the modified accrual basis of
accounting. All proprietary funds are accounted for using the accrual basis of accounting.
Expenditures of Federal Awards reported on the Schedule are recognized when incurred.
NOTE 3 -INDIRECT COST ELECTION
The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform
Guidance.
5
This Page Left Intentionally Blank
INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, the aggregate discretely presented component units , each major
fund, and the aggregated remaining fund information of the City as of and for the year ended June 30,
2017, and the related notes to the financial statements, which collectively comprise the City's basic
financial statements, and have issued our report thereon dated September 28 , 2017 . Our report includes a
reference to other auditors who audited the financial statements of the San Rafael Sanitation District, as
described in our report on the City's financial statements . This report does not include the results of the
other auditors' testing of internal control over financial reporting or compliance and other matters that
are reported on separately by those auditors. Our report included an emphasis of a matter paragraph
disclosing the implementation of new accounting principles .
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements , we considered City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of City's internal control. Accordingly, we do not
express an opinion on the effectiveness of City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees , in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis . A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness , yet important enough to merit attention by those charged
with governance .
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Accou nta ncy Corporation
34 78 Buskirk Aven ue, Suite 2 15
Pl easant Hill , CA 94523 7
T 925 .930 .0902
F 925 .930.0 135
E m aze@mazeassoc iates .com
w rnazeassociates.corn
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
'W\.(}.l,Cl.-i ~Mo~
Pleasant Hill, California
September 28, 2017
8
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE;
AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS
REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Members of the City Council
City of San Rafael, California
Report on Compliance for Each Major Federal Program
We have audited City of San Rafael's compliance with the types of compliance requirements described in
the OMB Compliance Supplement that could have a direct and material effect on each of the City's major
federal programs for the year ended June 30, 2017. The City's major federal programs are identified in
the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of federal statutes, regulations, and
terms and conditions of federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal programs
based on our audit of the types of compliance requirements referred to above. We conducted our audit of
compliance in accordance with auditing standards generally accepted in the United States of America;
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and the audit requirements of Title 2 US. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the City's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal program . However, our audit does not provide a legal determination of the City's compliance.
Opinion on Each Major Federal Program
In our opinion, the City complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs for
the year e nded Jun e 30, 2017 .
Accountancy Corporation
3478 Buskirk Avenue , Suite 2 15
Pleasant Hill, CA 94523 9
T 925 .930 .0902
F 925 .930 .0135
E maze@ mazeassociat es.com
w mazeassociates.com
Report on Internal Control Over Compliance
Management is responsible for establishing and maintaining effective internal control over compliance
with the types of compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the City's internal control over compliance with the types of requirements
that could have a direct and material effect on each major federal program to determine the auditing
procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal control over compliance in
accordance with the Unifonn Guidance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control
over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of the
Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of and for the year ended June
30, 2017. We have issued our report thereon dated September 28, 2017 which contained unmodified
opinions on those financial statements. Our audit was conducted for the purpose of forming an opinion
on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is
presented for purposes of additional analysis as required by the Uniform Guidance and is not a required
part of the financial statements. Such information is the responsibility of management and was derived
from and relates directly to the underlying accounting and other records used to prepare the fmancial
statements. The information has been subjected to the auditing procedures applied in the audit of the
fmancial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the basic financial
statements as a whole.
ty{lCl.1e. 'l 1\M'~
Pleasant Hill, California
September 28, 2017
10
STAFF REPORT APPROVAL
ROUTING SLIP
Staff Report Author: Mark Moses Date of Meeting: 12/18/2017
Department: Finance Department
Topic: FY17 Year End Financial Audit
Subject: FY17 Year End Financial Audit
Type: (check all that apply) ☐ Consent Calendar ☐ Public Hearing
☒ Discussion Item ☐ Resolution ☐ Ordinance
☐ Professional Services Agreement ☐ Informational Report
*If PSA, City Attorney approval is required prior to start of staff report approval process
Was agenda item publicly noticed? ☐ Yes ☐No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ
Due Date Responsibility Description Completed
Date Initial / Comment
DEPARTMENT REVIEW
FRIDAY
noon
12/1
Director Director approves staff
report is ready for ACM,
City Attorney & Finance
review.
12/1/2017
☒
MM
CONTENT REVIEW
MONDAY
morning
12/4
Assistant City Manager
City Attorney
Finance
ACM, City Attorney &
Finance will review items,
make edits using track
changes and ask questions
using comments. Items will
be returned to the author
by end of day Wednesday.
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enter a date.
12/5/2017
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enter a date.
☒
☒
LG
☒
DEPARTMENT REVISIONS
FRIDAY
noon
12/8
Author Author revises the report
based on comments
receives and produces a
final version (all track
changes and comments
removed) by Friday at
noon.
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enter a date.
☒
ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL
MONDAY
morning
12/11
Assistant City Manager
City Attorney
Finance
ACM, City Attorney &
Finance will check to see
their comments were
adequately addressed and
sign-off for the City
Manager to conduct the
final review.
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12/11/2017
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☒
☒
MM
TUES
noon
12/12
City Manager Final review and approval 12/13/2017 ☒
JS