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HomeMy WebLinkAboutFin Financial Reports 2010Agenda Item No: 7 ^\ Meeting Date: March 15, 2010 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE Prepared by: Cindy Mosser City Manager Approval: Finance Director SUBJECT: FY 2008-2009 ANNUAL FINANCIAL AUDIT REPORT; THE GANN APPROPRIATION LIMIT REPORT, AND THE MEMORANDUM ON INTERNAL CONTROL STRUCTURE. RECOMMENDATION: ACCEPT THE FY 2008-2009 ANNUAL FINANCIAL AUDIT REPORT; ACCEPT THE GANN APPROPRIATION LIMIT REPORT; AND ACCEPT THE MEMORANDUM ON INTERNAL CONTROL STRUCTURE. IC : . lfZ�li1`►11� As is required by both local code and State law, the City of San Rafael must complete an annual audit of its financial activities. The auditing firm of Maze and Associates, Accountancy Corporation conducted the audit for fiscal year 2008-2009. 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 Federal Government requires that any local agency receiving or 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 amount did occur in fiscal year 2008-2009; therefore, a separate audit report is required. This report will be presented at a later date. The requirements of Section 1.5 of Article XIIIB of the California Constitution is met with an agreed upon procedure report applied to the Gann Appropriation Limit calculated for the year ending June 30, 2010. A management letter/report is also prepared by the auditors to help identify areas that could help improve the City's organization and controls over financial activities. This letter/report is enclosed separately with this staff report. FOR CITY CLERK ONLY File No.: Council Meeting: Disposition: SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 The City Council's approval and acceptance of fiscal year 2008-2009 audited financial report, and memorandum of internal control structure are needed to remain in compliance with local charter, State and Federal law. ANALYSIS: The actual results of the City's financial activities are presented in the Government -Wide Financial Statements with governmental activities and business -type activities presented separately. Net assets are a good indicator of the City's financial position. During this fiscal year, net assets of the City were $216.9 million, which is a decrease of $3.5 million from the prior year. A financial summary of expenditures and revenues is shown in the Statement of Activities and Changes in Net Assets. Supplementary explanatory information is provided with a Management's Discussion and Analysis (MD&A) beginning on page 3. The MD&A provides key highlights and a summary view of performance of financial activities for the year ended June 30, 2009. The Agreed -Upon Procedures report for the Gann Appropriations Limit required three steps to be performed including testing the accuracy of the calculations and comparison of information presented. No exceptions were noted in all three steps for the years ended June 30, 2010. In the area of accounting practices and internal controls, there are no areas of significant deficiencies noted for fiscal year 2008-2009. The Memorandum on Internal Control Structure addressed three other recommendations for the City. The first recommendation addresses the City's budget and financial condition. The other two recommendations are informational in nature. From the 2007 fiscal year's management letter/report, all of the prior recommendations are in various stages of progress or have been implemented. A report on the internal controls from the parking citation contractor was received which complies with requirements of Statement on Auditing Standards #70 — Service Organizations. The recommendation for the physical security of the Information System's server room is completed with a smoke detector. Any other change to the facility is cost prohibitive. A new professional standard requires our auditors to communicate to the City Council matters that come to their attention relating to the audit. This section is the last three pages of the Memorandum on Internal Control Structure. FISCAL IMPACT: No fiscal impact occurs by having the Council accepts these reports. The fiscal year 2008-2009 Annual Financial Audit Reports and related letters/reports are presented as the actual results of the City and Agency financial activities for the year. OPTIONS: The City Council can choose to either: 1) Accept the Fiscal Year 2008-2009 Comprehensive Annual Financial Report, Agreed - Upon Procedures report for the Gann Appropriations Limits, and the Memorandum on Internal Control Structure as presented, or SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 2) Reject the reports. The Council is required under current law to accept the reports and file it with numerous County, State and Federal agencies. Rejecting these reports would leave the City out of compliance with applicable laws. ACTION REQUIRED: Staff recommends Council accept the reports and letters as presented. Attachments: Comprehensive Annual Financial Report Appropriations Limit Increments Memorandum on Internal Control W:\Management Services- WorkFile\Finance- WorkFile\Council Material\Staff Reports\2010\City\Audit report fy2008-09.doc COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDING JUNE 30, 2009 The newly renovated mall at Northgate This Page Left Intentionally Blank This Page Left Intentionally Blank COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2009 City of San Rafael, California P.O. Box 151560 1400 Fifth Avenue San Rafael, California 94915-1560 Prepared by the Finance Department Cindy Mosser, Finance Director/City Treasurer LOMA San Rafael's weekly Downtown Farmers Market This Page Left Intentionally Blank CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009 Table of Contents INTRODUCTORY SECTION TABLE OF CONTENTS Letterof Transmittal............................................................................................................................................ i FINANCIAL SECTION Independent Auditor's Report on Basic Financial Statements..................................................................1 Management's Discussion and Analysis........................................................................................................3 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Assets......................................................................................................................17 Statementof Activities........................................................................................................................18 Fund Financial Statements: Major Governmental Funds: BalanceSheet..................................................................................................................................22 Balance Sheet - Reconciliation of Governmental Fund Balances to Net Assets of Governmental Activities......................................................................................23 Statement of Revenues, Expenditures, and Changes in Fund Balances........................................24 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities....................................................................................... 25 Proprietary Funds: Statementof Net Assets.................................................................................................................. 28 Statement of Revenues, Expenses, and Changes in Fund Net Assets...........................................29 Statementof Cash Flows................................................................................................................. 30 CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009 Table of Contents FINANCIAL SECTION (Continued) Notes to Basic Financial Statements........................................................................................................31 Required Supplementary Information: Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetary Basis GeneralFund................................................................................................................................... 68 Traffic and Housing Mitigation Special Revenue Fund................................................................. 69 GasTax Special Revenue Fund...................................................................................................... 70 Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual - Budgetary Basis Redevelopment Agency Capital Projects Fund..............................................................................71 Non -major Governmental Funds: CombiningBalance Sheet...................................................................................................................78 Combining Statement of Revenues, Expenditures, and Changes inFund Balance........................................................................................................................... 84 Budgeted Non -major Government Funds: Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual............................................................................... 90 Internal Service Funds: Combining Statement of Net Assets.................................................................................................102 Combining Statement of Revenues, Expenses and Changes in Net Assets ....................................103 Combining Statement of Cash Flows...............................................................................................104 CITY OF SAN RAFAEL, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2009 Table of Contents STATISTICAL SECTION Financial Trends: Net Assets by Component — Last Seven Fiscal Years......................................................................109 Changes in Net Assets — Last Seven Fiscal Years............................................................................110 Fund Balances of Governmental Funds — Last Ten Fiscal Years.....................................................115 Changes in Fund Balance of Governmental Funds — Last Ten Fiscal Years....................................116 Revenue Capacity: Assessed and Estimated Actual Value of Taxable Property — Last Eight Fiscal Years ...................118 Property Tax Rates - All Direct and Overlapping Governments— Last Ten Fiscal Years ................ 119 Principal Property Tax Payers — Current Year and Nine Years Ago................................................120 Property Tax Levies and Collections — Last Ten Fiscal Years .........................................................121 Debt Capacity: Ratio of Outstanding Debt by Type — Last Ten Fiscal Years ...........................................................122 Computation of Direct and Overlapping Debt..................................................................................123 Computation of Legal Bonded Debt Margin— Last Eight Fiscal Years............................................124 Revenue Bond Coverage Parking Facility — Last Ten Fiscal Years.................................................125 Redevelopment Pledged Revenue Coverage....................................................................................126 Demographic and Economic Information: Demographic Statistics — Last Ten Fiscal Years..............................................................................127 Principal Employers — Fiscal Year 2008-2009.................................................................................128 Operating Information: Full -Time Equivalent City Government Employees by Function — Last Ten Fiscal Years.................................................................................................................129 Operating Indicators by Function/Program — Last Ten Fiscal Years ...............................................130 Capital Asset Statistics by Function/Program — Last Ten Fiscal Years ...........................................132 This Page Left Intentionally Blank CITY OF Mayor Albert J. Boro Council Members Greg Brockbank Damon Connolly Barbara Heller Marc Levine February 23, 2010 Honorable Mayor, Members of the City Council and Residents of San Rafael The Comprehensive Annual Financial Report (CAFR) of the City of San Rafael for the year ended June 30, 2009, is hereby submitted as mandated by both local ordinances and State of California statutes. These ordinances and statutes require that the City of San Rafael annually issue a report on its financial position and activity, and that an independent firm of certified public accountants audits this report. Responsibility for both the data accuracy, and the completeness and fainiess of the presentation, rests with management. To the best of our knowledge and belief, the data presented is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City of San Rafael. The financial statements are prepared in accordance with Generally Accepted Accounting Principles as promulgated by the Governmental Accounting Standards Board (GASB) and include the report of the independent certified public accounting firm, Maze and Associates Accountancy Corporation. Further, the CAFR is prepared in accordance with procedures and policies set by the Government Finance Officers Association. The analysis of the financial condition and the result of operations are in the Management's Discussion and Analysis document in the financial section. 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 of San Rafael's elected and appointed officials. 2. Financial section includes the general-purpose financial statements, related footnote disclosures, and the combining and individual find and account group financial statements and schedules, as well as the independent auditors' report. 3. Statistical section, which is unaudited, includes selected financial and demographic information, presented on a multi-year basis. Generally, ten-year data is presented for expenditures, revenues, assessed valuation for local properties and construction activity. REPORTING ENTITY — PROFILE. OF THE GOVERNMENT The City of San Rafael provides a full range of municipal services required by statute or charter, namely: Fire, Police, Community Development (encompassing Building, Planning and Code Enforcement), Public Works, Community Services (both Recreation and Child Care programs), Redevelopment, Library and Management Services. The City Council is financially accountable for the San Rafael Redevelopment Agency and the San Rafael Joint Powers Financing Authority. These entities are considered blended component units and are combined with the City's figures in this report. 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 Footnote No. I in the Financial Section of the CAFR. CAFR TRANSMITTAL LETTER 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 aminal 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 Footnote No. 12 in the CAFR. The Mission San Rafael Archangel was founded in 1817. San Rafael was incorporated in 1874 and became a charter city in 1913 by vote within the City. The City Council is composed of five members; four are elected at large to four-year terms. The mayor is elected separately to a four-year term. The City currently has a land area of 22 square miles that includes 17 square miles of land and five of water and tidelands. San Rafael's population in 2009 was 58,363. The City of San Rafael is located 17 miles north of San Francisco in Marin County. Protected by its Mediterranean like setting along the shores of the San Francisco Bay, the City enjoys a mild climate year round. As the County seat, San Rafael is considered the commercial, financial and cultural and civic hub of Marin County. Abundant recreational facilities are available in and around the San Rafael area. In addition to the City's cultural, park and recreational resources, there are other attractions that include Muir Woods, five State parks, the San Francisco area, Oakland and the nearby wine country. Each year business merchants and the SRDA sponsor community events, including the Classic Car Parade, Farriers' Market, Winter Wonderland, Italian Street Painting Festival and the Parade of Lights. San Rafael is home to Marin County's cultural activities. Marin Center presents numerous ballets, concerts and speaking engagements. The Falkirk Cultural Center provides art exhibits and children's programming. ECONOMIC CONDITION San Rafael is a regional employment center. The number of jobs within the City exceeds the number of employed residents. Our diversified economic mix includes high-tech, financial, service based, entertainment and industrial businesses. Even with this diversity, the City finds itself struggling with a multi-million dollar deficit, resulting from a down economy rooted in high unemployment, vacant commercial properties, and a stagnant real estate market. Financial performance and the short term outlook is not getting any brighter in the current (2009-2010) fiscal year. Sales taxes have been down for four straight quarters. Property taxes remains relatively flat. The future continues to look troubling as staff and the City Council peer into the future. The State of California budget deficit was targeted at $21 billion as of December 2009. The current severe recession continues to have an extreme negative impact on the City's budget. In the past two years, the City Council has taken actions to reduce the General Fund budget by over $5 million. Actions implemented produced a multitude of cost savings and revenue enhancements primarily outlined in a Recession Action Plan and Economic Vitality Plan. Work furloughs, and early retirement program, hiring freeze, position eliminations including layoffs, and deferrals of contractual salary increases are some of the actions taken to reduce the deficit. CAFR TRANSMITTAL LETTER The 2009-2011 budget cycle looks to be another financial challenge. With a continued flat economy (and no real recovery expected until at least late 2011) and the State fiscal fiasco, the community and City Council will be spending countless hours over the next few months reviewing options and looking at ways of maintaining core services. Employee and community involvement will play a key role in determining how the City's financial future is shaped. Demographic Data A sampling of demographic information is provided to give the user an understanding of the character and diversity that make San Rafael an exceptional place to live and work. IE Economic development organizations in San Rafael include the Redevelopment Agency, Business Improvement District, Chamber of Commerce and the Marin County Economic Commission. IE San Rafael's population rate grew at about 0.5% per annum from 2000 (56,063) to 2009 (58,363). El Unemployment rates for 2009 were 9.6% (2008 was 5.9%) for the City and 8.1% countywide. Q Countywide office vacancy rates rose dramatically to 24.5% for 2009, a dramatic increase from the 16.0% levels for 2008. 171 Median office rents in Central San Rafael were $2.75 per square foot; in North San Rafael the rate averaged $2.45. O Median industrial space rents averaged $0.95 per square foot for San Rafael. I^l Major shopping areas, as measured in available retail square footage, include the Downtown corridor (938,000 aggregate), the Mall at Northgate (725,000), Montecito Center (130,000) and Northgate One (113,900). O "Total Marin County land acreage of 388,352 breaks down as 55,424 in waterways, 128,519 for public use, 23,241 subject to exemption, 97,615 contract restricted (open space and agriculture), and 83,913 as developed. The latter category denotes only 22% of all acreage is used for development. El Several hotels and motels support tourism activity, led by 235 room facilities for both the Embassy Suites and Four Points Sheraton. Citywide, the total number of hotel rooms is 803. O Home buying and apartment rentals continue to be a challenge both in San Rafael and Marin County. Mean household incomes in San Rafael are $78,680 as of 2008, but less than 30% can afford to buy a median priced home. Rents for one bedroom apartments range from $80041,900, while two bedroom apartments go for $1,075 to $2,000. MAJOR INITIATIVES Current Year Proicets. Accomplishments and Service Efforts The City Council adopted a one-year budget in July of 2009 for the 2009-2010 fiscal year. These objectives support Department goals, the City Council's five-year goals, and our Mission Statement. Progress reports are provided to the City Council and community at six-month intervals during the two- year budget. San Rafael's fiscal practices are codified in the City's Financial Management Policies. The Policies were adopted to manage current and long-term financial resources, allow for adequate controls, and most importantly, to encourage input and participation in the City's financial affairs. CAFR TRANSMITTAL LETTER FINANCIAL INFORMATION The City's Management Team 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 should ensure that proper accounting data is collected so as to prepare reports in conformance with generally accepted accounting principles. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived. All internal control evaluations occur within the above framework. We believe the City's internal accounting controls adequately safeguard assets and provide reasonable assurance that financial transactions are properly recorded. Budget Controls - The City develops a budget based upon 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 fiord. 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 their budget allocations consistent with policies set by the City Council and monitored by the City Manager, OTHER INFORMATION Independent Audit - the Charter of the City of San Rafael requires an annual audit of the City's financial records and transactions by an independent certified public accounting firm. This year, the accounting firm of Maze and Associates Accountancy Corporation performed the audit. The audit requirement has been met and the auditors' opinion has been included in this report. Acknowled rg Hent - The preparation of this document was accomplished through the diligent, dedicated efforts of the Finance Department's staff. Appreciation goes to Van Bach, Accounting Supervisor, Helen Yu, Accountant, and Carl Tregner, Accountant. All of these top-notch employees were instrumental in coordinating the amoral audit in a timely and professional manner. Also, Sylvia Gonzalez, the City Manager's Administrative Assistant, helped assemble the City's Comprehensive Annual Financial Report. Lastly, staff support by the Mayor and City Council Members, with an emphasis on community focus and customer service, has allowed the Finance Department to bring professional level financial leadership and management home to San Rafael. Staff expects to continue producing high quality products, including award winning annual financial reports. The City Council's openness to change and support in planning and conducting the operations of the City in a responsible, progressive manner empowers staff to achieve important goals through a commitment to excellence, professionalism and community interest. Respectfully submitte , Ken ordhoff City Mahager iv ( Cindy Mosser Finance Director CITY OF 400q q MISSION STATEMENT The Mission of the City of San Rafael is to enhance the quality of life and to provide for a safe, healthy, prosperous and livable environment in partnership with the community. VISION STATEMENT Our vision for San Rafael is to be a vibrant economic and cultural center reflective of our diversity, with unique and distinct neighborhoods in a beautiful natural environment, sustained by active and informed residents and a responsible innovative local government. January 1996 Albert J. Boro, Mayor Barbara Heller, Vice- Mayor Greg Brockbank, Council Member Damon Connolly, Council Member Cyr N. Miller, Council Member U CITY OF Ii/r OK jn&%AWM� City Officials City Council Albert J. Boro, Mayor Barbara Heller, Vice -Mayor Greg Brockbank, Council Member Damon Connolly, Council Member Cyr N. Miller, Council Member Elected Officials Rob F. Epstein, City Attorney Esther Beirne, City Clerk Management Team Ken Nordhoff, City Manager Jim Schutz, Assistant City Manager / Management Services Director Nancy Mackle, Deputy City Manager / Economic Development Director Tenni Hardesty, Assistant to the City Manager Eric Davis, Deputy City Attorney Lisa Goldfien, Deputy City Attorney Bob Brown, Community Development Director Carlene MCCart, Community Services Director Cindy Messer, Finance Director Christopher Gray, Fire Chief Leslie Loomis, Hunan Resources Director David Dodd, Library Director Matthew Odetto, Police Chief Parviz Mokhtari, Interim Pubic Works Director vi vii FINANCIAL San Rafael Corporate Center This Page Left Intentionally Blank Maze & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 ^ FAX (925) 930-0135 INDEPENDENT AUDITOR'S REPORT maze@mazeassociates.com ON BASIC FINANCIAL STATEMENTS www.mazeassociates.com To the Honorable Mayor and Members of the City Council City of San Rafael, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of San Rafael as of and for the year ended June 30, 2009, which collectively comprise the City's basic financial statements as listed in the Table of Contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the component unit financial statements of the San Rafael Sanitation District (District), which represents 13% and 11% of the assets and revenues and 4% and 9% of liabilities and expenses of the reporting entity, respectively. These component unit financial statements were audited by other auditors, whose report thereon has been furnished to us. Our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of these other auditors. We conducted our audit in accordance with generally accepted auditing standards in the United States of America and the standards for 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 as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the basic financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of San Rafael as of June 30, 2009 and the respective changes in the financial position and cash flows, where applicable, thereof for the year then ended, in conformity with generally accepted accounting principles in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2009 on our consideration of the City of San Rafael'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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. As described in Note 11, the City implemented the provision of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. A Professional Corporation Management's Discussion and Analysis and Budget and Actual schedules for the General Fund, Traffic and Housing Mitigation Special Revenue Fund and Gas Tax Special Revenue Fund are not a required part of the basic financial statements but are supplementary information required by the Government Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit this information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The supplemental information listed in the Table of Contents is presented for purposes of additional analysis and is not a required part of the basic statements of the City of San Rafael. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section listed in the Table of Contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. t Ale, i October 30, 2\009 A Government -Wide Highlights: Net Assets - The assets of the City exceeded its liabilities at fiscal year ending June 30, 2009 by $216.9 million. Of this amount $1.2 million was reported as "unrestricted net assets' and may be used to meet the government's ongoing obligations to citizens and creditors. Expense Activities - During the fiscal year the City's total revenues ($93.1 million), which is less than expenses for governmental and business -type activities ($96.6 million) by $3.5 million. Excluding Depreciation (non-cash expense of $7.7 million), collected revenues were $4.2 million above expenses. Changes in Net Assets - The City/s total net assets decreased by $3.50 million in fiscal year 2009. Net assets of governmental activities decreased by $4.08 million, while net assets of the business type activities increased by $.58 million. Fund Highlights: Governmental Funds - Fund Balances- As of the close of fiscal year 2009, the City's governmental funds reported combined ending fund balances of $31.5 million, a decrease of $3.1 million from the prior year. Of this total amount, $18.9 million represents reserved fund balances and $1.7million is designated. General Fund - The fund balance of the general fund on June 30, 2009 was $3.9 million, a decrease of $2.3 million from the prior year. $2.2 million was held in reserve, and $1.7 million is designated to meet our 10% reserve requirement as defined by the City's Financial Management Policies. Long -Term Debt: The City's total outstanding debt decreased by $2.6 million (6.0 percent) during the fiscal year, which reflects payment on redevelopment debt, court fine repayment note, and capitalized lease obligations. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, which are comprised of 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. The City's component units consist of the following: The Redevelopment Agency of the City of San Rafael (Agency) and the San Rafael Joint Powers Financing Authority (Authority). These component units are, for practical purposes, departments of the City and have been included in the basic financial statements as an integral part of the primary government using the blended method. 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 Government Accounting Standards Board (GASB) Statement No. 34. The Statement of Net Assets and the Statement of Activities and Changes in Net Assets report information about the City as a whole and about its activities. 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 yeai`s revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Assets presents information on all of the City s assets and liabilities, with the difference between the two reported as net assets. Over time, increases in net assets 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 Assets presents information showing how the City s net assets changed during the year. All changes in net assets 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 Assets and the Statement of Activities and Changes in Net Assets, we separate the City activities 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 and Economic Development, Cultural and Recreation and Government Administration (finance, human resources, legal, City Clerk and City Manager operations). Property, sales and use taxes, user fees, interest income, franchise fees, hotel taxes, business license and property transfer taxes, plus state and federal grants finance these activities. Business-Type Activities —The City charges a fee to customers to cover all or most of the costs of certain services it provides. The City's Parking Services program is reported as a business-type activity. Discretely Presented Component Units - The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate entity, the San Rafael Sanitation District 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 itself. The government-wide financial statements can be found on pages 17 through 19 of this report. Fund Financial Statements and Major Component Unit Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. GITYQF SANRAFt1EL Management's Discussion and Analysis Fiscal Year Ended June 30, 2009 The fund financial statements provide detail information about each of the City's most significant funds, called Major Funds. The concept of Major Funds, and the determination of which are major funds, was established by GASB Statement 34 and replaces the concept of combining like funds and presenting them in total. histead, 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 78 through 99 of this report. Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial capacity. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for government funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliation's are presented on the page immediately following each governmental fund financial statement. The City has thirty-one 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 fmld balances. The City's four major funds are - the General Fund, Redevelopment Agency Capital Projects, Gas Tax, and Traffic and Housing Mitigation. Data from the other twenty-seven governmental funds are combined into a single, aggregated presentation. The basic governmental fund financial statements can be found on pages 22 through 25 of this report. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements on pages 78 through 99 of this report. Proprietary Funds - The City maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses an enterprise fund to account for its Parking Services program. 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 fleet of vehicles, building maintenance, radio systems, telephone systems, personal computer replacement program, self-insurance for worker's compensation, dental, public liability, and employee benefits programs. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities in the governmental -wide financial statements. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. Like the government -wide financial statements, proprietary fund financial statements use the accrual basis of accounting. There is no reconciliation needed between the government -wide financial statements for business -type activities and the proprietary fund financial statements. The basic proprietary fund financial statements can be found on pages 28 through 30 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 31 through 63 of this report. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. It contains budgetary comparison statements for the major funds (general, redevelopment agency capital project, gas tax, and traffic and housing mitigation). Required supplementary information can be found on pages 68 through 71 of this report. GOVERNMENT -WIDE FINANCIAL ANALYSIS Statement of Net Assets Net assets are a good indicator of the City's financial position. During this fiscal year, net assets of the City were $216.9 million, which is a decrease of $3.5 million from the prior year. The following is the condensed Statement of Net Assets for the fiscal years ended June 30, 2008 and 2009. City of San Rafael Statements of Net Assets June 30, (Amounts in Millions) Governmental Activities Increase 2009 2008 (Decrease) Business -Type Activities Increase 2009 2008 (Decrease) Assets: Invested in capital assets, Current assets $ 40.0 $ 45.9 $ (5.9) $ 2.3 $ 2.7 $ (0.4) Capital assets, net 214.4 214.9 (0.5) 18.2 17.3 0.9 Total assets 254.4 260.8 (6.4) 20.5 20.0 0.5 Liabilities: Current liabilities 9.1 10.1 (1.0) 0.3 0.3 - Long-term liabilities 41.5 42.9 (1.4) 7.0 7.1 (0.1) Total liabilities 50.6 53.0 (2.4) 7.3 7.4 (0.1) Net Assets: Invested in capital assets, net of related debt 178.7 176.7 2.0 11.3 10.1 1.2 Restricted 25.7 26.8 (1.1) - - - Unrestricted (0.7) 4.3 (5.0) 1.9 2.5 (0.6) Total net assets $ 203.7 $ 207.8 $ (4.1) $ 13.2 $ 12.6 $ 0.6 M At June 30, 2009, the largest portion of net assets (87.6 percent) consists of the City's investment in capital assets net of related debt. This component portrays the total amount of funds required to acquire those assets less any related debt used for such acquisition that is still outstanding. The City uses these capital assets to provide services to citizens. The increase in total net assets from 2007-2008 to 2008-2009 is largely attributable to a netting of capital assets acquisition against depreciation expense for the year. Total depreciation for this current year was $7.7 million, while capital asset acquisition totaled $8.5 million, leaving a net increase of $0.8 million. 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 assets (11.9 percent) is subject to restrictions imposed by external parties and their use is determined by those restrictions and agreements. The remainder of net assets, $1.2 million, may be used to meet the City s ongoing operations. For the year ended June 30, 2009, the City reported positive balances of net assets in capital and restricted net assets for governmental activities. Business -type activities reported positive net assets in capital and unrestricted net assets. Net Assets $250.00 $200.00 a r o $150.00 R $100.00 $50.00 $0.00 s nvesment In Capital Assets neent related debt Restricted Unrestricted Total Net Assets X2009 $189.99 $25.72 $1.24 $217.0 77 CITI OFSAIVRAFAEL =.-777777777777777777. Management's Discussion andAnalysis Fiscal Year Ended June 30, 2009 Statement of Activities The following is the condensed Statement of Activities and Changes in Net Assets for the fiscal years ended June 30, 2009 and 2008: Revenues: Program revenues General revenues Total revenues Expenses Change in net assets before transfers Transfers Net Assets: Beginning, as restated Ending Governmental Activities: (Amounts in Millions) Governmental Activities Increase Business -Type Activities 2009 2008 (Decrease) 2009 2008 Increase (Decrease) $ 31.4 $ 26.9 $ 4.5 $ 4.5 $ 4.2 $ 0.3 57.1 62.8 (5.7) 0.1 0.1 - 88.5 89.7 (1.2) 4.6 4.3 0.3 93.0 89.7 3.3 3.6 3.3 0.3 (4.5) (4.5) 1.0 1.0 (0.0) 0.4 0.3 $ 0.1 (0.4) (0.3) $ (0.1) 207.8 207.5 12.6 11.9 $ 203.7 $ 207.8 $ 13.2 $ 12.6 The City's governmental activities decreased net assets by $4.1 million, which represents a 2.0% increase from last year. Key elements of this change were as follows: Revenue highlights: • Property Tax revenues decreased by $0.2 million or 1.0 percent in 2009. The decrease includes $778,000 for the SB418 settlement amount for excess Educational Revenue Augmentation Fund (ERAF). • Sales tax decreased by $3.8 million or approximately 14.7 percent compared to fiscal year 2008. • Motor vehicles revenues decreased by $59,000 or 23 percent. • Transient Occupancy Tax revenues decreased by $284,000 or 14 percent. • Property Transfer Tax revenues decreased by $604,000 or 47 percent. 8 Management's Discussion andAnalysis Fiscal Year Ended June 30, 2009 Governmental Activities - Revenues: Governmental Activities Revenues By Source June 30, 2009 F Governmental Activities - Expenses: 0 2E Governmental Activities Expenses by Function June 30, 2009 12% 2% 9% 3% Property Taxes Sales Taxes ❑Other Taxes ❑Charges for Services ■Miscellaneous III Grants and Contributions Investment Earnings General Government Public Safety ❑Public Works and Parks ❑Community Development ■ Culture and Recreation Debt Service Total expenses for governmental activities were $91.0 million (not including interest on long-term debt of $2.0 million). Program revenues offset total expenditures as follows: • Those who directly benefited from programs contributed $20.6 million in charges for services. • A total of $7.3 million in capital projects was funded by outside agencies through capital grants and contributions. As a result, total expenses that were funded by tax revenues; investment income and other general revenues were $63.2 million. Functional expenses for the years ended June 30, 2009 were as follows: Expenses by Function For the fiscal year ended June 30, 2009 Function General Government Public Safety Public works and parks Community development Culture and recreation Interest on Debt Total Expenses Business -Type Activities: Amount Percent of Total $ 8,075,344 8.7% 42,708,538 45.9% 23,036,677 24.8% 5,759,171 6.2% 11,505;896 12.4% 1,907,229 2.1% $ 92,992,855 100.0% Net assets for business -type activities were $13.2 million, a $0.6 million increase from the prior fiscal year. Parking services is the City's only business type activity and income is derived from program revenues of $4.5 million Program revenues include parking meter coin at $1.4 million, and parking garage hourly parking at $0.8 million. Revenues also include parking and non -vehicle code fines totaling $2.1 million. Total expenses for parking services were $3.6 million during fiscal year 2008-2009. FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financial capacity. In particular, unreserved 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 the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $31.5 million. Approximately, $12.6 million of this amount constitutes unreserved and undesignated fund balance, which is available for spending at the government's discretion. The remainder of fund balance is reserved to indicate that it is not available for spending because it has already been legally committed. General Fund - The General Fund is the primanj operating fund of the city. At the end of the current fiscal year, unreserved fund balance of the general fund was $1.7 million, while total fund balance reached $3.9 million. $1.7 million is held as part of the 10 percent designated unreserved for emergencies and cash flow cycles as defined in San Rafael's Financial Management Policies. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 3 percent of total general fund expenditures including transfers out, while total fund balance represents 7 percent of that same amount. The available fund balance in the City's General Fund decreased by $2.3 million compared to the 2008 fiscal year. This decrease resulted from: 10 Sales tax decreased by $3.8 million or approximately 14.7 percent compared to fiscal year 2008. • Expenditures increased with personnel costs mainly benefit costs leading the way. Redevelopment Agency Capital Project Fund - The Redevelopment Agency is responsible for assisting in the clearance and rehabilitation of areas determined to be in a declining condition in the City. The Agency s operations are funded primarily by the issuance of debt, which is expected to be repaid out of property tax increment revenue generated by increased in property assessed values in the redevelopment areas. The Redevelopment Agency Capital Project Fund was established to account for capital improvement projects related to the various redevelopment areas. At the end of fiscal year 2009, the reserved fund balance was $6.1 million, a decrease of $0.9 million from the prior year. Expenditures exceeded revenues by $0.94 million. The decrease is primarily related to decreased expenditures for capital improvement projects. A total of $5.8 million in fund balance as of June 30, 2009 was reserved for future capital project and housing programs. Proprietary Funds The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. As discussed in the business -type activities previously, the City's net assets increased by $0.6 million as a result of operations in the Parking Services fund. GENERAL FUND BUDGETARY HIGHLIGHTS The final amended budget totaled $57.0 million, including an increase of $155,762 in appropriations to the originally adopted budget. During the year, however, revenues exceeded budgetary estimates and expenditures did not exceed the final budgetary estimate. Overall, expenditures exceeded revenues by $2.1 million. The transfers out exceeded the transfers in by $0.2 million. 11 CITYbF.SAIVRAFAEL . Management's Discussion andAnalysis Fiscal Year Ended June 30, 2009 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, 2009 amounts to $232.6 million, net of accumulated depreciation of $113.4 million. This investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems and similar items. The total additions to the City's investment in capital assets for the current fiscal year was $8.5 million, offset by accumulated depreciation and retirements of $8.0 million, thereby equaling a net increase of $0.5 million. Major capital asset additions during the current fiscal included work in process Medway Canal Intersection Improvements, Third/Union Intersection Improvement, and Francisco Blvd. East Improvement. The City also purchased eleven vehicles, which included one Paint truck and one Street Sweeper. Capital Projects 4tb Street Rehabilitation -West End project was completed in 2009. Additional information on the City's capital assets can be found in Note 5 on pages 45 through 47 of this report. Debt Administration As of June 30, 2009, the City had outstanding debt issues as listed below. Not included in the following table is the Community Facilities District No.1 Special Tax Bond, which is backed by property tax levies against property owners. The City has no obligation for these bonds. Certain specific revenues back each of the City's other bonds or General Fund lease payments and carry respectable ratings. The City's long-term obligations for the fiscal years 2009 and 2008 were as follows: Additional information on the City's long-term debt can be found in Note 6 on pages 48 through 52 of this report. 12 Governmental Business -Type Activities Activities Total 2009 2008 2009 2008 2009 2008 Revenue Bonds $ 0.5 $ 0.8 $ 7.0 $ 7.1 $ 7.5 $ 7.9 Special Assessment Bonds - - - - - - Tax Allocation Bonds 35.8 37.5 - - 35.8 37.5 Court Fine Promissory note 0.6 0.8 - - 0.6 0.8 Redevelopment note 0.2 0.2 - - 0.2 0.2 Capitalized Leases 0.2 0.4 - - 0.2 0.4 Compensated Absences 4.5 4.5 0.2 0.1 4.7 4.6 Total Outstanding Debt $ 41.8 $ 44.2 $ 7.2 $ 7.2 $ 49.0 $ 51.4 Additional information on the City's long-term debt can be found in Note 6 on pages 48 through 52 of this report. 12 ECONOMIC CLIMATE AND NEXT YEAR'S BUDGET Many factors were considered in preparing the City's budget for fiscal year 2009-2010. In July, the budget was balanced with strategic remedies such as: o Deferring the replacement of all non -emergency fleet replacement, and moving the life cycle of each of our vehicles out one year. This results in the General Fund saving of $754,000. o Non -Safety Employee Furloughs of 5 percent of approximately $500,000 reduction in the General Fund. o Implementing a Voluntary Retirement Separation Program for approximately $900,000 reduction in the General Fund. o Reduction of force through a Layoff program for an approximate savings of $550,000 in the General Fund. o Elimination of a series of vacant positions permanently from the budget, totaling $1.3 million for next year. o Reset our projected (and required) Liability and Workers Compensation reserves, providing a one time General Fund relief of $500,000. The magnitude and depth of the current recession could not be projected for the rest of the fiscal year. This downturn in the economy impacts many City revenues. Our sales tax, the City's biggest tax revenue generator, faces a decline of eighteen percent with no relief in sight. The credit crisis instigated a slow down in the sale of property causing a reduction in the City's property transfer tax. The City's second largest tax generator is property tax. Although property sales are not as strong as in previous years, the assessed values of the properties rose slightly. The City's largest expenditure by far relates to personnel costs. Salaries and benefits are tied to the labor agreements with each bargaining group. Except for known increases in contractual obligations, the fiscal year 2008-2009 baseline operating cost levels were maintained for fiscal year 2009-2010. Unfortunately, the City's revenues are not keeping up with the City's expenditures. Difficult decisions will be made in the coming months in order to achieve and maintain a balanced budget. 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, 1400 Fifth Avenue, Room 204, San Rafael, California 94901. 13 This page intentionally left blank CITY OF SAN RAFAEL STATEMENT OF NET ASSETS AND STATEMENT OF ACTIVITIES The Statement of Net Assets and the Statement of Activities summarize the entire City's financial activities and financial position. The Statement of Net Assets reports the difference liabilities, including all the City's capital assets and focuses the reader on the composition of the City's assets. between the City's total assets and the City's total all its long-term debt. The Statement of Net Assets net assets, by subtracting total liabilities from total The Statement of Net Assets summarizes the financial position of all 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 assets. 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 Assets is computed and reconciled with the Statement of Net Assets. Both these Statements include the financial activities of the City, the City of San Rafael Redevelopment Agency, and the San Rafael Joint Powers Financing Authority which are legally separate but are 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 discretely presented component units of the San Rafael Sanitation District are included in these statements as separate columns_ 15 This Page Left Intentionally Blank CITY OF SAN RAFAEL STATEMENT OF NET ASSETS JUNE 30, 2009 ASSETS Cash and investments available for operations (Note 2) Restricted cash and investments (Note 2) Receivables: Accounts Taxes Grants Interest Loans (Note 4) Internal balances (Note 3) Prepaid expenses and other Capital assets (Note 5): Nondepreciable Depreciable, net Total Assets LIABILITIES Accounts payable Deposits payable Interest payable Developer bonds payable Arbitrage payable Unearned revenue Due to other agency Claims payable (Note 13): Due in one year Due in more than one year Compensated absences (Note 1J): Due in one year Due in more than one year Long-term debt (Note 6): Due in one year Due in more than one year Net OPEB liability (Note 11) Total Liabilities NET ASSETS (Note 8) Invested in capital assets, net of related debt Restricted for: Special revenue projects Capital projects Debt service Redevelopment projects Total Restricted Net Assets Unrestricted Total Net Assets 840,577 14,276 854,853 Component 3,739,220 150,691 3,889,911 Unit 2,804,258 Primary Government 2,974,258 San Rafael Governmental Business -Type 41,211,350 Sanitation Activities Activities Total District 50,597,023 7,335,240 57,932,263 2,381,424 $29,046,503 $2,187,810 $31,234,313 $10,595,258 2,086,750 2,086,750 476,291 2,215,142 91,770 2,306,912 3,372,875 3,372,875 445,439 2,080,365 2,080,365 143,879 143,879 1,790 993,224 1,936,958 993,224 10,034,452 (17,618) 17,618 $216,944,960 $37,358,427 64,334 64,334 53,562 86,106,517 8,743,714 94,850,231 3,233,659 128,269,417 9,474,923 137,744,340 25,379,291 254,361,388 20,515,835 274,877,223 39,739,851 1,949,025 113,606 2,062,631 597,049 151,812 151,812 329,379 81,667 411,046 32,642 376,548 376,548 25,127 25,127 219,627 219,627 5,129 5,129 2,400,000 2,400,000 1,316,971 - 1,316,971 840,577 14,276 854,853 3,739,220 150,691 3,889,911 2,804,258 170,000 2,974,258 430,000 34,406,350 6,805,000 41,211,350 1,321,733 2,033,000 2,033,000 50,597,023 7,335,240 57,932,263 2,381,424 178,744,119 11,243,637 189,987,756 26,878,536 14,433,572 14,433,572 3,361,760 3,361,760 2,936,860 2,936,860 445,439 4,989,039 4,989,039 25,721,231 25,721,231 445,439 (700,985) 1,936,958 1,235,973 10,034,452 $203,764,365 $13,180,595 $216,944,960 $37,358,427 See accompanying notes to financial statements 17 CITY OF SAN RAFAEL STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2009 Total Primary Government $96,556,089 $25,022,992 $3,544,248 $7,311,173 Component Unit San Rafael Sanitation District $9,143,977 $10,567,647 General revenues: Taxes: Property Sales Paramedic Motor vehicles Transient occupancy Franchises Business licenses Other Investment earnings Miscellaneous Aid from other governmental agencies Transfers Total general revenues and transfers Change in Net Assets Not Assets, beginning of year Net Assets, end of year See accompanying notes to financial statements 18 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary Government Governmental Activities: General government $8,075,344 $1,738,685 $90,105 Public safety 42,708,538 5,906,445 1,031,801 Public works and parks 23,036,676 4,753,817 1,481,146 $6,756,614 Community development/ redevelopment 5,759,171 2,915,872 554,559 Culture and recreation 11,505,896 5,253,683 941,196 Interest on long-term debt 1,907,229 Total Governmental Activities 92,992,854 20,568,502 3,544,248 7,311,173 Business -type Activities Parking services 3,563,235 4,454,490 Total Business -type Activities 3,563,235 4,454,490 Total Primary Government $96,556,089 $25,022,992 $3,544,248 $7,311,173 Component Unit San Rafael Sanitation District $9,143,977 $10,567,647 General revenues: Taxes: Property Sales Paramedic Motor vehicles Transient occupancy Franchises Business licenses Other Investment earnings Miscellaneous Aid from other governmental agencies Transfers Total general revenues and transfers Change in Net Assets Not Assets, beginning of year Net Assets, end of year See accompanying notes to financial statements 18 Net (Expenses) Revenues and Changes in Net Assets ($6,246,554) Component Primary Government Unit (10,045,099) San Rafael Governmental Business -Type Sanitation Activities Activities Total District ($6,246,554) ($6,246,554) (35,770,292) (35,770,292) (10,045,099) (10,045,099) (2,288,740) (2,288,740) (5,31 1,017) (5,311,017) (1,907,229) (1,907,229) (61,568,931) (61,568,931) 361,190 $891,255 891,255 891,255 891,255 (61,568,931) 891,255 (60,677,676) 1,446,947 $1,423,670 21,978,859 (33504,143) 21,978,859 855,511 21,970,262 220)449,103 21,970,262 3,210.317 3,210,317 $13,180,595 197,989 $37,358,427. 197,989 1,678,912 1,678,912 2,941,149 2,941,149 2,405,934 2,405,934 1,561,835 1,561,835 717,968 49,084 767,052 206,752 461,224 461,224 3.540 381,144 361,190 (361,190) 57,485,639 (312,106) 57,173,533 1,446,947 (4,083,292) 579,149 (33504,143) 2,870,617 207,847,657 12,601,446 220)449,103 34,487,810 $203,764,365 $13,180,595 $216,944,960 $37,358,427. I This Page Left Intentionally Blank FUND FINANCIAL STATEMENTS Major fiords are defined generally as having significant activities or balances in the current year. The finds described below were determined to be Major Funds by the City in fiscal 2009. Individual non -major funds may be found in the Supplemental section. GENERAL FUND Established to accounts for all financial resources and transactions except those required to be accounted for in other funds. TRAFh'IC AND HOUSING MITIGATION FUND Established to maintain a long-term developer deposits for major housing and street improvement projects. GAS TAX FUND Established to receive and expend the City's allocation of the State gasoline taxes. REDEVELOPMENT AGENCY CAPITAL PROJEC'T'S FUND Established to account for the capital projects activities of the San Rafael Redevelopment Agency. 21 CITY OF SAN RAFAEL GOVERNMENTAL FUNDS BALANCESHEET JUNE 30, 2009 LIABILITIES AND FUND BALANCES Redevelopment Liabilities: Reserved for: Traffic and Accounts payable Agency Other Total $1,907323 Deposits payable Housing 398,012 Capital Govemmental Governmental 350,048 General Mitigation Gas Tax Projects Funds Funds ASSETS 25,127 Due to other funds (Note 3A) 623,863 68,572 87,581 87,581 Cash and investments available for operations(Note 2) $346,217 $10,037,159 $2,228,993 $3,194,389 $9,320,009 $25,126,767 Restricted cash and investments (Note 2) 74,896 5,129 Compensate([ absences (Note I D 1,602,634 409,220 2,086,750 Receivables: Total Liabilities 1,078,123 120,361 289,471 868,034 1,214,278 3,570,267 74,896 Accounts 411,511 16,333 11,028 729,091 1,167,963 Taxes 3,248,540 3,363,933 80, 377 17,855 _ X6,103 3,372,875 Grants 12,261,159 Unrcemed, designated: 356,060 720,250 1,004,055 2,080,365 Interest 133,703 1,670,455 10,128 48 143,879 Loans (Note 4) 623,863 68,572 300,789 993,224 Due from other funds (Note 3A) 87,581 2,392,292 6,248,947 87641,239 Capital Projects Funds 87,581 Prepaid expenses 48,042 35,826 (1,030293) Debt Service Funds 11,105 59,147 Total Assets $4,974,353 $10,105,731 S2,681,763 $5,857,073 $11,499,631 $35,118,551 LIABILITIES AND FUND BALANCES Liabilities: Reserved for: Accounts payable $635,495 $289,471 $97,657 S894,700 $1,907323 Deposits payable 31,451 $120,361 398,012 Petty cash 151,812 Developer bonds payable 350,048 25,000 1,500 376,548 Arbitrage payable 25,127 25,127 Due to other funds (Note 3A) 623,863 68,572 87,581 87,581 Deferred revenue Prepaid expense 720,250 219,627 939,877 Due to other agency 59,147 Debt service 5,129 5,129 Compensate([ absences (Note I D 61,129 627,715 15,741 76.870 Total Liabilities 1,078,123 120,361 289,471 868,034 1,214,278 3,570,267 Fund Balances (Note 8): Reserved for: Encumbrances 350,717 46,075 1,220 398,012 Petty cash 3,645 3,645 Project development 530,512 530,512 Loans receivable 623,863 68,572 300,789 993,224 Prepaid expense 48,042 11,105 59,147 Debt service 627,715 627,715 Court fine audit 594,100 594,100 Assessment districtsiopen space 74,896 74,896 Improvement projects 3,363,933 3,363,933 Traffic and housing 9,870 723 2,390,436 12,261,159 Unrcemed, designated: Emergency and cash flow 1,670,455 1,670,455 Unreserved, undesignated Special Revenue Funds 2,392,292 6,248,947 87641,239 Capital Projects Funds (1,066,119) 35,826 (1,030293) Debt Service Funds 3,360,540 3,360,540 Total Fund Balances 3,896,230 9,985 370 2392,292 4,989,039 10,285,353 31,548,294 Total Liabilities and Fund Balances $4,974,353 $10,105,731 32,681,763 $5,857,073 $11,499,631 $35,118,551 See accompanying notes to basic financial statements 22 CITY OF SAN RAFAEL GOVERNMENTALFUNDS BALANCE SHEET - RECONCILIATION OF GOVERNMENTAL FUND BALANCES TO NET ASSETS OF GOVERNMENTAL ACTIVITIES NNE 30, 2009 Total fund balances reported on the governmental funds balance sheet Amounts reported for Governmental Activities in the Statement of Net Assets are different from those reported in the Governmental Funds because of the following: Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the Governmental Funds. Internal service funds are used by management to charge the cost of management of communication, telephone, building, fleet maintenance, equipment replacement, workers' compensation, employee benefits, insurance, and post-retirement healthcare benefits to individual funds. The assets and liabilities are included in Governmental Activities in the Statement of Net Assets. Interest payable on long-term debt does not require the use of current financial resources and, therefore, are not reported in the Governmental Funds. Revenues that are deferred because they are not available currently are taken into revenue in the Statement of Activities. Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the Governmental Funds. Long-term compensated absences Net OPEB liability Net assets of governmental activities See accompanying notes to financial statements 23 $31,548,284 214,375,934 1,195,811 (329,379) 720,250 (37,210,608) (4,502,927) (1033,000) $203,764,365 CITY OF SAN RAFAEL GOVERNMEN'rAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2009 REVENUES 'faxes and special assessments Licenses and permits Fines and forfeitures Use of money and property Inhogovemmented Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development / redevelopment Culture and recreation Capital outlay Capital improvement /special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES,) Transfers in (Note 313) Transfers out (Note 3B) Total Other Financing Sources (Uses) Net Change in Fund Ealmmes FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Redevelopment Traffic and Agency Other Total Housing Capital Governmental Governmental General Mitigation Gas Tax Projects Funds Funds $42951,759 167,217 4,745,188 $980,997 $7,086,387 $51,019,143 1,467,413 (6,614,806) (205,139) (182,783) $5,500 1,472,913 660,338 67,917 63,162 (937,098) (137,706) 147,756 5,348,674 660,338 156,747 $233,585 $36,703 127,051 293,034 847,120 7,018,197 financial statements 6,487,634 554,559 3,458,280 17,518,670 1,923,653 145,124 988,593 27,153 13,299,742 16,384,265 238,614 21,819 65,823 16,791 416,273 759,320 54,416,721 400,528 7,578,753 1,706,551 24,559,216 88,661,M 6,811,591 167,217 4,745,188 30,660 1,217,275 8,059,526 35 056,051 (6,614,806) (205,139) (182,783) 6,153,921 41 209,972 7,299,137 67,917 63,162 (937,098) (137,706) 147,756 5,348,674 12 926,646 4,004,061 34,582,909 $3,896,230 $9,985,370 1,569,018 $4,989,039 $10,285,353 5,572 079 2,463,777 financial statements 7,769,584 10,233,361 159,230 221,187 3,649,700 569,099 448,828 5,048,044 518,251 3,431,818 328,116 2,328,672 6,606,857 222,019 2,492,339 2,714,358 1,683,240 1683 240 56,534,117 289,104 7,144680 3643,649 27,442,533 94,054,083 (2,117,396) 111,424 434,073 (937,098) (2,883,317) (5,392,314) 4,060,090 167,217 4,745,188 8,972,495 (4,265,29) (350,000) (1,999,577) (6,614,806) (205,139) (182,783) 2,745,611 2,357,689 (2,322,535) 111,424 251,290 (937,098) (137,706) (3,034,625) 6,218,765 9,873,946 2,141 002 5,926,137 10,423,059 34,582,909 $3,896,230 $9,985,370 $2392,292 $4,989,039 $10,285,353 $3[.548,284 See accompanying notes to financial statements 24 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, 2009 NET CHANGE IN FUND BALANCES - TOTAL GOVERNIvd.NTAL FUNDS Amounts reported for Govermnenlal Activities in the Statement of Activities are different because of die 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. Expenditures for capital assets are added back to fund balance Loss on retirement of capital assets and capital assets transferred to Enterprise Fund are deducted from the fund balance Current year depreciation is deducted from fund balance Long -Terni Debt Proceeds and Payments Repayment of debt principal is an expenditure in the govermnental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Bond interest accretion is deducted from fund balance 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): Interest payable Compensated absences Deferred revenue Net OPEB liability Allocation of Internal Service Fund Activity Internal service funds are used by management to charge die costs of certain activities to individual funds. The net revenue of the internal service fund is reported with governmental activities. Change in Net Assets of Governmental Activities See accompanying notes to financial statements 25 ($3,034,625) 7,259,333 (369,810) (7,37),259) 2,714,358 (221,531) (2,458) (4,850) (241,655) (2,033,000) (777,795) ($4,083,292) This Page Left Intentionally Blank MAJOR PROPRIETARY FUNDS Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. The City reported its only enterprise fund as a major proprietary fund. PARKING SERVICES FUND Established to maintain parking garages, lots and spaces in the Downtown Parking District (established over 40 years ago), and to pay for parking enforcement, meter collection, and downtown office services. 27 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2009 Business -type Activities - Enterprise Governmental Funds Activities Some amounts reported for bu.rine.ss-type actinilies in the Statement of Net Assets are different because certain internal service Rind assets and liabilities are included with business -type activities. 17,618 Net assets bQ3MCSS-type activitieS $13.180,595 See accompanying notes to financial statements 28 Parking Internal Services Service Funds ASSETS Current Assets: Cash and investments available for operations (Note 2) $2,187,810 $3,919,736 Accounts receivable 91,770 1,047,179 Due from other funds (Note 3A) 855,578 Prepaids and deposit 5,187 Total Current Assets 2,279,580 5,827,680 Noncurrent Assets: Capital assets (Note 5): Nondepreciable 8,743,714 Depreciable, net 9,474,923 Total Noncurrent Assets 18,218,637 Total Assets 20,498,217 5,827,680 LIABILITIES Current Liabilities: Accounts payable 113,606 41,702 interest payable 81,667 Due to other funds (Note 3A) 855,578 Claims payable, due in one year (Note 13) 2,400,000 Compensated absences, due in one year (Note IJ) 14,276 Long-term debt, due in one year (Note 6) 170,000 Total Current Liabilities 379,549 3,297280 Noncurrent Liabilities: Claims payable (Note 13) _ 1,316,971 Compensated absences (Note IJ) 150,691 Long -tern debt (Note 6) 6,805,000 Total Noncurrent Liabilities 6,955,691 1,316 971 Total Liabilities 7,335,240 4,614,251 NET ASSETS (Nate 8) Invested in capital assets, net of related debt 11,413,637 Unrestricted 1,749,340 1,213,429 Total Net Assets 13,162,977 $1,213,429 Some amounts reported for bu.rine.ss-type actinilies in the Statement of Net Assets are different because certain internal service Rind assets and liabilities are included with business -type activities. 17,618 Net assets bQ3MCSS-type activitieS $13.180,595 See accompanying notes to financial statements 28 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2009 Business -type Activities - Enterprise Governmental Funds Activities Parking Internal Services Service Funds OPERATINGREVENUE,S 49,084 128,258 Charges for current services $2,276,450 $5,746,940 Other operating revenues 2,178,040 1,685,643 Total Operating Revenues 4,454,490 7,432,583 OPERATING EXPENSES 168,501 Personnel 2,139,683 (2,165,000) Insurance premiums and claims 583,396 5,166,823 Maintenance and repairs 12,579,581 534,043 Depreciation 304,244 $1,213,429 General and administrative 784,682 645,518 Total Operating Expenses 3,228,609 6,346,384 Operating Income (Loss) 1,225,881 1,086,199 NONOPERATING REVENUES (EXPENSES) Investment income 49,084 128,258 Interest expense (330,379) Total Nonoperating Revenues (Expenses) (281,295) 128,258 Income (Loss) Before Transfers 944,586 1,214,457 Transfers in (Note 3B) 168,501 Transfers out (Note 3B) (361,190) (2,165,000) Change in Net Assets 583,396 (783,042) NET ASSETS, BEGINNING OF YEAR 12,579,581 1,995,471 NET ASSETS, END OF YEAR 13,162,977 $1,213,429 Change in Net Assets 583,396 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. (4,247) Change in Net Assets of Business -type Activities $579,149 See accompanying notes to financial statements 29 CITY OF SAN RAFAEL PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2009 Business -type Activities - Enlerprise Governmental Funds Activities Parking Internal Services Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other funds $2,276,450 $5,950,089 Cash payments to suppliers for goods and services (739,516) (6,918,928) Cash payments to employees (2,1 12,435) Other operating revenues 2,128,975 1,685,643 Cash Flows from Operating Activities 1,553,474 716,804 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Innerfund payments (361,190) (2,451,248) Cash Flows from Noncapital Financing Activities (361,190) (2,451,248) CASH FLOWS FROM CAPITAI. AND ABLATED FINANCING ACTIVITIES Cash paid for capital acquisitions (1,252,552) Principal payments on certificates of participation (165,000) Interest expenses and fiscal charges (331,616) Cash Flows from Capital and Related Financing Activities (1,749,168) CASH FLOWS FROM INVESTING ACTIVITIES Investment income 49,084 128,258 Cash Flows from Investing Activities 49,084 128,258 NET ASSETS, BEGINNING OF YEAR (507,800) (1,606,186) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 2,695,610 5,525,922 CASH AND CASH EQUIVALENTS, END OF YEAR $2,187,810 $3,919,736 FUND BALANCES, BEGINNING OF YEAR . provided by operating activities: Operating income (loss) $1,225,881 $1,086,199 Adjustments to reconcile operating income (loss) to cash flows from operating activities: Depreciation 304,244 Net change in assets and liabilities; Accounts receivable (49,065) 203,149 Prepaids and deposits 2,270 Accounts payable 45,166 (31,656) Compensated absence obligations 27,248 Claims payable (543,158) Net Cash Provided by (Used in) Operating Activities $1,553,474 $716,804 30 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Financial Reporting Entity As required by generally accepted accounting principles, the financial statements present the City of San Rafael (the City) as the Primary Government, with its component units for which the City is considered financially accountable. The component units discussed below are included in the City's reporting entity because of the significance of their operational and financial relationships with the City. B. Description of Blended Component Units The accompanying basic financial statements include all funds and boards and commissions that are controlled by the City Council. The basic financial statements include the City's blended component units, entities for which the City is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the City's operations and so data from this entity is combined with the City. The City's following blended component units are described below. San Rafael Redevelopment Agency — The San Rafael Redevelopment Agency (Agency) was established under the provisions of the Community Redevelopment Law (California Health and Safety Code, commencing with Section 33000) primarily to assist in the clearance and rehabilitation of areas determined to be in a declining condition in the City. Financial activity of the Agency commenced in July 1983. Under the Agency's Redevelopment Plan (Plan), approved in November 1982, the Agency is to assist in the development of the property located in the central San Rafael business core and east San Rafael, The Agency receives incremental tax revenues on the developed property due to increases in assessed value. The Agency functions as an independent entity. The City Council serves as the governing board of the Agency. The Agency's assets, liabilities, revenues and expenditures (other than those applicable to its capital assets and long-term debt) are reported in the Fund Financial Statements. The Agency's capital assets and long-term debt are reported with the Governmental Activities in the Government -Wide Financial Statements. San Rafael Joint Powers Financing Authority — The San Rafael Joint Powers Financing Authority (Authority) was created by the City of San Rafael pursuant to Articles 1 and 2 of Chapter 5 of Division 7 of Title I of the Government Code of the State of California for the purpose of assisting in the financing and refinancing of certain assessment district activities in the City. All of the Authority's assets, liabilities, revenues and expenditures are reported in the Fund Financial Statements. The Agency's capital assets and long-term debt are reported with the Governmental Activities in the Government -Wide Financial Statements. 31 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 souther two-thirds of the City and adjacent unincorporated areas. The City contracts with the District to maintain the collection systems in the City and 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 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 end in June 30 and its separately issued component unit financial statements can be obtained at Central Marin Sanitation Agency, Finance Department, 1301 Andersen Drive, San Rafael, California 94901. D. Basis of Presentation Government -wide Statements - The Statement of Net Assets and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Interfund transfers and amounts owed between funds within the primary government have been eliminated from the statements. Amounts representing interfund services and uses remain in the statements. These statements distinguish between the governmental and business - type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business -type activities are financed in whole or in part by fees charged to external parties. The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business -Type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular 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 and proprietary — 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 nonmajor funds. 32 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 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. The City reported the following major governmental funds in the accompanying financial statements: General Fund — Accounts for all financial resources and transactions except those required to be accounted for in other funds. Traffic and Housing Mitigation Fund — Established to maintain long-term developer deposits for major housing and street improvement projects. Gas Tax Fund - Established to receive and expend the City's allocation of the State gasoline taxes. Redevelopment Agency Capital Projects Fund — Consist of five funds; 1) the 1999 Agency Bonds Funds, 2) the 2002 Agency Bonds Funds, 3) the RDA Capital Improvement Fund (for improvement projects), 4) project Administration Fund, and 5) the Housing Fund. The City reported its only enterprise fund as a major fund in the accompanying financial statements. The enterprise funds is: Parking Services Fund — Established to maintain parking garages, lots and spaces in the Downtown Parking District (established over 40 years ago), and to pay for parking enforcement, meter collection, and downtown officer services. The City also reports the following fund types: Internal Service Funds - These funds account for: building maintenance, employee benefits, liability insurance, workers' compensation, dental insurance, all of which are provided to other departments on a cost -reimbursement basis. 33 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Basis of Accounting The government -wide, proprietary 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. 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. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long -terns 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. Sales taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. Other receipts and taxes are recognized as revenue when the cash is received. Non-exchange transactions, in which the City gives or receives value without directly, receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants, categorical block grants, and general revenue. Thus, both restricted and unrestricted net assets 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. The City follows statements and interpretations of the Financial Accounting Standards Board and its predecessors that were issued on or before November 30, 1989, in accounting for its business - type activities, unless they conflict with Government Accounting Standards Board Pronouncements, 34 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Budgets, Budgetary Accounting, And Encumbrances The City adopts a budget on a biannual basis, to be effective July I for the ensuing and subsequent fiscal years. The two year budget reflects estimated revenues and expenditures for each fiscal year. 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. Expenditures may not exceed appropriations at the departmental 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 total budget. Several supplemental appropriations were approved during the course of the year. The City legally adopts budgets for all its governmental fluids, except for the Cast Francisco Boulevard Assessment District, 1915 Act Bonds and 1997 Reassessment Bonds debt service funds, because the City is only required to make debt service payments in the event of bondholder default. Encumbrance accounting, under which purchase orders, contracts and other commitments for expenditures are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. Encumbrances outstanding at year end are reported as a reservation of fund balances since they do not constitute expenditures or liabilities and are carried forward in the subsequent year's budget. All unencumbered appropriations lapse at year end. The following departments in General Fund and Major Special Revenue Funds incurred expenditures in excess of their budget. Sufficient resources were available within each department to finance these overages. General Fund Culture and Recreation $15,399 Capital Outlay 74,518 Capital Improvements/Special Projects 214,351 Traffic and Housing Mitigation Special Revenue Fund Public Works and Parks 1,687 Capital Outlay 221,187 Gas Tax Special Revenue Fund Capital Outlay 1,989,746 Capital Improvements/Special Projects 2,065,146 $4,582,034 35 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Cash Equivalents For purposes of the statement of cash flows, the City considers all highly liquid investments (including all restricted assets) with maturity of three months or less when purchased to be cash equivalents. The City maintains a cash and investment pool that is available for use by all funds. As the proprietary funds' share of this pool is readily available when needed, such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are related to insurance and benefits and are not considered cash equivalents for purposes of the statement of cash flows. L Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. GASB Statement No 34 requires the inclusion of infrastructure capital assets in local governments' basic financial statements. In accordance with GASB Statement No. 34, the City has included the value of all infrastructure capital assets into its Basic Financial Statements using the Basic Approach for infrastructure reporting. 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. 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 City has assigned the useful lives listed below to capital assets: Buildings, improvements, and structures 20 — 50 years Machinery and equipment 5 —15 years Infrastructure 15 — 50 years 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 exceeds $5,000. The similar threshold for infrastructure is $25,000. Z CompensatedAbsenees Compensated absences are accrued as earned. Upon termination, employees are paid for all unused vacation at their current hourly rates. Unused sick leave based upon the rate of two to three percent (2%-3%) for each year of service, one half of accumulated sick leave becomes vested, up to a maximum amount as specified under labor contract provisions. The vested portion is available for current use or, if unused, is payable at termination or retirement. 36 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The long-term portion of the liability for compensated absences for governmental fund type operations is recorded as compensated absences in the government -wide financial statements. Compensated absences are liquidated by the fund that has recorded the liability. Proprietary fund liabilities are recorded within their respective funds. The changes of the compensated absences were as follows: Governmental Business -Type Activities Activities Total Beginning Balance $4,498,077 $137,719 $4,635,796 Additions 3,964,848 126,980 4,091,828 Payments (3,883,128) (99,732) (3,982,860) Ending Balance $4,579,797 $164,967 $4,744,764 Current Portion $840,577 $14,276 $854,853 K. Property Tax Levy, Collection and Maximum Rates State of California Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIII A and may be adjusted by no more than 2% per year unless the property is sold, transferred, or substantially improved. The State Legislature has determined the method of distribution of receipts from a 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: Secured Unsecured Valuation/lien dates January 1 January 1 Levy dates July 1 July 1 Due dates (delinquent as of) 50% on November 1 (December 10) July 1 (August 31) 50% on February I (April 10) The term "unsecured" refers to taxes on personal property other than land and buildings. These taxes are secured by liens on the property being taxed. Property taxes are levied and recorded as revenue when received in the fiscal year of levy because of the adoption of the "alternate method of property tax distribution," known as the Teeter Plan, by the City and the County of Marin. The Teeter Plan authorized the auditor -controller of the County of Marin to allocate 100% of the secured property taxes billed, but not yet paid. The County of Marin remits tax monies to the City in three installments, as follows: 55 % remitted on December 15 40% remitted on April 15 5% remitted on June 15 37 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) L. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the dates of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting periods. Actual results could differ from those estimates. M. New Fund The City has created the Print Shop and Mail Internal Service Fund in fiscal year 2009- The fund was set up to maintain sufficient reserves for printing and mail payment. All costs associated with printing and mail expenses are paid from this fund. NOTE 2 - CASH AND INVESTMENTS The City's goal is to invest at the maximum yield, consistent with safety and liquidity, while individual funds can process payments for expenditures at any time. A. Policies 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 entre system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City managed investments, regardless of their form. California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution. The City's investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. 38 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 2 - CASH AND INVESTMENTS (Continued) B. Classification Cash and investments as of ,lune 30, 2009 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. Financial Statement Presentation: Minimum Statement of Net Assets: Maximum City of San Rafael: Credit Cash and investments available for operations $30,978,365 Restricted cash and investments 2,342,699 Total Primary Government Cash and Investments 33,321,064 San Rafael Sanitation District: Cash and investments available for operations 10,595,258 Restricted cash and investments 476,291 Total San Rafael Sanitation District Cash and No limit Investments 11,071,549 Total Cash and Investments $44,392,613 The City does not 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. C. Investments Authorized by the California Government Code and the City's Investment Policy The City's investment policy and the California Government Code allow the City to invest in the following provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City's Investment Policy where it is more restrictive: Authorized Investment Type U.S. Government Obligation U.S. Agency Securities and Instruments Repurchase Agreements Primer Commercial Paper Bankers' Acceptances Medium -Term Corporate Notes Negotiable Certificates of Deposit Non-negotiable Certificates of Deposit Local Agency Investment Fund Money Market/Mutual Funds N/A N/A N/A AAA 9M N/A N/A 10% N/A Minimum Maximum Maximum Maximum Credit Percentage of Investment in Maturity Quality Portfolio One Issuer 5 years No limit No limit 5 years AAA No limit No limit 1 year A-1 No limit No limit 270 days A-1 25% $1,000,000 180 days A-1 40% $2,000,000 5years A 30% $1,000,000 5 years AA 30% No limit 180 days N/A No limit No limit N/A N/A N/A AAA 9M N/A N/A 10% N/A CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 2 - CASH AND INVESTMENTS (Continued) D. (A) The City of San Rafael Sanitation District adopted the investments policy of the Treasurer and Tax Collector of the County of the Marin. Accordingly, the District, following the County, may invest in U.S. Treasury and agency securities, commercial paper, banker's acceptances, time deposits, repurchases agreements, and the State of California LAIF. The district, additionally, may invest in the Marin County Investment Pool. At year-end, the District's investments were in compliance with the above provisions. 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 the City fails to meet its obligations under these debt issues. 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: Authorized Investment Maximum Minimum Credit Maximum Percentage Type Maturity Quality of Portfolio U.S. Treasury Obligations N/A N/A No Limit U.S. Agency Securities 3 years N/A No Limit Category Bankers' Acceptances 360 days Highest No Limit Rating Category Money Market Funds N/A Highest No Limit Rating Category Commercial Paper 270 days Highest No Limit Rating Guaranteed Investment Category Contracts (filly N/A Highest No Limit collateralized) (A) Rating Municipal Obligations N/A Two Highest Category Ratings No Limit Guaranteed Investment Contracts must be fully collateralized with U.S. Treasury Obligations or U.S. Agency Obligations. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 2 - CASH AND INVESTMENTS (Continued) E. 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: Total District's Cash and Investments 11 071,549 Total Cash and Investments $44,392,612 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, 2009, these investments matured in an average of 235 days. Money Market Mutual Funds are available for withdrawal on demand and at June 30, 2009 matured in an average of 7 to 47 days. 41 12 Months 13 to 24 25 to 60 Type of Investment or Less Months Months Total City: U.S. Treasury Bill $1,021,444 $1,021,444 U.S. Federal Agency Securities 1,524,096 $2,083,113 $539,646 4,146,855 Money Market Mutual Funds 2,342,699 2,342,699 Local Agency Investment Fund 24,299,515 24,299,515 Corporation Notes 514,8 t0 514,810 Total Investments $29,187,754 $2,083,113 $1,054,456 32,325,323 Cash in banks and on hand 995,740 Total City Cash and Investments 33,321,063 San Rafael Sanitation District: Cash in banks and short-term pooled investments 11,071,549 Total District's Cash and Investments 11 071,549 Total Cash and Investments $44,392,612 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, 2009, these investments matured in an average of 235 days. Money Market Mutual Funds are available for withdrawal on demand and at June 30, 2009 matured in an average of 7 to 47 days. 41 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 2 - CASH AND INVESTMENTS (Continued) E Credit Risk Credit risk is the risk that an issuer of ata investment will not fidfill 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, 2009 for each of the Primary Government's investment types as provided by Standard and Poor's or Fitch investment rating systems, except as noted: of Investment City: U.S. Federal Agency Securities Money Market Mutual Funds Corporation Notes Total rated investments Not rated: U.S. Treasury Bill Local Agency Investment Fund Cash in banks and on hand Total City Cash and Investments San Rafael Sanitation District: Not rated: Cash in banks and short-term pooled investments Total Uistriefs Cash and Investments Total Cash and Investments NOTE 3 - INTER -FUND TRANSACTIONS A. Inter fund Receivables and Payables Aa2/AA+ Ana/AAA Total $514,810 $4,146,855 2,342,699 $1 t,071,549 $7,004,364 1,021,444 24,299,515 995,740 33,321,063 )1,071,549 $44,392,612 Amounts due to or due from other funds reflect inter -fund balances for set -vices rendered or short- term loans expected to be repaid in the next fiscal year. As of June 30, 2009, the Household Hazlnat Facility Special Revenue Fund and the Capital Improvement Capital Project Fund owed the General Fund $8,121 and $79,460, respectively. The Employee Benefits Internal Service Fund owed the Workers' Compensation Internal Service Fund $855,578. 42 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 3 - INTER -FUND TRANSACTIONS (Continued) B. Transfers Resources may be transferred from one City fund to another. Transfers routinely fund capital projects or capital outlays, lease or debt service payments, operating expenses and low and moderate -income housing projects, Transfers between funds during the fiscal year ended June 30, 2009 were as follows: From Fund General Fund Gas Tax Fund Non -Major Governmental Funds Parking Services Enterprise Funds To Fund Amount Nan -Major Governmental Funds $4,096,728 A Internal Service Funds 168,501 B Non -Major Governmental Fonds 350,000 A General Fund. 1,832,359 D Gas Tax Fund 167,218 C General Fund 271,190 D Non -Major Governmental Funds 90,000 A Internal Service Funds General Fund 2,156,540 D Non -Major Governmental Funds 8,460 A $9,140,996 (A) Transfers to the Non -major Governmental Funds were for administrative costs, program support, capital projects, special projects acrd housing portion of debt service. (B) Transfers to the Internal Service Funds were for benefits and claims reserves. (C) Transfers to Gas Tax Fund for capital projects cost. (D) Transfers to the General Fund were for administrative costs and costs of dispatch. C Internal Balances Internal balances are presented in the Entity -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. 43 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 4 — LOANS RECEIVABLE AND DEFERRED REVENUE A. Summary of Loans Receivable The City has reserved the portion of fund balance represented by these loans. At June 30, 2009, these loans totaled: Employees' Loans $41,256 Centertown Associates 300,789 One "H" Street Associates 68,572 Fire Chief Loan 582,607 Total $993,224 B. Employee Loans Effective February 1, 2000, the City agreed to loan employees up to $2,500 for the purchase of computer hardware and software. The loan program, which stipulates that employees may not have more than one loan outstanding, provides financial assistance from the City in the form of a no interest loan repaid through automatic payroll deductions. C. Centertown Associates The City loaned Centertown Associates, Ltd, $303,000 at 3% interest due semiannually. The loan was made for the construction of 60 -units affordable Centertown apartments and is fully secured by a deed of trust. The final payment is due on July 31, 2065. D. One "H"Street Associates 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. The loan was made in connection with an affordable housing project located at One "i1" Street. 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, under 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, 2009, the balance of the loan was $582,607. 44 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 4 — LOANS RECEIVABLE AND DEFERRED REVENUE (Continued) F. Marin Housing Authority On April 7, 2008 the Redevelopment Agency approved a loan in the amount of $333,000 to the Marin Housing Authority. This loan is funded by the Agency's Low and Moderate Income Housing Capital Projects Fund to assist the housing Authority in the acquisition of a housing unit so that the unit might remain in the City's Below Market Rate program. The Agency further approved a subsidy of up to $35,000 to reduce the sales price of the unit. As of June 30, 2009 this loan was paid off in fiscal year 2008-09. NOTE 5 - CAPITAL ASSETS Changes in capital assets during the fiscal year consist of. Governmental Activities Capital assets not being depreciated: Lard Construction in progress Total capital assets notbeing 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 Balance Balance lune 30, 2008 Additions Retirements Transfers lane 30, 2009 582,464,364 $246,431 $82,710.795 3,902,952 1,898,255 ($286,337) ($2,119,148) 3,395,722 86,367,316 2,144,686 (286,337) (2,119,148) 86,106,517 7,954,041 251,060 33,960 8,239,061 38,431,581 361,054 37,470 38,830,105 15,727,629 963,729 (836,513) 320,118 16,174,963 171,281,124 3,538,804 1,707,993 176,527,921 233,394,375 5,114,647 (836,513) 2,099,541 239,772,050 (3,614,388) (274,647) (3,889,035) (7,817,110) (1,128,894) (8,946,004) (9,418,979) (1,240,659) 755,982 16,665 (9,886,991) (84,053,5,14) (4,727,059) (88,780,603) Total accumulated depreciation (104,904,021) (7,371,259) 755,982 16,665 (111,502,633) Total net capital assets being depreciated 128,490,354 (2,256,612) (80,531) 2,116,206 t28,269,417 Total governmental activity capital assets $214,857,670 ($111,926) ($366,868) ($2,942)$214,375,934 45 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 5 - CAPITAL ASSETS (Continued) Business -type Activities Capital assets not being depreciated: Land Construction in progress 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 San Baird 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 Balance Balance June 30, 2008 Additions Transfers June 30, 2009 $8,620,853 122,861 8,743,714 $8,620,853 122,861 8,743,714 9,004,106 $1,230,415 10,234,521 1,103,388 19,195 $19,607 1,142,190 10,107,494 1,249,610 19,607 1 1,376,71 1 (1,251,724) (180,181) (1,431,905) (329,155) (124,063) (16,665) (469,883) (1,580,879) (304,244) (16,665) (1,901,788) 8,526,615 945,366 2,942 9,474,923 $17,270,329 $945,366 $2,942 $18,218,637 Balance Balance .lune M, 2008 Additions June 30, 2009 $115,329 $115,329 136,065 $2,982,265 3,118,330 251,394 2,982,265 3,233,659 12,152,655 12,152,655 33,428,586 33,428,586 371,394 39,658 411,052 45,952,635 39,658 45,992,293 (8,173,169) (211,397) (8,384,566) (11,227,869) (815,481) (12,043,350) (148,597) (36,489) (185,086) (19,549,635) (1,063,367) (20,613,002) Total net capital assets being depreciated 26,403,000 (1,023,709) 25,379,291 Total District's capital assets $26,654,394 $1,958,556 $28,612,950 EEO CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 5 - CAPITAL ASSETS (Continued) 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 $140,110 Public safety 984,230 Public works and parks 5,434,105 Community development/redevelopment 65,676 Culture and recreation 747,138 Total Governmental Activities $7,371,259 Business -type Activities Parking services $304,244 Total Business -type Activities $304,244 47 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 6 - LONG-TERM OBLIGATIONS A summary of governmental and business -type activities transactions for the fiscal year ended June 30, 169,000 2009, follows: 169,000 Court Fine Repayment Promissory Note, Authorized Balance Balance Current 816,119 and Issued June 30, 2008 Additions Retirements June 30, 2009 Portion Governmental Activities: 2.92%, due 3/24/2009 668,134 San Rafael Joint Powers Financing Authority 141,485 Telephone System Capitalized Lease Obligations, 1997 Authority Revenue Bonds 4.29%, due 05/30/2012 318,000 4.00%-6.00%, due 9/2/2011 $5,250,000 $780,000 $325,000 $455,000 $455,000 San Rafael Redevelopment Agency $221,531 $2,714,358 $37,210,608 $2,804,258 1999"Pax Allocation Bonds Current Interest Bonds 4.5%-5.00%, due 12/1/2022 21,115,000 15,810,000 730,000 15,080,000 765,000 Capital Appreciation Bonds 5.58%-5.6%, due 12/1/2022 2,389,004 3,907,161 $22L531 4,128,692 2002 Tax Allocation Refunding Bonds 2.00%-5.25%,due 12/1/2021 25,020,000 17,820,000 1,235,000 16,585,000 1,290,000 Total Tax Allocation Bonds 37,537,161 221,531 1,965,000 35,793,692 2,055,000 Ground Lease Note Payable 8.00%, due 11/1/2024 169,000 169,000 169,000 Court Fine Repayment Promissory Note, 3.873%, due November 2011 1,133,458 816,119 222,019 594,100 230,772 Fire Truck Capitalized Lease Obligations, 2.92%, due 3/24/2009 668,134 141,485 141,485 Telephone System Capitalized Lease Obligations, 4.29%, due 05/30/2012 318,000 259,670 60,854 198,816 63,486 Total Governmental Long-term Debt $39,703,435 $221,531 $2,714,358 $37,210,608 $2,804,258 Business -type Activities 2003 Authority Lease Revenue Bonds 3.00-4.70%, due 4/1/2033 7,605,000 $7,140,000 $165,000 $6,975,000 170,000 Total Enterprise Fund Debt $7,140,000 $165,000 $6,975,000 $170,000 San Rafael Sanitation Dish let 2001 Certificates of Participation 3.25440%, due 8/1/2012 Less: unamortized discount/ issuance cost Total District Debt 4,710,000 $2.220,000 (86,235) $2,133,765 48 $410,000 $1,810,000 430,000 (27,968) (58,267) $382,032 $1,751,733 $430,000 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) A. 1997Authority Revenue Bonds On January 28, 1997, the San Rafael Joint Powers Financing Authority issued the 1997 Authority Revenue Bonds in the amount of $5,250,000 bearing interest at rates from 4.00% to 6.00°/x. The proceeds of the bonds were used to consolidate and refund the previously issued Limited Obligation Refunding Bonds. The bonds mature annually each September 2 from 1997 to 2011, in amounts ranging from $20,000 to $555,000. Interest is payable semiannually on March 2 and September 2. The bonds are subject to redemption on any March 2 or September 2 in advance of maturity at the option of the City upon payment of the principal and interest accrued thereon to the date of redemption plus a redemption premium ranging from 2.00% to 5.00°/x. Revenues from the repayment of the Refunding Bonds and the reserve account are utilized to meet debt service requirements of the Revenue Bonds. The Refunding Bonds are secured by unpaid reassessments confined against private property within the Reassessment District. This pledge of revenues ends upon repayment of the $468 thousand in remaining debt service on the Authority's long-term debt which is scheduled to occur in fiscal 2010. For fiscal year 2009 pledged special assessment revenues amounted to $246 thousand and debt service of these Bonds amounted to $391 thousand. B. 1999 Tax Allocation Bonds and Capital Appreciation Bonds On June 16, 1999, the 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 Agency's Central San Rafael Redevelopment Project Area. The Current Interest Bonds mature annually each December 1 from 2000 to 2022, in amounts ranging from $560,000 to $1,460,000 and bear interest at rates ranging from 4.50% to 5.00%. Interest is payable semiannually on June 1 and December 1. The Current Interest Bonds maturing on or after December 1, 2008, are subject to optional redemption prior to maturity, in whole or in part, either in inverse order of maturity or on a pro rata basis among maturities, on any date on or after December 1, 2007, at a price equal to the principal amount, plus accrued interest on the redemption date, plus a premium ranging from 0.00% to 2.00%. 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°/x. 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. The pledge of firiwe tax increment revenues ends upon repayment of the $28.8 million in remaining debt service on the Redevelopment Agency's long-term debt which is scheduled to occur in 2022. For fiscal year 2009 tax increment revenues amounted to $1.5 million and debt service amounted to $1.5 million. WE CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) C. 2002 Ta.vAllocation Refunding Bonds On October 9, 2002, the 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 t, 2013, are subject to optional redemption prior to maturity, in whole or in pail, and by lot within any one maturity, prior to their respective maturity dates, on any date oil 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 Agency related to the Central San Rafael Redevelopment Project Area. The pledge of future tax increment revenues ends upon repayment of the $21.1 million in remaining debt service on the Redevelopment Agency's long term debt which is scheduled to occur in 2021. For fiscal year 2009 tax increment revenues amounted to $2.1 million and debt service also amounted to $2.1 million. D. Note Payable At June 30, 2007, Notes Payable consisted of a $169,000 promissory note hearing interest at 8% with principal and accrued interest due and payable in November 2024. The note was assumed to finance the purchase of certain property by the Agency. The outstanding balance of the loan at June 30, 2009 was $169,000 plus accrued interest of $185,394 which is recorded as interest payable. E. Capitalized Lease Obligations The City leased two fire trucks in the amount of $668,134. The annual lease payment of $72,295 for five years started hr September 2004. The lease expires in 2009. Under the lease agreements, ownership of the fire trucks passes to the City at the end of the lease. Since the lease is in essence a financing arrangement, the cost of the fire trucks and the amount of the leases have been included in the City's financial statements. F. Court Fine Repayment Promissory Note On December 29, 2006, the City signed a promissory note in the amount of $1,133,458 to repay the Superior Court of California, County of Marin. The purpose of the note is to repay the Superior Court for over payment of court revenues, generated from traffic violations, made to the City from the period July 1999 through June 2006. The note bears interest at 3.873% per annum. Principal and interest are payable monthly commencing from January 2007 until December 2011. 50 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) G. Telephone System Capital Lease On May 30, 2007, the City entered into a capital lease agreement in the amount of $318,000 to purchase telephone related network equipment and services. Principal and interest payments are due each May 30 and November 30, commencing November 30, 2007, until May 30, 2011. The capital lease bears interest at 4.28% per annum. H. 2003 Authority Lease Revenue Bonds On March 26, 2003, the Authority issued 2003 Authority Lease Revenue Bonds in the amount of $7,605,000 bearing interest at rates from 3.00% to 4.70%. The proceeds of the bonds were provided for the design and construction of a new public parking garage. The bonds mature annually each April I from 2006 to 2033, in amounts ranging from $150,000 to $290,000. Interest is payable semiannually on April 1 and October 1. The bonds maturing on or after April 1, 2011 are subject to optional redemption prior to maturity on or after April 1, 2010 at the option of the City, as a whole on any date. The Lease Revenues are secured by lease payments made by the City to the Authority for leasing the City facilities. L Discretely Presented Component Unit — San Rafael Sanitation District — 2001 Certificates of Participation On May 1, 2001, the District and its Financing Corporation issued $4,710,000 of Certificates of Participation at a discount of $35,121 maturing in 2011 The certificates were to be used (1) to refund in whole the outstanding Series 1991 Certificates of Participation (2) to finance the District's share of a new construction corporation yard, (3) to fund in whole or in part, a reserve fund for certificates, and (4) to pay certain costs of issuing the certificates. The certificates are fully registered with principal due annually on August 1 and interest payable semiannually on February 1 and August 1. The certificates are subject to optional prepayment on any date on or after August 1, 2009. Terms of the Trust Agreement call for a premium at 101% to exercise optional prepayment between August 1, 2009 and July 31, 2010, and no premium August 1, 2010 and after. 51 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 6 - LONG-TERM OBLIGATIONS (Continued) Future debt service requirements, including interest and capital leases, at June 30, 2009, were as follows: For the Year Governmental Activities Business -type Activities Ended June 30 Principal Interest Principal Interest 2010 $2,804,258 $1,543,498 $170,000 $326,666 2011 2,456,103 1,424,130 175,000 321,141 2012 2,457,555 1,307,310 185,000 314,141 2013 2,380,000 1,186,144 190,000 306,741 2014 2,505,000 1,062,151 200,000 299,141 2015-2019 14,549,946 3,284,730 1,125,000 1,364,838 2020-2024 13,590,054 674,713 1,395,000 1,089,612 2025-2029 169,000 1,770,000 715,500 2030-2033 1,765,000 226,000 Totals 40,911,916 $10,482,676 $6,975,000 $4,963,780 Reconciliation of long-term debt: Less macerated discount (3,701,308) Less unaraortized original issue discount $37,210,608 NOTE 7 - DEBT W IHOUT CITY COMMITMENT Component Unit San Rafael Sanitation District Principal Interest $430,000 $69,310 440,000 50,820 940,000 20,680 1,810,000 $140,810 58,267 $1,751,733 The City has sponsored the issuance of the following debt, for which the City is not liable for repayment but is only acting as an agent for the property owners and bondholders: San Rafael Redevelopment Agency Multifamily Housing Revenue Bonds California Statewide Communities Development Authority Revenue Bonds San Rafael Redevelopment Agency Variable Rate Demand Multifamily Housing Revenue Bonds San Rafael Redevelopment Agency Multifamily Housing Revenue Bonds -2001 Multifamily Housing Revenue Bonds -2007 City of San Rafael Variable Rate Revenue Bonds San Rafael Redevelopment Agency Multifamily Housing Revenue Bonds -2007 Series A Project Description Original Amount Outstanding June 30, 2009 162-175 Belvedere Apartments $3,590,529 $1,342,934 St. Marks School 5,605,000 5,125,000 55 Fairfax Apartments 3,000,000 2,700,000 San Rafael Commons Apartments 6,100,000 5,700,000 Martinelli House 1,000,000 Kaiser Foundation Hospitals 275,000,000 195,630,000 Martinelli House Project 6,000,000 2,540,163 52 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 8 --NET ASSETS AND FUND BALANCES A. Net Assets Net Assets is the excess of all the City's assets over all its liabilities, regardless of fund. Net Assets are divided into three captions. These captions apply only to Net Assets, which is determined only at the Government -wide level, and are described below: Invested in Capital Assets, net of related debt describes the potion of Net Assets which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of Net Assets 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. These principally include assets restricted due to Redevelopment Agency bond covenants or low and moderate income housing loan agreements. Unrestricted describes the portion of Net Assets which is not restricted to use. B. ITund Balance Ll 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. Portions of a fund's balance may be reserved or designated for future expenditure. C. Reservations Reserves are restrictions placed by outside entities, such as other governments, which restrict the expenditures of the reserved funds to the purpose intended by the entity which provided the funds. The City cannot modify or remove these restrictions or reserves. D. Designations Designations are imposed by City Council to reflect the future spending plans or concerns about the availability of future resources. Designations may be modified, amended, or removed by Council action. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 9 — EMPLOYEES RETIREMENT PLAN A. Plan Description The City contributes to the Marin County Employees' Retirement Association (Association). All full- time and permanent part-time employees who work at least 75% of a full time position are eligible to participate. The Association is an agent multiple -employer defined benefit retirement plan that acts as a common investment and administrative agent for various local governmental agencies within the County of Marin. The Association provides retirement, disability, and death benefits based on the employee's years of service, age, and final compensation. Employees vest after five years of service and are eligible to receive retirement benefits after 10 years of service and having attained the age of 50, or 30 years of service (20 years for safety employees) regardless of age. These benefits provisions and all other requirements are established under the County Employees' Retirement Law of 1937. The City's retirement plan is included in a separately issued report from the Marin County Employees' Retirement Association, which can be obtained from Marin County Employee's Retirement Association, 3501 Civic Center Drive, Room 408, Civic Center, San Rafael, California 94903. B. Funding Policy The funding policy of the Association provides for actuarially determined periodic contributions by the City at rates such that sufficient assets will be available to pay Fund benefits when due. The City contributed 50.90% and 58.69% of payroll to Fund for Police and Fire personnel, respectively, and 26.70°/% for other covered employees for the year ended June 30, 2009. C. Annual Pension Cost The annual required contribution was determined as part of the actuarial performed as of June 30, 2008. The employer rates for normal cost is determined using the Entry Age Normal Actuarial Cost Method, projected benefit cost method. It takes into account those benefits that are expected to be earned in the future as well as those already accrued. The significant assumptions used in the 2008 actuarial valuation include an assumed rate of return on invested assets of 8.00%, annual payroll increases reflecting 4.00% for inflation and an approximate range of 0.50% to 3.00% for merit and longevity. The actual rate of return on investments was a gain of 9.8%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a period of five years. The Association also uses the level percentage -open method to amortize the unfunded actuarial liability which was revised to sixteen years level in the amortization period. It is assumed that payroll will increase at an annual inflation rate of 4.00% over the amortization period. The required contributions and related rates for the year ended June 30 were as follows: Fiscal Year Annual Percentage of Net Ended Pension Cost APC Pension June 30 (APC) Contributed Obligat on 2007 $11,108,650 100% s0 2008 13,754,798 100% 0 2009 13,746,154 100% 0 54 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 9 — EMPLOYEES RETIREMENT PLAN (Continued) The Plans' actuarial value (which differs from market value) and funding progress over the most recent three years available is set forth below at their actuarial valuation date of June 30: NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which is defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive, The plan is administered by Phase 11 located at F.O. Box 10009, Costa Mesa, California 92627. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account, the returns earned on investments on those contributions, and forfeitures of other participant's benefits that may be allocated to such participant's account. As established by the plan, all eligible non represented employees of the City will become participants in the plan from the date that they 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. The City has established the voluntary Retirement Separation Program in fiscal year 2009. During the year, the City and employees contributed $71,156. The total covered payroll of employees participating in the plan for the year ended June 30, 2009, was $1,897,489. The total payroll for the year was $40,377,568. 55 Actuarial Excess Excess (Deficit) Actuarial Actuarial Accrued (Deficit) Assets Over AAl Valuation Value Liability (AAL) Assets Funded Covered As a %of Date of Assets Entry Age Over AAL Ratio Payroll Payroll 6/30/06 $209,785,000 $306,079,000 ($96,294,000) 69%u $28,606,000 (279%) 6/30/07 235,756,000 325,219,000 (89,463,000) 72% 30,180,000 (277%) 6/30/08 262,677,000 360,298,000 (97,621,000) 73% 31,854,000 (306%) NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which is defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are determined instead of specifying the amount of benefits the individual is to receive, The plan is administered by Phase 11 located at F.O. Box 10009, Costa Mesa, California 92627. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account, the returns earned on investments on those contributions, and forfeitures of other participant's benefits that may be allocated to such participant's account. As established by the plan, all eligible non represented employees of the City will become participants in the plan from the date that they 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. The City has established the voluntary Retirement Separation Program in fiscal year 2009. During the year, the City and employees contributed $71,156. The total covered payroll of employees participating in the plan for the year ended June 30, 2009, was $1,897,489. The total payroll for the year was $40,377,568. 55 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 10 - PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) (Continued) Additionally, the City participates in a 401(a) tax qualified plan for eligible non -represented management/mid-management employees. This is an employer only contribution program separate from the Marin County Employees' Retirement Association. The City Manager, as Plan Administrator, annually determines the percent amount of contribution which can range from 0% to 5% of base salary of eligible employees. During the year, the City contributed $146,524 to the plan on behalf of the eligible employees. NOTE 11—POST-EMPLOYMENT HEALTH CARE BENEFITS The City provides certain health care benefits for retired employees and their spouses. The benefit provisions were established under the authority of the 1937 Act, Section 31450, et. Seq, of the Government Code. Substantially, all of the City's employees may become eligible for these benefits if they are receiving a retirement benefit from the Marin County Employees' Retirement Association within 120 days of retirement from City employment. At June 30, 2009, 301 retirees and surviving spouses received post -employment health care benefits. Those expenditures are reduced by reimbursements from the Marin County retirement Office by the annual amount set forth in the County Retirement Rules and Regulations 1937 Act as amended and in Sections 31450 et. seq. of the Government Code. During fiscal year 2009, the City implemented the provisions of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes uniform financial reporting standards for employers providing postemployment benefits other than pensions (OPEB). The provisions of this statement are applied prospectively and do affect prior years financial statements. Required disclosures are presented below. 56 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE II —POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) The provisions and benefits of the City's Other Post Employment Benefit Plan, in effect at June 30, 2009, are summarized as follows: Funding Policy and Actuarial Assumptions The annual required contribution (ARC) was determined as part of a .lune 30, 2007 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) 4.50% investment rate of return and (b) 3.00% of general inflation increase, and (c) a healthcare trend of declining annual increases ranging from 10.4% to 11.3% in 2009 to 4.50% for year starting 2017. In addition, the fixed dollar benefit amounts are assumed to increase according to general inflation in the future and the premium related benefits are assumed to increase with the healthcare trend rate. 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 -tern 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 biannually as results are compared to past expectations and new estimates are made about the fixture. The City's OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year amortization period. 57 Elected Officials, Mid -Management, & Unrepresented Management All other Bargaining Units Eligibility Retire directly from the City: - Age 50 with 10 years services OR 30 years service (Miscellaneous), 20 - years service (Safety) OR - Disability Retirement Up to cap and it varies by Benefit all premium bargaining units Spouse Benefit Continuation to surviving spouse Medicare Part B Pull reimbursement INone Otker No dental vision, or life benefits Funding Policy and Actuarial Assumptions The annual required contribution (ARC) was determined as part of a .lune 30, 2007 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) 4.50% investment rate of return and (b) 3.00% of general inflation increase, and (c) a healthcare trend of declining annual increases ranging from 10.4% to 11.3% in 2009 to 4.50% for year starting 2017. In addition, the fixed dollar benefit amounts are assumed to increase according to general inflation in the future and the premium related benefits are assumed to increase with the healthcare trend rate. 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 -tern 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 biannually as results are compared to past expectations and new estimates are made about the fixture. The City's OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year amortization period. 57 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 11— POST -EMPLOYMENT HEALTH CARE BENEFITS (Continued) In accordance with the City's budget, the City's annual contributions to the Plan are based on pay-as- you-go financing. Generally accepted accounting principles permit assets to be treated as OPEB assets and deducted from the Actuarial Accrued Liability when such assets are placed in an irrevocable trust or equivalent arrangement. Contributions a 401 (h) account held and administered by the MCERA were made by the City in prior years and were included in the June 30, 2007 actuarial study. During the fiscal year ended June 30, 2009, the City has calculated and recorded the Net OPEB Obligation, representing the difference between the ARC, and contributions, as presented below: Annual Overfunded Requited (Underfunded) Actuarial Contribution Annual Actual Percentage Net OPEB Fiscal Year (ARC) Pension Cost Contribution of ARC Obligation Ended (000's omitted) (000's omitted) (000's omitted) Contributed (000's omitted) June 30, 2009 $4,269 $4,269 $2,236 52% $2,033 The Schedule of Funding Progress presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Trend data from the June 30, 2007 actuarial study is presented below: 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. 58 Overfunded (Underfunded) Actuarial Actuarial Unfunded Liability as Value of Accrued Accrued Covered a Percentage of Valuation Assets Liability Liability Funded Payroll Covered Date (00o's omitted) (000's omitted) (000's omitted) Ratio (000's omitted) Payroll 1/1/2007 $14,563 $56,624 ($42,061) 26% $38,480 -109.31% 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. 58 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) A. The Marin County Integrated On -Line Library System (System) The Marin County Integrated On -Line Library System was formed to provide for the procurement, ownership, operation, maintenance, and governance of an integrated on-line system that is jointly owned and operated by the cities of San Rafael, Mill Valley, Sausalito, and the County of Marin. 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 the acquisition cost in the amount of $108,007 represents 17.06% of ownership in the System. Operating costs for the System are also shared by each participant by applying the cost sharing formula. The City contributed $117,616 to the System for operating costs for the year ended June 30, 2009. Financial statements of the System can be obtained at the County Librarian, Marin County Free Library, Civic Center, Administration Building, 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 the tendency of an eminent domain action against PG&E, and the subsequent transfer of the facilities to the individual local agencies. Each of the local agency's share of contributions was based on the number of street lights to be acquired in the local agency's individual jurisdiction in relation to the total number of street lights to be acquired by the MSLAJPA. The City's contribution to MGSA was $2,103 for the year ended June 30, 2009. Financial statements of the MGSA can be obtained at 27 Commercial Boulevard, Suite C, Novato, CA 94949. C. The Morin Emergency Radio Authority (MERA) MERA was formed on February 28, 1998 by the County of Marin and 25 local agencies within the County to plan, finance, implement, manage, own, and operate a Comity -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 will be 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 $637,578 for the Authority's operation and debt service for the fiscal year ended June 30, 2009. 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 3501 Civic Centre Drive, San Rafael, California 94903. 59 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 12 — JOINTLY GOVERNED ORGANIZATIONS (Continued) D. The Countywide Planning Agency The Agency was established by the County of Marin and ten local cities to implement countywide performance standards for traffic, housing, water and sewer facilities, and environmental protection to ensure that residential and commercial growth does not exceed local water, sewer and transportation capacities. The Governing Board of the Countrywide Planning Agency consists of one member of the County Board of Supervisors and one member of the City Council of each participating city. Financial statements of the Agency can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. E. The Marin Telecommunications Agency The Agency was established to regulate the rates for cable television service and equipment and to advise the participants of their license authority. The Governing Board of the Marin Telecommunications Agency consists of one member from each of the eleven participating agencies. The City's contribution to the Agency was $150,292 for the year ended June 30, 2009. Financial statements of the Agency can be obtained at 371 Be] Marin Keys Blvd, Suite 100, Novato, CA 94949. F. The Morin County Hazardous and Solid Waste Joint Powers Authority The Authority was established by the County, local cities, and waste franchising districts to finance, prepare and implement source reduction and recycling elements on a county -wide integrated waste management plan as required by State Assembly Bill 939. The City's contribution to the Authority was $15,320 for the year ended June 30, 2009. Financial statements of the Authority can be obtained at 3501 Civic Center Drive, San Rafael, California 94903. G. Friends of Satz Rafael Friends of San Rafael is a California nonprofit Public Benefit Corporation established to help finance and accomplish the City's efforts to erect, construct and maintain public buildings, roads, monuments, plazas, parks, gardens, safety features and similar public improvement and infrastructure. Financial statements of' the Corporation can be obtained at P.O. Box 151560, San Rafael, CA 94915. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 13 - RISK MANAGEMENT The City manages risk by participating in the public entity risk pools described below and by retaining certain risks. Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those 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 site and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, 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 these risk pools are not the City's responsibility. A. Risk Coverage Liability Coverage The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims up to $40,000,000. The City also purchases commercial insurance for property damage claims with an insured amount of $98,575,604. The City is self-insured up to a maximum of $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 claims up to the limit. During the fiscal year ended June 30, 2009, the City contributed $260,851 for coverage during the current year and received a refund of $120,550 of prior year excess contributions. Financial statements for the risk pools may be obtained from CJPRMA, 2333 San Ramon Valley Blvd., Suite 250, San Ramon, CA 95608. Workers' Compensation Coverage The City purchased insurance for workers' compensation through AIG Excess Workers' Compensation and Employers Liability Insurance with coverage up to statutory limits. The City is self-insured up to a minimum of $750,000 for each worker's compensation claim. The contributions made to each risk pool equal the ratio of their respective payrolls to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. B. Insurance 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. 61 CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 13 - RISK MANAGEMENT (Continued) The City's liability for uninsured general liability claims and workers' compensation claims, including claims incurred but not reported, are reported in the City's Liability Insurance Internal Service Fund and Workers' Compensation Internal Service Fund, respectively. The liability is based on historical trend information provided by its third party administrators and was computed as follows at June 30: Balance, beginning of year Current year claims and changes in estimates Claims paid Balance, end of year Current portion General Workers' Totals, as of June 30 Liability Compensation 2009 2008 .$437,518 $3,822,611 $4,260,129 $4,558,181 442,143 (141,850) 300,293 1,329,653 (472,300) (371,151) (843,451) (1,627,705) $407,361 $3,309,610 $3,716,971 $4,260,129 $300,000 $2,100,000 $2,400,000 $2,284,387 The claims settlements have not exceeded insurance coverage for the past three years. NOTE 14 - COMMITMENTS AND CONTINGENCIES The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. The City worked with the Department of Justice (DOJ) to determine the City's compliance with the Americans with Disabilities Act of 1990 (ADA). The DOJ ratified an ADA Settlement Agreement in August 2004 providing a number of specific remedies including timelines, law specific solutions and reporting over the next ten years. For example, City's Web site needs an ADA overhaul, and a significant amount of items relate to curb ramps. As of June 30, 2009, the City has mad significant progress in improving the accessibility of its programs, activities, services and facilities. The majority of the remaining items relate to curb ramps. The City's latest estimate is 583 ramps remaining to be constructed and the estimated average cost is $5,800 per curb ramp. On October 1, 2002, the Agency entered into a second amendment to Section 33401 Tax Sharing Agreement with San Rafael High School District. This agreement provides for additional payments in the amount of $179,000 each fiscal year beginning with fiscal year 2002-03 through fiscal year 2021-22. M. CITY OF SAN RAFAEL NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2009 NOTE 15 —SUBSEQUENT EVENT The State of California adopted AB26 4X in July 2009 which directs that a portion of the incremental property taxes received by redevelopment agencies be paid to the County supplemental educational revenue augmentation fund (SERAF) in fiscal years 2009-10 and 2010- 11. The State Department of Finance will determine each agency's SERAF payment by November 15 of each year, and payments are due by May 10 of the applicable year. Based on the calculations in AB26 4X, the Agency's SERAF's are estimated to be $1,370,626 in fiscal year 2009-10 and $282,188 in fiscal year 2010-I1. The Agency can use any legally available funds to make the SERAF payments. The payment due in fiscal year 2009-10 represents 42% of the Agency's cash and investments available for operations at June 30, 2009. The obligation to make the SERAF payment is subordinate to obligations to repay bonds, however if the Agency fails to make the SERAF payment the Agency may not encumber or expend future funds other than to pay pre-existing indebtedness, contractual obligations and 75% of the amount expended on Agency administration for the preceding fiscal year until the SERAF is paid in full. The Agency's obligation is in addition to amounts due pursuant to the Fiscal Agreement as discussed above in Note 6. 63 This Page Left Intentionally Blank REQUII2ED SUPPLEMENTAL INFORMATION 65 This Page Left Intentionally Blank GENERAL FUND AND MAJOR SPECIAL REVENUE FUND BUDGET -TO -ACTUAL STATEMENTS GASB Statement 34 dictates that budget -to -actual information in the basic financial statements should be limited to the General Fund and major Special Revenue Funds. This section is provided for the presentation of Budget -to -Actual Statements for the General Fund, Traffic and Bousing Mitigation, and the Gas Tax Special Revenue Funds. 67 CITY OF SAN RAFAEL GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public safety Public works and parks Community development/redevelopment Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $47,364,401 $45,560,864 $42,951,759 ($2,609,105) 1,279,148 1,288,198 1,467,413 179,215 769,070 769,070 660,338 (108,732). 479,680 199,680 156,747 (42,933) 6,683,510 7,099,360 7,018,197 (81,163) 2,235,555 2,020,555 1,923,653 (96,902) 126,560 161,560 238,614 77,054 58,937,924 57,099,287 54,416,721 (2,682,566) 6,893,355 6,958,424 6,811,591 146,833 35,426,487 35,463,104 35,056,051 407,053 7,403,440 7,361,116 7,299,137 61,979 4,196,345 4,150,415 4,004,061 146,354 2,456,440 2,448,378 2,463,777 (15,399) 4,320 84,712 159,230 (74,518) 233,900 303,900 518,251 (2t4,351) 222,020 222,020 222,019 56,836,307 56,992,069 56,534,117 457,952 2,101,617 107,218 (2,117,396) (2,224,614) 2,202,950 2,902,090 4,060,090 1,158,000 (4,561,000) (4,039,229) (4,265,229) (226,000) (2,358,050) (1,137,139) (205,139) 932,000 ($256,433) ($1,029,921) (2,322,535) ($1,292,614) 68 6,218,765 $3,896,230 CITY OF SAN RAFAEL TRAFFIC AND HOUSING MITIGATION SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Use of money and property Charges for services Other revenue Total Revenues EXPENDITURES Current: Public works and parks Capital outlay Capital improvement/special projects Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 66,230 66,230 67,917 (1,687) 221,187 (221,187) 1,074,705 1,074,705 66,230 1,140,935 289,104 851,831 (45,230) (1,059,935) 111,424 1,171,359 ($45,230) ($1,059,935) W.• 111,424 $1,171,359 9,873,946 $9,985,370 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) $21,000 $81,000 $233,585 $152,585 145,124 145,124 21,819 21,819 21,000 81,000 400,528 319,528 66,230 66,230 67,917 (1,687) 221,187 (221,187) 1,074,705 1,074,705 66,230 1,140,935 289,104 851,831 (45,230) (1,059,935) 111,424 1,171,359 ($45,230) ($1,059,935) W.• 111,424 $1,171,359 9,873,946 $9,985,370 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, 2009 REVENUES Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: 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 Variance with Final Budget Budgeted Amounts Original Final Actual Amounts Positive (Negative) $32,860 $32,860 $36,703 $3,843 1,027,500 2,772,351 6,487,634 3,715,283 636,000 636,000 988,593 352,593 65,823 65,823 1,696,360 3,441,211 7,578,753 4,137,542 74,840 70,640 63,162 7,478 1,215,640 1,659,954 3,649,700 (1,989,746) 1,366,672 3,431,818 (2,065,146) 1,290,480 - 3,097,266 7,144,680 (4,047,414) 405,880 343,945 434,073 90,128 167,217 167,217 (350,000) (350,000) (350,000) (350,000) (182,783) (181783) $55,880 $161,162 $251,290 $90,128 70 2,141,002 $2,392,292 CITY OF SAN RAFAEL REDEVELOPMENT AGENCY CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments Use of money and property Intergovernmental Charges for services Other revenue Total Revenues EXPENDITURES Current: General government Public works and parks Community development/redevelopment Capital outlay Capital improvement/special projects Total Expenditures Net Assets (Accumulated Deficit), beginning of year OVER (UNDER) EXPENDITURES Net Change in Fund Balances FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR 1,176,820 1,176,820 1,706, 551 529,731 21,650 21,650 Variance with (9,010) 163,910 Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) 569,099 $900,000 $900,000 $980,997 $80,997 263,240 263,240 127,051 (136,189) 554,559 554,559 13,580 13,580 27,153 13,573 16,791 16,791 1,176,820 1,176,820 1,706, 551 529,731 21,650 21,650 30,660 (9,010) 163,910 163,910 147,756 16,154 1,587,810 1,637,280 1,568,018 69,262 569,099 (569,099) 322,470 322,470 328,116 (5,646) 2,095,840 2,145,310 2,643,649 (498,339) (919,020) (968,490) (937,098) 31,392 ($919,020) ($968,490) 71 (937,098) $31,392 5,926,137 $4,989,039 This Page Left Intentionally Blank SUPPLEMENTARY INFORMATION 73 This Page Left Intentionally Blank NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Recreation Revolving Fund — Established to administer the Recreation Department's program and facility rental charge and accounts for the Recreation Memorial Fund. Baypoint Lagoons Assessment District Fund — The Baypoint Lagoons Lighting and Landscape District was formed to protect and enhance wildlife habitat and water quality in Baypoint (Spinnaker) Lagoon and the adjacent diked salt marsh. Household Hazmat Facility Fund - Established to account for State mandated hazardous materials information, collection, and reporting. Expenditures include inspection of businesses for compliance with regulations. This fund also serves as the depository for countywide Household Hazardous Waste Program. Childcare Fund — Established to administer and account for childcare programs at eleven sites throughout the City, Street Maintenance and Cleaning Fund — Established to maintain the City's streets, pubic properties and rights of way. Loch Lomond Assessment District Fund — Established to provide maintenance for stormwater and geotechnic 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. 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 -tern developer deposits used to enhance and maintain the park structure within City limits_ Emergency Medical Services Fund — Established to account for the Emergency Medical Services and Transportation program that provides services to all segments of the community. Business Improvement Fund — Established to account for activities held in Downtown San Rafael, such as the Farmers Market. 75 NON -MAJOR GOVERNMENTAL FUNDS Sewer Maintenance Fund — Established under the terns of the JPA to provide all necessary maintenance to the Sanitation District's gravity collection sewer system. DEBT SERVICE FUNDS Peacock Gap Assessment District Fund — Established to accumulate funds for the payment of principal and interest for the 1993 Bonds which mature 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 matures 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 matures 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. Redevelopment Agency Fluid — Established to account for the principal payments, interest payments, and related costs of the 1999 Project Tax Allocation Bonds and 2002 Tax Allocation Refunding Bonds. 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 Valley/Lucas Valley Open Space, East San Rafael Drainage Assessment District 1. Park Capital Projects Fund — Established to account for capital improvements for all City owned parks, whether paid for by City funds, grants, donations, or partnership with the community. Open Space Fund — Established for the acquisition of open space. Equipment Replacement Fund - Established to provide replacement of equipment 76 NON -MAJOR GOVERNMENTAL FUNDS 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 City. 77 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2009 SPECIAL REVENUE FUNDS Baypoint Liabilities: Lagoons Household Street Recreation Assessment Hazmat Maintenance Revolving District Facility Childcare and Cleaning ASSETS Liabilities: Accounts payable $83,353 Cash and investments $91,900 $108,685 $52,986 $517,741 Restricted cash and investments 3,497 Due to other agency 5,129 Compensated absence Receivables: Total Liabilities 299,483 234,286 33,648 7,042 Accounts 228,917 $326,000 117,613 Taxes 152 Grants 43,745 Interest Prepaids and deposits 11,105 Total Assets $331,922 $108,837 $326,000 $96,731 $665,354 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $83,353 $226,165 $25,022 $7,042 Developer bonds payable Due to other funds 8,121 Defened revenue 216,130 3,497 Due to other agency 5,129 Compensated absence Total Liabilities 299,483 234,286 33,648 7,042 Fund Balances: Reserved for: Encumbrances Prepaids and deposits 11,105 Debt service Unreserved, undesignated 21,334 $108,837 91,714 63,083 658,312 Total Fund Balances 32,439 108,837 91,714 63,083 658,312 Total Liabilities and Fund Balances $331,922 $108,837 $326,000 $96,731 $665,354 78 REVENUE FUNDS Loch Lomond Assessment Public Development Parkland District Library Safety Stormwater Services Grants Dedication $858,764 $118,209 $177,594 $734,668 $660,573 $607,402 $1,237,197 89 90,270 21,697 4,733 299,329 $858,853 $208,479 $199,291 $739,401 $660,573 $906,731 $1,237,197 $8,571 $228 $34,411 $31,031 $9,307 1,500 15,741 8,571 228 50,152 32,531 9,307 $858,853 199,908 199,063 689,249 628,042 897,424 $1,237,197 858,853 199,908 199,063 689,249 628,042 897,424 1,237,197 $858,853 $208,479 $199,291 $739,401 $660,573 $906,731 $1,237,197 (Continued) 79 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Interest Prepaids and deposits Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other funds Deferred revenue Due to other agency Compensated absence Total Liabilities Fund Balances: Reserved for: Encumbrances Prepaids and deposits Debt service Unreserved, undesignated Total Fund Balances CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2009 SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS Emergency Peacock Gap Ntariposa Medical Business Sewer Assessment Assessment Services Improvement Maintenance District District $594,795 19,767 $4,916 $302,068 $2,875 $16,259 $614,562 $4,916 $302,068 $2,875 $16,259 $65,615 65,615 $5 $259,995 5 259,995 548,947 4,911 42,073 548,947 4,911 42,073 $2,875 $16,259 2,875 16,259 Total Liabilities and Fund Balances $614,562 $4,916 $302,068 $2,875 $16,259 M DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS 1997 Financing Park Authority Redevelopment Capital Bedroom Assessment Capital Open Revenue Bonds Agency Improvement Tax Districts Projects Space $274,648 $33,941 $30,411 $223,741 $15,060 $143,577 332,571 1,837 1,362 48 $570,711 $608,581 $35,826 $570,711 $30,411 $223,741 $15,060 $143,577 $105,044 79,460 184,504 $608,581 $35,826 386,207 $30,411 $223,741 $15,060 $143,577 608,581 35,826 386,207 30,411 223,741 15,060 143,577 $608,581 $35,826 $570,711 $30,411 $223,741 $15,060 $143,577 (Continued) 81 CITY OF SAN RAFAEL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2009 ASSETS Cash and investments Restricted cash and investments Receivables: Accounts Taxes Grants Interest Prepaids and deposits Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other fiords Deferred revenue Due to other agency Compensated absence Total Liabilities Fund Balances: Reserved for: Encumbrances Prepaids and deposits Debt service Unreserved, undesignated Total Fund Balances Total Liabilities and Fund Balances CAPITAL PROJECT FUNDS Total Non -Major Equipment Radio Telephone Governmental Replacement Replacement Replacement Funds $2,050,523 $431,476 $9,320,009 $74,812 409,220 34,864 729,091 26,103 1,004,055 48 11,105 $2,085,387 $431,476 $74,812 $11,499,631 $20,184 $8,727 $884,700 1,500 87,581 219,627 5,129 15,741 20,184 8,727 1,214,278 1,220 1,220 11,105 627,715 2,063,983 $431,476 66,085 9,645,313 2,065,203 431,476 66,085 10,285,353 $2,085,387 $431,476 $74,812 $11,499,631 82 This Page Left Intentionally Blank CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments License and permits Use of money and property 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 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 Balance, Beginning Fund Balance, Ending SPECIAL REVENUE FUNDS Baypoint 2,277 $1,086 $2,135 Lagoons Household Street Recreation Assessment Hazmat Maintenance Revolving District Facility Childcare and Cleaning $25,368 $761 2,277 $1,086 $2,135 $18,296 20,000 7,799 389,834 1,170,225 2,089,342 1,375,518 2,799,342 (272,282) 68,192 9,640 2,765 8,392 253,920 955,888 2,178,295 27,645 1,394,043 3,194,076 1,196,913 3,856,042 55,454 1,337,960 4,896 3,482,129 7,988 1,774,164 207,593 3,911,496 4,896 1,345,948 3,482,129 1,981,757 (1,733,201) 22,749 48,095 (288,053) (784,844) 1,732,760 253,920 1,228,170 (272,282) 1,732,760 253,920 955,888 (441) 22,749 48,095 (34,133) 171,044 32,880 86,088 43,619 97,216 487,268 $32,439 $108,837 $91,714 $63,083 $658,312 84 SPECIAL Loch Lomond Assessment Public Development Parkland District Library Safety Stormwater Services Grants Dedication $14,796 90,000 1,034,816 296,601 88,962 $700 $5,500 19,776 $44,677 $3,721 14,665 $41,023 $17,401 25,611 341,690 79,059 3,328 915,117 (1) 6,147 5,680 792,996 25,219 (44,859) (82,296) 161,374 30,545 1,895 459,144 84,791 63,800 1,000 $858,853 $199,908 $199,063 34,572 423,059 90,355 816,489 151,033 996,318 188,684 142,738 53 1,399,144 114.190 163,227 279,808 10,166 58,829 195,892 520 100,000 317,223 270,257 662,215 53 393,998 152,904 1,621,200 195,892 1,350,215 34,519 29,061 (62,549) (804,711) (44,859) (353,897) 188,684 85 90,000 1,034,816 296,601 88,962 (17,075) (25,000) (17,075) 90,000 1,034,816 271,601 88,962 34,519 - 11,986 27,451 230,105 (44,859) (82,296) 277,646 824,334 187,922 171,612 459,144 672,901 979,720 959,551 $858,853 $199,908 $199,063 $689,249 $628,042 $897,424 $1,237,197 (Continued) 85 CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments License and permits Use of money and property 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 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 Balance, Beginning Fund Balance, Ending SPECIAL REVENUE„ FUNDS DEBT SERVICE FUNDS Emergency Peacock Gap Mariposa Medical Business Sewer Assessment Assessment Services Improvement Maintenance District District $3,210,317 655 $181 $395 $260 13,000 2,025,709 1,671,525 16,057 5,236,681 29,238 1,671,920 260 29,252 4,573,223 1,528,320 4,573,223 29,252 1,528,320 663,458 (14) 143,600 260 8,460 (347,950) (143,600) (339,490) (143,600) 323,968 224,979 (14) 4,925 42,073 260 $2,875 15,999 $548,947 $4,911 $42,073 $2,875 $16,259 86 DEBT SERVICE FUNDS 11,499 CAPITAL PROJECT FUNDS 1997 (154,400) (200,000) Financing Park (142,901) Authority Redevelopment Capital Bedroom Assessment Capital Open Revenue Bonds Agency Improvement Tax Districts Projects Space 734,570 35,430 832,834 216,341 $223,741 31,379 143,745 $246,031 $3,568,775 $30,411 $223,741 $20,400 20,619 396 $6,278 5,246 $429 $3,343 518,229 6,003 266,650 3,569,171 524,507 25,646 6,432 3,343 3,768 11,576 824,465 325,000 1,965,000 65,889 1,603,775 390,889 3,568,775 828,233 11,576 (124,239) 396 (303,726) 14,070 22,751 3,511 22,751 3,511 (16,319) (168) 87 11,499 (1,750) (154,400) (200,000) (1,750) (142,901) (200,000) (125,989) 396 (446,627) (185,930) (16,319) (168) 734,570 35,430 832,834 216,341 $223,741 31,379 143,745 $608,581 $35,826 $386,207 $30,411 $223,741 $15A60 $143,577 (Continued) 87 CITY OF SAN RAFAEL COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2009 88 CAPITAL PROJECT FUNDS Total Non-1,4ajor Equipment Radio Telephone Governmental Replacement Replacement Replacement Funds REVENUES Taxes and special assessments $7,086,387 License and permits 5,500 Use of money and property $49,080 $12,015 $2,708 293,034 Intergovernmental 3,458,280 Charges for services 1,395,510 649,380 302,000 13,299,742 Other revenue 123,193 416,273 Total Revenues 1,567,783 661,395 304,708 24,559,216 EXPENDITURES Current: General government 311,476 637,578 238,449 1,217,275 Public safety 6,153,921 Public works and parks 642,097 5,348,674 Culture and recreation 7,769,584 Capital outlay 448,828 Capital improvement/special projects 2,328,672 Debt service: Principal 141,485 60,854 2,492,339 Interest and fiscal charges 3,106 10,470 1,683,240 Total Expenditures 1,098,164 637,578 309,773 27,442,533 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 469,619 23,817 (5.065) (2,883,317) OTHER FINANCING SOURCES (USES) Transfers in 4,745,188 Transfers out (437,520) (400,000) (1,999,577) Total Other Financing Sources (Uses) (437,520) (400,000) 2,745,611 Net Change in Fund Balances 32,099 (376,183) (5,065) (137,706) Fund Balance, Beginning 2,033,104 807,659 71,150 10,423,059 Fund Balance, Ending $2,065,203 $431 A76 $66,085 $10,285,353 88 This Page Left Intentionally Blank CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCFS BUDGET AND ACTUAL, FOR THE YEAR ENDED JUNE 30, 2009 REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and property Intergovenuuental Charges for services Other revenue Total Revenues EXPENDITURES Current: General goversauent Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principal Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) FUND BALANCES, BEGINNING OF YEAR AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR SPECIAL REVENUE FUNDS 3,551,086 3,856,042 Recreation Revolving 2,480 Baypoint Lagoons Assessment District 45,000 55,454 (10,454) Variance (312,930) Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $25,000 $25,368 $368 $5,000 $761 ($4,239) 800 2,277 1,477 20,000 20,000 2,079,840 2,089,342 9,502 49,850 68,192 18,342 2,154,690 2,178,295 23,605 25,800 27,645 -1,845 3,551,086 3,856,042 (304,956) 2,480 2,480 45,000 55,454 (10,454) 3,598,566 3,911,496 (312,930) 4,896 (4,896) 4,896 (4,896) (1,443,876) (1,733,201) (289,325) 25,800 22,749 (3,051) 1,386,760 1,732,760 346,000 1,386,760 1,732,760 346,000 ($57,116) (441) $56,675 $25,800 32,880 $32,439 M 22,749 ($3,051) 86,088 $108,837 SPECIAL REVENUEFUNDS Household Hazmat Facility Childcare Street Maintenance and Cleaning Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $1,550 $1,086 ($464) $2,135 $2,135 $21,090 $18,296 ($2,794) 5,330 7,799 2,469 $417,548 389,834 (27,714) 501,805 1,170,225 668,420 1,385,780 1,375,518 (10,262) 2,936,600 2,799,342 (137,258) (1,325,015) (784,844) 540,171 9,640 9,640 2,765 2,765 2,580 8,392 5,812 1,392,660 1,394,043 1,383 3,354,148 3,194,076 (160,072) 525,475 1,196,913 671,438 1,329,330 1,337,960 6,750 7,988 (8,630) 1,831,180 1,774,164 57,016 3,514,283 3,482,129 32,154 11,890 11.890 1 19, 310 119,310 (1,238) (100,000) 207,593 (307,593) 1,336,080 1,345,948 (9,868) 3,526,173 3,482,129 44,044 1,850,490 1,981,757 (131,267) 56,580 48,095 (8,485) (172,025) (288,053) (116,028) (1,325,015) (784,844) 540,171 300,430 253,920 (46,510) 1,228,170 1,228,170 (46,510) 46,510 (214,282) (272,282) (58,000) 253,920 253,920 [,013,888 955,888 (58,000) $56,580 48,095 ($8,485) $81,895 (34,133) ($116,028) ($311,127) 171,044 $482,171 43,619 97,216 487,268 $91,714 $63,083 $658,312 (Continued) 91 REVENUES Taxes and special assessments Licenses and pemiits Fines and forfeitures Use of money and property Intergovenunental 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 Debt service Principle Interest and fiscal charges Total Expenditures EXCENU SS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 SPECIAL REVENUE FUNDS Loch Lomond Assessment District Library Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $14,800 $14,796 ($4) 20,000 19,776 (224) $26,060 $44,677 $18,617 189,690 341,690 152,000 4,000 6,147 2,147 20,000 30,545 10,545 34,800 34,572 (228) 239,750 423,059 183,309 53 (53) 137,692 114,190 23,502 56,500 279,808 (223,308) 53 (53) 194,192 393,998 (199,806) 34,800 34,519 (281) 45,558 29,061 (16,497) Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES $34,800 FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR (17,075) (17,075) (17,075) (17,075) 34,519 (281) $28,483 824,334 $858,853 92 11,986 ($16,497) 187,922 $199,908 SPECIAL REVENUE FUNDS Public Safety Stomnvater Development Services Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) 168,570 142,738 25,832 1,580,530 1,399,144 181,386 324,740 163,227 161,513 4,000 10,166 (6,166) 58,829 (58,829) 93,445 195,892 (102,447) 172,570 152,904 19,666 1,905,270 1,621,200 284,070 93,445 195,892 (102,447) (103,750) (62,549) 41,201 (1,007,920) (804,711) 203,209 34,170 (44,859) ($79,029) 90,000 90,000 1,034,816 1,034,816 90,000 90,000 1,034,816 $5,500 $5,500 ($13,750) 27,451 $41,201 $26,896 2,260 ($2,260) $1,220 $3,721 $2,501 10,950 14,665 3,715 $34,170 $41,023 $6,853 60,100 79,059 18,959 3,328 3,328 7,000 5,680 (1,320) 878,640 792,996 (85,644) 25,219 25,219 500 1,895 1,395 93,445 84,791 (8,654) 68,820 90,355 21,535 897,350 816,489 (80,861) 127,615 151,033 23,418 168,570 142,738 25,832 1,580,530 1,399,144 181,386 324,740 163,227 161,513 4,000 10,166 (6,166) 58,829 (58,829) 93,445 195,892 (102,447) 172,570 152,904 19,666 1,905,270 1,621,200 284,070 93,445 195,892 (102,447) (103,750) (62,549) 41,201 (1,007,920) (804,711) 203,209 34,170 (44,859) ($79,029) 90,000 90,000 1,034,816 1,034,816 90,000 90,000 1,034,816 1,034,816 ($13,750) 27,451 $41,201 $26,896 230,105 $203,209 $34,170 171,612 $199,063 459,144 $689,249 93 (44,859) ($79,029) 672,901 $628,042 (Continued) CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 SPECIAL REVENUE FUNDS u. Gants Parkland Dedication Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Taxes and special assessments $10,650 $700 ($9,950) Licenses and permits Fines and forfeitures Use of money and property $26,450 $17,401 ($9,049) 25,611 25,611 Intergovernmental 1,402,832 915,117 (487,715) (1) (1) Charges for services 161,374 161,374 Other revenue 134,410 63,800 (70,610) 1,000 1,000 Total Revenues 1,563,692 996,318 (567,374) 10,650 188,684 178,034 EXPENDITURES Current: General government 520 (520) Public safety 112,240 100,000 12,240 Public wanks and parks Culture and recreation 490,583 3 17 223 173,360 Capital outlay 90,124 270,257 (180,133) Capital improvement/special projects 1,261,170 662,215 598,955 Debt service: Principle Interest and fiscal charges Total Expenditures 1,954,117 1,350,215 603,902 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (390,425) (353,897) 36,528 10,650 188,684 178,034 OTHER FINANCING SOURCES (USES) Transfers in 296,601 296,601 88,962 88,962 Transfers out (25,000) (25,000) Total Other Financing Sources (Uses) 271,601 271,601 88,962 88,962 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES ($118,824) (82,296) $36,528 $99,612 277,646 $178,034 FUND BALANCES, BEGINNING OF YEAR 979,720 959,551 FUND BALANCES, END OF YEAR $897,424 $1,237,197 u. SPECIAL REVENUE FUNDS Emergency Medical Services Business Improvement Sewer Maintenance Variance Variance Variance Final Positive Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $3,310,000 $3,210,317 (.$99,683) 655 655 $560 $181 ($379) $6,970 $395 ($6,575) 16,510 13,000 (3,510) 1,900,000 2,025,709 125,709 1,924,550 1,671,525 (253,025) 22,520 16,057 (6,463) 5,210,000 5,236,681 26,681 39,590 29,238 (10,352) 1,931,520 1,671,920 (259,600) 39,580 29,252 10,328 4,508,536 4,573,223 (64,687) 1,000 1,000 1,782,866 1,528,320 254,546 4,509,536 4,573,223 (63,687) 39,580 29,252 10,328 1,782,866 1,528,320 254,546 700,464 663,458 (37,006) 10 (14) (24) 148,654 143,600 (5,054) 8,460 8,460 (347,950) (347950) (143,600) (143,600) (339,490) (339,490) (143,600) (143,600) $360,974 323,968 ($37,006) $10 224,979 $548,947 (14) ($24) $5,054 4,925 $4,911 95 $5,054) 42,073 $42,073 (Continued) REVENUES Taxes and special assessments Licenses and permits Fines and forfeitures Use of money and property Intergovemmental Charges for services Other revenue Total Revenues EXPENDITURES current: General govermnent Public safety Public works and parks Culture and recreation Capital outlay Capital improvement/special projects Debt service: Principle Interest and fiscal charges Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out CITY OF SAN RAFAEL BUDGETED NONMAJOR GOVERNMENTAL FUNDS COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2009 DEBT SERVICE FUND Mariposa Assessment District 1997 Financing Authority Revenue Bonds Variance Variance Final Positive Final Positive Budget Actual (Negative) Budget Actual (Negative) $300,440 $246,031 $1,080 $260 ($820) 2,620 20,619 ($54,409) 17,999 1,080 260 (820) 303,060 266,650 (36,410) 180,000 325,000 (145,000) 52,030 65,889 (13,859) 232,030 390,889 (158,859) 1,080 260 (820) 71,030 (124,239) (3195,269) Total Other Financing Sources (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES $1,080 FUND BALANCES, BEGINNING OF YEAR FUND BALANCES, END OF YEAR (1,750) (1,750) (1,750) (1,750) 260 ($820) $69,280 (125,989) ($195,269) 15,999 $16,259 Mei 734,570 $608,581 DEBT SERVICE FUND CAPITAL PROJECT FUND Redevelopment Agency Capital Improvement Open Space Variance Variance Variance Final Positive Final Positive Final Positive Budget Aetna] (Negative) Budget Actual (Negative) Budget Actual (Negative) $3,568,780 $3,568,775 ($5) 396 396 $6,278 $6,278 $5,470 $3,343 ($2,127) 518,229 518,229 3,568,780 3,569,171 $391 524,507 524,507 5,470 3,343 (2,127) 3,768 (3,768) $81,750 824,465 (742,715) 12,960 3,511 9,449 1,965,000 1,965,000 1,603,780 1,603,775 5 3,568,780 3,568,775 5 81,750 828,233 (746,483) 12,960 3,511 9,449 396 396 (81,750) (303,726) (221976) (7,490) (168) 7,322 11,499 (154,400) 11,499 (154,400) (142,901) (142,901) 396 $396 ($224,651) 35,430 $35,826 (446,627) ($221,976) ($7,490) 832,834 $386,207 (Continued) 97 (168) $7,322 143,745 $143,577 EXPENDITURES CITY OF SAN RAFAEL Transfers in BUDGETED NONMAJOR GOVERNMENTAL FUNDS Current: Transfers out COMBINING SCHEDULE OF REVENUES, EXPENDITURES, (437,520) (400,000) General government 307,930 AND CHANGES IN FUND BALANCES (3,546) 649,380 637,578 11,802 BUDGET AND ACTUAL 45,040 45,040 AND OTHER SOURCES AND USES OVER FOR THE YEAR ENDED JUNE 30, 2009 Public works and parks 770,040 642,097 CAPITAL PROJECT FUND 32,099 $275,199 ($367,140) (376,183) ($9,043) Culture and recreation Equipment Replacement Radio Replacement FUND BALANCES, END OF YEAR Variance $431.476 Variance Final Positive Final Capital improvement/special projects Positive Budget Actual (Negative) Budget Actual (Negative) Debt service: REVENUES Principle Taxes and special assessments 141,485 705 Licenses and permits hiterest and fiscal charges 13,890 3,106 10,784 Fines and forfeitures Total Expenditures 1,279,090 Use of money and property $42,000 $49,080 $7,080 $32,860 $12,015 ($20,845) Intergovernmental Charges for services 1,395,510 1,395,510 649,380 649,380 469,619 Other revenue 36,000 123,193 87,193 23,817 (9,043) Total Revenues 1,473,510 1,567,783 94,273 682,240 661,395 (20,845) EXPENDITURES Transfers in Current: Transfers out (437,520) (437,520) (400,000) General government 307,930 311,476 (3,546) 649,380 637,578 11,802 Public safety 45,040 45,040 AND OTHER SOURCES AND USES OVER Public works and parks 770,040 642,097 127,943 32,099 $275,199 ($367,140) (376,183) ($9,043) Culture and recreation 2,033.104 807,659 FUND BALANCES, END OF YEAR Capital outlay $431.476 (Continued) Capital improvement/special projects Debt service: Principle 142,190 141,485 705 hiterest and fiscal charges 13,890 3,106 10,784 Total Expenditures 1,279,090 1,098,164 180,926 649,380 637,578 11,802 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 194,420 469,619 275,199 32,860 23,817 (9,043) OTHER FINANCING SOURCES (USES) Transfers in Transfers out (437,520) (437,520) (400,000) (400,000) Total Other Financing Sources (Uses) (437,520) (437,520) (400,000) (400,000) EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES AND USES OVER (UNDER) EXPENDITURES ($243,100) 32,099 $275,199 ($367,140) (376,183) ($9,043) FUND BALANCES, BEGINNING OF YEAR 2,033.104 807,659 FUND BALANCES, END OF YEAR $2,065,203 $431.476 (Continued) ZEI CAPITAL PROJECT FIND Telephone Replacement Variance Final Positive Budget Actual (Negative) $300 $2,708 $2,408 302,000 302,000 302,300 304,708 2,408 230,000 238,449 (8,449) 60,850 60,854 10,470 10,470 301,320 309,773 (8,449) 980 (5,065) (6,045) $980 (5,065) ($6,045) 71,150 $66,085 go This Page Left Intentionally Blank 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. 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. Print Shop and Mail Fund — Set up to maintain sufficient reserves for printing and mail payment. All costs associated with printing and mail expenses are paid from this fund. 101 CITY OF SAN RAFAEL. INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS JUNE 30, 2009 Building Employee Liability Workers' Dental Print Shop Maintenance Benefits Insurance Compensation Insurance and Mail Total ASSETS Current Assets: Cash and investments $148,344 $928,241 $2,820,814 $7,360 $14,977 $3,919,736 Accounts receivable $1,047,179 1,047,179 Duc Gem other funds 855,578 855,578 Prepaids and deposits 1,729 3,458 5,187 Total Assets 148,344 1,047,179 929,970 3,679,850 7,360 14,977 5,827,680 LIABILITIES Current Liabilities_ Accounts payable 20,115 1,337 707 5,751 4,150 9,642 41,702 Due to other funds 855,578 855,578 Claims payable 300,000 2,100,000 2,400,000 Total Current Liabilities 20,115 856,915 300,707 2,105,751 4,150 9,642 3,297,280 Noncurrent Liabilities: Claims payable 107,361 1,209,610 1,316,971 Total Noncurrent Liabilities 107,361 1,209,610 1,316,971 Net Assets Total Liabilities 20,115 856,915 408,068 3,315,361 4,150 9,642 4,614,251 NET ASSETS: Unrestricted 128,229 190,264 521,902 364,489 3,210 5,335 1,213,429 Total Net Assets $128,229 $190,264 $521.902 $364,489 $3,210 $5,335 $1213,429 102 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED .JUNE 30, 2009 103 1 Building Employee Liability Workers' Dental Print Shop Maintenance Benefits Insurance Compensation Insurance and Mail Total OPERATING REVENUES Charges for current services $110,690 $1,339,897 $1,571,440 $2,011,247 $527,628 $186,038 $5,746,940 Other operating revenues 1,519,397 151,916 14,330 1,685,643 'Total Operating Revenues 110,690 2,859,294 1,723 356 2,011 247 541,958 186,038 7,432,583 OPERATING EXPENSES Insurance premiums and claims 2,389,901 948,104 1,130,245 541,960 156,613 5,166,823 Maintenance and repairs 419,774 81,342 32,927 534,043 General and administrative 574,192 163 71,163 645,518 Total Operating Expenses 419,774 2,964,093 948,267 1,211,587 541,960 260,703 6,346,384 Operating Income (Loss) (309,084) (104,799) 775,089 799,660 (2) (74,665) 1,086,199 NONOPERATING REVENUES (EXPENSES) Investment income 3,794 25,881 98,135 448 128,258 Total Nonoperating Revenues(Fxpenses) 3,794 25,881 98,135 448 128,258 Net income (loss) before transfers (305,290) (104,799) 800,970 897,795 446 (74,665) 1,214,457 Transfers in 88,501 80,000 168,501 Transfers out (500,000) (750,000) (915,000) (2,165,000) Change in Net Assets (216,789) (604,799) 50,970 (17,205) 446 5,335 (782,042) NET ASSETS, BEGINNING OF YEAR 345,018 795,063 470,932 381,694 2,764 1,995,471 NET ASSETS, END OF YEAR $128,229 $190,264 $521,902 $364,489 $3,210 $5,335 S11,213 429 103 1 CITY OF SAN RAFAEL INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASFI FLOWS FOR THE YEAR ENDED JUNE 30, 2009 Building Employee Liability Workers' Dental Print Shop Maintenance Benefits Insurance Compensation Insurance and Mail Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers/other Ponds $110,690 $1,543,046 $1,571,440 S2,OI 1,247 $527,628 $186,038 $3,950,089 Cash payments to suppliers for goods and services (460,668) (2,963,272) (978,411) (1,723,516) (542,000) (251,061) (6,918,928) Other operating revenues 1,519,397 151,916 14,330 1,681 643 Cash Flows from Operating Activities (349,978) 99,171 744,945 287,731 (42) (65,023) 716,804 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES TntcrFlrnd receipts(paymcnts) 88,501 (99,171) (750,000) (1,770,578) 80,000 (2,451,248) Cash Flows firm Noneapilal Financing Activities 88,501 (99,171) (750,000) (1,770,578) 80,000 (2,451248) CASH FLOWS FROM INVESTING ACTIVITIES Invesmient received 3,794 25,891 98,135 448 128,258 Cash Flows from Investing Activities 3,794 25,881 98.135 448 128,258 Net Increase (Decrease) in cash and cash equivalents (257,683) 20,826 (1,384,712) 406 14,977 (1,606,186) CASH AND CASH EQIJFVALENTS, BEGINNING OF YEAR 406,027 907,415 4,205,526 6,954 5,525,922 CASH AND CASA EQUIVALENTS, END OF YEAR $148,344 $928,241 $2,820,814 $7,360 $14,977 $3,919,736 Reconciliation ofopemfing income (loss) to net cash provided by operating activities: Operating income (loss) ($309,084) ($104,799) $775,089 $799,660 ($2) ($74,665) .$1086,199 Net change in assets and liabilities: Accounts receivable 203,149 203,149 Prepaids mid deposits 2,389 (119) 2,270 Accounts payable (40,894) 821 (2,376) 1,191 (40) 9,642 (31656) Claims payable (30,157) (513,001) (543,158) Net Cash Provided by (Used in) Operating Activities ($349,978) $99,171 $744,945 $287,731 ($42) (S65,023) $716,804 104 STATISTICAL Classic Car Parade This Page Left Intentionally Blank 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 Assets by Component 2. Changes in Net Assets 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 Estinmated 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. Bonded Debt Pledged Revenue Coverage, Redevelopment Agency Tax Allocation Bonds Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place: 1. Demographic and Economic Statistics 2. Principal Employers Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs: 1. Full -Time Equivalent City Government Employees by Function 2. Operating Indicators by Fumction/Program 3. Capital Asset Statistics by Function/Program Sources Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting goverumentwide information include information beginning in that year. 107 This Page Left Intentionally Blank $250,000 T $200,000 n 0 u s $150,000 fl n it $]00.000 9 $50,000 $0 2003 2004 2005 2006 2007 2008 2009 ®NetofRelated Debt IlRestricted ®Unrsracod CITY OF SAN RAFAEL NET ASSETS BY COMPONENT Last Seven Fiscal Years (accrual basis of accounting) 109 Aa oMeti,30, 2003 2004 2005 2006 2007 2008 2009 Gave menrn7acriviries Invested in eapital assets, net ofrelated debt $198,031,181 $202,215,793 $194,658,126 $175,806,100 $171,849,149 $176,724,820 $1]8,]94,119 Restricted 2,933,294 2,708,397 2,378,641 620,889 31,124,935 26,848,900 25,721,231 Unneandeted 16,216230 9,775,565 14.167,627 32,739318 4499.136 4,273,937 (700,985) Total governmental activities act assets $217184705 $214,69,755 $211204394 5109,166_307 $20],4]3220 $207,847657 64 365 $2037. Bnsinan-type acnvides Invested in capital assets, net ofrelated debt $8,464,417 $8,749,750 $8,615,483 $9,819,435 $9,717,501 $10,130,329 $11,243,637 Unrestricted 1078,245 1,447467 1,900,504 2,113,659 2,226,838 2,471,117 1,936,958 Total business4ypc activities net assets $9,542662 510,197,217 $10,515,987 511933094 $11944339 312601446 $13,180,595 Manoygovernment Invested in capital assets, net ofrelsted debt $206,495,598 $210,965,543 $203,273,609 $185,625,535 $181,566,650 $186,855,149 $189,987,756 Restricted 2,933,294 2,708,397 2,378,641 620,889 31,124,935 26,848,900 25,721,231 Unrestricted 17,294,475 11,223032 16,068,131 34,852,977 6,725,974 6,745,054 1,235,973 Total primary government net assets $22672336] 5224.8969]2 $221720,381 %221,099,401 $219.417,559 $220949103 5216,944,960 109 CITY OF SAN RAFAEL CHANGES IN NET ASSETS Last Seven Fiscal Years (Accrual Basis of Accounting) 110 Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 Expenses Governmental Activities: General government $5,555,915 $5,074,335 $5,895,390 $6,252,533 $8,908,433 Public safety 30,476,353 30,453,108 32,891,692 33,178,537 37,271,272 Public works and parks 27,237,899 16,043,092 16,820,453 23,401,246 20,998,749 Community development/redevelopment 3,727,315 3,921,422 4,624,345 4,194,249 4,384,408 Culture and recreation 9,055,681 7,444,339 8,450,017 8,652,445 9,729,485 Interest on longterm debt 4,082,760 2,516,659 2,129,818 1,725,559 2,183,683 Total Governmental Activities Expenses 80,135,923 65,452,955 70,811,715 77,404,569 83,476,030 Business -Type Activities: Parking ser vices 1245,316 1,539,441 2,451,941 2,761,511 3,110,254 Total Business -Type Activities Expenses 1,245,316 1,539,441 2,451,941 2,761,511 3,110,254 Total Primary Government Expenses $81,381,239 $66,992,396 $73,263,656 $80,166,080 586,586,284 Component Unit: San Rafael Sanitation District .$5,708,208 $5,297,737 $5,288,582 $6,148,915 $6,656,432 Program Revenues Governmental Activities: Charges for services: General government $1,433,37) $1,487,595 $1,831,269 $402,094 $1,512,814 Public safety 2,530,916 2,203,371 4,315,141 5,085,679 5279,785 Public works and parks 3,072,849 2,697,858 3,298,076 3,799,861 4,030,060 Community development/redevelopment 1,691,427 1,982,211 1,974,527 3,190,832 2,815,009 Culture and mcoution 3,688,418 3,960,777 3,924,360 4,368,274 4,521,004 Operating grants and contributions 6,003,700 5.252,820 3,321,135 2,745,570 3,701,901 Capital grants and courtibutions 1,744,556 573,485 606,589 3,936,474 2,786,761 'total Government Activities Program Revenues 20,165,238 18,158,117 19,271,097 23,528,784 24,647,334 Business -Type Activities: Charges For services: Parking services 1,814479 2.307,432 2,604-066 3,025,380 3,242,046 Total Business Type Activities Program Revenues t,810,479 2,307,432 2,004,066 3,025,380 3,242,046 Total Primary Government Program Revenues $21,975,717 $20,465,549 $21,875,163 $26,554,164 $27,889,380 Component Unit: Charges for services: San Rafael Sanitation District $5,566,610 $5,811,437 $6,060,993 $6,340,773 $7,857,916 Net Govemmental Activities ($59,974685) ($47,294,838) ($51,540,618) ($53,875,785) ($58,828,696) Business -Type Activities 565,163 767,991 152,125 203,869 131,792 Total Primary Government Net Expense ($59,405,522) ($46,526,R47) ($51,388,493) ($53,611,976) ($58,696,904) Component Unit Activities ($141598) $513,700 $772,411 5191,858 $1,201,484 110 2008 2009 $8,621,079 $8,075,344 40,845 347 42,708,538 22,105,367 3,247,024 23,036,676 5,811,866 5,253,683 5,759,171 10,300230 3,239,509 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 51,738,685 5,562,072 5,906,445 4,983,288 4,753,517 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 $9,366305 $10,567,647 ($62,812,332) ($61,568,931) 879,701 891,255 ($61,932,631) ($60,677,676) $1,275,669 $1,423,670 111 General Revenues and Other Changes in Net Assets Governmental Activities: Taxes: Property Sales Special assessments Paramedic Motor Wades Transientoccupanry Forecloses Business licenses Other Investment eamings Loss on disposal of assets Miscellaneous special item - Court Saes repayment Transfers CITY OF SAN RAFAEL CHANGES IN NET ASSETS (continued) Last Seven Fiscal Years (Accrual Basis of Accounting) 2003 2004 2005 2006 2007 $13,983,697 $14,895,188 $17,385,722 $20,848,887 $20,360,475 16,779,878 17,166,966 17,132,100 18,188,524 24,484,356 3,055,575 3,329,680 3,642,184 3,017,488 2,998,925 3,317,710 2,495,598 4,657,817 372,726 331,620 5,465,495 5,476,044 5,151,205 6,963,448 8,830955 1,897,339 809,242 1,112,548 1,248,409 1,669,181 (500,819) 154,919 Investment earnings 17,772 29,534 1,843,458 498,200 876,907 361,195 491,488 40,735 1,309,893 (1,133,458) 232,398 142,970 15,720 201,191 212,170 Total Government Activities 46,074,731 44,813,888 49,974,203 51,201,868 58,245,712 Business -Type Activities: 117,348 237,206 367,887 154,919 Investment earnings 17,772 29,534 28,522 44,536 91,623 Aid from other government agencies 340,642 40,735 1,309,893 Transfers (232,398) (142,970) (15,720) (201,191) (212,170) Total Business -Type Activities (214,626) (113,436) 53,537 1,153,238 (120,547) Total Primary Government $45860,105 $44,700,452 $50,027,740 $52,355,106 $58,125,165 Component Unit: San Rafael Sanitation District Property Taxes Investment earnings Misceltummus Aid from ower governmental agencies Total Component Unit Change in Net Assets Governmental Activities Business -Type Activities Total Primary Government Change in Net Assets Component Unit Activities $560,269 $591,078 $125,959 $179,479 $755,763 104,358 75,739 117,348 237,206 367,887 154,919 141,314 609,419 645,804 340,642 $808 941 $821,736 $852,726 $1,062,489 $1,464,292 ($13,895,954) ($2,480,950) ($1,566,415) ($2,673,917) ($582,984) 350,537 654,555 205,662 1,417,107 11,245 ($13,545,417) ($1,826 395) ($1,360,753) ($1,256,810) ($571,739) $664343 $1,335,436 $1,625,137 $1,254,347 $2,665,776 112 2008 2009 22,195,606 $21978,859 25,764,457 21,970,262 3,503,555 3,540 577,860 3,210,317 257,370 197,989 $1,725,509 1,678,912 7,941,149 7,405,934 9,242,241 1,561 835 1593,056 717,968 296,454 461,224 344,080 361,190 63,186,769 57,485,639 121,486 49,084 (344,080) (361,190) (222,594) (312,106) $62,964,175 $57,173.533 $803,071 5855,511 341,032 206,752 3,546 3,540 577,860 381,144 $1,725,509 $1,446,947 $374,437 ($11,083,292) 657,107 579,149 $I 031,544 ($3,504,143) $3,001,178 $2,870,617 113 This Page Left Intentionally Blank n.., -d. 34096 $50,000 330,000 330.000 S.'.0 510,000 30 CMSANBAFABL FOND BALANCES OF GOVERNMENTAL FONDS Lw9 Ten Fiscal Yeas (6 .MW Aeemnl Bu0 o3Aee0wl4ng) 30 3001 zWx zMl r M3005 3006 300] zWe zaP. S R,,md �Vnmeryed 115 MW —^ x000 201 300E 306 3004 3005 3006 3007 3008 3009 ml mtl 33,239M7 6,010,]45 33347,991 E;35],904 $1,451,016 51,441,881 $2,335]91 3905,949 s2,1%jsaW11 $1,315,4]3 U— Ovesm:d 3,239M7 6,155738 5.111.914 4139610 IN6153 5]]9480 3.363131 5.016.939 4.013613 1470.455 TdilOmuol Flwd S]d 1]010 $10.16fi.d01 s,W.910 5639],511 35,69].188 59333 561 35.69].542 95911.997 56.318.]65 S3,B96330 (e) NI a1M1erVormwmlel Fuvds Rcened 519,781,134 5)3,963,16 332,5)9,186 336,695,]18 533,411.197 $21,111.151 111,603]16 330,773,70 517,599.141 316.680,548 lhrtservN,rt in: F V,991,OH 13,841}41 13,195,HL+ 6,317.S92 5,5]4.098 5,638.10] 7,169,153 9,107,477 7,413,08 $691,239 D,b,S-neweFmds we 35,410 (J.I.,x93) ap.] Fnn i.]3d,986 3,315,764 3]W.590 F,p NjT—,F Erymdehk tmslFwW W]]99 961913 411.199 TOW a0 o0v8osmmenml Nda 44].3±0.006 E9&386503 536.197.226 63.00 290 338.043.215 53321]]49 U8,772 477 333.616223 $28.364.194 52].453.054 (e)'Ibeo ,1 ..1 fiord bd —f, ft Q—t Fmd ando ,eowm .1(w in Uw wMun,.eo Dj—d. and Pm,n 115 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, 2000 2001 2002 2003 Revenues 5,725,859 5,737,343 6,188,702 4,740,703 Taxes and special assessments $36,267,264 $39,753,729 $38,530,602 $39,284,643 Licenses and permits 846,005 844,793 690,D77 735,109 Fines and forfeitures 1.466,685 1;337,617 773,239 770,632 Use of money and property 2,616,579 3,989,893 2,465,306 1,897,339 Intergovernmental 9,061,449 9,223,148 8,590,790 9,405,422 Charges for services 10,590,021 12,019,807 9,704,113 10,102,392 Other revenue 7,014,228 4,684,447 1,148,767 3,568,297 Total Revenues 67,862,231 71,853,434 61,902,894 65,763,834 Expenditures Current: General government 5,725,859 5,737,343 6,188,702 4,740,703 Public safety 23,756,604 24,437,700 25,898,206 28,041,079 Public works and parks 7,607,760 8,669,755 9,329,346 9,491,552 Community development/ redevelopment 2,914,886 3,454,234 3,610,108 3,253,947 Culture and recreation 6,217,506 6,361,725 7,077,117 7,176,097 Capital outlay 486,424 2,923,669 307,483 125,884 Capital improvement / special projects 19,479,314 10,935,705 15,760,086 11,058,796 Debt service: Capitalized lease obligation 197,132 Principal 1,875,000 1,786,000 1,849,000 24,290,000 Interest and fiscal charges 2,700,668 2,746,333 2,641,111 4,046,170 Total Expenditures 70,764,021 67,072,464 72,661,159 92,421,360 Excess (deficiency) of revenues over (under) expenditures (2,901,790) 4,780,970 (10,758,265) (26,657,526) Other Financing Sources (Uses) Proceeds from issuance of debt 32,625,000 Contribution from Sanitation District 744,556 Capital lease for equipment acquisition Transfers in 7,846,585 7,070,234 5,750,044 42,503,976 Transfers (out) (8,333,854) (7,830,234) (6,432,801) (42,97 1 ,248) Total other financing sources (uses) (487,269) (760,000) (682,757) 32,902,284 Net Change in fund balances ($3,389,059) $4,020,970 ($11,441,022) $6,244,758 Debt service as a percentage of noncapital expenditures (a) (a) (a) (a) NOTE: (a) The City implemented GASB Statement 34 in fiscal year 2003. Therefore this calculation is included only for fiscal years subsequent to that date. 116 Fiscal Year Ended Jane 30,. 2004 2005 2006 2007 2008 2009 $40,975826 $42,901,520 $44,901,544 $52,472,246 $56,129,195 $51,019,143 928,303 929,993 1,175,030 1,157,981 1,489,748 1,472,913 791,975 1,088,459 622,494 515,528 797,081 660,338 1,024,199 1,244,406 1,316,558 1,744,688 1,584,508 847,120 8,049,002 10,522,095 11,705,917 12,760,496 12,081,968 17,518,670 10,423,754 11,407,622 13,104,572 13,504,621 15,607,460 16,384,265 735,976 1,135,485 1,475,078 1,468,743 815,704 759,320 62 829,035 69,229,580 74,301,193 83,624,303 88,505,664 88,661,769 5,014,452 5,539,191 6,200,338 8,188,999 8,288,170 8,059,526 28,863,197 31,784,872 33,321,967 36,264,321 40,299,862 41,209,972 9,257,991 9,294,419 10,622,585 11,972,537 13,641,665 12,926,646 3,875,542 3,763,614 4,184,084 4,319,042 5,786,661 5,572,079 7,145,264 7,538,607 8,409,833 9,005,370 9,820,365 10,233,361 31,703 1,027,267 60,411 6,716,630 6,243,517 5,048,044 9,825,103 9,253,661 13,200,872 1,189,613 5,124,091 6,606,857 10,775 141,197 130,315 2,360,000 2,585,000 7,525,000 2,287,255 2,504,370 2,714,358 2,45fi 357 2,140,673 1,878,265 1,829,091 1,776,354 1,683,240 68,840,384 73,068,501 80,533,670 81,772,858 93,485,055 94,054,083 (6,011,349) (3,838,921) (6,232,477) 1,851,445 (4,979,391) (5,392,314) 318,000 5,222,868 8,636,544 6,925,107 6,812,260 6,353,216 -8,972,495 (4,979,898) (7,740,324) (6,672,916) (6,958,046) (6,329,136) (6,614,806) 242,970 896,220 252,191 172,214 24,080 2,357,689 ($5,768;379) ($2,942,701) ($5,980,286) $2,023,659 (.'64,955,311) ($3,034,625) 8.9% 8.2% 7.0% 5.9% 5.5% 5.1% 117 $12,000 $10,000 $8,000 8 0 $6,000 $4,000 $2,000 $0 CITY OF SAN RAFAEL ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST EIGHT FISCAL YEARS 2002 2003 2004 2005 2006 2007 2008 2009 —a •unsectned Property — 'Secured Property Real Property Total Real Total Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market( Tax Rate (b) 2002 $4,516,490,542 $1,410,153,485 $126,299,238 $78,693,794 $6,131,637,059 $6,131,637,059 $6,131,637,059 0.29149% 2003 4,827,556,658 1,480,344,464 128,546,036 74,236,658 6,510,683,816 $445,297,553 6,955,981,369 6,955,981,369 0.32195% 2004 5,160,984,286 1,514,445,365 130,514,420 91,737,340 6,897,681,411 431,291,562 7,328,972,973 7,328,972,973 0.32010% 2005 5,510,630,728 1,546,579,852 146,822,250 93,875,824 7,297,908,654 406,163,129 7,704,071,783 7,704,071,783 0.30834% 2006 6,018,318,932 1,618,091,589 177,974,231 91,321,393 7,905,706,145 407,016,133 8,312,722,278 8,312,722,278 0.30792% 2007 6,544,841,348 1,745,483,576 197,040,979 122,977,950 8,610,343,853 376,890,454 8,987,234,307 8,987,234,307 0.30328% 2008 7,024,610,641 1,824,656,505 214,341,528 105,409,028 9,169,017,702 362,727,209 9,531,744,911 9,531,744,911 0.30273% 2009 7,357,121,277 1,941,927,620 234,669,841 129,177,651 9,662,896,389 374,976,613 10,037,873,002 10,037,873,002 030752% Source: 14dL Corers & Cove, Marin Cmmty Assessor 2001/02-2008/09 Combined Tae Roas (a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over -rides. These values are considered to be full market values. (b) California cities do not set their own direct tax rate. The state constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. 118 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 2000 0.154 0.295 0.5413 0.0461 1.0360 2001 0.154 0.295 0.5683 0.0461 1.0630 2002 0.154 0.295 0.5873 0.0461 1.0820 2003 0.154 0.295 0.6163 0.0461 1.1110 2004 0.154 0.295 0.6483 0.0461 1.1430 2005 0.154 0.295 0.6593 0.0461 1.1540 2006 0.154 0.295 0.6828 0.0461 1.1775 2007 0.154 0.295 0.7160 0.0461 1.2107 2008 0.154 0.295 0.7225 0.0461 1.2172 2009 0.154 0.295 0.7192 0.0461 1.2139 Notes: (1) Like other cities, San Rafael inoludes several property tax rate areas with different rates. A mean average is indicated. Source: Marin County Assessors Office 1999/00 - 2008/09 Tax Rate Tables 119 CITY OF SAN RAFAEL PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO Source: HdL Coren & Cone, Marin County Assessor 1999-2000 & 2008-2009 Net Taxable Value History 120 2008-09 1999-2000 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Value Value Value Northgate Mall Associates $97,270,425 1.0% $89,597,441 1.7% SR Corporation Center Phase 1 & 2 89,644,871 0.9% 0.0% Hines San Rafael LLC 80,929,782 0.8% 0.0% Sutter Health 41,564,999 0.4% 0.0% Regency Center R Associates LP 40,911,379 0.4% 34,230,569 0.7% Marin Sanitary Service 38,347,115 0.4% 0.0% 4040 Civic Center 36,205,533 0.4% 0.0% Bay Apartment Communities Inc 34,497,679 0.3% 0.0% Northbay Properties II 33,950,419 0.3% 0.0% Rafael Town Center Investors LLC 33,948,747 0.3% 0.0% AMG Realty Partners LP 63,750,047 1.2% Lucas Digital Ltd. LLC 40,982,654 0.8% Autodesk Inc 33,142,893 0.6% MHV Joint Venture 25,443,053 0.5% Home Depot USA Inc. LfL etal 21,816,912 0.4% F E Trotter Inc. 21,735,510 0.4% Fair Isaac & Co. Inc 19,637,270 0.4% WHLW Real Estate Ltd. Partners 19,037,112 0.4% Subtotal $527,270,949 5.3% $369,373,461 7.2% Total Net Assessed Valuation: Fiscal Year 2008-2009 $10,037,873,007 Fiscal Year 1999-2000 $5,163,095,206 Source: HdL Coren & Cone, Marin County Assessor 1999-2000 & 2008-2009 Net Taxable Value History 120 y 24 c 23 22 M 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 CITY OF SAN RAFAEL PROPERTY TAX LEVIES AND COLLECTIONS (q LAST TEN FISCAL YEARS 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Delinquent taxes Fiscal as a Percent of Year Rate Levies Allocations Collections ApporfionmentsDelinquencies Allocations 2000 1.00 (2) 10,954,198 (2) 10,954,198 (2) 0.0% 2001 1.00 (2) 11,594,551 (2) 11,594,551 (2) 0.0% 2002 1.00 (2) 12,293,952 (2) 12,293,952 (2) 0.0% 2003 1.00 (2) 13,983,697 (2) 13,983,697 (2) 0.0% 2004 1.00 (2) 14,895,188 (2) 14,895,188 (2) 0.0% 2005 1.00 (2) 17,385,722 (2) 17,385,722 (2) 0.0% 2006 1.00 (2) 20,848,887 (2) 20,848,887 (2) 0.0% 2007 1.00 (2) 20,360,475 (2) 20,360,475 (2) 0.0% 2008 1.00 (2) 22,195,606 (2) 22,195,606 (2) 0.0% 2009 1.00 (2) 21,978,859 (2) 21,978,859 (2) 0.0% Notes: (t) Excludes State Reimbursed Exemptions and deductions for County property tax administration. (2) Information not applicable. All general purpose property taxes are levied by the county and allocated to other governmental entities. Source: San Rafael Finance Department Revenue Reports 121 $60 a 0 $50 $40 $30 $20 $10 $0 CITY OF SAN RAFAEL RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Note : Debt amounts exclude any premiums, discounts, or other amortization amounts. Sources: City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data.. 122 Governmental Activities RDA Tax Financing Court Fine Capitalized Fiscal Allocation Authority Note Promissory Lease Year Bonds Revenue Bonds Payable Note Obligations Total 2000 $47,099,004 $4,315,000 $169,000 $51,583,004 2001 45,899,004 3,885,000 169,000 49,953,004 2002 43,479,004 3,335,000 169,000 46,983,004 2003 44,914,000 2,820,000 169,000 47,903,000 2004 43,239,004 2,340,000 169,000 45,748,004 2005 41,514,004 1,685,000 169,000 43,368,004 2006 40,849,107 1,155,000 169,000 $412,441 42,585,548 2007 39,217,501 950,000 169,000 $1,029,717 596,927 41,963,145 2008 37,537,161 780,000 169,000 816,119 401,155 39,703,435 2009 35,793,692 455,000 169,000 594,100 198,816 37,210,608 Business -Type Activities Parking Total Percentage Fiscal Services Primary of Personal Per Year Bonds Total Government Income (a) Capita (a) 2000 $51,583,004 0.31% $920 2001 49,953,004 0.30% 883.59 2002 46,983,004 0.29% 828.76 2003 $7,605,000 $7,605,000 55,508,000 0.34% 973.72 2004 7,605,000 7,605,000 53,353,004 0.29% 933.04 2005 7,605,000 7,605,000 50,973,004 0.26% 890.76 2006 7,455,000 7,455,000 50,040,548 0.24% 872.56 2007 7,300,000 7,300,000 49,263,145 0.22% 848.68 2008 7,140,000 7,140,000 46,843,435 N/A 804.39 2009 6,975,000 6,975,000 44,185,608 N/A 757.08 Note : Debt amounts exclude any premiums, discounts, or other amortization amounts. Sources: City of San Rafael State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) See Schedule of Demographic and Economic Statistics for personal income and population data.. 122 CITY OF SAN RAFAEL COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2009 2008-09 Assessed Valuation: $10,037,813,007 15.135% $6,522,923 Redevelopment Incremental Valuation: 2,191,093,123 15.135% 17,065,469 Adjusted Assessed Valuation: $7,846,719,884 15.135% 36,040 Marin Municipal Water District General Fund Obligations Total Debt 19.463% City's Share of OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2009 °/ Applicable (1) Debt 6/30/09 Marin Community College District $132,180,000 15.160% $20,038,488 San Rafael High School District 56,670,315 73.930% 41,896,364 Tamalpais Union High School District 182,405,000 0.091% 165,989 Dixie School District 8,485,810 66.806% 5,669,030 Ross School District 18,724,941 1.857% 347,722 Ross Valley School District 15,039,213 0,008% 1,203 San Rafael School District 66,688,301 78.095% 52,080,229 City of San Rafael 1915 Act Bonds 445,000 100.000% 445,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $130,644,025 DIRECT AND OVERLAPPING GENERAL FUND DEBT Marin County Certificates of Participation $43,098,270 15.135% $6,522,923 Marin County Pension Obligations 112,755,000 15.135% 17,065,469 Marin County Transit District General Fund Obligations 238,124 15.135% 36,040 Marin Municipal Water District General Fund Obligations 193,728 19.463% 37,705 Marin Community College District Certification of Participation 2,940,834 15.160% 445,830 Dixie School District Certificates of Participation 555,000 66.806% 370,773 San Rafael School District Certificates of Participation 4,280,000 78.095% 3,342,466 City of San Rafael General Fund Obligations 10,387,438 100.000% 10,387,438 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $38,208,645 COMBINED TOTAL DEBT $158,852,670 (2) (1) Percentage of overlapping agency's assessed valuation located within boundaries of the City. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease obligations. Ratios to 2008-09 Assessed Valuation Total Overlapping Tax and Assessment Debt 1.20% Ratios to Adjusted Assessed Valuation: Combined Direct Debt 0.13% Combined Total Debt 2.03% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/09: $0 Source: California Municipal Statistics, Inc. 123 CITY OF SAN RAFAEL COMPUTATION OF LEGAL BONDED DEBT MARGIN June 30, 2009 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: California Municipal Statistics. Inc. and City of San Rafael's Management Service Department 124 ASSESSED VALUATION: $10,037,873,002 BONDED DEBT LIMIT (3,75% OF ASSESSED VALUE) (a) 376,420.238 LESS AMOUNT OF DEBT SUBJECT TO LIMIT: 35,793,692 LEGAL BONDED DEBT MARGIN $412,213,930 Total net debt Total Net Debt Legal applicable to the limit Fiscal Debt Applicable to Debt as a percentage Year Limit Limit Margin of debt limit 2002 $229,936390 $ 43,479,004 $ 186,457,386 23.32% 2003 260,849,301 44,914,000 215,935,301 20.80% 2004 274,836,486 43,239,004 231,597,482 18.67% 2005 288,902,692 41,514,004 247,388,688 16.78% 2006 311,727,085 40,849,107 270,877,978 15.08% 2007 337,021,287 39,217,501 297,803,786 13.17% 2008 357,440,434 37,537,161 319,903,273 11.73% 2009 376,420,238 35,793,692 340,626,546 10.51% 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: California Municipal Statistics. Inc. and City of San Rafael's Management Service Department 124 4.00 3.00 2.00 1.00 0.00 CITY OF SAN RAFAEL REVENUE BOND COVERAGE PARKING FACILITY LAST SIX FISCAL YEARS 2004 2005 2006 2007 2008 2009 —O— Coverage Notes: On March 26, 2003, the City Financing Authority issued lease revenue bonds for the design and construction of a new par] (1) Includes all Parking Facility Operating Revenues and Non-operating Interest Revenue (2) Includes all Parking Facility Operating Expenses less Depreciation and Interest Source: City of San Rafael Annual Financial Statements 125 Debt Service Requirements Net Revenue Fiscal Gross Operating Available for Year Revenue (1) Expenses (2) Debt Service Principal Interest Total Coverage 2004 $ 2,336,966 $ 1,498,740 $ 838,226 - - - N/A 2005 2,632,588 1,964,713 667,875 - $ 431,958 $ 431,958 1.55 2006 3,069,915 2,155,435 914,480 $ 150,000 344,441 494,441 1.85 2007 3,331,754 2,344,285 987,469 155,000 339,904 494,904 2.00 2008 4,089,112 2,692,086 1,397,026 160,000 335,216 495,216 2.82 2009 4,503,574 2,924,365 1,579,209 165,000 330,379 495,379 3.19 Notes: On March 26, 2003, the City Financing Authority issued lease revenue bonds for the design and construction of a new par] (1) Includes all Parking Facility Operating Revenues and Non-operating Interest Revenue (2) Includes all Parking Facility Operating Expenses less Depreciation and Interest Source: City of San Rafael Annual Financial Statements 125 CITY OF SAN RAFAEL REDEVELOPMENT PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS 1999 RDA Tax Allocation Bands 2002 RDA Tax Allocation Bonds Funding Source; RDA lax increment revenues Funding Source; RDA tax increment revenues Fiscal Available Debt Service Reyuirements Fiscal Available Debt Service Requirements Year Revenue Principal Interest Total Coverage Year Revenue Principal Interest Total Coverage 2000 $1,491,200 $ 560,000 $ 937.200 $ 1,497,200 1 00 2000 N/A N/A N/A N/A N/A 2001 1,497,529 500,000 997,529 1,497,529 1.00 2001 WA N/A NIA N/A N/A 2002 1,499,475 525,D00 974,445 1,499,445 1,00 2002 WA N/A N/A N/A WA 2003 1,499,600 550,000 949,600 1,499,600 1.00 2003 $2,069,768 $1,475,000 $ 594,768 $2069,768 1.00 2004 1,497,881 575,000 922,881 1,497,881 1.00 2004 2,069,425 1,100,000 969,425 2,069,425 1.00 2005 1,499,856 605,000 394,856 1,499,856 100 2005 2,067,225 1,120,OD0 947,225 2,067,225 1,00 2006 1,495,525 630,000 865,525 1,495,525 1.00 2006 2,069,575 1,145,000 924,575 2,069,575 1.00 2007 1499.769 665,000 834,769 1.499.769 1,00 2007 2066,475 1,165,000 901,475 2,066,475 1.00 2008 1,497,469 695,000 802,469 1,497,469 1.00 2008 2,070,381 1,195,000 876,381 2,071 381 1.00 2009 1498,625 730,000 768,62S 1498,625 1.00 2009 2,070,150 1235.000 835,150 2070,150 1.00 126 CITY OF SAN RAFAEL DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS a $100 c $90 $80 r $70 ~ $60 $50 $40 $30 -+- Per Capita Personal Income (2) Personal Fiscal City Income (2) Year Population (1) in millions $25,000 $20,000 $15,000 $10,000 $5,000 $0 2000 2001 2002 2W3 2004 2005 2006 2007 2008 2009 ®Personal Income (2) (in millions) ■ Unemployment Rate (%) Per Capita Average Marin City Personal Unemployment County Population Income (2) Rate (3) Population % of County 2000 56,063 $16,766 $67,714 2.80% 247,289 22.67% 2001 56,534 16,900 68,135 3.50% 249,231 22.68% 2002 56,691 16,159 65,558 4.90% 250,078 22.67% 2003 57,006 16,341 66,620 4.90% 249,808 22.82% 2004 57,182 18,115 74,230 4.40% 251,330 22.75% 2005 57,224 19,485 79,688 3.90% 252,485 22.66% 2006 57,349 21,266 86,719 3.50% 253,341 22.64% 2007 58,047 22,590 91,483 3.70% 255,982 22.68% 2008 58,235 n/a n/a 4.60% 257,406 22.62% 2009 58,363 n/a n/a 7.60% 258,618 22.57% Source (1) State of California, Department of Finance - Demographic Research Unit. The data represents the City's population as of January 1, of each year. (2) Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce. Data is Marin county -wide rate. (3) Employment Development Department, Labor Market Information Division. Data represents Marin county -wide rate only and is not seasonally adjusted. 127 CITY OF SAN RAFAEL PRINCIPAL EMPLOYERS FISCAL YEAR 2008-2009 Total employment in the City of San Rafael as of October 2009 was 27,800 Source: State of California, Employment Development Department, Labor Market Information Divis Source: http://www.cajobmateb.com _ Note: Data not available for ranking or total employment, or for nine years prior. 128 - Percentage of Number of Total Employment Employer Employees in San Rafael Kaiser Permanente 2,267 8.15% Autodesk, Inc. 1,200 4.32% Golden Gate Bridge Highway & Transportation Disi 828 2.98% City of San Rafael 633 228% Dominican University of California 508 1.83% Fair Issac Corp. 350 1.26% YMCA 348 1.25% San Rafael City Elementary School District 335 1.21% San Rafael City High School District 250 0.90% Ghilotti Bros. Inc. 240 0.86% Totals 6,959 25.03% Total employment in the City of San Rafael as of October 2009 was 27,800 Source: State of California, Employment Development Department, Labor Market Information Divis Source: http://www.cajobmateb.com _ Note: Data not available for ranking or total employment, or for nine years prior. 128 CITY OF SAN RAFAEL FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 450.00 400.00 350.00 300.00 W 250.00 w 200.00 150.00 100.00 50.00 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 11 General Government M Public Safety IM Public Works and Parks El Community Development/Redevelopment Culture and Recreation Source: City of San Rafael 129 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Function General Government 36.56 36.56 39.20 41.73 49.27 47.02 53.71 59.38 59.88 58.88 Public Safety 202.00 202.00 203.03 203.03 201.63 193.13 188.86 189.00 186.00 183.00 Public Works and Parks 75.70 75.70 80.70 79.95 76.70 72.80 74.80 76.80 78.80 78.80 Community Development/Redevelopment 26.28 26.28 30.28 29.75 28.75 26.75 26.43 31.00 34.50 34.50 Culture and Recreation 81.99 81.99 83.76 83.76 83.26 79.73 77.49 80.22 85.90 85.90 Total 422.53 422.53 436.97 438.22 439.61 419.43 421.29 436.40 445.08 441.08 Source: City of San Rafael 129 CITY OF SAN RAFAEL OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program Public safety: Fire: Inspection Permit issued Police: Police calls for service Law violations: Part I crimes Physical arrests (adult and juvenile) Traffic violations Parking violations Public works Street resurfacing (miles) Culture and recreation: Recreation class participants Library: Total items borrowed (thousands) Items in collection (thousands) Wastewater Residential connections Commercial connections Other connections Average daily sewage treatment (millions of gallons) Note: N/A denotes information not available. 2000 2001 2002 2003 2004 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a a/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 15,468 26,308 30,946 n/a 7.16 n/a 1.20 5.70 6,000 6,000 6,000 7,000 7,000 121.96 122.71 121.85 128.12 118.74 315.20 318.72 336.57 338.60 332.33 6.976 6.976 6.976 6.976 6.976 130 2005 2006 2007 2008 2009 n/a n/a 143 217 196 n/a n/a 43,480 43,488 42,227 n/a n/a 2,557 2,314 2,352 n/a n/a 3,809 4,182 4,487 n/a n/a 5,197 9,241 5,777 39,421 33,610 36,228 42,481 44,913 6.80 1.08 n/a 4.95 2.77 7,000 8,000 8,000 8,000 8,000 121.81 123.12 124.46 299.30 333.15 359.41 124,404 6.976 6.976 6.976 6.976 6.976 131 132 CITY OF SAN RAFAEL CAPITAL ASSET STATISTICS BY FUNCTIONIPROGRAM LAST TEN FISCAL YEARS 2000 2001 2002 2003 2004 Function/Program Public safety: Fire stations 6 6 6 6 6 Police stations 1 1 1 1 1 Police Fleet Public works Miles of sheets 165 165 171 171 172 Streetlights 4,167 4,167 4,200 4,200 4,333 Parking District lights Traffic Signals 86 86 85 85 85 Culture and recreation: Community services: City parks 19 19 19 19 19 City parks acreage 41 41 41 41 41 Playgrounds 13 13 13 13 13 City hails 15 15 15 15 15 Community gardens 2 2 2 2 2. Connnunity centers 4 4 4 4 4 Senior centers 0 0 0 0 0 Sports centers 0 0 0 0 0 Performing arts centers 0 0 0 0 0 Swimming pools 1 1 I 1 1 Tennis courts 10 t0 10 10 10 Basketball Courts 5 5 5 5 5 Baseball/softball diamonds 5 5 5 5 5 Soccer/football fields 0 2 2 2 2 Library: City Libraries 1 1 1 1 1 Wastewater Miles of sanitary sewers 171.32 175.82 176.90 178.40 179.15 42.30 49.30 51.40 53.50 57.60 Number of treatment plants 1 1 1 1 1 (1) Source: City of San Rafael 132 2005 2006 2007 2008 2009 6 6 6 6 6 1 1 1 t 1 172 173 173 173 173 4,333 4,435 4,435 4,435 4,435 85 89 89 89 89 19 19 19 20 20 41 41 41 42 42 13 11 13 14 14 15 15 20 20 20 2 1 1 1 1 4 4 4 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 10 10 10 10 10 5 5 5 5 5 5 5 5 5 5 2 2 2 2 2 1 1 1 1 2 179.15 179.15 179.15 179.15 179.15 57.60 57.60 57.60 57.60 57.60 1 1 1 1 1 133 This Page Left Intentionally Blank MAZE & ASSOCIATES ACCOUNTANCY CORPORATION 3478 Buskirk Ave. - Suite 215 Pleasant Hill, California 94523 (925) 930-0902 • FAX (925) 930-0135 maze@mazeassociates.com www.mazeassociates.com AGREED UPON PROCEDURES REPORT ON COMPLIANCE WITH THE PROPOSITION 111 2009-2010 APPROPRIATIONS LIMIT INCREMENT Honorable Mayor and Members of the City Council City of San Rafael, California We have applied the procedures below to the Appropriations Limitation Worksheet for the City of San Rafael for the year ended June 30, 2010. These procedures, which were suggested by the League of California Cities and presented in their Article XIHB Appropriations Limitation Uniform Guidelines were performed solely to assist you in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The sufficiency of the procedures is solely the responsibility of the specified users of this report. 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. This report is intended for the information of management and the City Council; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record. The procedures you requested us to perform and our findings were as follows: A. We obtained the Appropriations Limitation Worksheet and determined that the 2009-2010 Appropriation Limit of $66,617,708 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 2009-2010 Current Appropriations Limit by multiplying the 2008-2009 Appropriations Limit by the annual adjustment factors. C. For the Appropriations Limitation Worksheet, we agreed the Per Capita Income, County and City Population Factors to California State Department of Finance Worksheets. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the Worksheet. Accordingly, we do not express such an opinion. Had we performed additional procedures or had we made an audit of the Appropriations Limitation Worksheet and the other completed worksheets described above, matters might have come to our attention, which would have been reported to you. *�4 44v CM.I/LP/3 October 30, 2009 J A Professional Corporation CITY OF SAN RAFAEL MEMORANDUM ON INTERNAL CONTROL AND REQUIRED COMMUNICATIONS FOR THE YEAR ENDED JUNE 30, 2009 This Page Left Intentionally Blank CrFY OF SAN RAFAEL MEMORANDUM ON INTERNAL CONTROL AND REQUIRED COMMUNICATIONS For the Year Ended dune 30, 2009 Table of Contents Page Memorandum on Internal Control....................................................................................................1 Scheduleof Other Matters........................................................................................................3 Schedule of Prior Year Recommendations..............................................................................5 RequiredCommunications.................................................................................................................7 Financial Statement Audit Assurance.....................................................................................7 Other Information Included with the Audited Financial Statements....................................7 AccountingPolicies.................................................................................................................7 Unusual Transactions, Controversial or Emerging Areas .....................................................8 Estimates................................................................................................................................... 8 Disagreements with Management...........................................................................................8 RetentionIssues........................................................................................................................9 Difficulties................................................................................................................................9 AuditAdjustments....................................................................................................................9 Uncorrected Misstatements.....................................................................................................9 This Page Left Intentionally Blank This Page Left Intentionally Blank CITY OF SAN RAFAEL MEMORANDUM ON INTERNAL CONTROL SCHEDULE OF OTHER MATTERS 2009-01- Budgets and Cash Balances Without a doubt the City's General Fund budget and liquidity is a top priority. As of June 30, 2009, General Fund available fund balances amounted to $1.7 million. This amount represents eleven days of general fund expenditures, a very low level of reserves. Actual expenditures for fiscal 2008-2009 totaled $56.5 million and exceeded revenues by $2.1 million. During this year's audit, we reviewed the City's financial condition and satisfied ourselves that the City had sufficient resources available that it could continue as a going concern through June 30, 2010. Continued deficit spending reduces the likelihood that the City will be able to continue as a going concern, meaning the City is able to pay its bills on time. With our next audit we will again be required to review the City's financial condition and determine the likelihood of the City's status as a going concern. The City should continue to work toward a balanced budget, meaning current year revenues are sufficient to pay for current year expenditures. Balancing the budget must be top priority. Secondarily, continued close management and comparison of actual activity against the budget will be needed to ensure further costs reductions are made as needed. Lastly, staff must determine a minimum cash balance needed for the "dry spell" and to finance cash flows for the overall City. The City must ensure this minimum cash balance requirement is not depleted. Management Response: The City's financial condition is a top priority to Management. We have held a study session, a workshop, and two community outreach town hall meetings for budgetary information purposes from November 2009 through January 2010. The City Council took action on January 4 and on January 26 to amend the fiscal year 2009-2010 budget. The actions, totaling $2.8 million, included staffing reductions through layoffs and the elimination of vacant positions, reductions of operating expenditures including contractual services, travel and conferences and temporary seasonal help. We are continually monitoring the City's revenue and expenditures and prepare cash flow worksheets to monitor the City's cash needs. New Governmental Accounting Standards Board Pronouncements: The following comments represent new pronouncements taking affect in the next few years. We cite them here to keep you abreast of developments: 2009-02 — Statement No. 53 — Accounting and Financial Reporting for Derivative Instruments (Effective for fiscal 2009-2010) This Statement is intended to improve how state and local governments report information about derivative instruments in their financial statements. Specifically, GASB 53 requires governments to measure most derivative instruments at fair value in their financial statements that are prepared using the economic resources measurement focus and the accrual basis of accounting (proprietary and entity -wide financial statements). Governments enter into derivative instruments as investments; as hedges of identified financial risks associated with assets or liabilities, or expected transactions (that is, hedgeable items); or to lower the costs of borrowings. Governments often enter into derivative instruments with the intention of effectively fixing cash flows or synthetically fixing prices. Common types of derivative instruments used by governments include interest rate and commodity swaps, interest rate locks, options (caps, floors, and collars), swaptions, forward contracts, and futures contracts. In addition, this standard addresses hedge accounting requirements. CITY OF SAN RAFAEL MEMORANDUM ON INTERNAL CONTROL SCHEDULE OF OTHER MATTERS 2009-03 Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions (Effective for fiscal 2010-2011) This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The initial distinction that is made in reporting fund balance information is identifying amounts that are considered nonspendable, such as fund balance associated with inventories. This Statement also provides for additional classification as restricted, committed, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent. The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. Unassigned fund balance is the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications. In other funds, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. Governments are required to disclose information about the processes through which constraints are imposed on amounts in the committed and assigned classifications. Disclosure of the policies in the notes to the financial statements is required. This Statement also provides guidance for classifying stabilization amounts on the face of the balance sheet and requires disclosure of certain information about stabilization arrangements in the notes to the financial statements. The definitions of the general fund, special revenue fund type, capital projects fund type, debt service fund type, and permanent farad type are clarified by the provisions in this Statement. Interpretations of certain terms within the definition of the special revenue fund type have been provided and, for some governments, those interpretations may affect the activities they choose to report in those funds. The capital projects fund type definition also was clarified for better alignment with the needs of preparers and users. Definitions of other governmental fund types also have been modified for clarity and consistency. CITY OF SAN RAFAEL MEMORANDUM ON INTERNAL SCHEDULE OF PRIOR YEAR RECOMMENDATIONS Prior year recommendations that require the reporting of the current year status are as follows: 2007-01: Parkins Citation Revenue Processing Controls Current Status: The City's parking citation contractor has provided a SAS 70 audit for the last two years. 2007-05: Information Systems Review Current Status: The City's Information Technology (IT) department has a Disaster Recovery Plan, a draft Public Safety IT Contingency Plan, and a two-year strategic plan. The server room has a smoke detector. Any other changes to the server room will have to be part of an overall facility needs assessment. Due to the diversity of the different City department's, each new employee is trained by the department. Department Director's or their designee will inform the IT department of the computer needs. W This Page Left Intentionally Blank CITY OF SAN RAFAEL REQUIRED COMMUNICATIONS This Statement established uniform financial reporting standards for employers providing postemployment benefits other than pensions (OPEB). There was no cumulative effect on prior year financial statements. However, Note 11 to the financial statements was modified to include required disclosures. GASB Statement No. 49 -- Accounting and Financial Reporting for Pollution Remediation Obligations This Statement establishes financial reporting of obligations for pollution remediation. There was no material effect on the financial statements from the implementation of this Statement. Unusual Transactions, Controversial or Emerging Areas: No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. There have been no initial selections of accounting policies and no changes in significant accounting policies or their application during 2009. Estimates: Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are depreciation, compensated absences and fair values of investments. Management's estimate of 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 1I. 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. Accrued compensated absences are estimated using accumulated unpaid leave hours and hourly pay rates in effect at the end of the fiscal year as discussed in Note 1J. We evaluated the key factors and assumptions used to develop the accrued compensated absences and determined that it is reasonable in relation to the basic financial statements taken as a while. Estimated Fair Value of Investments: As of June 30, 2009, the City, held approximately $44 million of cash and investments, as measured by fair value. Fair value is essentially market pricing in effect as of June 30, 2009. These fair values are not required to be adjusted for changes in general market conditions occurring subsequent to June 30, 2009. Disagreements with Management: For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. CITY OF SAN RAFAEL REQUIRED COMMUNICATIONS Retention Issues: We did not discuss any major issues with management regarding the application of accounting principles and auditing standards that resulted in a condition to our retention as the City's auditors. Difficulties: We encountered no serious difficulties in dealing with management relating to the performance of the audit. Audit Adjustments: For purposes of this communication, professional standards define an audit adjustment, whether or not recorded by the City, as a proposed correction of the financial statements that, in our judgment, may not have been detected except through the audit procedures performed. These adjustments may include those proposed by us but not recorded by the City that could potentially cause future financial statements to be materially misstated, even though we have concluded that the adjustments are not material to the current financial statements. We did not propose any audit adjustments that, in our judgment, could have a significant effect, either individually or in the aggregate, on the City's financial reporting process. Uncorrected Misstatements: Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. We have no such misstatements to report to the Council. This report is intended solely for the information and use of the City Council, its committees, and management and is not intended to be and should not be used by anyone other than these specified parties. 6 This Page Left Intentionally Blank