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Home My WebLink AboutFY2001-02 CAFRCITVCF ~ (Ad CAl ~;dZ? r .• CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30. 2002 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2002 City of San Rafael, California p.o. Box 151560 1400 Fifth Avenue San Rafael, California 94915-1560 Prepared by the Management Services Department Ken Nordhoff, Assistant City Manager/Director of Management Services Dennis Shives, Assistant Director of Management Services, Finance Division CITYCF ~ 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, Council Member Paul M. Cohen, Council Member Gary Phillips, Council Member Cyr Miller, Council Member City of San Rafael Comprehensive Annual Financial Report For the year ended June 30,2002 Table of Contents Introductory Section: Page Letter of Transmittal ....................................................................................................................................... i Organization Chart. ......................................................................................................................................... xxi Boards and Commissions ............................................................................................................................... xxii List of City Officials ......................................................................................................................................... xxiii Location Map ................................................................................................................................................... xxiv Financial Management Policies ........................... ~ ......................................................................................... xxv Financial Section: Independent Auditors' Report ...................................................................................................................... 1 General Purpose Financial Statements: Combined Balance Sheet -All Fund Types, Account Groups and Discretely Presented Component Unit ............................................................................................ 4 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All Governmental Fund Types and Expendable Trust Funds .................................................................................................................... 6 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual-General Fund, Special Revenue Funds, Debt Service Funds with Budgets, and Expendable Trust Funds with Budgets ....................... 8 Combined Statement of Revenues, Expenses and Changes in Retained Earnings -All Proprietary Fund Types and Discretely Presented Component Unit ............................................................................................ 10 Combined Statement of Cash Flows -All Proprietary Fund Types and Discretely Presented Component Unit ............................................................................................ 12 Notes to General Purpose Financial Statements ............................................................................ : ...... 15 Required Supplementary Information: Marin County Employees' Retirement System -Schedule of Funding Progress ............................ 62 Supplemental Information: General Fund : Description .......................................................................................................................................... 65 Comparative Balance Sheets ............................................................................................................. 66 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances .......................................................................................................... 67 Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual ........................................................................... 68 City of San Rafael Comprehensive Annual Financial Report, Continued For the year ended June 30, 2002 Table of Contents, Continued Financial Section, Continued: Supplemental Information, Continued: Special Revenue Funds : Page Description ......................................................................................................................................... 69 Combining Balance Sheet ................................................................................................................. 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......................................................................................................... 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and ActuaL .................................................................. 80 Debt Service Funds: Description ......................................................................................................................................... 87 Combining Balance Sheet ................................................................................................................. 88 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..................................................................... ; ................................... 90 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual (With Budgets) ........................................ 92 Capital Projects Funds: Description ......................................................................................................................................... 95 Combining Balance Sheet ................................................................................................................. 96 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 98 Enterprise Funds: Description ......................................................................................................................................... 101 Combining Balance Sheet ................................................................................................................. 102 Combining Statement of Revenues, Expenses and Changes in Retained Earnings .......................................................................................... 103 Combining Statement of Cash Flows ............................................................................................. 104 Internal Service Funds: Description ......................................................................................................................................... 105 Combining Balance Sheet ................................................................................................................. 106 Combining Statement of Revenues, Expenses and Changes in Retained Earnings .......................................................................................... 108 Combining Statement of Cash Flows .................................................................................................... 110 Expendable Trust Funds: Description ......................................................................................................................................... 113 Combining Balance Sheet. ................................................................................................................ 114 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 115 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual (With Budgets) ....................................... 116 City of San Rafael Comprehensive Annual Financial Report, Continued For the year ended June 30, 2002 Table of Contents, Continued Statistical Section: Page General Governmental Expenditures by Function .................................................................................. 119 General Governmental Revenues by Source ............................................................................................ 120 Secured Property Tax Levies and Collections .......................................................................................... 121 Summary of Special Assessment Billings and Collections ..................................................................... 122 Assessed Valuation of Taxable Property .................................................................................................. 123 Property Tax Rates-Direct and Overlapping Governments ................................................................... 124 Ratio of Net General Bonded Debt to Assessed Valuation and Net General Bonded Debt Per Capita ................................................................................................. 125 Ratio Annual Debt Service to Total General Governmental Expenditures ................................................................................................................... ;;; ..................... 126 Computation of Direct and Overlapping Debt ........................................................................................ 127 Computation of Legal Debt Margin .......................................................................................................... 128 Principal Taxpayers ..................................................................................................................................... 129 Sales Tax by Industry Group ...................................................................................................................... 130 Construction Activity .................................................................................................................................. 131 Schedule of Insurance in Force ................................................................................................................... 132 Miscellaneous Statistical Data .................................................................................................................... 133 Miscellaneous Tax Revenues: Sales Tax .................................................................................................................................................. 135 Property Tax ........................................................................................................................................... 136 Motor Vehicle in Lieu Fees ................................................................................................................... 137 Business License Tax ............................................................................................................................. 138 Hotel (Occupancy) Tax ......................................................................................................................... 139 Property Transfer Tax ........................................................................................................................... 140 Franchise Fees ......................................................................................................................................... 141 Allocation of $1.00 of Property Tax Revenue ........................................................................................... 142 CITY OF December 29, 2002 Honorable Mayor, Members of the City Council and Residents of San Rafael: Mayor Albert J. Boro Council Members PsulM Cohen Barbers Heller Cyr N. Miller Gary Q Phillips The Comprehensive Annual Financial Report (CAFR) of the City of San Rafael for the year ended June 30, 2002, 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 fairness 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, account groups 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, Caporicci and Larson, CP As. Further, the CAFR is prepared in accordance with procedures and policies set by the Government Finance Officers Association and the California Society of Municipal Finance Officers. 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 fund and account group financial statements and schedules, as well as the independent auditors' report. 3. Statistical section, which is unaudited, includes selected financial and demographic information, presented on a multi-year basis. Generally, ten-year data is presented for expenditures, revenues, assessed valuation for local properties and construction activity. REPORTING ENTITY This report is prepared utilizing Government Accounting Standards Board Statement (GASB) No. 14, the purpose of which was to define the various entities that should be included in a CAFR. The financial reporting entity includes all the funds and account groups of the primary government (i.e., the City of San Rafael), as well as all of its related component units . The definition of a primary government entity is a separately elected governing body -one that is elected by a majority of citizens in a popular, general CAFR TRANSMITTAL LETTER election. Conversely, component units are separate legal entities whose elected leaders are financially accountable to or reliable on the primary entity. Component unit presentation is required in order to provide the CAFR reader a complete, comprehensive financial picture. Component units are broken down into two categories. Blended component units are part of the City's operations, and therefore their financial data is included with that of San Rafael. The second category, discrete component units, has financial data presented separate from the City's information in order to recognize that they are separate legal entities with different governing bodies. Under GASB Statement No. 14, the San Rafael Redevelopment Agency and the San Rafael Joint Powers Financing Authority 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.1 in the Financial Section of the CAFR. The City partICIpates in various organizations through formally organized and separate entitles established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these agencies exercise full powers and authorities within the scope of the related Joint Powers Agreement including the preparation of annual budgets, accountability for all funds, and the power to make and execute contracts. Obligations and liabilities of the separate entities are not those of the City. For a further explanation of these separate entities, refer to Footnote No. 18 in the CAFR. GOVERNMENTAL STRUCTURE AND SERVICES 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 2000 was 56,063. 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. ill 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, Farmers' 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. The City of San Rafael provides 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. ii CAFR TRANSMITTAL LETTER 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. Successes for the past several years have been lead by the Redevelopment Agency's commitment to a revitalization of downtown. Partnerships with community members and the Chamber of Commerce have paved the way for both new businesses as well as expansion needs of existing companies. Tourism and travel continue to support hotel and related industries and many come from all over the world to enjoy the physical beauty of San Rafael and the surrounding areas. Thanks to redevelopment efforts, two major new centers came to life. Wilson Equity Offices completed the first two of five planned office buildings at the San Rafael Corporate Center. This prime office development is located on an old utility plant site, and represents the type of high quality commercial project the community had called for in the Downtown Vision approved several years ago. The Rafael Town Center provides office space, retail square footage and 113 units of urban rental apartments. Adjacent to the Rafael Town Center, the City completed the San Rafael City Plaza. An investment of $1.9 million, without the use of tax revenues, brought to life a community-gathering place for public events, and includes a water wall feature. 2001-2002 produced the first economic downturn since the early nineties. Implosion of the technology industry, a national recession and the terrorist attacks of September 11th all combined to produce fewer revenues than the prior year. San Rafael braced itself for this downturn when the 2001-2003 biennial budget was adopted by increasing General Fund reserves from 10% to 15%. All of this excess reserve will disappear by the end of the two year budget cycle thanks in particular to a stagnant Northern California economy. Financial performance and the short term outlook is not getting any brighter in the current (2002-2003) fiscal year. Sales taxes have been down for four straight quarters. Property taxes remain one area of strength, as the desire to relocate to Marin County continues to put upward pressure on home values. 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 $35 billion as of December 2002. The Governor has proposed an immediate $10.5 billion dollar deficit down payment that includes the loss of transportation funds for streets, reductions in library allocations, and the taking of uncommitted Redevelopment Agency housing resources. The State Legislature is expected to meet in January 2003 and begin cranking out a series of complex and difficult decisions, which will leave no local government unscathed, including cities. San Rafael expects to lose some or all vehicle license fees or some other large General Fund tax source, forcing the City Council to make painful service delivery decisions. Compounding the State problems is an expected increase of $1 million needed for employee pension contributions (attributable to pension plan investment losses over the past two years). Anticipating that San Rafael was entering tough times, the City Council amended the 2002-2003 budget in July of this year by eliminating vacant positions in the Public Works and Police Departments, dropping theatre programming and trimming some operating expenses. Also, the level of spending was reduced for street paving (by $100,000) and sidewalk replacement (by $281,000). The sum total of the actions in July was $1.5 million to keep the 2002-2003 budget balanced. iii CAFR TRANSMITTAL LETTER The 2003-2005 budget cycle looks to be the City's biggest financial challenge in the coming year. With a continued flat economy (and no real recovery expected until at least late 2003) 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. Population: * San Bafael COllni): Totals-2000 56,063 247,289 White 68 .9 '« 81.590 Latino 23.3 9r 11.1% Asian 5 .6 9( 4.590 African-American 2.2 % 2.9% Median Age 38.5 41.3 Mean Household Income -2002 $74,398 $88,934 College Degrees 43.6% 51.3% * -Sources include San Rafael Chamber of Commerce Economic Profile 2002, California Department of Finance, Association of Bay Area Governments Projections 2000 and US Census (2000) Housing Units:** Totals-2000 Detached Attached Multiple 2-4 Multiple 5 plus Mobile Homes Occupied % Vacant Persons/ Household 22,963 10,490 1,992 2,433 7,559 413 22,517 2.51% 2.43 104,990 63,666 8,452 9,349 21,400 1,581 101,467 4.09% 2.35 ** -US Census (2000) and California Department of Finance E5 Report 2002 Home Sales-2001:*** Detached-Mean Detached-Median # Units sold Attached-Mean Attached-Median # Of unit sold $694,431 $600,000 389 $391,108 $321,000 242 $829,824 $650,000 2,239 $404,980 $367,000 829 *** -Marin County Assessor's Office January 2002 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. 129 Economic development organizations in San Rafael include the Redevelopment Agency, Chamber of Commerce and the Marin County Economic Commission. 129 San Rafael's population rate grew at about 1.6% per annum from 1990 (48,404) to 2000 (56,063). 129 Unemployment rates for 2001 were 3.5% (2000 was 2.3%) for the City and 2.5% countywide. Entry-level positions are a continued concern to businesses. The low unemployment, coupled with high housing costs, makes attracting and retaining these types of workers a significant challenge. 129 Countywide office vacancy rates rose dramatically to 22.4% for 2002, a dramatic increase from the 2.7% levels for 1999. 129 Office rents in Central San Rafael were $3.10 per square foot; in North San Rafael the rate averaged $2.75. 129 Industrial space rents averaged $1.05 per square foot for San Rafael. 129 Major shopping areas, as measured III available retail square footage, include the Downtown corridor (938,000 aggregate), the Mall at Northgate (743,000), Montecito Center (130,000) and Northgate One (113,900). 129 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. iv CAFR TRANSMITTAL LETTER 129 Several hotels and motels support tourism activity, led by 235 room facilities for both the Embassy Suites and Four Points Sheraton (formerly Wyndham Gardens). 129 Home buying and apartment rentals continue to be a challenge both in San Rafael and Marin County. Mean household incomes in San Rafael are $74,000 as of 2000, but less than 30% can afford to buy a median priced home. Rents for one bedroom apartments range from $800-$1,500, while two bedroom apartments go for $1,075 to $1,625. MAJOR INITIATIVES Cmrent Veal' Projects, Accomplishme ors and Service Efforts The City Council adopted a two-year budget in June of 2002 for the 2001-2003 fiscal years. The budget process included focus group meetings, called "San Rafael Choices." These community sessions solicited service and project priorities from various neighborhoods throughout the City. In addition, a public opinion poll was conducted in January of 2001 to evaluate service importance and satisfaction. San Rafael received very high marks on a broad menu of services. Taking all of this information, and working with staff in all departments, the City Council was able to adopt a budget that included over 700 objectives for the coming two-year budget period. 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. Department summaries of the 2001-2003 major objectives, and the status of each are shown in the table below. Established objectives are presented in the left-hand column. The right hand column identifies specific accomplishments or progress completed relative to each objective. This list is by no means all inclusive of the City's objectives, but is intended to highlight significant service and project efforts in the two year accounting and budgeting cycle. OBJECTIVES A CCOiUPLISHM ENTSIPROGRESS P1.lB.JJ£J:J!QE ~ Constmct new Corporation Yard in east San Rafael. ~ Coordinate Southbound HOV (High Occupancy Vehicle) project with Caltrans and Redevelopment Agency to facilitate right of way acquisition. project constmction. and undergrounding of utilities on Francisco Boulevard West. rr Constmction of major building completed as of December 2002. moving date for operations and engineering is Januarv 2003. rr Plans completed and work scheduled to commence by Caltrans in early 2003 v CAFR TRANSMITTAL LETTER OB.! ECTIVES A CCOll1 PLISHMENTS/PROGRESS ~ Complete East San Rafael Traffic Projects (Phases ITA, lIB, III) to increase traffic capacity and improve level of service at Bellam Boulevard, Francisco Boulevard East and Y Work with lobbyist and Corps of Engineers to secure federal funds for of San Rafael ~ Initiate comprehensive study of all City-owned buildings to identify each facility's seismic, life safety and ~ Develop partnerships with neighborhood groups to facilitate the beautification of medians throughout ~ Established Public Works Emergency Response Team in accordance with FEMA urban search and rescue standards. Y Obtain grant funds for Public Works proiects. ~ Reduce Pm1 I Crimes below our five-year average and achieve a crime rate at least 20% below that of the State rate. Y Reduce traffic collisions (hit and mn and iniury) through increased enforcement and education. ~ Improve quality of life 10 neighborhoods through enforcement eff0l1s and community partnerships with highest priority given to schools, dm ry' Phase ITA (Shoreline) and Phase lIB (Bellam Boulevard) completed. Caltrans continuing to review Phase III (Francisco Blvd. East widening at Scotland Yard) design. ry' Secured $1,800,000 appropriation; dredging began in fall of 2002. City cost of project limited to $100,000. ry' Consultant selected and worked commenced in June 2002, strategic plan expected by early 2003. Possible bond measure planned for November 2003. ry' Knight Drive and Freitas Parkway median renovated in 2002. ry' Public Works Urban Search and Rescue Team fully established with integration of Fire Department staff. State OES certification for medium level rescue ry' Received approval from MTC for $900,000 capital grant for Medway/Canal Intersection Improvement ry' Our crime rate for this fiscal year 2001-2002 is 3,709. Previous fiscal year was 3,311. This is 6.3% above our five-year average and 16.4% below our ten- year average. The California Part I Crime Rate was 3,748 in 2000 (most recent data.) (The Crime Rate is defined as the number of Part I crimes per one ry' Traffic Collisions (Injury and Fatal) Rate per 100,000 population for 2001-2002 was 396.1. The previous year was 440.1. We are currently 16.1 % below the five-year average rate of 472, and below the Office of Traffic ry' The Community Survey results showed we are maintaining above average responses to the quality of life in neighborhood (89% above average), schools (73% above average) and parks (70% above average). vi y Improve our crime clearance rates for violent and propeity crimes and maintain crime clearance rates better than the Western regional average as y Implement new technology and management practices to assure availability of the highest Quality of statistical data for use in development of crime fighting strategies and fiscal Y Acquire and install new paVl·oll, financial and human resources software applications. Y As required under new reporting standards, change the City's annual audit to conform to new requirements. Final implementation Y Continue positive labor relations enioyed during the next few years by negotiating new MOU's that support the City's compensation obiectives, provide equity among all bargaining groups and maintain the City's long Y Completed tranSItIon of parking enforcement officers from Police Association to MAPE union division officially comes to life Y Develop a conceptual architectural plan for expansion and renovation of Y Continue to expand services to CAFR TRANSMITTAL LETTER ~ Crime Clearance Rates of 19.7% for this fiscal year remains above the Western Region Average of 19.5% (vr 2000.) ~ Computer Aided Dispatch (CAD) and Record Management System (RMS) awarded in summer of 2002; systems installed and training in progress through end of 2002; cutover expected in early 2003. ~ First phase of 'Eden' modules went live October 2001. Payroll and HR began March 2002. Accounts Receivable and Fixed Assets started July of 2002. Departmental requisitions and purchasing deferred until September 2002. Budget development portion ~ Approved proposal received from City's auditing firm to have GASB #34 (new standards for financial reporting) in place for FY 2002-2003. Infrastructure valuation commenced October 2002. ~ Four-year contracts completed with Police, Fire Mid Management, MAPE/SEIU, Police Mid Management and Unrepresented Management. Fire contract unresolved and still under discussion as of December 2002 . ~ Hired new Parking Services Manager November 2002. Transition completed July 2002. ~ Consultant under contract and working with staff and Library Board on options -recommendations ~ Teen Librarian initiated a Summer Reading Program vii ~ Develop Falkirk grounds for greater community use through restoration of ~ Provide greater service to San Rafael youth and teens. (Falkirk) ? Complete a successful Proposition 14 grant application to fund renovation of the Canal Library as part of the Pickleweed Expansion ? To continue the expansion of the fire department's role as an effective community resource through the interaction and assessment of community needs and to provide the nexus for the delivery of those services through the philosophy of Community Fire Servicing during FY ~ To maintain an effective Customer Satisfaction Rating of nine (9) on a scale of 1-10 for all requests for emergency service and maintain a satisfaction rating of eight (8) for both Engine Company and Fire Prevention FY ~ To maintain an emergency response capability for both fire and medical services that will ensure the on-scene arrival of the first unit within eight (8) minutes to all areas served using Total Reflect Time during FY 2001- ~ To reduce the OCCUlTence of fire in all occupancy classification below the five-year average of 15 fires per year through a comprehensive range of fire prevention, educational, and community fire servicing programs CAFR TRANSMITTAL LETTER nr Completed 'Greenhouse' restoration for horticultural purposes in partnership with "Marin Master Gardeners nr "Learning to Look" is serving students at five elementary schools. nr Pickleweed expansion team and library staff submitted grant; did not receive funding in round one; awaiting round two results in 2003. nr Fire Department Staff coordinating Community Fire Servicing activities with Captains, neighborhoods and stakeholders. New CFS accomplishments include used battery collection stations, bi-lingual first aid training and senior fall prevention program. nr Last survey period using the revised scale the Department received a Satisfaction rating of 9.8 for emergency services and 9.6 on Fire Prevention Inspections. nr Exceeding obiective for this review period. New Fire CAD system should cause improved analysis, as times will be automatically recorded rather than Dispatcher driven. nr Meeting obiective of maintaining fires below the 5- year average of 15 fires. Annual fire occurrence for 2001 is nine working (9) fires. First 6 months of 2002 number of fires is 2. viii ~ To migrate off the BRC computer system and implement a new Records Management and CAD System. ~ Renovate current Fire Dispatch Center to accommodate installation of the MERA radio system. CAFR TRANSMITTAL LETTER ~ Fire and Police Departments have selected joint CAD System. (RIMS). Fire has selected Vision as RMS. Migration from BRC is underway and should ~ Architect and Structural Engineer preparing revised plan for the Dispatch Center at Cuthbert's building next to Fire Station 1. Bids expected to be released ~ Execute a Development Disposition Agreement and I ~ Preliminary traffic analysis underway to determine for feasibility of project. Final analysis to be completed by Traffic Engineering after wider General Plan downtown Cineplex. ~ Execute an Owner Participation Agreement for development of the Third Street site for a downtown hotel and St. Vincent de Paul Society ~ In coordination with Capital Improvement Program Committee. continue to plan. secure funding for. and execute capital improvement ~ Complete Redevelopment Agency Plan Amendment and Five-Year ~ Complete negotiations with taxing agencies regarding new issuance of redevelopment bonds sufficient to continue projects and planning for ~ Issue new bonds. ~ Continue housing efforts through the Canal Area Housing In1Provement Program, Canal Area Safe & Healthy Housing (CASH) Program, & Community Development Block ~ Project delayed due to PG&E bankruptcy, which is holding up sale of land. Continue to confirm the commitment of both buyer (Marriott) and seller. ~ Parking Structure design plans finished in December 2002. Two property acquisition negotiations are completed. In coordination with Public Works, completed construction of San Rafael City Plaza. ~ Completed Preliminary Report on the Plan Amendment and circulated to taxing agencies . ~ Initial meetings held with School District and County. Contacting all other taxing agencies for required consultations. ~ Refinanced outstanding bonds in October 2002, netting $3,050,000 of new capital project dollars for the Agency. New bonds pending Agency negotiations obiective. ~ Approved CASH Loan ($250,000). (13 affordable units). First phase of Belvedere Place (26 units) rehab is completed and tenants have been relocated to their new units. Rehabilitation of 55 Fairfax (40 units) is underway. Awarded housing rehabilitation funds to ix >-Continue to support and fund oppOltunities for nonprofit ownership of existing units to create affordable housing. >-Continue to seek non-governmental and other outside funding for affordable housing. >-Successfully produce and/or coordinate Farmer's Market Festival, Bonelli Mav Madness Classic Car Parade. Mercado del Canal, Italian Street Painting Festival, Parade of Lights, Criterium Bike Race, and >-Complete the projects and promote the openings of the Parkside Child Care Center and the Terra Linda Pool >-Complete conceptual plans and initiate a fundraising strategv and campaign for the Pickleweed >-Complete plans and make applications for funding a skate park facilitv at McInnis Park. >-Target Middle School population for enrichment, sports, and recreation programs. >-Increase program participation across all divisions bv 10% annuallv. CAFR TRANSMITTAL LETTER rr Completed conduit bond financing for BRIDGE Housing's acquisition of 55 Fairfax (40 affordable units). Provided grant of $6,000 to St. Vincent de Paul to assist in B Street propertv rehabilitation. Provided $170,000 grant to Buckelew for acquisition 12 units on Mission Ave. rr Secured Foundation support (Marin Communitv & Cowell Foundation) for Bridge's 55 Fairfax Street acquisition. Applied for and were awarded $436,000 in 2002/03 HOME funds for CAHIP program. Issued conduit housing bonds to assist BRIDGE Housing's rr Completed calendar vear 2002 Events, including adding the Brown Bag lunches at the San Rafael Citv Plaza. rr Parkside Child Care Center opened September 2001. The Tena Linda Pool commenced splashing April 28, 2002. rr Conceptual plan approved bv Pickleweed Advisorv Board and Parks and Recreation Commission; fundraising has commenced. rr Conceptual plan complete and approved; engineering plan complete and approved; construction documents under preparation. Prop 12 Grant approved; MCF donation received. Communitv event planned for Fall 2002 rr Programs initiated at Gallinas Middle School; teen focus group conducted; program marketing materials developed; summer camp developed for rr Youth Services, Seniors, Youth Sports, Classes, Special Events Theater Programs Rentals, all up 10%. Child Care is maximized. Adult Sports, Trips, x ~ Implement Council priorities for the expenditure of Proposition 12 ~ Adopt General Plan 2020 . ~ Efficientlv process applications for development of St. Vincent's propertv. providing for extensive communitv input and maximizing opportunities for housing and ~ Expand the apartment inspection ~ Complete implementation of the CRW Permit Tracking program in the Code Enforcement and Planning ~ Update zomng and code enforcement ordinances. including regulations for telecommunications facilities. subdivision ordinance. noise ordinance. limited sign ordinance revisions. mobile-vendor ordinance. apartment/motel inspection ordinance and nuisance Future projects and Goals CAFR TRANSMITTAL LETTER r-r Recommendations approved August 2001. Over $500,000 is committed to several park projects r-r Substantial progress made towards completion of draft document in fiscal vear 2001-2002 with extensive communitv involvement. Communitv Charrette held in January 2002. Working through housing opportunitv sites and traffic modeling in summer and fall of 2002. Adoption of General Plan r-r Application submitted and reviewed for completeness. Participated in numerous communitv informational meetings and have worked with the applicants to further refine the project. Process to be reviewed bv Citv Council in January 2003. r-r Program instituted in November 2001. r-r Planning Division is utilizing the software. Code Enforcement programming and training has been completed, but svstem utilization will wait for hiring and r-r Apartment/Hotel Inspection Ordinance completed. Hearings on draft Subdivision Ordinance in summer. 2002. Telecommunication Ordinance work to begin in Julv 2002. Updating sign ordinance~ banner portion to be done first. ApartmentlHotel inspection ordinance completed Fall 2001. As outlined in the City'S 2001-2003 budget, a variety of objectives has been identified for the balance of the two-year budget period. New projects may have been added since adoption, and are also included below. Additional projects or actions for the July 2002 to June 2003 timeframe are as follows: Ii Move forward on a number of new public facility projects: ~ Begin construction of a new Parking Garage at "C" and 3rd Streets. Construction to commence March 2003. Also, parking revenue bonds will need to be issued to coincide with construction timetable. xi CAFR TRANSMITTAL LETTER ~ Finish relocation of existing tenant and obtain occupancy of new space for Fire Dispatching and Parking Services Division operations. Renovation and improvement should be completed for occupancy by May for dispatching and summer for Parking. ~ Complete fundraising efforts through "Friends of San Rafael" in order to obtain full resources needed for Pickleweed Community Center facilities expansion and renovation. Project should begin in fiscal year 2003-2004. ~ During the 'parking holiday' period (Thanksgiving to New Years Day), replace all parking meters. New digital meters will be installed on streets and in smaller parking lots. In addition, some pay-by-space equipment is planned in long-term facilities, and a new revenue control system replaces the old technology in the "A" street parking structure. )i Facilitate a wide variety of private investment and economic development efforts, which include: ~ Continue working with PG&E and the Marriott Corporation to locate a new hotel on the current PG&E administrative site downtown -plans to incorporate a relocation of St. Vincent de Paul dining room. ~ Continue efforts to determine if a downtown Cineplex can be built (traffic studies and design need staff analysis). ~ Negotiating with State Lands and Montecito Center owner regarding new public dock to be located behind the Center. => Investigating environmental and wetland status of Bellam and Windward Way property to assess its potential development. Coordinating with Fire Department, County of Marin and regional regulatory agencies. ~ Community Services is working with the San Rafael School District to resolve childcare facility needs on several campuses. A possibility is being explored of replacing all City owned modular buildings with new permanent structures as part of a massive school facility upgrading project. The District would own the sites and lease them to San Rafael for our on-site preschool and after school programs. )i The City currently has over 50 capital improvement projects under management in Public Works. Key infrastructure efforts in the coming year consist of: ~ Repaving the Miracle Mile and the Second @ Union intersections. => Replace the pump station at Peacock Gap. ~ Work on the next phase of the Safe Routes to School program. ~ Study traffic signalization at several intersections. If studies and volumes suggest signalization needs, prepare the necessary recommendations through Traffic Engineer and with the support of affected neighborhoods. ~ Finnish the seismic and deferred maintenance study. Make recommendations for improvements and operation needs to the City'S essential service buildings (Police, Fire, Community Centers for shelter in the time of disaster) that would include the sizing and timing of a new bond measure. ~ Finalize renovation of Santa Margarita Park. ~ Complete designs of Bret Harte Park and Del Ganado Ditch improvements. xii CAFR TRANSMITTAL LETTER )I Technology needs are going to be addressed in the following ways: :> Working closely with Marin Emergency Radio Authority (MERA) representatives, complete installation and training of Police, Fire and Public Works staff. :> Finalize the Police and Fire CADIRMS systems. )I Other major efforts include: :> Completing the General Plan 2020. Working through traffic constraints and housing opportunity sites poses significant challenges in moving this committee process through the Planning Commission and on to the City Council. :> Developing and refining the 2003-2005 budget process. Prior budgets were developed in times of growing services and higher revenues. Careful thought will need to be given on how to involve employees, residents and businesses in a process that allocate dwindling resources across an ever growing demand for services. 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 Financial Services Division maintains a traditional line item budget by major function. Budget control is accomplished at the functional or division level within each fund. This budget creates a comprehensive management and fiscal system aimed at achieving the objectives of each operating level consistent with those that have been set for the community by the City Council. Each department director is responsible for accomplishing goals within his or her functional area and monitoring the use of their budget allocations consistent with policies set by the City Council and monitored by the City Manager. GENERAL GOVERNMeNT FUNDS Analy~j" ojMajor Tax Revenue" 2001-2002 tax performance represented a bust when compared to the five previous years of double-digit growth. The 'magnificent seven' (six major taxes plus motor vehicle fees) declined 11.5% over the prior year period. Tax revenues had mixed performance. Those that were economically sensitive (sales, hotel) plummeted after the 9-11 attacks and a prolonged economic downturn. Stable sources (vehicles license fees, property tax) grew as vehicle sales and assessed valuations climbed in 2001-02. The table below summarizes changes from 2000-2001 to 2001-2002. xiii CAFR TRANSMITTAL LETTER lax BelleDue Sales Tax ProDertv Tax Business License Tax Hotel (OccuDancv) Tax ProDertv Transfer Tax Franchise Tax Commercial DeveloDment Tax TOTAL TAXES CITY OF SAN RAFAEL CHANGES IN TAX REVENUES FOR THE FISCAL YEAR ENDED JUNE 30 2002 FYE 6-30-01 FYE 6-30-02 FYE 6-30-02 Audited Audited Percentage Totals Totals of Total Dollar Increase (Decrease) from 00-01 $18,464.210 $16.589,495 41.25% $ (1.874.715) 7.186.676 7.890.347 19.62% 703.671 1.993.649 2.145.235 5.33% 151.586 1.840.532 1.395.321 3.47% (445.211) 1.203.603 1.161.067 2.89% (42.536) 1.559.321 1.795.637 4.46% 236.316 22.060 6.094 0.02% (15.966) $32.270.051 $30.983.196 77.04% $ (1.286.855) Motor Vehicle In-Lieu Fees 2.851.240 3.053.248 All Other Revenues (Permits. Fines & Fees) $ 6.026.984 $ 6.183.066 7.59% 15.37% 202.008 156.082 General Fund Total Revenues $41,148,275 $40,219.510 1 QO.OO% $ (928,765) Tax Table Explanations: 2001-2002 General Fund Revenues Percentage Increase (Decrease) from 00-01 -10.2% 9.8% 7.6% -24.2% -3.5% 15.2% -72.4% -4.0% 7.1% 2.6% -2'.3% Sales Tax -Sales Tax now represents 41 % of all general fund revenues (as shown in adjacent graph). The recession, terrorist attacks and lack of new significant retailers resulted in a 10.2 % decline in the City'S largest resource. Drops occurred in all of the major groupings, including autos ($337,324), general consumer goods ($188,181) and business and industry ($436,138). Modest gains occurred in the hotel, restaurant and food categories. No recovery is expected in this source at least until the latter part of the 2003 calendar year. -All Other Taxes o All Other II Sales Tax 41% Sources 23% III Sales Tax • All Other Taxes D All Other Sources Property Tax -By far the major contributor to this change was the secured tax liens. Up 13.3% for the year, assessed values continue to skyrocket as available housing sales remain competitive and interest lending rates are at 40 year historic lows. 26% of the City'S property taxes were diverted in the early nineties, on a permanent basis, as part of the Sacramento Legislature balancing the State budget. $523,857 came back to Marin County cities that have continued to pay 'excessive' ERAF property taxes under a State prescribed formula. xiv CAFR TRANSMITTAL LETTER Business License Tax -Adding a Business License Examiner position to the Financial Services Division in 1998 has resulted in greater compliance and enforcement efforts. Special projects through cooperation with other federal and state agencies have increased our total number of licensed businesses. The increase in taxes is a combination of the Examiner's efforts, special focus on home occupations, and CPI tax rate adjustments allowed under local ordinance. Hotel Taxes -Tourism plummeted as business travel dropped markedly, even prior to the horrors tied to the terrorist attacks. The 2.42% decrease had most hotels and motels results back to 1996-97 levels. Embassy Suites dropped $168,010 (18%), and the Four Points Sheraton was off $130,740 (28%). Property Transfer Tax -An annual double-digit increase in real estate values was offset by lower volume of activity. Tum over of pre-Proposition 13 properties remained slow. Significant commercial and office sites were part of the prior year (2000-01) results. Franchise Fees -This tax is two fold. Taxes on the local waste hauler increased by $102,640. This sum reflects an increase in service volume, customers and an audit of franchise fees collected. A 2% rate increase was awarded to the refuse company in January 2002. This played a small role in the growth of this revenue. Utility and cable operations were up about $133,676 (15.2%). Mismanaged State utility programs led to huge spikes in electricity costs in 2001-02. Although consumers and businesses were hurt by these increases, the residual impact to San Rafael was high electric franchise fees (up $39,000, or about 39%). Changes in the City'S cable provider resulted in increased services (and consumer rates) and higher franchise fee collections. Motor Vehicle In-Lieu Tax -In July of 1998, the State Legislature passed a bill to reduce this tax to all citizens of California by 25% effective January 1, 1999. Trigger mechanisms in the bill raised this tax reduction to 67.5% for California motorists. The majority of car taxes (vehicle license fees) are returned to cities and counties. This 67.5%35% reduction amounts to a potential loss of City revenues in excess of $2,000,000 per annum. The State pledged as part of this bill to backfill losses from its General Fund. Through the 2001-2002 year end, the State has paid the backfill. This source remains extremely volatile so long as the State has the ability to manipulate collection and distribution based upon its own interest. Growth for the year is tied to increase in prior year auto sales (tax paid on value of car). The decline of all taxes over 2001-2002 levels is significant. The majority of these moneys, which provide general Police, Fire, Parks, Library and Recreation Programs, has provided budget stability and heightened infrastructure maintenance in 2000-01 and prior years . For 2001-02, the economy performed at a lower level and looks to remain sluggish for the foreseeable future. xv CAFR TRANSMITTAL LETTER A nalysi so af Major Expenditures by Function Increases or decreases in governmental fund expenditures for major functions of the City compared to the prior year are detailed below: 8.5% 8.0% 35.7% 6.0% 12.9% 7.6% 5.0% 4.5% 9.7% 10.0% 0.4% (89.5% 21.7% 44.1% In summarizing the changes for Police and Fire Operations, public Safety expenditures have grown over the prior year for several reasons. Compensation obligations in both bargaining groups required raises in salaries and benefits ranging from 4% to 6%. A new Fire Inspector was added to the Fire Prevention Bureau. Lastly, dramatic changes in workers compensation claims and costs added over $200,000 to public safety benefit expenses as compared to the 2000-2001 levels. The Public Works category in the current year includes additional staffing positions in Traffic Engineering and Park Maintenance. The City took over the apartment and hotel inspection program from the County. The results are the addition of two Code Enforcement Officers in Community Development services. Cu ltllfa I and Recreation actIVItIes encompass the Library, Falkirk, Recreation and Child Care Programming. Expanded efforts in teen and theatre programming added over $50,000 of new expenses in 2001-2002. Well over half of these expenses are recovered through user fees. xvi CAFR TRANSMITTAL LETTER Outlays for infrastructure projects and special needs are reflected as Capital Projects Completion of major projects is paid through a combination of grant, redevelopment, matching and City resources. Annual costs (which does not necessarily reflect project total) for the 2001-2002 were: @ $958,911 for the resurfacing of over 40 streets using STIP funds occurred in the Fall of 2001. @ $162,407 was the initial payment for the Lincoln Avenue Street and sidewalk rehabilitation project. A total of $1.3 million was used through October of 2002 to completely resurface the road and improve the worst sidewalk sections of a major north/south San Rafael road. @ Sidewalk replacement along various segments throughout the community was $95,711. @ The Redevelopment Agency participated in creating housing at 55 Fairfax Street. $1,180,000 was used from Low and Moderate Housing Funds to convert this site to 40 units of affordable housing .. @ The second phase of the BellamlKerner improvements included $861,230 of expenditures for street improvements, new signals and improved turning lanes. @ The widening of North San Pedro Road, using City mitigation and County resources, included $837,218 in 2001-2002. This project was completed in the Fall and included new signals, street widening and medians for this major north San Rafael intersection. @ The new San Rafael City Plaza was constructed at a cost of $1,918,000, of which $1,689,326 was spent in the audit year. This project was completed without the use of taxpayer revenues and fulfills a major public improvement need identified in the Downtown Vision. @ The West Francisco Boulevard Ditch consumed $515,196 of the Agency's 1995 bond resources. @ Parkside Child Care Center opened in Albert Park in September of 2001. Expenditures to complete this project in 2001-2002 totaled $1,121,112. @ The new Corporation Yard was under construction in 2001-2002. At year-end, $4,177,536 of 1995 and 1999 Agency bond moneys were drawn down to pay for the first p0l1ion of construction on this $6.7 million dollar facility. @ Reopening the Terra Linda pool in March of 2002 was a welcomed event after fifteen months of closure and major improvements to the City's only plunge. $1,169,641 paid in 2001-2002 was the final construction portion of the $1,401,000 project budget. Debt Service reflects a declining payment on outstanding assessment district bonds, as well as payment of all Redevelopment debt remaining flat from year to year. Fund Equity In order to assess the increase or decrease in each governmental fund's assets, changes in fund equity from June 30, 2001 to June 30, 2002 is discussed below. Fund equity in governmental funds can be described as the difference between current assets and current liabilities, or accumulated earnings from operations. Simply stated, it is the current spendable resources of the fund. The General Fund's change in fund equity was as follows: General Fund 2002 2001 Decrease Fund Equity $8,460,420 $10,166,483 ($1,706,063) xvii CAFR TRANSMITTAL LETTER The build up of fund equity through 2001 tied to strong economic performance tailed off in 2002. At year- end, the total reflects a reserve of $3,347,314 set aside to meet compensation goals, the completion pf General Plan 2020, loan receivables and other legal, contractual or administrative commitments. Another $3,757,328 represents 10% of budgeted expenditures, which is consistent with the City'S Financial Policy of a 10% General Fund Reserve. This portion is held for emergencies and cash flow cycles. The balance of $1,355,598 are reserves the Council had established as part of the two year budget and are expected to be consumed in the 2002-2003 fiscal year in order to maintain a balanced budget. SPECTA L REVENlffl FUNDS 2002 200J Decrease Fund Equity $14,558,876 $17,265,890 ($2,707,014) ~ The Special Revenue Fund~ as a group decreased in fund equity by 15.7%. Special Revenues Funds are established for several reasons, including legal statutes, administrative practices and government accounting standards. Gas Tax balances declined $482,039 as prior year revenues were used to complete several street-paving projects. Traffic Mitigation balances dropped $1,137,208, reflecting the signal and road improvement expenditures for the Bellam Boulevard and North San Pedro Road projects. $404,678 of runoff charges (paid through property tax bills) was added to the Stormwater Fund and held for projects to be completed in the 2002-2003 and subsequent years. CA PTTA L PRO meT FUNDS 2002 20ill Decrease Fund Equity $19,090,310 $28,494,422 ($9,404,112) Use of Redevelopment Agency project bonds, as noted above, was the major contributor to this decline. $2,226,250 remains in equity to complete new corporation yard garages and offices in East San Rafael. The local school and college districts have claim to $308,000, and redevelopment housing efforts include $1,355,823 for a "B" Street comer initiative. Completion of the Police and Fire CADIRMS technology project requires use of $1,258,931 in 2002-03. $9,515,227 of unspent redevelopment bonds is held for approved projects and should be drawn down within the next two years. PROPRmTA RY FUNDS The City has no water or sewer enterprise funds. Separately established districts throughout the City and County provide these services. For the first time, the City is presenting a Parking Services Enterprise Fund. Established with the adoption of the 2001-2003 budget, the Parking Fund is charged with running a full menu of services, including enforcement, collection, adjudication, maintenance of equipment and replacement of assets. This fund was accounted for as a Special Revenue Fund in prior audits, but is now properly classified as an Enterprise Fund since the formation of the Parking Services Division under the Management Services Department. The City has six internal service funds in place. Replacement of all City vehicles, pool cars and rolling stock is accounted for in the Equipment Replacement Fund. Rental charge to Departments allow for the planned replacement of over $10,000,000 in City assets. Workers Compensation and Liability functions xviii CAFR TRANSMITTAL lETTER are self-insured. The City participates in a "pooled" insurance program for catastrophic losses. The Dental Insurance Program was established in 1997 when the City chose to become self-insured. The Radio Replacement Fund was established this year to pay for MERA radio operating expenses and debt service requirements. The City, as a member ofMERA, pays 16.9% of all expenses of this multi-agency entity. DEBT ADMINISTRATION The City has no outstanding general obligation bonds as of June 30, 2002. Several debts remain outstanding for the City and its component units. Outstanding principal on debt obligations of the City include $870,000 of special assessment bonds and $3,883,789 for the long-term portion of compensated absences. Also, capitalized leases for equipment, ambulances and fire trucks total $223,726. The San Rafael Redevelopment Agency has three separate tax allocation bonds outstanding. Year-end outstanding principal balances total $43,479,004 for the 1992, 1995 and 1999 series. The new Tax Allocation Bonds issued in June of 1999 received the first ever AA rating for a redevelopment bond issue in the State of California. $169,000 is due as part ofanote payable related to the financing of real property acquisition. The outstanding Certificates of Participation issued by the San Rafael Sanitation District ($4,130,955) are to be repaid by District property tax changes in future years and are not an obligation of the City of San Rafael. All assessment and tax allocation bond debt is administered by a third party custodial arrangement. Pursuant to each individual bond document, the trustee collects taxes and remits payments to bondholders based upon established schedules. CASH MANAGEMENT Income earned on investments represents a significant revenue source to the City and allows the City to operate effectively with fewer resources than would otherwise be required. The investment portfolio at June 30, 2002 was comprised primarily of U.S. Agency notes, certificates of deposit, medium term corporate notes and pooled investments with the State of California'S Local Agency Investment Fund. The City's investments are classified according to their respective credit risk. Purchases are made following the City's adopted investment policy. Securities must be rated "A" or better at the time of purchase. The majority of the portfolio'S securities are "AAA" U.S. agency bonds with respect to third party safekeeping. City funds are pooled for investment yield purposes. Interest is returned to the various funds comprising the investment pool based on the fund's cash balance at the end of each quarter. Investments are presented in the auditor's report under GASB #31. Market value adjustments have been made to all securities that the City intends to hold until maturity. GENERAL FIXED ASSETS The general fixed assets of the City are those assets used in the performance of general government functions. As of June 30, 2002, the property and equipment is provided for assets capitalized in the general fixed assets account group. The book value of City owned assets at June 30, 2002 is $44,243,426. xix CAFR TRANSMITTAL LETTER The City is required to change its financial presentatio~ including valuation of infrastructure assets, under the Governmental Accounting Standards Board (GASB) Statement #34. The GASB requirement for San Rafael takes effect in fiscal year 2002-2003. City staffs are spending time and resources currently to develop capitalization policies, complete a field audit and asset valuation process, and are working with our auditors to meet the requirements of Statement #34 in a timely manner. RISK MANAGEMENT POLICIES The City of San Rafael maintains a self-insured retention of $500,000 for general liability and participates in a public agency risk sharing pool, California Joint Powers Risk Management Authority, for an additional $24,500,000 in excess of $500,000. A third party claims administrator evaluates liability claims and makes recommendations to the City. The City's self-insured retention for workers compensation claims is $250,000 with excess coverage of $9,750,000 with United States Fidelity and Guaranty. The City contracts with a different third-party claims administrators for workers compensation claims. OTHER INFORMATION Independent Audjt -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 finn. This year, the accounting firm of Caporicci and Larson, CP As perfonned the audit. The audit requirement has been met and the auditors' opinion has been included in this report. Acknowledgment -The preparation of this document was accomplished through the diligent, dedicated efforts of the Management Services Department's staff. Appreciation goes to Dennis Shives, Assistant Director of Management Services, Financial Services Division, Robert Behan, Accounting Supervisor and Van Bach, Accountant. All of these top-notch employees were instrumental in coordinating the annual audit in a timely and professional manner. Also, Kim Kopral, the Department's Administrative Assistant, helped assemble and edit the City's fifth 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 Management Services 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. ~~ Rod Gould City Manager :rdhofI xx Organization Chart of the City of San Rafael - - I Electorate I I I I City Attorney I I City Council I I City Clerk I City Manager Community Community Development Services Economic Fire Development Library/ Management Cultural Affairs Services Police I Public Works I xxi Organization Chart of the City of San Rafael Boards & Commissions I Electorate I City Council r---------------------I • : Bicycle & P I : Advisory Co I I I I I L ____________________ _ r--------------------- I I I I I I I I I I I I I Citizens A Comm L _______________ -_____ -__ _ r---------------------I I I I I I I I I I I I I Design R Boa L ____________________ __ .---------------------! Geotech ! Review I I I I I I ~---------------------r--------------------I Marin/Sonom I : and Vector I ' i District B I L ____________________ _ r---------------------I I I I I I I I , I I I I Plann Commi L ______________ ~ _____ _ r--------------------I I I I I I I I I I Volunteer Advisory Committee I I L ______________________________________ ~ xxii I I ---------------------, ard of Trustees I I I I I I I I I I I I _____________________ 1 --------------------, • I al Affairs : I mission i I I I I ---------------_____ -1 --------------------- ire mission ------------------------------------------ ommission Aging ------------------------------------------ Recreation mission -----------------------------------------, oordinating ! I mittee i I I I I I _ ____________ ---_ ... ____ 1 CITY OF City Officials City Council Albert J. Boro, Mayor Barbara Heller, Council Member Paul M. Cohen, Council Member Cyr N. Miller, Council Member Gary Phillips, Council Member Elected Officials Gary T. Ragghianti, City Attorney Jeanne M. Leoncini, City Clerk Management Team Rod Gould, City Manager Ken Nordhoff, Assistant City Manager Bob Brown, Community Development Director Bob Marcucci, Fire Chief Carlene McCart, Community Services Director Dave Bernardi, Public Works Director Gus Guinan, Assistant City Attorney Mike Cronin, Police Chief Nancy Mackle, Economic Development Director Vaughn Stratford, Library Director xxiii '. 'V~ i } \ Pacific Ocean / J/ Greater San Francisco Bay Area " W~~ . 5 0 5 10 15 Miles 1'"""'1=~ LOCATION xxiv I r I _ ":J '~~ --':~ -- MAP Financial Management Policies IT IS THE POLICY OF THE SAN RAFAEL CITY COUNCIL TO BE PRUDENT, CAREFUL AND OPEN REGARDING THE CITY'S FINANCIAL RESOURCES. RECOGNIZING THAT A BUSINESS OR RESIDENT MUST PLAN FOR BOTH SHORT AND LONG TERM FINANCIAL NEEDS, THE CITY SHALL MAKE EVERY EFFORT TO DO THE SAME. THE CITY'S FINANCIAL POLICIES SHALL INCLUDE ASSETS (BOTH HUMAN AND CAPITAL), EXPENSES, SAVINGS AND METHODOLOGY. To THIS END, THE FOLLOWING SHALL BE THE CITY'S FINANCIAL POLICIES: .-.-.-.. -.-.-.-~.-.. -.-.--.-.. -.-.. -.-.. -.-.-.-.-.-.-.-._._ ... _ ... _._._._._._._._._.-._ ... -._._._.-.-._._._.-._._._._._._._.-.-._._._._._._._._._._._._., , . ! Category One ! Assets : The City's allocation of resources shall be balanced in such a way so as to provide for proper management of employees, volunteers, property, buildings and equipment. I i i i i ! I i I i I i ~-......... -............... -.......... -...... -.. -.. -...... _ .•.•.•.•.•...•.................................................................... ~ The City shall maintain its infrastructure. Ongoing, preventative maintenance is an essential component of the City's operations. Adequate funding shall be allocated in current years to minimize expenditures in future years. Infrastructure maintenance includes, but is not limited to street, sewers, storm drains, sidewalks, lights and parks. The City shall adequately fund capital replacement. To the extent possible, the cost of replacing or expanding existing facilities and equipment will be fully amortized and funded as a continuing cost of doing business. With respect to equipment, rates shall be established to recover the replacement cost of each item at the end of its useful life. Facilities will be amortized to cover ongoing maintenance and cyclical repairs and, to the extent resources are available, for the replacement or expansion of major structures. xxv The City shall maintain competitive compensation. The City wishes to continue positive labor relations, be competitive in the market place and desires to attract and retain top talent. Competitive salary and benefits will be provided to all employees within the City's means, with the expectation that services being provided by all staff shall continue to be exemplary. -'-'_.-'-'-''''-,--'-",;0--.''_,--,-'--'--'--'''''--'--'--'-.. _._. __ ......................................... _ ..... _ ..... _ ..... _._. __ . __ ._._._._._._._ ............. _._ .......... _._._._._ ...... _ ..... _ .•. __ ._ •. _. Expenses Category Two The City shall know the cost of providing services, make certain tax dollars are used both efficiently and wisely, and incur debt only to the extent it does not create a long·term financial burden. i j \0 ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• .! The City must know its true costs of providing all services. The City shall maintain current full business costs of providing each and every City provided service. In addition, the City shall make conscious decisions about cost recovery and/or general tax subsidy of those services that benefit only portions of the tax paying public. The City shall competitively procure goods and services. Significant savings of tax dollars can be obtained through the competitive bidding of purchases of goods and services. The City shall seek market prices or proposals for all significant purchases of goods and services, including periodic market testing of internally provided services, consistent with the City's purchasing policy. Preference will be given to San Rafael businesses. The City shall oppose mandated programs that are unfounded. The Federal and State Governments regularly adopt laws that mandate local compliance or implementation. The City is forced to incur additional operating costs and no funding is provided to pay for these mandates. The City shall have a general policy against unfunded mandates, including social services, which have an adverse impact to San Rafael's services and budget. xxvi The City shall only borrow what it can afford to repay. Loans and other debts will be established wisely to level out costs. Refinancing of existing debt will take place when market conditions lend themselves to economic gains . The City shall not overextend indebtedness, which may cause undue financial burdens in subsequent years. i'-"'-"--'-'-"-'-'-"'---'--"-'-"--~-''''-''-''--'-''-................. -.-.-.-.-.-..... -.----.--...... -.--.-.......... -.-.. -.... _._ .............. -._ .... _ .... _._._-..... _._._ ..... _._._ ..... _ . ., i , i , i i i i i i i i Savings : Category Three The City shall set aside sufficient monies to meet short and long term needs and shall invest all savings in a safe manner. I .... ___ ._ •. _ .... _ .• _ •. _._._ .• _._ ...... _ .... _._._._ .... _ .... _ ..... _ ..... _._._._._._._._ ..... _ .............................. _ ...... _ .... _ .• __ ,_,_'_'._0 '_'_'_'_"_''''''''''''''''''' __ -'_'_'_''''_'''''_'_'_ .... _._J The City Shall Maintain Prudent Reserves, including a 10% General Fund Reserve. Adequate reserves of funds shall be established to meet future capital needs, to offset economic hard times, to stabilize fluctuations in cash flow requirements, and to provide for emergency situations. This shall include an ongoing 10% General Fund reserve. The City shall conservatively invest its idle cash. The City will invest its idle cash in a conservative manner so as to safeguard public funds. Investment instruments will be chosen using safety, liquidity and yield as the selection criteria. r···················_·_·······························'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'·'·'·'·'·'·'·'·'·'·'·'·'·'·'·'·'·'·'·'1 I Category Four I i i i Methods: The City shall live within its financial means, comply with j all aspects of local government financial laws, and publicly ! disclose major financial decisions . i , i. •.•••. _ •.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•.•••.•.•.• _ .•.•.•.•.•.•.•.• xxvii City budgets must balance with ongoing revenues equal to or greater than ongoing expenditures. The City Council will continue to adopt balanced budgets on an annual basis. Annual audited financial reports confirm the adoption of a balanced budget, and note any discrepancies. These financial reports are used by the financing community to gauge the City's credit worthiness, among other issues. Cost must be matched with revenues. Ongoing costs shall only be funded with ongoing revenues. One-time costs can be funded with one-time revenues. However, one-time revenues cannot fund ongoing costs. The City shall base its budget on realistic estimates, assuming normal revenue inflation will go to pay for normal inflation expenses. The City shall make its budgetary and financial decisions on conservative estimates or revenues and expenditures. Normal revenue growth, defined as increased amounts from existing sources, may not always increase at a rate equal to or faster than the expenses they support. As a result, the City should avoid using such revenue as start-up revenue money for new projects or programs that have ongoing costs. Increases in service levels should be supported by new revenue sources or reallocation of existing resources. If normal revenue inflation does not keep up with expense inflation, alternatives such as decreases in expenses or new revenue sources would be explored. The City shall make and report its financial decisions publicly. Public involvement is encouraged in budgeting and financial planning. The City Council shall make all non-routine or non-administrative financial decisions in public at regularly scheduled meetings. The results of such decision making shall be reported in a timely manner through Comprehensive Annual Financial Reports, newsletters and other public information documents. The City shall comply with all requirements of generally accepted accounting principles (GAAP) as they apply to local governmental agencies. The City will always conduct our financial affairs and maintain our records in accordance with GAAP as established by the Government Accounting Standards Board, so as to maintain accuracy and public confidence in our financial reporting systems. xxviii The City shall maintain a long-range fiscal perspective. The City shall examine its financial condition periodically by forecasting several years into the future. In this way, adverse trends can be anticipated and better managed. The City will require that all proprietary funds (Enterprise and Internal Service) be self-supporting. Enterprise Funds Any enterprise funds established by the City will be supported by their own rates and not subsidized by the General Fund. We will assess charges against those funds at a reasonable rate for services provided by general government. Internal Service Funds The internal service funds for vehicle replacement, information systems and building maintenance should be structured to fund adequate maintenance and replacement of vehicles, office equipment, information systems and City buildings in an efficient and orderly marner. The Building Improvements Fund rates will be brought up to appropriate levels over a five-year period. The Risk Management (liability and worker's compensation) Self-Insurance Funds will continue meeting the City's insurance needs as economically as possible while maintaining sufficient levels of coverage to protect the City's employees, property and reserves. xxix ')JuvZq 1/azlillvuonualuJ aSvd sPl.L N ~ I .' r:rS V:)NVN ,' City of San Rafael San Rafael, California General Purpose Financial Statements and Independent Auditors' Report For the year ended June 30, 2002 IC&L Caporicci & Larson Certified Publtc Accountants Offices located in: Bay Area Orange County Sacramento INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council of the City of San Rafael San Rafael, California We have audited the accompanying general purpose financial statements of the City of San Rafael, California (City) as of and for the year ended June 30, 2002, as listed in the foregoing table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We did not audit the financial statements of the San Rafael Sanitation District (District), which is presented as a discrete component unit in the accompanying financial statements. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the general purpose financial statements, insofar as it relates to the amounts included for the District in the accompanying general purpose financial statements, is based on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountS and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of other auditors, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City as of June 30, 2002, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles .in the United States. In accordance with Government Auditing Standards, we have also issued a report dated October 31, 2002 on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Toll Free Tel: (877) 862-2200 Bay Area 1300 Clay Street, Suite 600 Oakland, California 94612 Orange County 3184-D Anway Avenue Costa Mesa, California 92626 Toll Free Fax: (866) 436-0927 Sacramento 777 Campus Commons Rd., Suite 200 Sacramento, California 95825 To the Honorable Mayor and Members of the City Council of the City of San Rafael San Rafaet California Page Two Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining, individual fund and account group financial statements and schedules listed as supplemental information in the foregoing table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City. This information is the responsibility of the City's management. The information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, based on our audit and the report of other. auditors, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. The statistical information listed in the foregoing table of contents was not audited by us and, accordingly, we express no opinion on the statistical section. ~~'f~~ Oakland, California October 31, 2002 2 £ SlNtlWtllVlS iVI:JNVNH tlSOcUIfid iV'lltlNtl9 City of San Rafael Combined Balance Sheet All Fund Types, Account Groups and Discretely Presented Component Unit June 30, 2002 (With comparative totals for June 30, 2001) Proprietary Governmental Fund Types Fund T:n~e Special Debt Capital Enterprise General Revenue Service Projects Funds ASSETS AND OTHER DEBITS Assets: Cash and investments (Note 2) $ 4,896,560 $ 15,336,261 $ 2,125,904 $ 17,734,156 $ 969,477 Receivables (Note 3) 4,312,694 983,930 1,597,058 20,056 Due from other funds (Note 5) 14,552 71,578 932,735 Due from other governments Prepaid expenses 15,000 Other current assets General fixed assets (Note 6) Component unit fixed assets, net (Note 6) COP issuance costs, net Total assets 9,223,806 16,391,769 2,125,904 20,278,949 989,533 Other Debits: Amount available in debt service funds Amount to be provided for retirement of general long-term debt Total other debits Total assets and other debits $ 9,223,806 $ 16,391,769 $ 2,125,904 $ 20,278,949 $ 989,533 LIABILITIES, FUND EQUITY, AND OTHER CREDITS Liabilities: Accounts payable $ 695,914 $ 795,184 $ 52 $ 734,799 $ 50,360 Connection fees payable Developer bonds payable 28,500 1,500 25,000 Arbitrage payable 358,840 Insurance claims payable (Note 17) Interest payable Due to other funds (Note 5) 36,578 947,287 35,000 Deferred revenue (Note 4) 2,394 88,922 35,000 5,000 Capital lease obligations (Note 7) Compensated absences (Note 7) Certificates of participation (Note 7) Note payable (Note 7) Special assessment debt (Note 7) Bonds payable (Note 7) Total liabilities 763,386 1,832,893 52 1,188,639 55,360 Fund Equity and Other Credits: Investment in general fixed assets Contributed capital (Note 11) Retained earnings 934,173 Fund balances (Note 9): Reserved 3,347,494 1,363,024 2,125,852 19,090,310 Unreserved: Designated 3,757,328 12,754,850 Undesignated 1,355,598 441,002 Total fund equity and other credits 8,460,420 14,558,876 2,125,852 19,090,310 934,173 Total liabilities, fund equity, and other credits $ 9,223,806 $ 16,391,769 $ 2,125,904 $ 20,278,949 $ 989,533 See accompanying Notes to General Purpose Financial Statements. 4 Totals Component Proprietary Fiduciary Primary Unit Totals Fund TYEe Fund TYEe Account Groups Government San Rafael {Memorandum Only~ Internal Expendable General General Long-(Memorandum Sanitation Service Trust Fixed Assets Term Debt Onl.Yl District 2002 2001 $ 8,225,490 $ 431,763 $ $ $ 49,719,611 $ 5,671,685 $ 55,391,296 $ 65,763,120 6,913,738 8,324 6,922,062 8,867,431 1,018,865 1,018,865 1,071,069 22,723 22,723 51,122 15,000 15,181 30,181 15,481 14,147 14,147 34,400 44,243,426 44,243,426 44,243,426 38,973,530 22,393,472 22,393,472 22,644,006 75,511 75,511 83,824 8,225,490 431,763 44,243,426 101,910,640 28,201,043 130,111,683 137,503,983 2,125,852 2,125,852 2,125,852 2,061,238 49,834,667 49,834,667 49,834,667 52,076,631 51,960,519 51,960,519 51,960,519 54,137,869 $ 8,225,490 $ 431,763 $ 44,243,426 $ 51,960,519 $ 153,871)59 $ 28,201,043 $ 182,072.202 $ 191.641,852 $ 114,843 $ 9,575 $ $ $ 2,400,727 $ 22,974 $ 2,423,701 $ 3,767,762 33,188 33,188 163,812 55,000 55,000 73,399 358,840 358,840 338,867 3,853,612 3,853,612 3,853,612 2,754,026 72,333 72,333 30,012 1,018,865 1,018,865 1,071,069 131,316 131,316 197,330 223,726 223,726 223,726 420,500 3,883,789 3,883,789 3,883,789 3,889,365 4,130,955 4,130,955 4,427,987 169,000 169,000 169,000 169,000 870,000 870,000 870,000 1,055,000 46,814,004 46,814,004 46,814,004 48,604,004 3,968,455 9,575 51,960,519 59,778,879 4,259,450 64,038,329 66,962,133 44,243,426 44,243,426 44,243,426 38,973,530 7,377,012 7,377,012 7,377,012 4,257,035 5,191,208 16,564,581 21,755,789 19,876,191 25,926,680 25,926,680 37,974,054 422,188 16,934,366 16,934,366 17,409,625 1,796,600 1,796,600 3,069,307 4,257,035 422,188 44,243,426 94,092,280 23,941,593 118,033,873 124,679,719 $ 8,225,490 $ 431,763 $ 44,243,426 $ 51,960,519 $ 153,87U59 $ 28,201,043 $ 182,072,202 $ 191Ml,852 5 City of San Rafael Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Expendable Trust Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 3D, 2001) Governmental Fund Types General Special Fund Revenue REVENUES: Taxes and special assessments $ 30,983,196 $ 2,063,579 $ Licenses and permits 685,086 4,991 Fines and forfeitures 773,239 Uses of money and property 425,677 787,754 Intergovernmental 5,337,427 2,712,065 Charges for current services 1,713,025 7,843,441 Other revenues 301,860 418,087 Total revenues 40,219,510 13,829,917 EXPENDITURES: Current: General government 6,128,307 8,065 Public safety 21,544,132 4,354,074 Public works and parks 5,334,031 3,546,773 Community development/ redevelopment 1,836,087 248,930 Culture and recreation 1,691,308 5,319,800 Capital outlay 148,574 141,800 Capital improvement/ special projects 405,071 3,774,611 Debt service: Principal retirement Interest and fiscal charges Total expenditures 37,087,510 17,394,053 REVENUES OVER (UNDER) EXPENDITURES 3,132,000 (3,564,136) OTHER FINANCING SOURCES (USES): Operating transfers in (Note 5) 453,973 4,301,655 Operating transfers out (Note 5) (5,292,036) (1,090,215) Total other financing sources (uses) (4,838,063) 3,211,440 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,706,063) (352,696) FUND BALANCES: Beginning of year 10,166,483 14,911,572 End of year $ 8,460,420 $ 14,558,876 $ See accompanying Notes to General Purpose Financial Statements. 6 Debt Service 4,526,131 36,144 4,562,275 1,849,000 2,641,111 4,490,111 72,164 (7,550) (7,550) 64,614 2,061,238 2,125,852 Capital Projects $ 957,696 1,196,668 506,298 147,647 407,309 3,215,618 448,542 1,525,091 17,109 11,580,404 13,571,146 (10,355,528) 994,416 (43,000) 951,416 (9,404,112) 28,494,422 $ 19,090,310 Fiduciary Totals Fund T~~l~e (Memorandum Only) Expendable Trust 2002 2001 $ $ 38,530,602 $ 39,753,729 690,077 844,793 773,239 1,337,617 19,063 2,465,306 3,989,893 35,000 8,590,790 9,223,148 9,704,113 12,019,807 21,511 1,148,767 4,684,447 75,574 61,902,894 71,853,434 52,330 6,188,702 5,737,343 25,898,206 24,437,700 9,329,346 8,669,755 3,610,108 3,454,234 66,009 7,077,117 6,381,725 307,483 2,923,669 15,760,086 10,935,705 1,849,000 1,786,000 2,641,111 2,746,333 118,339 72,661,159 67,072,464 (42,765) (10,758,265) 4,780,970 5,750,044 7,070,234 (6,432,801) (7,830,234) (682,757) (760,000) (42,765) (11,441,022) 4,020,970 464,953 56,098,668 54,432,016 $ 422,188 $ 44,657,646 $ 58,452,986 7 City of San Rafael Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual-General Fund, Special Revenue Funds, Debt Service Funds with Budgets, and Expendable Trust Funds with Budgets For the year ended June 30, 2002 General Fund Specia l Revenue Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual iUnfavorable) REVENUES: Taxes and special assessments $30,274,950 $30,983,196 $ 708,246 $ 2,067,835 $ 2,063,579 $ (4,256) Licenses and permits 555,150 685,086 129,936 53,500 4,991 (48,509) Fines and forfeitures 743,980 773,239 29,259 2,000 (2,000) Uses of money and property 331,000 425,677 94,677 591,025 78 7,754 196,729 Intergovernmental 5,170,600 5,337,427 166,827 3,197,222 2,712,065 (485,157) Charges for current services 1,522,372 1,713,025 190,653 7,930,959 7,843,441 (87,518) Other revenues 133,115 301,860 168,745 80,920 418,087 337,167 Total revenues 38,731 ,167 40,219,510 1,488,343 13,923,461 13,829,917 (93,544) EXPENDITURES: Current: General government 6,136,284 6,128,307 7,977 7,744 8,065 (321) Public safety 21,104,203 21 ,544,132 (439,929) 4,198,427 4,354,074 (155,647) Public works and parks 5,490,331 5,334,031 156,300 4,109,049 3,546,773 562,276 Community development/ redevelopment 2,076,020 1,836,087 239,933 248,930 (248,930) Culture and recreation 1,770,059 1,691,308 78,751 5,097,328 5,319,800 (222,472) Capital outlay 265,702 148,574 117,128 168,033 141,800 26,233 Capital improvement/ special projects 369,091 405,071 (35 ,980) 2,674,700 3,774,611 (1,099 ,911) Debt service: Principal retirement Interest and fiscal charges Total expenditures 37,211,690 37,087,510 124,180 16,255,281 17,394,053 _(1,138,772) REVENUES OVER (UNDER) EXPENDITURES 1,519,477 3,132,000 1,612,523 (2,331,820) (3,564,136) _(1,232,316) OTHER FINANCING SOURCES (USES): Operating transfers in (Note 5) 837,852 453,973 (383,879) 4,246,121 4,301,655 55,534 Operating transfers out (Note 5) (5,310,000) _(5,292,036) 17,964 (1,322,590) (1,090,215) 232,375 Total other financing sources (uses) (4,472,148) (4,838,063) (365,915) 2,923,531 3,211,440 287,909 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ {2,952,671} (1,706,063) $ 1,246,608 $ 591,711 (352,696) $ (944,40Z) FUND BALANCES: Beginning of year 10,166,483 14,911,572 Residual equity transfer End of year $ 8,460,420 $14,558,876 See accompanying Notes to General Purpose Financial Statements. 8 Debt Service Funds Expendable Trust Funds Totals (with Budgets) (with Budgets) (Memorandum Only) Variance Variance Variance Favorable Favorable Favorable Bud!aet Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 4,462,300 $ 4,526,131 $ 63,831 $ $ $ $36,805,085 $ 37,572,906 $ 767,821 608,650 690,077 81,427 745,980 773,239 27,259 25,800 36,144 10,344 22,210 17,584 (4,626) 970,035 1,267,159 297,124 35,000 35,000 8,402,822 8,084,492 (318,330) 9,453,331 9,556,466 103,135 17,000 15,311 (1,689) 231,035 735,258 504,223 --- 4,488,100 4,562,275 74,175 74,210 67,895 (6,315) 57,216,938 58,679,597 1,462,659 52,000 52,330 (330) 6,196,028 6,188,702 7,326 25,302,630 25,898,206 (595,576) 9,599,380 8,880,804 718,576 2,076,020 2,085,017 (8,997) 30,960 61,707 (30,747) 6,898,347 7,072,815 (174,468) 433,735 290,374 143,361 3,043,791 4,179,682 (1,135,891) 1,891,940 1,849,000 42,940 1,891,940 1,849,000 42,940 2,599,620 2,641,111 (41,491) 2,599,620 2,641,111 (41,491) 4,491,560 4,490,111 1,449 82,960 114,037 (31,077) 58,041,491 59,085,711 (1,044,220) (3,460) 72,164 75,624 (8,750) (46,142) (37,392) (824,553) (406,114) 418,439 5,083,973 4,755,628 (328,345) (7,550) (7,550) (6,640,140) (6,389,801) 250,339 (7,550) (7,550) (1,556,167) (1,634,173) (78,006) $ (11,010) 64,614 $ 75,624 $ (8,750) (46,142) $ (37,392) $ (2,380,720) (2,040,287) $ 340,433 1,977,753 2,397 $ 2,044,764 432,555 $ 386,413 9 27,488,363 2,397 $25,448,076 City of San Rafael Combined Statement of Revenues, Expenses and Changes in Retained Earnings All Proprietary Fund Types and Discretely Presented Component Unit For the year ended June 30, 2002 (With comparative totals for the year ended June 30,2001) Totals Primary Primary Government Government Enterprise Internal (Memorandum Fund Service Onli:} OPERATING REVENUES: Charges for current services $ 1,544,815 $ 3,732,907 $ 5,277,722 Refunds 125 174,502 174,627 Sewer charges Connection fees Other operating revenues 629,741 629,741 Total operating revenues 1,544,940 4,537,150 6,082,090 OPERATING EXPENSES: Contract 495,706 495,706 Insurance premiums and claims 3,801,618 3,801,618 Capital outlay 24,312 2,086,886 2,111,198 Capital improvement projects 1,570,794 1,570,794 Sewage collection Sewage treatment Depreciation and amortization General and administrative 993,729 993,729 Total operating expenses 1,018,041 7,955,004 8,973,045 OPERATING INCOME (LOSS) 526,899 ___ (3,417,8542-(2,890,955} NONOPERATING REVENUES (EXPENSES): Property taxes Operating transfers in 859,440 859,440 Aid from governmental agencies Gain on sale of fixed assets Contribution to the District Operating transfers out (98,683) (78,000) (176,683) Investment income 36,265 425,940 462,205 Interest expense Total nonoperating revenues (expenses) (62,418} 1,207,380 1,144,962 NET INCOME (LOSS) 464,481 (2,210,474) (1,745,993) Add: depreciation expense on assets acquired by contributed capital Less: contributed capital received Increase in retained earnings 464,481 (2,210,474) (1,745,993) RETAINED EARNINGS: Beginning of year 469,692 6,467,509 6,937,201 End of year $ 934,173 $ 4,257,035 $ 5,191,208 See accompanying Notes to General Purpose Financial Statements. 10 Component Unit San Rafael Sanitation District Enterprise Fund $ 5,373,170 25,351 90 5,398,611 1,6 20,922 2,031,224 843,368 193,665 4,689,179 709,432 527,714 101,960 134,274 (202,102'2 561,841 1,271,273 1,271,273 15,293,308 $ 16,564,581 Totals (Memorandum Only) 2002 2001 $ 5,277,722 $ 3,104,777 174,627 95,560 5,373,170 5,033,015 25,351 101,632 629,831 4,486 11,480,701 8,339,470 495,706 115,906 3,801,618 2,643,102 2,111,198 4,434 1,570,794 226,515 1,620,922 1,418,561 2,031,224 1,970,028 843,368 837,418 1,187,394 203,602 13,662,224 7,419,566 (2,181,523) 919,904 527,714 493,661 859,440 850,000 101,960 73,490 8,260 206,008 (176,683) (90,000) 596,479 529,849 {202,107) {184,600) 1,706,803 1,886,668 (474,720) 2,806,572 290,598 (206,008} (474,720) 2,891,162 22,230,509 16,985,029 $ 21,755,789 $ 19,876,191 11 City of San Rafael Combined Statement of Cash Flows All Proprietary Fund Types and Discretely Presented Component Unit For the year ended June 30, 2002 (With comparative totals for the year ended June 30,2001) Totals Primary Primary Government Government Enterprise Internal (Memorandum Fund Service Only~ CASH FLOWS FROM OPERATING ACTIVITIES: Operating income (loss) $ 526,899 $ (3,417,854) $ (2,890,955) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Changes in current assets and liabilities: Receivables (521) (521) Due to other governments Prepaid expenses and other current assets Accounts payable and other current liabilities 43,300 (563,828) (520,528) Insurance claims payable 1,099,586 1,099,586 Deferred revenues 5,000 5,000 Net cash provided (used) by operating activities 569,678 (2,882,096) (2,307,418) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating transfers in 859,440 859,440 Operating transfers out (98,683) (78,000) (176,683) Property taxes Aid from governmental agencies Net cash provided (used) by noncapital financing activities (98,683) 781,440 682,757 CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Cash paid for capital acquisitions Interest received from certificates of participation principal cash Principal payments on certificates of participation Interest paid on certificates of participation Net cash provided (used) by capital financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Gain on sale of fixed assets Investment income 36,265 425,940 462,205 Net cash provided (used) by investing activities 36,265 425,940 462,205 Net increase (decrease) in cash and investments 507,260 (1,674,716) (1,162,456) CASH AND INVESTMENTS: Beginning of year 457,217 9,900,206 10,357,423 End of year $ 964,477 $ 8,225,490 $ 9,194,967 See accompanying Notes to General Purpose Financial Statements. 12 Component Totals Unit (Memorandum Only) Enterprise Fund 2002 2001 $ 709,432 $ (2,181,523) $ 919,904 843,368 843,368 837,418 500 (21) (6,898) 28,399 28,399 (18,019) 20,553 20,553 (48,152) (612,553) (1,133,081) 547,591 1,099,586 355,563 5,000 989,699 (1,322,7191 2,587,407 859,440 850,000 (176,683) (90,000) 527,714 527,714 493,661 101,960 101,960 73,490 629,674 1,312,431 1,327,151 (599,100) (599,100) (995,499) 42,547 42,547 22,745 (325,000) (325,000) 571,281 (202,107) (202,107) (184,600) (1,083,660) (1,083,660) (586,073) 8,260 134,274 596,479 507,104 134,274 596,479 515,364 669,987 (497,469) 3,843,849 5,001,698 15,359,121 8,570,597 $ 5,671,685 $ 14,861,652 $ 12,414,446 13 S1 S.LNtlWtl.LV.LS lVI:::>NVNId: tlSO(nIncllVlItlNtl~ O.L Stl.LON City of San Rafael Notes to General Purpose Financial Statements For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of San Rafael (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. A. Reporting Entity The City maintains a Council-Manager form of government and provides the following services: public safety (police and fire), public works, community development, library, parks, recreation, childcare, and general administrative services. As required by GAAP, these general purpose financial statements present the City (the primary government) and its component units. Component units generally are legally separate entities for which a primary government is financially accountable. Financial accountability ordinarily involves meeting both of the following criteria set forth in GASB Statement No. 14: the primary government is accountable for the potential component unit, and the primary government is able to impose its will upon the potential component, or there is a possibility that the potential component unit may provide specific financial benefits or impose specific financial burdens on the primary government. In addition to having the same governing board, the City is financially accountable for the San Rafael Redevelopment Agency and the San Rafael Joint Powers Financing Authority, and management activities of both entities are conducted by City staff. The two legally separated entities are, in substance, part of the City's operations and are, therefore, blended into the City's general purpose financial statements. The component units discussed in this note are included in the City's reporting entity because of the significance of its operational or financial relationships with the City. Each component unit has a June 30 year end. Separately issued component unit financial statements can be obtained at the City of San Rafael, Finance Division, 1400 Fifth Avenue, Room 204, San Rafael, California 94901. Blended Component Units: 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 proposes to assist in the development of 16 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued A. Reporting Entity, Continued 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 fixed assets and long-term debt) are blended into the capital projects funds and debt service funds. The Agency's fixed assets are included in the General Fixed Assets Account Group. The Agency's long-term debts are blended into the General Long-Term Debt Account Group. 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 1 of the Government Code of the State of California for the purpose of assisting in the financing and refinancing of certain assessment district activities of the City. All of the Authority's assets, liabilities, revenues and expenditures are blended into the capital projects funds and the debt service funds. The Authority's long-term debts are blended into the General Long-Term Debt Account Group. Discretely Presented Component Unit: San Rafael Sanitation District -The San Rafael Sanitation District (District) was formed in 1947 under Section 4700 of the California Health and Safety Code to provide wastewater transmission over the southern two-thirds of the City and adjacent unincorporated areas. The 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 general purpose financial statements which includes the District's assets, liabilities, revenues, expenses, results of operations and cash flows. The District's fiscal year end is 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. 17 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued B. Description of Funds and Account Groups The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity with its own self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses. These funds and account groups are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds presented in the general purpose financial statements are grouped into categories as follows. Governmental Fund Types: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally or administratively restricted to expenditures for specified purposes. Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. Proprietary Fund Types: Internal Service Funds are used to account for the financing of goods or services provided by one department or program to other departments or programs of the City, or to other governments, on a cost-reimbursement basis. Enterprise Funds are used to account for operations where it is the stated intent that costs of providing services to the general public on a continuing basis be financed or recovered primarily through user charges. 18 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued B. Description of Funds and Account Groups, Continued Fiduciary Fund Type: Expendable Trust Funds are accounted for in the same manner as governmental funds. All trust funds of the City are classified as expendable. Account Groups: The General Fixed Assets Account Group is used to maintain control and cost information on capital assets acquired to perform general government functions. The General Long-Term Debt Account Group is used to record the unmatured principal of tax allocation bonds, special assessment bonds, notes, compensated absences, the principal amount of future lease payments due under lease purchase agreements and other long-term liabilities. C. Measurement Focus All governmental funds and expendable trust funds are accounted for on a spending or "current financial resources" measurement focus. This means that generally only current assets and current liabilities are included on their balance sheets, with the exception that the noncurrent portion of long-term receivables are reported on their balance sheets, offset by fund balance reserve accounts or deferred revenue. Statements of revenues, expenditures and changes in fund balances for governmental funds generally present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. All proprietary funds are accounted for on a cost of services or "economic resources" measurement focus. This means that all assets and liabilities (whether current or noncurrent) associated with the activity are included on the balance sheets. Their reported fund equity presents total net assets. Proprietary fund operating statements present increases (revenues) and decreases (expenses) in total net assets. D. Basis of Accounting All governmental funds and expendable trust funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Accordingly, revenues are recorded when received in cash 19 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued D. Basis of Accounting, Continued except that revenues subject to accrual are recognized as income when due. Accrued revenues include property taxes, taxpayer-assessed tax revenues (sales taxes, transient occupancy taxes franchise taxes, etc.) and earnings on investments. Grant revenues have been recorded according to the provisions of GASB, whereby grant funds received before the revenue recognition criteria have been met are reported as a receivable. Expenditures are recorded in the accounting period in which the related fund liability is incurred except for unmatured principal and interest on long- term debt, which are recognized when due, and compensated absences, which are recorded as a fund liability and an expenditure when expected to be liquidated with expendable available financial resources. All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned and become measurable; expenses are recognized when they are incurred. The City applies all F ASB statements that do not conflict with or contradict GASB guidance. E. Budgets The City adopts a budget on a biannual basis, to be effective July 1 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 funds, except for the East 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. No budget was created for the Recreation Fiduciary Expendable Trust Fund because donations cannot be anticipated or projected. 20 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued E. Budgets, Continued Because not all debt service and enterprise funds have annual budgets, the actual amounts that appear in the accompanying Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All Governmental Fund Types and Expendable Trust Funds and Combined Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General Fund, Special Revenue Funds, Debt Service Funds with Budgets and Expendable Trust Funds with Budgets do not agree. A reconciliation of key information for the debt service funds and expendable trust funds between the two statements is presented below: Debt Service Funds: Actual amounts on the Combined Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Funds without annual budgets: East Francisco Boulevard Assessments District 1915 Act Bonds 1997 Reassessment Bonds Amounts on Combined Statement of Revenues, Expenditures and Changes in Fund Balances Expendable Trust Funds: Actual amounts on the Combined Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Funds without annual budgets: Recreation Fiduciary Amounts on Combined Statement of Revenues, Expenditures and Changes in Fund Balances 21 Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses $ 64,614 $ 64,614 Fund Balances $ $ 2,042,367 13,701 67,387 2,397 2,125,852 $ (46,142) $ 386,413 3,377 35,775 $ (42,765) $ 422,188 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued E. Budgets, Continued The basis of accounting applied to the budget data presented for the General Fund, special revenue funds, debt service funds and expendable trust funds is the modified accrual basis of accounting, and also conforms to GAAP. The capital projects funds budgets are based on a project time frame, rather than a fiscal year 1/ operating" time frame, reappropriating unused appropriations from year to year until project completion. Supplemental appropriations for the fiscal year ended June 30, 2002, were as follows: Original Supplemental Final Fund Budget AEEroEriations Budget General Fund $ 35,665,740 $ 1,555,950 $ 37,221,690 Special Revenue Funds 15,609,166 646,115 16,255,281 Debt Service Funds 4,491,560 4,491,560 Expendable Trust Funds 58,420 24,540 82,960 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 reservations 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. F. Cash, Cash Equivalents and Investments The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts with original maturities of three months or less to be cash equivalents. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to change in interest rates. 22 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued G. Short-Term Interfund ReceivableslPayables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as 1/ due from other funds" or 1/ due to other funds" on the balance sheet. Short-term loans are classified as interfund receivables or payables. H. Property Tax Levy Collection and Maximum Rates The State of California (State) Constitution Article XIIIA provides that the combined maximum property tax rate on any given property may not exceed one percent (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 two percent (2%) per year unless the property is sold, transferred, or improved. The State Legislature has determined the method of distribution of receipts from a one percent (1 %) tax levy among the counties, cities, school districts, and other districts. Marin County assesses, bills for, and collects property taxes as follows: Lien dates Levy dates Due dates Delinquent as of Secured January 1 July 1 50% on November 1 and 50% on February 1 December 10 (for November) April 10 (for February) Unsecured January 1 July 1 July 1 August 31 The term 1/ unsecured" refers to taxes on personal property other than real estate, land, and buildings. These taxes are secured by liens on the property being taxed. Property taxes levied are recorded as revenue when received in the fiscal year of levy because of the adoption of the 1/ alternate method of property tax distribution," known as the Teeter Plan, by the City and the County of Marin. The Teeter Plan authorizes 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 23 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued 1. Taxpayer-Assessed Taxes Accrual In accordance with GASB Statement No. 22, Accounting for Taxpayer-Assessed Tax Revenues in Governmental Funds, the City recognizes taxpayer-assessed taxes in governmental funds as follows: Sales Taxes -The City accrues actual advances from the State Board of Equalization received in July and August of the subsequent fiscal year, as these amounts are both measurable and available to the City to meet its financial obligation for the current period. Public Safety Sales Tax (Proposition 172 Sales Tax) -The City accrues July and August receipts of the public safety sales tax on the basis consistent with the accrual of regular sales taxes. Transient Occupancy Taxes -The City collects transient occupancy taxes on a quarterly basis. The taxes assessed for the quarter ended June 30 are due by July 31 of the subsequent fiscal year. The City accrues all transient occupancy taxes for the June 30 th quarter received subsequent to the fiscal year end. Gas Taxes -The City accrues gas taxes assessed for the month ended June 30, as these amounts are both measurable and available to the City a month after the fiscal year end. Franchise Fees -The City collects cable franchise fees on a quarterly basis and refuse franchise fees on a monthly basis. The taxes assessed for the quarter ended June 30 are due by July 31 of the subsequent fiscal year. The City accrues all franchise fees for the June 30th period received subsequent to the fiscal year end. J. General Fixed Assets General fixed assets are recorded as expenditures of the various governmental funds at the time of purchase and are subsequently capitalized for memorandum purposes in the General Fixed Assets Account Group. Such assets include land, buildings, building improvements, furniture and equipment. Public domain /I infrastructure" fixed assets, such as roads, streets and sidewalks, bridges, curbs and gutters, drainage systems, lighting systems, and similar assets, are not capitalized. No depreciation is provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair market value on the date donated. Fixed assets acquired by lease obligations are valued at the present value of future lease payments at the inception of the lease. 24 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued J. General Fixed Assets, Continued The collection systems and facilities of the District are stated at cost less accumulated depreciation. Assets contributed have been recorded at the fair market value at the date received. Maintenance and repairs are charged to expense as incurred. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed asset. Depreciation is computed using the straight-line method over the useful lives of the assets. A summary of the useful lives of the fixed assets of the District is as follows: Subsurface lines Sewage collection facilities General plant and administrative facilities K. Long-Term Lease Accounting 50 years 5 -50 years 3 -15 years Fixed assets acquired through long-term lease contracts are capitalized at the time the contract is executed. The related assets and liabilities are recorded in the appropriate fund or account group. L. Compensated Absences The City accounts for compensated absences (unpaid vacation, sick leave, compensatory time, and administrative leave) expected to be currently payable as accrued payroll and benefits liability in the governmental funds to which they relate. The balance of the earned and vested, but unused, compensated absences expected to be paid subsequent to the end of current fiscal year, is recorded in the General Long-Term Debt Account Group. Effective July 2001, the requirement that employees hired before 10/79 be eligible for a portion of unused sick leave was eliminated. No expenditure was recorded for these amounts. M. Claims and Judgments Claims and judgments that normally would be liquidated with expendable available resources are accounted for in the internal service funds. N. Appropriation Limit Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from proceeds of taxes. For the fiscal year ended June 30, 2002, based on calculations by City's management, proceeds of taxes did not exceed related appropriations. Further, Section 5 of Article XIIIB allows the City to designate a portion of fund balances for general contingencies to be used for any purpose. 25 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES, Continued o. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. P. Total Columns on Combined Statements Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis and do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Such data is not comparable to a consolidation. Interfund eliminations have not been made. Q. Reclassifications Certain reclassifications have been made to prior year financial data in order to conform with the current year presentation. 2. CASH AND INVESTMENTS The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds, which the City Treasurer invests to enhance interest earnings. The pooled interest earned is allocated quarterly to each fund based on an average of quarterly opening and closing balances of cash and investments. A. Cash Deposits The carrying amounts of the City's cash deposits were $4,560,346 at June 30, 2002. Bank balances at June 30, 2002 were $5,607,110 which were fully insured and collateralized with securities held by the pledging financial institutions in the City's name as discussed below. The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City may waive collateral requirements for cash deposits which are fully insured up to $100,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements. 26 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 2. CASH AND INVESTMENTS, Continued B. Investments The City is authorized by State statutes and in accordance with the City's Investment Policy (the Policy), adopted on December 18, 2000, to invest in the following: o U.s. Government Obligations o U.s. Government Agencies and Instruments o Repurchase Agreements o Bankers Acceptances o Commercial Paper o Medium-Term Corporate Notes o Certificates of Deposit o Negotiable Certificates of Deposit o California Local Agency Investment Fund (LAIF) o Mutual Funds C. Risk Category In accordance with GASB Statement No.3, cash deposits and investments are categorized separately to give an indication of the level of risk assumed by the City. Cash deposits and investments not subject to such categorization under GASB Statement No.3 are identified as "uncategorized." The City's cash deposits and investments are categorized in the following manner: Deposits: Category 1 -Insured or collateralized with securities held by the entity or by its agent in the entity's name. Category 2 -Collateralized with securities held by the pledging financial institution's trust department or agent in the entity's name. Category 3 -Deposits which are uninsured or uncollateralized. 27 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 2. CASH AND INVESTMENTS, Continued C. Risk Category, Continued Investments: Category 1 -Insured or registered or securities held by the entity or its agent in the entity's name. Category 2 -Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the entity's name. Category 3 -Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the entity's name. Uncategorized -Certain cash deposits and investments are not subject to categorization under GASB Statement No.3. Pooled cash and investments were classified by risk category as follows at June 3D, 2002: Category Category Category Fair 1 2 3 Uncategorized Value City Treasury: Demand Deposits: Cash Deposits $ 4,560,346 $ $ $ $ 4,560,346 Certificates of Deposit 380,000 380,000 Total demand deposits 4,940,346 4,940,346 Investments: Securities of u.s. Government Agencies 5,314,578 5,314,578 Corporate bonds and notes 7,643,749 7,643,749 Local Agency Investment Fund 20,305,063 20,305,063 Total investments 12,958,327 20,305,063 33,263,390 Total City Treasury 4,940,346 12,958,327 20,305,063 38,203,736 Cash and Investments with Fiscal Agent 11,515,875 11,515,875 Total cash and investments $ 4,940,346 $ 12,958,327 $ 11,515,875 $ 20,305,063 $ 49,719,611 28 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 2. CASH AND INVESTMENTS, Continued C. Risk Category, Continued The City's invesbnents with Local Agency Invesbnent Fund (LAIF) at June 30, 2002, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These invesbnents include the following: Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/ or that have embedded forwards or options. Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMO's) or credit card receivables. As of June 30, 2002, the City had $20,305,063 invested in LAIF, which had invested 3.086% of the pool invesbnent funds in Structured Notes and Asset-Backed Securities. The LAIF fair value factor of 1.002780144 was used to calculate the fair value of invesbnents in LAIF. Cash and invesbnents stated at fair value held in the City Treasury grouped by maturity date at June 30, 2002, are shown below: Maturity Fair Value Current to one year $ 26,432,785 One to two years 621,595 Two to three years 3,740,148 Three to four years 2,607,286 Four to five years 4,801,922 Total $ 38,203,736 D. Cash and Investments with Fiscal Agent The funds deposited with fiscal agent can be held in cash or invested in various securities. The fiscal agent can invest in securities as outlined in trust agreements, provided the investments are within the limits imposed by State statutes upon the entity. At June 30, 2002, cash and investments with fiscal agent totaling $11,515,875 were recorded at fair value. 29 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 2. CASH AND INVESTMENTS, Continued E. Component Unit -Sanitation District Cash and Investments All of the District's cash is deposited with the County of Marin's pooled cash and investments account, except cash related to the certificates of participation which is invested in an open-end mutual fund held in trust by the District's custodial agent. The carrying amount and fair value of the pooled cash and investments account and the open-end mutual fund at June 30, 2002, amounted to $4,448,695 and $1,222,915, respectively, totaling $5,671,610. In accordance with Category 3, both of these types of investments are not required to be categorized as to credit risk. Fair values for the pooled cash and investments were provided by the County of Marin as the pool's sponsor. The fair value of the open-end mutual fund was based upon the unit share price at June 30, 2002. Cash and investments at June 30, 2002, consisted of the following: Cash and investments $ 5,671,610 Petty cash 75 Total $ 5,671,685 Umestricted cash: Cash $ 4,448,770 Restricted cash: Certificates of participation 1,222,915 Total $ 5,671,685 3. RECEIVABLES As of June 30, 2002, receivables consisted of the following: Accounts $ 960,268 Taxes 4,310,410 Grants 239,854 Interest 398,317 Loans 1,004,889 Total $ 6,913,738 30 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 3. RECEIVABLES, Continued A. Accounts Receivable Accounts receivable consisted of amounts accrued in the funds in the ordinary course of operations. The total amount of accounts receivable as of June 30, 2002, was as follows: General Fund $ 169,290 Special Revenue Funds: Recreation Revolving 117,824 Street Maintenance and Cleaning 65,551 Sewer Maintenance 23,573 Household Hazmat Facility 290,334 Library 213,725 Stormwater 40,295 Development Services 19,270 Falkirk Revolving 350 Total special revenue funds 770,922 Enterprise Fund: Parking Services 20,056 Total Enterprise funds 20,056 Total $ 960,268 B. Taxes Receivable As of June 30, 2002, the following taxes receivable were outstanding: Capital General Projects Fund Funds Totals Property taxes $ 147,786 $ $ 147,786 Sales taxes 2,670,521 2,670,521 Transient occupancy taxes 228,376 228,376 Franchise fees 248,351 248,351 Miscellaneous taxes & fees 77,136 938,240 1,015,376 Totals $ 3,372,170 $ 938,240 $ 4,310,410 31 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 3. RECEIVABLES, Continued C. Grants Receivable The total amount of grants receivable as of June 30, 2002, were as follows: Special Revenue Funds: Childcare $ 18,180 Grants 81,674 Total special revenue funds 99,854 Capital Projects Fund: Capital Improvement 140,000 Total capital projects fund 140,000 Total $ 239,854 D. Interest Receivable As of June 30, 2002, interest receivable consisted of the following: General Fund $ 385,684 Capital Projects Fund: Redevelopment Agency Funds 12,633 Total $ 398,317 32 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 3. RECEIVABLES, Continued E. Loans Receivable The City had the following loans receivable at June 30, 2002: General Fund: Loan from City Manager Employees' Computer Loans Total general fund Special Revenue Funds: Traffic and Housing Mitigation: One "H " Street Associates Parkland Dedication: Muir Terrace Homes Total special revenue funds Capital Projects Funds: Park Capital Projects: Marin Bocce Federation Low and Moderate Income Housing: Marin Housing Development Centertown Associates Balloon Mortgage Loan Total capital projects funds Total $ 356,663 28,887 385,550 91,428 21,726 113,154 35,000 100,000 246,199 124,986 506,185 $ 1,004,889 On August 1, 1996, the City made a 30-year loan to the City Manager in the amount of $392,040, at an interest rate equivalent to the Local Agency Investment Fund interest rate, for the purchase of a home. The loan is secured by the Deed of Trust. The principal and interest are payable monthly commencing September 1, 1996 through August 31, 2026. As of June 30, 2002, the outstanding balance of the loan was $356,663. Effective February 1, 2000, the City agreed to loan employees up to $2,500 for the purchase of computer software and hardware. 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. As of June 30, 2002 the outstanding balance of the employees' computer loans was $28,887. 33 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 3. RECEIVABLES, Continued E. Loans Receivable, Continued $100,000 loan from One "H" Street Associates at 0% interest rate with annual payments of $2,857 and with final payment due January 18, 2034. The loan is in connection with the affordable housing project located at One "H" Street. As of June 30, 2002, the outstanding balance of the loan was $91,428. In April 1996, Muir Terrace Homes entered in agreement with the City to defer all development fee payments except the Traffic Mitigation fee is waived for the Below Market Rate units. The payments are due when the developer has sold all the units for low-mod income housing. The outstanding balance of the loan receivable at June 30, 2002 was $21,726. The City entered an interest free loan with the Marin Bocce Federation to finance the San Rafael Bocce Center projects. The loan is due in annual installments, due and by June 30 of each year in the amount of $5,000. The outstanding balance at June 30, 2002 was $35,000. $100,000 from Marin Housing Development at 0% interest rate. All principal and interest shall be due on January 30,2005. As of June 30, 2002, the balance of the loan was $100,000. $303,000 loan from Centertown Associates, Ltd. at 3% interest rate due semiannually. The final payment is due on July I, 2065. The remaining loan receivable at June 30, 2002 was $246,199. On May 18, 2001, the Agency entered a five-year balloon mortgage loan agreement with Brendan Mitchell in the amount of $126,160. The annual interest rate of the loan is 7.875%. The principal and interest are payable monthly in the amount of $915 on the first day of each month commencing July I, 2001. The entire outstanding balance is due and payable on or before June 30, 2006. At June 30, 2002, the outstanding balance of the loan was $124,986. 34 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 4. DEFERRED REVENUE As of June 30, 2002, deferred revenue as related to certain receivables was recorded as follows: General Fund $ 2,394 Special Revenue Funds: Recreation Revolving 67,196 Parkland Dedication 21,726 Capital Projects Fund: Park Capital Projects 35,000 Enterprise Funds: Parking Services 5,000 Total $ 131,316 5. INTERFUND TRANSACTIONS A. Interfund Receivables and Payables As of June 30, 2002, balances of interfund receivables and payables were as follows: D ue To Other Fu n d s Capital Projects Special Revenue Funds Fund Traffic and General Housing Development Park Capital Fund Childcare Mitigation Services Projects Totals '" General Fund $ $ 14,552 $ $ $ $ 14,552 "t:l = ::s Special Revenue Funds: .... .. ~ Childcare 36,578 36,578 -= 0 Parkland Dedication 35,000 35,000 S 0 Capital Projects Fund: .. .... ~ Redevelopment Ag ency Funds 200,000 732,735 932,735 ::s Cl Totals $ 36,578 $ 14,552 $ 200,000 $ 732,735 $ 35,000 $ 1,018,865 35 City of San Rafael Notes to General Purpo!:!e Financial Statements, Continued For the year ended June 30, 2002 5. INTERFUND TRANSACTIONS, Continued B. Operating Transfers Operating transfers for the year ended June 30, 2002, were as follows: Special Revenue Funds Street Maintenance General Recreation Gas and Public Fund Revolvin~ Tax Childcare Cleaning Safetr General Fund 959,038 500,000 $ 37,100 1,472,586 $ 25,000 Special Revenue Funds: Gas Tax 400,000 Childcare Sewer Maintenance 71,737 Grants 27,000 Parkland Dedication Emergency Medical Services 260,177 Debt Service Funds: -= Peacock Gap 0 ~ Assessment District 2,537 .t; c Mariposa Assessment District 151 ~ f-< 1997 Financing Authority Revenue Bonds 4,862 Capital Projects Fund: Bedroom Tax Enlerprise Fu nd: Parking Services 87,509 Internal Service Fund: Equipment Replacement Totals 453,973 959,038 500,000 37,100 1,872,586 25,000 Transfers In Capital Projects Funds Internal Service Funds Parks Capital Capital Equipment Building Worker's Storm water Grants ImeTovement Proiects Reelacement Maintenance Comeensation Totals 716,581 120,000 741,731 40,000 535,000 145,000 5,292,036 71,350 471,350 1,440 1,440 43,511 115,248 120,000 147,000 95,000 95,000 260,177 2,537 151 4,862 43,000 43,000 11,174 98,683 78,000 78,000 716,581 191,350 874,416 120,000 40,000 674,440 145,000 6,609,484 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 6. FIXED ASSETS A summary of the City's changes in general fixed assets for the year ended June 30, 2002, follows: Changes of Capitalization Balance Amount July 1, 2001 Additions Deletions Adjustments land and buildings $ 22,211,958 $ 3,432,3% $ $ (106,836) Rolling equipment 7,151,326 1,010,202 (150,916) (36,792) Furniture and equipment 6,250,618 1,850,125 (2,289,445) Improvements other than buildings 3,359,628 1,566,601 (5,439) Totals $ 38,973,530 $ 7,859,324 $ {150,916} $ {2,438,512} A summary of the District's fixed assets at June 30, 2002, follows: Land and easements Subsurface lines Sewage collection facilities General plant and administration Construction in progress Total Less accumulated depreciation Total 37 $ 115,329 12,152,655 23,923,020 50,393 108,027 36,349,424 (13,955,952) $ 22,393,472 Balance June 30,2002 $ 25,537,518 7,973,820 5,811,298 4,920,790 $ 44,243,426 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT The City records long-term debt of governmental funds in the General Long-Term Debt Account Group. Other governmental fund obligations not expected to be financed with current available financial resources are also recorded in the General Long-Term Debt Account Group. Long-term debt outstanding at June 30, 2002, was as follows: San Rafael Joint Powers Financing Authority: 1997 Authority Revenue Bonds San Rafael Redevelopment Agency Tax Allocation Bonds: Series 1992 Series 1995 Series 1999 Total Tax Allocation Bonds Special Assessment Bonds (with governmental commitment): Peacock Gap Refunding Mariposa Road Assessment Total Special Assessment Bonds Note Payable Capitalized Lease Obligations Compensated Absences Total long-term debt Component Unit -San Rafael Sanitation District: 2001 Certificates of Participation Totals Balance July 1, 2001 $ 3,885,000 14,620,000 7,655,000 22,444,004 44,719,004 930,000 125,000 1,055,000 169,000 420,500 3,889,365 $ 54,137,869 $ 4,427,987 $ 4,427,987 38 Additions $ $ $ $ Deletions Balance June 30,2002 $ (550,000) $ 3,335,000 (505,000) (210,000) {525,000) (1,240,000) (170,000) {15,000} (185,000} (196,774) {5,576} $ (2,177,350) 14,115,000 7,445,000 21,919,004 43,479,004 760,000 110,000 870,000 169,000 223,726 3,883,789 $ 51,960,519 $ (297,032) $ 4,130,955 $ (297,032) $ 4,130,955 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued A. 1997 Authority Revenue Bonds -Original Issue $5,250,000 On January 28, 1997, the Authority issued the 1997 Authority Revenue Bonds in the amount of $5,250,000 bearing interest at rates from 4.00% to 6.00%. 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%. 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 confirmed against private property within the Reassessment District. The outstanding balance of the bonds was $3,335,000 as of June 30, 2002. The annual debt service requirements on these bonds are as follows: Year Ending June 30, Principal Interest Totals 2003 $ 465,000 $ 11,985 $ 476,985 2004 485,000 12,870 497,870 2005 510,000 13,780 523,780 2006 535,000 14,715 549,715 2007 215,000 6,188 221,188 2008-2012 1,125,000 34,148 1,159,148 Totals $ 3,335,000 $ 93,686 $ 3,428,686 39 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued B. 1992 Tax Allocation Refunding Bonds -Original Issue $18,615,000 On May 1, 1992, the Agency issued Tax Allocation Refunding Bonds in the amount of $18,615,000. The proceeds of the bonds were used to refund $10,905,000 outstanding principal of the Agency's Central San Rafael Redevelopment Project Tax Allocation Bonds, Series 1985, to fund the construction of new improvements within the Project Area. The 1992 bonds mature annually each December 1 from 1992 to 2017, in amounts ranging from $340,000 to $1,350,000 and bear interest at rates ranging from 3.25% to 6.45%. Interest is payable semiannually on June 1 and December 1. The bonds maturing after December 1, 2002 are subject to the optional redemption prior to maturity, in whole or in part, on any date on or after December 1, 2002, 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 bonds are secured by an irrevocable pledge of certain tax revenues and other funds. As of June 30, 2002, the outstanding balance of the bonds was $14,115,000. The annual debt service requirements on these bonds are as follows: Year Ending June 30, Princi~ Interest Totals 2003 $ 535,000 $ 901,946 $ 1,436,946 2004 570,000 869,311 1,439,311 2005 605,000 834,256 1,439,256 2006 640,000 796,746 1,436,746 2007 680,000 756426 1,436,426 2008-2012 4,115,000 3,073,429 7,188,429 2013-2017 5,620,000 1,567,995 7,187,995 2018 1,350,000 87,075 1,437,075 Totals $ 14,115,000 $ 8,887,184 $ 23,002,184 40 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued C. 1995 Tax Allocation Bonds -Original Issue $8,895,000 On October 1, 1995, the Agency issued Tax Allocation Bonds in the amount of $8,895,000. The proceeds of the bonds were used to finance certain redevelopment activities of the Agency relating to the Central San Rafael Redevelopment Project Area. The bonds mature annually each December 1 from 1995 to 2021, in amounts ranging from $170,000 to $610,000 and bear interest at rates ranging from 3.50% to 6.00%. Interest is payable semiannually on June 1 and December 1. The bonds 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 I, 2003, 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 bonds are secured, on a parity with the 1992 bonds, by a pledge and lien on tax revenues and amounts on deposit in certain funds and accounts held by the fiscal agent. The outstanding balance of the bonds was $7,445,000 as of June 30, 2002. The annual debt service requirements on these bonds are as follows: Year Ending June 30, Principal Interest Totals 2003 $ 215,000 $ 412,435 $ 627,435 2004 225,000 402,750 627,750 2005 235,000 392,224 627,224 2006 250,000 380,760 630,760 2007 260,000 368,390 628,390 2008-2012 1,530,000 1,618,520 3,148,520 2013-2017 2,015,000 1,125,820 3,140,820 2018-2022 2,715,000 426,750 3,141,750 Totals $ 7,445,000 $ 5,127,649 $ 12,572,649 41 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued D. 1999 Tax Allocation Bonds -Original Issue $23,504,004 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 I, 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 ranging from 5.58% to 5.60%. Interest on the Capital Appreciation Bonds will compound on each interest premium date and will be payable solely at maturity. The bonds are secured, on parity with the 1992 and 1995 bonds, by a pledge and lien on tax revenues and amounts on deposit in certain funds and accounts held by the fiscal agent. The outstanding balance of the bonds was $21,919,004 as of June 30, 2002. The annual debt service requirements on these bonds are as follows: Year Ending June 30, Princi,eal Interest Totals 2003 $ 550,000 $ 949,600 $ 1,499,600 2004 575,000 922,881 1,497,881 2005 605,000 894,856 1,499,856 2006 630,000 865,525 1,495,525 2007 665,000 834,769 1,499,769 2008-2012 3,835,000 3,654,188 7,489,188 2013-2017 4,905,000 2,578,875 7,483,875 2018-2022 8,126,235 1,184,375 9,310,610 2023 2,027,769 36,500 ~064,269 Totals $ 21,919,004 $11,921,569 $ 33,840,573 42 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued E. Peacock Gap Reassessment District Limited Obligation Refunding Improvement Bonds - Original Issue $2,405,000 On October 7, 1993, the City issued Limited Obligation Refunding Improvement Bonds for the Peacock Gap Reassessment District in the amount of $2,405,000. The proceeds of the bonds were used to constitute a trust fund for the redemption and payment of principal and interest on the City of San Rafael Improvement Bonds of the Peacock Gap Improvement District, dated September 4, 1984. Interest is payable semi-annually on each March 2 and September 2, commencing March 2, 1994, at rates ranging from 4.00% to 5.75%. As of June 30, 2002, the outstanding balance of the bonds was $760,000. The annual debt service requirements on these bonds are as follows: Year Ending June 30, Princi~ Interest Totals 2003 $ 180,000 $ 39,068 $ 219,068 2004 190,000 28,798 218,798 2005 195,000 17,920 212,920 2006 195,000 6,181 201,181 Totals $ 760,000 $ 91,967 $ 851,967 F. Mariposa Road Assessment District Limited Obligation Improvement Bonds -Original Issue $233,688 On January 6, 1993, the City issued Limited Obligation Refunding Improvement Bonds for the Mariposa Road Assessment District in the amount of $233,688. The proceeds of the bonds were used to finance the grading and paving of Mariposa Road, to fund a Reserve Fund, and to pay the costs of issuance on the bonds. The bonds are issued as Serial Bonds and mature in various amounts on each September 2 commencing September 2, 1994 and ending September 2, 2008. Interest shall be payable commencing on March 2, 1993, and semiannually thereafter on September 2 and March 2 of each year until maturity, at rates ranging from 4.50% to 6.90%. As of June 30, 2002, the outstanding balance of the bonds was $110,000. 43 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued The annual debt service requirements on these bonds are as follows: Year Ending June 3D, Princi~ Interest 2003 $ 15,000 $ 6,938 $ 2004 15,000 5,955 2005 15,000 4,958 2006 15,000 3,946 2007 15,000 2,926 2008-2009 35,000 2,588 Totals $ 110,000 $ 27,311 $ G. Note Payable Totals 21,938 20,955 19,958 18,946 17,926 37,588 137,311 At June 30, 2002, Notes Payable consisted of a $169,000 promissory note bearing 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. H. Capitalized Lease Obligations The City leased one Fire Department ambulance in the amount of $113,814 including interest of $16,106. The lease is for five years beginning in 1998 through capital leasing arrangements. The lease expires in 2003. The City leased one fire truck in the amount of $558,370 including interest of $57,620. The annual lease payment of $186,124 for three years, including interest per year, started on April 10, 2001. The lease expires in 2003 . The City leased two copiers. Copier one is in the amount of $16,800. The monthly lease payment is $280 for five years. The lease expires in 2004. Copier two is in the amount of $11,880. The monthly lease payment is $198 for five years. The lease expires in 2006. The City leased furniture in the amount of $30,939. The monthly lease payment of $619 for five years started in July 2000. The lease expires in 2006. 44 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued The future minimum lease obligations are due as follows: Year Ending June 30, Ambulance Fire Truck Coeiers 2003 $ 11,381 $ 186,124 $ 6,636 2004 5,888 2005 2,490 2006 2,342 Minimum lease payments 11,381 186,124 17,356 Less amount representing interest {318} {9,954} {L728} Present value of minimum lease payments $ 11,063 $ 176,170 ~ 15,6~ 1. Compensated Absences Furniture Totals $ 7,426 $ 211,567 7,471 13,359 7,379 9,869 1,074 Q 3,416 23,350 238,211 (2,485} {J4,485} _$-20,865 _$_223,726 The City's liability for vested and unpaid compensated absences (accrued vacation, sick leave, compensatory time and administrative leave) expected to be paid subsequent to the fiscal year end, is reported in the General Long-Term Debt Account Group. At June 30, 2002, the balance of compensated absences in the governmental fund types totaled $3,883,789. J. Component Unit -San Rafael Sanitation District -2001 Certificates of Participation - Original Issue $4,710,000 The District and its Financing Corporation on May 1, 2001 issued $4,710,000 of Certificates of Participation at discount of $35,121. The certificates are 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 the 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 call premium at 101% to exercise optional prepayment between August I, 2009 and July 31, 2010, and no premium August 1, 2010 and after. 45 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 7. LONG-TERM DEBT, Continued The transaction advance refunded the 1991 Certificates by placing an amount in an irrevocable escrow fund sufficient to retire the debt on August 1, 2001, terminating and legally defeasing the 1991 Certificates. The excess of the reacquisition price over the net carrying amount of the debt defeased resulted in a deferred amount on refunding of $250,973. The deferred amount on refunding as well as the discount are carried as a reduction of the certificates of participation to be amortized on a straight-line basis over the life of the new debt as a component of interest expense. The transaction reduced total cash flows by $44,969 and resulted in an economic gain of $263,736. The annual debt service requirements on these bonds are as follows : Year Ending June 30, Principal Interest Totals 2003 $ 330,000 $ 168,237 $ 498,237 2004 345,000 157,010 502,010 2005 350,000 145,020 495,020 2006 365,000 132,142 497,142 2007 380,000 118,170 498,170 2008-2011 2,615,000 330,605 2,945,605 Totals $ 4,385,000 $ 1,051,184 $ 5,436,184 Total debt outstanding as of June 30, 2002, net of discounts and deferred amount on refunding were as follows: Principal outstanding at June 30, 2001 Less: Discount Deferred amount on refunding Net bonds outstanding at June 30, 2002 46 $ $ 4,385,000 (31,638) (222,40?) 4,130,955 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 8. NON-CITY OBLIGATIONS The following bond issues are not reported in the City's financial statements, because these are special obligations payable solely from and secured by specific revenue sources described in the resolutions and official statements of the respective issues. Neither the faith and credit nor the taxing power of the City, the Agency, the State of California or any political subdivision thereat is pledged for payment of these bonds. 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-200l A City of San Rafael Variable Rate Revenue Bonds Project DescriEtion 162-175 Belvedere Apartments St. Marks School 55 Fairfax Apartments San Rafael Commons Apartments Kaiser Foundation Hospitals 47 Original Amount $ 3,590,529 5,605,000 3,000,000 3,220,000 275,000,000 Outstanding June 30,2002 $ 2,500,000 5,605,000 3,000,000 3,203,810 275,000,000 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 9. FUND BALANCES RESERVATIONS AND DESIGNATIONS Fund balances consist of reserved and unreserved amounts. Reserved fund balances represent that portion of a fund balance which is not appropriable for expenditure or is legally segregated for a specific future use. The remaining portion is unreserved fund balances. Portions of unreserved fund balances may be designated to indicate tentative plans for financial resource utilization in a future period, such as for general contingencies or capital projects. Such plans or intent are subject to change, have not been legally authorized and may not result in expenditures. A detailed schedule of the fund balances at June 30, 2002, is shown as follows: Reserved: Encumbrances Petty cash General plan Department savings Employee M.O .U. Loans receivabl e Employee benefits Debt service Improvement projects Information systems projects Equipment replacement Buildings and structures Facility closures Assessment districts/open space Mello Roos assessment Educational Revenue Augmentation Fund Housing School payments Corporation yard Total reserved Unreserved, Designated: Emerge ncy a nd cash flow Library/endowments Public safety Gra nt projects Park projects Gas tax projects Street projects Traffic mitigation Total d esignated Unreserved, Undesignated Totals $ Governmental Fund Types Special Debt General Revenue Service Capital Projects Fiduciary Fund Type Expendable Trust Totals 27,853 $ 116,734 $ -$ 59,820 $ -$ 204,407 3,970 390,911 891,901 626,535 356,662 618,000 190,411 72 ,842 168,409 3,347,494 3,757,328 3,757,328 1,355 ,538 773,783 9,000 35,600 60,000 17,907 350,000 1,363,024 2,125,852 450,521 10,706,977 1,258,931 840,401 3,970 390,911 891,901 626,535 807,183 618,000 2,125,852 11,671,171 1,331,773 9,000 35,600 60,000 858,308 350,000 168,409 1,355,823 1,355,823 308,000 308,000 4,104,837 4,104,837 2,125,852 19,085,310 25,921,680 3,757,328 317,500 380,561 698,061 972,663 972,663 150,784 150,784 552,570 41,627 594,197 459,997 459,997 2,072,260 2,072,260 8,229,076 8,229,076 12,754,850 422,188 16,934,366 441 ,002 1,796,540 $ 8,460,360 $14,558,876 $ 2,125,852 $19,085,310 $ 422,188 $ 44,652,586 48 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 10. EXCESS OF EXPENDITURES OVER APPROPRIATIONS Appropriations Special Revenue Funds: Recreation Revolving $ 2,159,042 Gas Tax 1,202,211 Household Hazrnat Facility 924,014 Library 382,213 Public Safety Revolving 93,929 Traffic and Housing Mitigation 70,000 Developrrent Services EIrergency Medical Services 3,090,121 Debt Service Funds: Mariposa AssessIrent District 23,860 1997 Financing Authority Revenue Bonds 667,910 Expendable Trust Funds: Business ImproveIrent 52,000 Library Fiduciary 30,960 11. CONTRIBUTED CAPITAL ~nditures $ 2,278,738 1,630,873 924,376 392,310 106,507 1,777,079 248,930 3,123,766 24,550 676,503 52,330 61,707 Changes in the District's balances of contributed capital were as follows: Excess $ 119,696 428,662 362 10,097 12,578 1,707,079 248,930 33,645 690 8,593 330 30,747 Balance July 1, 2001 Depreciation Attributable to Contributed Capital Balance June 30,2002 Component Unit: San Rafael Sanitation District $ 7,377,012 =$======= $ 7,377,012 49 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 12. EMPLOYEES' RETIREMENT PLAN A. Plan Description The City contributes to the Marin County Employees' Retirement Fund (Fund). All full-time and permanent part-time employees are eligible to participate. The fund 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 Fund 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 Fund, which can be obtained from William M. Mercer, Incorporated, 3 Embarcadero Center, Suite 1500, San Francisco, CA 94111-4015. B. Funding Policy The funding policy of the Fund 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 7.03% of payroll to the Fund for public safety personnel and 6.94% for other covered employees for the year ended June 30, 2002. The City, due to a collective bargaining agreement, also has a legal obligation to contribute one-half of the employees' contribution up to a maximum of 7% of payroll for safety employees and a maximum of 5% of payroll for all other employees. Employees have an obligation to contribute the remaining portion. C. Annual Pension Cost The City's annual pension cost to the Fund for the year ended June 30, 2002, of $2,880,000 was equal to the City's required and actual contributions. The annual required contribution was determined as part of the actuarial valuation performed as of June 30, 2001. The employer rates for normal cost is determined using the Entry Age Normal Actuarial Cost Method, a 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 2001 actuarial valuation include an assumed rate of return on investment assets of 8.25%, and annual payroll increases of 4.12% per year reflecting 4.25% for inflation and approximately 1.00% for merit and longevity. 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 Fund also uses the level percentage-open method to amortize the unfunded actuarial liability which had fourteen years left in the amortization period. It is assumed that payroll increases at an annual inflation rate of 4.25 % over the amortization period. 50 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 13. EMPLOYEES' RETIREMENT PLAN, Continued D. Three-Year Historical Trend Information Fiscal Year Annual Pension Percentage of Ending Cost(APC) APC Contributed 6/30/2000 $ 2,503,855 100% 6/30/2001 2,187,000 100% 6/30/2002 2,880,000 100% Net Pension Obligation $ 14. PUBLIC AGENCY RETIREMENT SYSTEM (DEFINED CONTRIBUTION RETIREMENT PLANS) The City contributes to the Public Agency Retirement System (PARS), which is a defined contribution retirement plan. A defined contribution retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's accounts are to be determined instead of specifying the amount of benefits the individual is to receive. The plans are administered by Phase II located at P.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 a participant in the plan from the date that they are hired. An eligible employee is any employee who, at any time during which the employer maintain this plan, is not accruing a benefit under the Marin County Employees' Retirement Fund. Contributions made by an employee and the employer vest immediately. 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. During the year, the City contributed $70,613 and employees contributed $70,613. The total covered payroll of employees participating in the plan for the year ended June 30, 2002, was $1,883,013. The total payroll for the year was $30,237,962. 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 Fund. 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 $110,839 to the plan on behalf of the eligible employees. 51 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 15. 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 Fund within 120 days of retirement from City employment. At June 30, 2002, 207 retirees received post- employment health care benefits. Those expenditures are reduced by reimbursements from the Marin County Retirement Office of 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. The cost of retiree health care benefits is recognized as an expenditure as claims are paid. For the fiscal year ended June 30, 2002, those costs totaled $309,303. 16. SEGMENT INFORMATION FOR ENTERPRISE FUND Segment information for the fiscal year ended June 30,2002, is as follows: San Rafael San Rafael Enterprise Sanitation Types of goods or services provided Fund District Operating revenues $ 1,544,940 $ 5,398,611 Depreciation and amortization expense 843,368 Operating income (loss) 526,899 709,432 Tax revenues Nonoperating revenues (expenses) (62,418) 561,841 Net income (loss) 464,481 1,271,273 Fixed asset additions 584,524 Net working capital (35,304) (71,120) Total assets 989,533 28,201,043 Total fund equity 934,173 23,941,593 52 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 17. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City is self-insured up to a maximum of $500,000 for each general liability claim, $250,000 for each workers' compensation claim, and $25,000 for each property damage claim. The City participates in a public agency risk sharing pool (California Joint Powers Risk Management Authority) for general liability claims in excess of the self-insured amounts up to $24,500,000. The City purchases commercial insurance for workers' compensation claims in excess of the self-insured amount up to $9,750,000. The City also purchases commercial insurance for property damage claims with insured amount of $35,615,500. The City accounts for and finances its uninsured risks of loss in the internal service funds. The City had established a claims liability of $3,668,909 at June 30, 2002, based on the requirement of GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Settled claims have not exceeded this coverage in any of the past three fiscal years. Changes in the general and workers' compensation claims liabilities for the fiscal years ended June 30, 2000, 2001, and 2002, are as follows: Balance at Current Year Balance at General Beginning of Claims and Changes Claim End of Liabili!y' Fiscal Year In Estimates Payments Fiscal Year 1999-00 $ 599,198 $ 252,464 $ (565,313) $ 286,349 2000-01 286,349 263,884 (365,530) 184,703 2001-02 184,703 1,372,096 (1,051,827) 504,972 Worker's Balance at Current Year Balance at Compensation Beginning of Claims and Changes Claim End of Liabili~ Fiscal Year In Estimates Payments Fiscal Year 1999-00 $ 1,558,927 $ 1,383,422 $ (830,235) $ 2,112,114 2000-01 2,112,114 1,410,416 (953,207) 2,569,323 2001-02 2,569,323 2,207,423 (1,612,809) 3,163,937 53 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 17. RISK MANAGEMENT, Continued The California Joint Powers Risk Management Authority -which began operations in February 1986, is a governmental self-insurance cooperative organized under a joint power agreement consisting of 23 members which represent over 120 public agencies in California. The Risk Management Authority pools self-insurance losses of charter and associate members, develops risk management programs, and provides for administration of pooled coverage claims. The City paid $263,917 in premiums to the Risk Management Authority during the fiscal year ended June 30, 2002. Condensed financial information for the California Joint Powers Risk Management Authority for the fiscal year ended June 30, 2002, was as follows: Assets $ 61,449,095 Liabilities $ 38,026,089 Equity: Retained earnings 23,423,006 Total liabilities and equity $ 61,449,095 Revenues $ 15,159,473 Expenses (21,172,694) Refunds to members (5,252,665) Net increase in retained earnings $ {11,265,886} 18. JOINT VENTURES, JOINTLY GOVERNED ORGANIZATIONS AND RELATED PARTY TRANSACTIONS A. Joint Ventures 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 entities exercise full powers and authorities within the scope of the related Joint Powers Agreement 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. Obligations and liabilities of the separate entities are not those of the City. 54 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 18. JOINT VENTURES, JOINTLY GOVERNED ORGANIZATIONS AND RELATED PARTY TRANSACTIONS, Continued A. Joint Ventures, Continued The Marin County Integrated On-Line Library System (System) -was formed to provide for the procurement, ownership, operation, maintenance, and governance of an integrated on-line library 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 18.98% of ownership in the System. Operating costs for the System are also shared by each participant by applying the cost sharing formula. Financial statements of the System can be obtained at the County Librarian, Marin Count Free Library, Civic Center, Administration Building, San Rafael, California 94903. The Marin Street Light Acquisition Joint Powers Authority (MSLAIP A) -was formed by the County of Marin and twelve local agencies to acquire street light facilities, operate the facilities during the pendency of an eminent domain action against PG&E, and the subsequent transfer of the facilities to the individual local agencies. The Governing Board consists of five members from the participating agencies. Each of the local agency's share of contribution was based on the number of street lights to be acquired in the local agency's individual jurisdiction in relation to the total number of street lights to be acquired by the MSLAJP A. The Marin Emergency Radio Authority -was formed on February 28,1998 by the County of Marin and 25 local agencies within the County to plan, finance, implement, manage, own, and operate a County-wide public safety and emergency radio system. The Governing Board consists of one representative from each member. On February 1, 1999, the Authority issued the 1999 Revenue Bonds in the amount of $26,940,000 with interest rates ranging from 4.75% to 5.01 %, maturing on August 15, 2016, to finance the acquisition and installation of the system. The costs of maintenance, operation, and debt service 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 is scheduled for August 2002. The City has established a reserve in its internal service funds to pay future service payments. 55 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30,2002 18. JOINT VENTURES, JOINTLY GOVERNED ORGANIZATIONS AND RELATED PARTY TRANSACTIONS, Continued B. Jointly Governed Organizations The Countywide Planning 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 Countywide Planning Agency consists of one member of the County Board of Supervisors and one member of the City Council of each participating city. . The Marin County Cable Rate Regulation Toint Powers Authority -was established to regulate the rates for cable television service and equipment and to advise the participants in their exercise of their license authority. The Governing Board of the Marin County Cable Rate Regulation Joint Powers Authority consists of one member from each of the seven participating local cities. The Marin County Major Crimes Task Force -was established by 12 local law enforcement agencies to provide funding and policy direction of a unit of peace officers and support personnel to detect, apprehend, and prosecute major crimes, including highly mobile criminal narcotic traffickers, thus reducing major narcotic activity and combating its influence throughout the County. The Governing Board of the Marin County Major Crimes Task Force consists of nine members: one city council member, one member of the Marin County Board of Supervisors, two city managers, two chief law enforcement officials, two residents of Marin County, and the Marin County Administrator. The Marin County Hazardous and Solid Waste Toint Powers 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. Friends of San Rafael - a California nonprofit Public Benefit Corporation -was 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 improvements and infrastructure. 56 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 19. SAN RAFAEL SANITATION DISTRICT The San Rafael Sanitation District, a discretely presented component unit, condensed financial statements as of and for the year ended June 30,2002, are presented below. Balance Sheet Current Assets: Cash and investments $ 5,671,685 Other current assets 135,886 Total current assets 5,807,571 General Fixed Assets, Net of Accumulated Depreciation 22,393,472 Total assets $ 28,201,043 Current Liabilities: Accounts and other payables $ 128,495 Total current liabilities 128,495 Long-Term Debt: Certificates of participation 4,130,955 Total long-term debt 4,130,955 Total liabilities 4,259,450 Fund Equity: Contributed capital 7,377,012 Retained earnings 16,564,581 Total fund equity 23,941,593 Total liabilities and fund equity $ 28,201,043 57 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 19. SAN RAFAEL SANITATION DISTRICT, Continued Statement of Revenues, Expenses and Changes in Retained Earnings Operating Revenues $ Operating Expenses: Sewage collection and treatment Depreciation and amortization Other operating expenses Total operating expenses Operating income Nonoperating revenues (expenses), net Net income Add back depreciation expense on assets acquired by contributed capital Less contributed capital received Increase in retained earnings Retained earnings -July 1, 2001 Retained earnings -June 30, 2002 $ 20. CONTINGENT LIABILITIES 5,398,611 3,652,146 843,368 193,665 4,689,179 561,841 1,271,273 1,271,273 15,293,308 16,564,581 The City is a defendant is various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. 58 City of San Rafael Notes to General Purpose Financial Statements, Continued For the year ended June 30, 2002 21. SUBSEQUENT EVENTS San Rafael Redevelopment Agency Tax Allocation Refunding Bonds -Original Issue $25,020,000 On October 9, 2002, the Agency issued Tax Allocation Refunding Bonds, series 2002 in the amount of $25,020,000. The proceeds of the bonds are used to refund and defease the 1992 Tax Allocation Refunding Bonds and the 1995 Tax Allocation Bonds. In addition, the bonds are used to provide financing for the Central San Rafael redevelopment Project Area. The bonds mature annually each December 1 from 2002 to 2018, in amounts ranging from $540,000 to $1,920,000 and bear interest at rates ranging from 2.50% to 5.25%. Interest is payable semiannually on June 1 and December 1. The bonds 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, 2013, at a price equal to the principal amount, plus accrued interest on the redemption date, without premium. The bonds are special obligations of the Agency and are payable exclusively from tax revenues to be derived from the Project Area. On October 7, 2002, the Agency adopted Resolution 2002-25 approving an amendment to the Health and Safety Code Section 33401 Agreement with the San Rafael High School District. This amendment provides that the Agency will pay the District $179,000 annually from fiscal year 2002- 2003 to 2021-2022 from the bonds proceeds of the bonds. 59 09 19 NOILVWNOiNI ANV LNHWHicIcInS GHNlnOHN City of San Rafael Required Supplementary Information For the year ended June 30, 2002 MARIN COUNTY EMPLOYEES' RETIREMENT SYSTEM SCHEDULE OF FUNDING PROGRESS Actuarial Actuarial Actuarial Accrued Excess Valuation Value Liability (AAL) Assets Funded Covered Date * of Assets Entry Age OverAAL Ratio Payroll 6/30/1999 $151,466,000 $134,247,000 $17,219,000 113% $23,293,000 6/30/2000 171,663,000 156,806,000 14,857,000 109% 23,372,000 6/30/2001 186,085,000 172,939,000 13,146,000 108% 25,650,000 * Latest information available. 62 Excess Assets OverAAL As a % of Payroll 73.9% 63.6% 51.3% £9 NOI.LVWllO.'!NI'1V.LNHWH'1ddfiS GENERAL FUND The General Fund accounts for all financial resources and transactions except those required to be accounted for in other funds. 65 City of San Rafael Comparative Balance Sheets General Fund June 30, 2002 and 2001 ASSETS Cash and investments Accounts receivable Taxes receivable Interest receivable Loans receivable Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other funds Deferred revenue Total liabilities Fund Balances: Reserved: Encumbrances Unrealized investment gains Petty cash General plan Department savings Employee M.O.U. Loans receivable Employee benefits Improvement projects Information systems projects Educational Revenue Augmentation Fund Unreserved, designated Unreserved, undesignated Total fund balances Total liabilities and fund balances 66 Totals 2002 2001 $ 4,896,560 $ 5,413,876 169,290 558,356 3,372,170 4,099,949 385,684 674,163 385,550 391,088 14,552 83,403 $ 9,223,806 $ 11,220,835 $ 695,914 $ 1,007,453 28,500 46,899 36,578 2,394 763,386 1,054,352 27,853 18,695 29,291 3,970 3,800 390,911 501 ,137 891,901 401,670 626,535 1,602,425 356,662 363,757 618,000 618,000 190,411 190,411 72,842 113,090 168,409 168,469 3,757,328 3,757,328 1,355,598 2,398,410 8,460,420 10,166,483 $ 9,223,806 $ 11,220,835 City of San Rafael Comparative Statements of Revenues, Expenditures and Changes in Fund Balances General Fund For the years ended June 30, 2002 and 2001 2002 REVENUES: Taxes and special assessments $ 30,983,196 Licenses and permits 685,086 Fines and forfeitures 773,239 Use of money and property 425,677 Intergovernmental 5,337,427 Charges for current services 1,713,025 Other revenues 301,860 Total revenues 40,219,510 EXPENDITURES: Current: General government 6,128,307 Public safety 21,544,132 Public works and parks 5,334,031 Community development/ redevelopment 1,836,087 Culture and recreation 1,691,308 Capital outlay 148,574 Capital improvement/ special projects 405,071 Total expenditures 37,087,510 REVENUES OVER (UNDER) EXPENDITURES 3,132,000 OTHER FINANCING SOURCES (USES): Operating transfers in 453,973 Operating transfers out (5,292,036) Total other financing sources (uses) (4,838,063) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (1,706,063) FUND BALANCES: Beginning of year 10,166,483 End of year $ 8,460,420 67 2001 $ 32,270,051 722,082 1,310,708 740,760 5,105,977 908,654 90,043 41,148,275 5,402,171 19,889,700 4,788,883 1,816,471 1,496,042 90,029 378,772 33,862,068 7,286,207 1,413,998 (5,745,732) (4,331,734) 2,954,473 7,212,010 $ 10,166,483 City of San Rafael Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual General Fund For the year ended June 30, 2002 Variance Favorable Budget Actual (Unfavorable) REVENUES: Taxes and special assessments $ 30,274,950 $ 30,983,196 $ 708,246 Licenses and permits 555,150 685,086 129,936 Fines and forfeitures 743,980 773,239 29,259 Use of money and property 331,000 425,677 94,677 Intergovernmental 5,170,600 5,337,427 166,827 Charges for current services 1,522,372 1,713,025 190,653 Other revenues 133,115 301,860 168,745 Total revenues 38,731,167 40,219,510 1,488,343 EXPENDITURES: Current: General government 6,136,284 6,128,307 7,977 Public safety 21,104,203 21,544,132 (439,929) Public works and parks 5,490,331 5,334,031 156,300 Community development/ redevelopment 2,076,020 1,836,087 239,933 Culture and recreation 1,770,059 1,691,308 78,751 Capital outlay 265,702 148,574 117,128 Capital improvement/special projects 369,091 405,071 (35,980) Total expenditures 37,211,690 37,087,510 124,180 REVENUES OVER (UNDER) EXPENDITURES 1,519,477 3,132,000 1,612,523 OTHER FINANCING SOURCES (USES): Operating transfers in 837,852 453,973 (383,879) Operating transfers out (5,310,000) (5,292,036) 17,964 Total other financing sources (uses) (4,472,148) (4,838,063) (365,915) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ (2,952,671) (1,706,063) $ 1,246,608 FUND BALANCES: Beginning of year 10,166,483 End of year $ 8,460,420 68 SPECIAL REVENUE FUNDS Special Revenue Funds account for taxes and other revenues set aside in accordance with law or administrative regulation that are restricted to expenditures for specified purposes. Funds included are: Recreation Revolving Fund -Established to administer the Recreation Deparhnent's program and facility rental charge. 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. Gas Tax Fund -Established to receive and expend the City's allocation of the State gasoline taxes. 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, public properties and rights of way. Sewer Maintenance Fund -Established under the terms of the JP A to provide all necessary maintenance to the Sanitation District's gravity collection sewer system. Household Hazmat Facility Fund -Established to account for State mandated hazardous materials information, collection, and reporting. Expenditures included inspection of businesses for compliance with regulations. This fund also serves as the depository for a countywide Household Hazardous Waste Program. 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 a self-funding storm drain maintenance program plus separate programs through the County and Bay Area to educate residents about urban runoff pollution. Traffic and Housing Mitigation Fund -Established to maintain long-term developer deposits for major housing and street improvement projects. 69 OL: SPECIAL REVENUE FUNDS, Continued Development Services Fund -Established to account for development activities that are supported by external sources of funds. This fund does not account for the operating costs of building, planning, and engineering, which are located in the General Fund. Grants Fund -Established to account for grants for the Library, Childcare, Police, and Falkirk Cultural Center. Parkland Dedication Fund -Established to account for long-term developer deposits used to enhance and maintain the park structure within City limits. Emergency Medical Services Fund -Established to account for the Emergency Medical Services and Transportation program that provides services to all segments of the community. 71 City of San Rafael Combining Balance Sheet Special Revenue Funds June 30, 2002 (With comparative totals for June 30, 2001) ASSETS Cash and investments Accounts receivable Taxes receivable Grants receivable Loans receivable Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other funds Deferred revenue Total liabilities Fund Balances: Reserved: Encumbrances Loans receivable Improvement projects Equipment replacement Building and structures Facility closures Assessment districts/ open space Mello Roos assessment Unreserved: DeSignated: Library/Endowments Public safety Grant projects Park projects Gas tax projects Street projects Traffic mitigation Undesignated Total fund balances Total liabilities and fund balances Recreation Revolving $ 42,974 117,824 $ 160,798 $ 75,063 67,196 142,259 9,734 8,805 18,539 $ 160,798 72 Baypoint Lagoons Street Assessment Gas Maintenance District Tax Childcare and Cleanin~ $ 17,907 $ 466,550 $ 522 $ 1,096,836 65,551 18,180 36,578 $ 17,907 $ 466,550 $ 55,280 $ 1,162,387 $ $ 6,553 $ 39,353 $ 180,932 14,552 6,553 53,905 180,932 17,907 459,997 981,455 1,375 17,907 459,997 1,375 981,455 $ 17,907 $ 466,550 $ 55,280 $ 1,162,387 Sewer Maintenance $ (17,853) 23,573 $ 5,720 $ 5,720 5,720 Household Loch Lomond Hazmat Assessment Facility District $ 347,701 $ 481,631 290,334 $ 638,035 $ 481,631 $ 234,244 $ 234,244 9,000 35,600 60,000 299,191 403,791 350,000 131,631 481,631 Library $ (98,690) $ 213,725 $ 115,035 $ $ 12,445 $ 12,445 102,590 102,590 Traffic and Public Housing Development Safety_ Stormwater _ Miti~ation Services 85,941 $ 1,052,976 $ 8,599,137 $ 1,474,397 40,295 19,270 91,428 85,941 $ 1,093,271 $ 8,690,565 $ 1,493,667 17,151 $ 8,186 $ 170,060 $ 20,649 1,500 732,735 200,000 17,151 8,186 370,060 754,884 91,429 738,783 68,790 1,085,085 8,229,076 68,790 1,085,085 8,320,505 738,783 $ 5,720 $ 638,035 $ 481,631 $ 115,035 $ 85,941 $ 1,093,271 $ 8,690,565 $ 1,493,667 (Continued) 73 City of San Rafael Combining Balance Sheet Special Revenue Funds, Continued June 30, 2002 (With comparative totals for June 30, 2001) ASSETS Cash and inveshnents Accounts receivable Taxes receivable Grants receivable Loans receivable Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Developer bonds payable Due to other funds Deferred revenue Total liabilities Fund Balances: Reserved: Encumbrances Loans receivable Improvement projects Equipment replacement Building and structures Facility closures Assessment districts/ open space Mello Roos assessment Unreserved: DeSignated: Library/endowments Public safety Grant projects Park projects Gas tax projects Street projects Traffic mitigation Undesignated Total fund balances Total Iiabilities and fund balances Grants $ 598,128 $ 350 81,674 $ 680,152 $ $ 15,821 $ 15,821 15,571 214,910 283,066 150,784 664,331 $ 680,152 $ 74 Emergency Totals Parkland Medical Dedication Services 2002 2001 552,570 $ 635,534 $ 15,336,261 $ 18,843,701 770,922 448,111 106,416 99,854 287,975 21,726 113,154 113,154 35,000 71,578 35,000 609,296 $ 635,534 $ 16,391,769 $ 19,834,357 $ 14,727 $ 795,184 $ 1,398,499 1,500 1,500 947,287 1,011,138 21,726 88,922 157,330 21,726 14,727 1,832,893 2,568,467 116,734 591,246 126,428 35,000 773,783 677,249 9,000 1,615,725 35,600 31,600 60,000 50,000 17,907 12,401 350,000 300,000 317,500 311,183 620,807 972,663 473,635 150,784 133,958 552,570 552,570 621,366 459,997 942,036 2,072,260 1,341,881 8,229,076 9,366,285 441,002 670,897 587,570 620,807 14,558,876 17,265,890 609,296 $ 635,534 $ 16,391,769 $ 19,834,357 (Concluded) City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances Special Revenue Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 3D, 2001) Baypoint Lagoons Recreation Assessment Gas Revolving District Tax Childcare REVENUES: Taxes and special assessments $ $ 25,258 $ $ Licenses and permits Fines and forfeitures Uses of money and property 2,262 634 65,072 1,062 Intergovernmental 30,600 1,021,051 262,240 Charges for current services 1,132,570 2,044,644 Other revenues 10,006 34,061 Total revenues 1,175,438 25,892 1,120,184 2,307,946 EXPENDITURES: Current: General government Public safety Public works and parks 20,386 188,081 Community development! redevelopment Culture and recreation 2,250,734 2,291,267 Capital outlay 28,004 52,265 Capital improvement! special projects 1,442,792 Total expenditures 2,278,738 20,386 1,630,873 2,343,532 REVENUES OVER (UNDER) EXPENDITURES (1,103,300) 5,506 (510,689) (35,586) OTHER FINANCING SOURCES (USES): Operating transfers in 959,038 500,000 37,100 Operating transfers out (471,350) (1,440) Total other financing sources (uses) 959,038 28,650 35,660 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (144,262) 5,506 (482,039) 74 FUND BALANCES: Beginning of year 162,801 12,401 942,036 1,301 End of year $ 18,539 $ 17,907 $ 459,997 $ 1,375 76 Street Maintenance and Cleaning $ 46,250 174,176 220,426 1,551,575 138 175,599 1,727,312 (1,506,886) 1,872,586 1,872,586 365,700 615,755 $ 981,455 Household Loch Lomond Traffic and Sewer Hazmat Assessment Public Housing Development Maintenance Facility District Library Safety Stormwater Mitigation Services $ $ $ 61,348 $ $ $ $ $ 4,991 12,000 22,045 18,372 56,845 2,214 31,337 399,413 66,209 14,018 329,037 59,357 48,227 913,914 905,913 7,485 33,054 813,511 173,665 41,547 43,189 21,918 2,650 18,566 202,708 925,914 990,156 79,720 415,285 97,275 844,848 639,871 310,464 921,849 106,507 850,665 54 929,086 4,690 248,930 382,088 2,527 10,222 227,665 1,772,389 850,665 924,376 54 392,310 106,507 1,156,751 1,777,079 248,930 75,249 65,780 79,666 22,975 (9,232) (311,903) (1,137,208) 61,534 25,000 716,581 (115,248) (115,248) 25,000 716,581 (39,999) 65,780 79,666 22,975 15,768 404,678 (1,137,208) 61,534 ___ 4_5:....,7_19_ 338,011 401,965 79,615 53,022 680,407 9,457,713 677,249 $ 5,720 $ 403,791 $ 481,631 $ 102,590 $ 68,790 $ 1,085,085 $ 8,320,505 $ 738,783 (Continued) 77 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances Special Revenue Funds, Continued For the year ended June 30,2002 (With comparative totals for the year ended June 30,2001) Emergency Totals Parkland Medical Grants Dedication Services 2002 2001 REVENUES: Taxes and special assessments $ $ $ 1,976,973 $ 2,063,579 $ 2,024,746 Licenses and permits 4,991 122,711 Fines and forfeitures 26,909 Uses of money and property 21,051 26,153 16,835 787,754 1,446,214 Intergovernmental 773,359 2,712,065 3,038,183 Charges for current services 115,706 1,661,432 7,843,441 10,985,260 Other revenues 84,938 51 418,087 Total revenues 995,054 26,204 3,655,240 13,829,917 17,644,023 EXPENDITURES: Current: General government 8,065 8,065 281,197 Public safety 206,323 3,119,395 4,354,074 4,548,000 Public works and parks 2,236 3,546,773 3,736,052 Community development/ redevelopment 248,930 169,041 Culture and recreation 395,711 5,319,800 4,875,490 Capital outlay 44,273 4,371 141,800 2,813,240 Capital improvement/ special projects 156,166 3,774,611 3,749,525 Total expenditures 812,774 3,123,766 17,394,053 20)72,545 REVENUES OVER (UNDER) EXPENDITURES 182,280 26,204 531,474 (3,564,136) (2,528,522) OTHER FINANCING SOURCES (USES): Operating transfers in 191,350 4,301,655 U85,780 Operating transfers out (147,000) (95,000) (260,177) (1,090,215) (898,596) Total other financing sources (uses) 44,350 (95,000) __ (260,177) 3,211,440 3,287,184 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 226,630 (68,796) 271,297 (352,696) 758,662 FUND BALANCES: Beginning of year 437,701 656,366 349,510 14,911,572 16,507,228 End of year $ 664,331 $ 587,570 $ 620,807 $ 14,558,876 $ 17,265,890 (Concluded) 78 61. City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Special Revenue Funds For the year ended June 30,2002 Recreation Revolving Baypoint Lagoons Assessment District Variance Variance Favorable Favorable Budg~_ Actual (Unfavorable) Budget Actual (Unfavorable) REVENUES: Taxes and special assessments $ $ $ $ 27,500 $ 25,258 $ (2,242) Licenses and permits Fines and forfeitures Uses of money and property 3,000 2,262 (738) 800 634 (166) Intergovernmental 30,600 30,600 Charges for current services 1,045,879 1,132,570 86,691 Other revenues 7,120 10,006 2,886 Total revenues 1,055,999 1,175,438 119,439 28,300 25,892 (2,408) EXPENDITURES: Current: General government Public safety Public works and parks 28,060 20,386 7,674 Community development/ redevelopment Culture and recreation 2,115,639 2,250,734 (135,095) Capital outlay 43,403 28,004 15,399 Capital improvement/ special projects Total expenditures 2,159,042 2,278,738 (119,696) 28,060 20,386 7,674 REVENUES OVER (UNDER) EXPENDITURES (1,103,043) (1,103,300) (257) 240 5,506 5,266 OTHER FINANCING SOURCES (USES): Operating transfers in 959,038 959,038 Operating transfers out Total other financing sources (uses) 959,038 959,038 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ (144,005) (144,262) $ (257) $ 240 5,506 $ 5,266 FUND BALANCES: Beginning of year 162,801 12,401 End of year $ 18,539 $ 17,907 80 $ Bud~ 40,000 1,086,500 1,126,500 173,861 1,028,350 1,202,211 (75,711) 500,000 (471,350) 28,650 $ (47,061) $ Gas Tax Actual 65,072 1,021,051 34,061 1,120,184 188,081 1,442,792 1,630,873 (510,689) 500,000 (471,350) 28,650 Variance Favorable (Unfavorable) $ $ 25,072 (65,449) 34,061 (6,316) (14,220) (414,442) (428,662) (434,978) ----- Childcare Variance Favorable Budget Actual (Unfavorable) $ $ 50 1,062 1,012 266,913 262,240 (4,673) 2,353,684 2,044,644 (309,040) 2,620,647 2,307,946 (312,701) 2,339,733 2,291,267 48,466 80,500 52,265 28,235 2,420,233 2,343,532 76,701 200,414 (35,586) (236,000) 37,100 37,100 (183,815) (1,440) 182,375 (183,815) 35,660 219,475 Street Maintenance and Clearing Variance Favorable Budget Actual (Unfavorable) $ $ $ 22,500 46,250 23,750 560,000 174,176 (385,824) 2,300 (2,300) 584,800 220,426 (364,374) 1,628,166 1,551,575 76,591 6,950 138 6,812 815,000 175,599 639,401 2,450,116 1,727,312 722,804 (1,865,316) (1,506,886) 358,430 1,872,586 1,872,586 1,872,586 1,872,586 (482,039) $ (434,978) $ 16,599 74 $ (16,525) $ 7,270 365,700 $ 358,430 942,036 1,301 615,755 $ 459,997 $ 1,375 $ 981,455 (Continued) 81 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Special Revenue Funds, Continued For the year ended June 30, 2002 Sewer Maintenance Household Hazmat Facility Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) REVENUES: Taxes and special assessments $ $ $ $ $ $ Licenses and permits 53,500 4,991 (48,509) Fines and forfeitures Uses of money and property 12,000 12,000 25,500 22,045 (3,455) Intergovernmental 15,000 14,018 (982) Charges for current services 933,817 913,914 (19,903) 819,129 905,913 86,784 Other revenues 33,000 43,189 10,189 Total revenues 945,817 925,914 (19,903) 946,129 990,156 44,027 EXPENDITURES: Current: General government Public safety 912,661 921,849 (9,188) Public works and parks 871,810 850,665 21,145 Community development/ redevelopment Culture and recreation Capital outlay 11,353 2,527 8,826 Capital improvement/special projects Total expenditures 871,810 850,665 21,145 924,014 924,376 (362) REVENUES OVER (UNDER) EXPENDITURES 74,007 75,249 1,242 22,115 65,780 43,665 OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out (115,248) (115,248) Total other financing sources (uses) (115,248) (115,248) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ {41,241} (39,999) $ 1,242 $ 22,115 65,780 $ 43,665 FUND BALANCES: Beginning of year 45,719 338,011 End of year $ 5,720 $ 403,791 82 Loch Lomond Assessment District Library Public Safety Variance Variance Variance Favorable Favorable Favorable Bud~ Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ 61,335 $ 61,348 $ 13 $ $ $ $ $ $ 13,500 18,372 4,872 38,100 56,845 18,745 1,375 2,214 839 350,559 329,037 (21,522) 55,250 59,357 4,107 14,000 7,485 (6,515) 15,600 33,054 17,454 12,000 21,918 9,918 2,650 2,650 74,835 79,720 4,885 414,659 415,285 626 72,225 97,275 25,050 93,929 106,507 (12,578) 11,452 54 11,398 382,213 382,088 125 10,222 (10,222) 11,452 54 11,398 382,213 392,310 (10,097) 93,929 106,507 (12,578) 63,383 79,666 16,283 32,446 22,975 (9,471) (21,704) (9,232) 12,472 25,000 25,000 (50,000t 50,000 (50,000) 50,000 25,000 25,000 $ 13,383 79,666 $ 66,283 $ 32,446 22,975 $ (9,471) $ 3,296 15,768 $ 12,472 401,965 79,615 53,022 $ 481,631 $ 102,590 $ 68,790 (Continued) 83 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Special Revenue Funds, Continued For the year ended June 30,2002 Stormwater Traffic and Housing Mitigation Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) REVENUES: Taxes and special assessments $ $ $ $ $ $ Licenses and permits Fines and forfeitures 2,000 (2,000) Uses of money and property 13,000 31,337 18,337 292,500 399,413 106,913 Intergovernmental 48,227 48,227 Charges for current services 835,000 813,511 (21,489) 400,000 173,665 (226,335) Other revenues 18,566 18,566 Total revenues 850,000 844,848 (5,152) 692,500 639,871 (52,629) EXPENDITURES: Current: General government Public safety Public works and parks 935,700 929,086 6,614 4,690 (4,690) Community development/ redevelopment Culture and recreation Capital outlay Capital improvement/ special projects 600,000 227,665 372,335 70,000 1,772,389 (1,702,389) Total expenditures 1,535,700 1,156,751 378,949 70,000 1,777,079 (1,707,079) REVENUES OVER (UNDER) EXPENDITURES (685,700) (311,903) 373,797 622,500 (1,137,208) (1,759,708) OTHER FINANCING SOURCES (USES): Operating transfers in 698,147 716,581 18,434 Operating transfers out Total other financing sources (uses) 698,147 716,581 18,434 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ 12,447 404,678 $ 392,231 $ 622,500 (1,137,208) $ (1,759,708) FUND BALANCES: Beginning of year 680,407 9,457,713 End of year $ 1,085,085 $ 8,320,505 84 Development Services Variance Favorable Budget Actual (Unfavorable) $ $ $ 20,000 66,209 46,209 41,547 41,547 202,708 202,708 20,000 310,464 290,464 248,930 (248,930) 248 ,930 (248,9302. 20,000 61,534 41,534 $ Bud£et 85,900 863,000 112,750 26,500 1,088,150 7,744 127,543 460,000 259,743 161,350 1,016,380 71,770 191,350 (147,000) 44,350 $ 20,000 61,534 $ 41,534 $ 116,120 677,249 $ 738,783 Grants Parkland Dedication Variance Variance Favorable Favorable Actual (Unfavorable) Budget Actual (Unfavorable) $ $ $ $ $ 21,051 (64,849) 20,200 26,153 5,953 773,359 (89,641) 115,706 2,956 1,100 (1,100) 84,938 58,438 51 51 995,054 (93,096) 21,300 26,204 4,904 8,065 (321) 206,323 (78,780) 2,236 457,764 395,711 (135,968) 44,273 (44,273) 156,166 5,184 812,774 203,606 182,280 110,510 21,300 26,204 4,904 191,350 (147,000) (95,000) (95,000) ___ _ 44,350 (95 ,000) (95,000) ___ _ 226,630 $ 110,510 $ (73,700) (68,796) $ 4,904 437,701 656,366 $ 664,331 $ 587,570 (Continued) 85 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Special Revenue Funds, Continued For the year ended June 30, 2002 Emergency Medical Services Totals Variance Favorable Budget Actual (Unfavorable) Bud~et Actual REVENUES: Taxes and special assessments $ 1,979,000 $ 1,976,973 $ (2,027) $ 2,067,835 $ 2,063,579 Licenses and permits 53,500 4,991 Fines and forfeitures 2,000 Uses of money and property 2,600 16,835 14,235 591,025 787,754 Intergoverrunental 3,197,222 2,712,065 Charges for current services 1,400,000 1,661,432 261,432 7,930,959 7,843,441 Other revenues 80,920 418,087 Total revenues 3,381,600 3,655,240 273,640 13,923,461 13,829,917 EXPENDITURES: Current: General government 7,744 8,065 Public safety 3,064,294 3,119,395 (55,101) 4,198,427 4,354,074 Public works and parks 4,109,049 3,546,773 Community development/ redevelopment 248,930 Culture and recreation 5,097,328 5,319,800 Capital outlay 25,827 4,371 21,456 168,033 141,800 Capital improvement/ special projects 2,674,700 3,774,611 Total expenditures 3,090,121 3,123,766 (33,645) 16,255,281 17,394,053 REVENUES OVER (UNDER) EXPENDITURES 291,479 531,474 239,995 (2,331,820) (3,564,136) OTHER FINANCING SOURCES (USES): Operating transfers in 4,246,121 4,301,655 Operating transfers out (260,177) (260,177) (1,322,590) (1,090,215) Total other financing sources (uses) (260,177) (260,177) 2,923,531 3,211,440 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ 31,302 271,297 $ 239,995 $ 591,711 (352,696) FUND BALANCES: Beginning of year 349,510 14,911,572 End of year $ 620,807 $14,558,876 86 Variance Favorable (Unfavorable) $ (4,256) (48,509) (2,000) 196,729 (485,157) (87,518) 337,167 (93,544) (321) (155,647) 562,276 (248,930) (222,472) 26,233 (1,099,911) (1,138,772) (1,232,316) 55,534 232,375 287,909 $ (944,407) (Concluded) DEBT SERVICE FUNDS The Debt Service Funds are used for the accumulation of resources for, and the payment of, general long-term principal and interest. Funds included are: East Francisco Boulevard Assessment District Fund -Established to accumulate funds for the payment of principal and interest. The related bonds were defeased in 1995. Peacock Gap Assessment District Fund -Established to accumulate funds for the payment of principal and interest for the 1993 Bonds which matures 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. 1915 Act Bonds Fund -Established to account for the debt service managed by the County of Marin. The debt service relates to Lucas Valley road improvements. 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 Reassessment Bonds Fund -Established to account for the refunding of the 1984 Kerner Boulevard Bond, the 1986 Sun Valley Bond, and the 1991 Civic Center/Northgate Bond. 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 Funds -Consist of three funds; l)The 1992 Agency Refunding Bonds Fund which established to accumulate funds for the payment of principal and interest for the 1992 Agency Tax Allocation Refunding Bonds that matures in 2017. The proceeds of the bonds were used to refund the 1985 Bond and to fund certain public capital improvements; 2)the 1995 Agency Bonds Fund, which established to accumulate funds for the payment of principal and interest for the 1995 Agency Tax Allocation Bonds that matures in 2021; and 3)the1999 Agency Bonds Fund, which established to accumulate funds for the payment of principal and interest for the 1999 Agency Tax Allocation Bonds that matures in 2023. 87 City of San Rafael Combining Balance Sheet Debt Service Funds June 30,2002 (With comparative totals for June 30, 2001) ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Total liabilities Fund Balances: Reserved for bond redemption Total fund balances Total liabilities and fund balances East Francisco Boulevard Assessment District $ 13,701 $ $ 13,701 $ $ $ 13,701 13,701 $ 13,701 $ 88 Peacock Gap 1915 Mariposa Assessment Act Assessment District Bonds District 334,973 $ 67,387 $ 37,004 334,973 $ 67,387 $ 37,004 52 $ $ 52 334,921 67,387 37,004 334,921 67,387 37,004 334,973 $ 67,387 $ 37,004 1997 Reassessment Bonds $ $ $ $ 1997 Financing Authority Revenue Bonds Redevelopment Agency Funds $ $ 1,041,029 $ 631,810 $ 1,041,029 $ 631,810 $ Totals 2002 2001 2,125,904 $ 2,061,238 2,125,904 $ 2,061,238 $ $ $ 52 $ --------- 52 1,041,029 631,810 2,125,852 2,061,238 1,041,029 631,810 2,125,852 2,061,238 $ 1,041,029 $ 631,810 $ 2,125,904 $ 2,061,238 89 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances Debt Service Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 3D, 2001) East Francisco Peacock Boulevard Gap 1915 Assessment Assessment Act District District Bonds REVENUES: Taxes and special assessments $ $ 230,131 $ Uses of money and property 10,118 Total revenues 240,249 EXPENDITURES: Debt service: Principal retirement 170,000 Interest and fiscal charges 66,271 Total expenditures 236,271 REVENUES OVER (UNDER) EXPENDITURES 3,978 OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out (2,537) Total otherfinancing sources (uses) (2,537) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 1,441 FUND BALANCES: Beginning of year 13,701 333,480 67,387 Residual equity transfer End of year $ 13,701 $ 334,921 $ 67,387 90 Mariposa Assessment District $ 23,949 1,176 25,125 15,000 9,550 24,550 575 (151) (151) 424 36,580 $ 37,004 1997 Reassessment Bonds $ $ 2,397 (2,397) 1997 Financing Authority Revenue Bonds Redevelopment Agency Funds Totals 2002 $ 719,264 $ 3,552,787 $ 4,526,131 $ 24,577 273 36,144 ---.....;...- 743,841 424,000 252,503 676,503 67,338 (4,862) (4,862) 62,476 976,156 2,397 3,553,060 1,240,000 2,312,787 3,552,787 273 273 631,537 4,562,275 1,849,000 2,641,111 4,490,111 72,164 (7,550) (7,550) 64,614 2,061,238 2001 4,489,349 56,864 4,546,213 1,786,000 2,746,333 4,532,333 13,880 (7,550) (7,550) 6,330 2,054,908 $ 1,041,029 $ 631,810 $ 2,125,852 $ 2,061,238 91 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -Debt Service Funds (With Budgets) For the year ended June 30,2002 Peacock Gap Assessment District Mariposa Assessment District Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) REVENUES: Taxes and special assessments $ 227,000 $ 230,131 $ 3,131 $ 22,850 $ 23,949 $ 1,099 Uses of money and property 14,000 10,118 (3,882) 1,400 1,176 (224) Total revenues 241,000 240,249 (751) 24,250 25,125 875 EXPENDITURES: Debt service: Principal retirement 195,000 170,000 25,000 13,865 15,000 (1,135) Interest and fiscal charges 52,000 66,271 (14,271) 9,995 9,550 445 Total expenditures 247,000 236,271 10,729 23,860 24,550 (690) REVENUES OVER (UNDER) EXPENDITURES (6,000) 3,978 9,978 390 575 185 OTHER FINANCING SOURCES (USES): Operating transfers in Operating transfers out (2,537) (2,537) (151) (151) Total other financing sources (uses) (2,537) (2,537) (151) (151) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES $ (8,537) 1,441 $ 9,978 $ 239 424 $ 185 FUND BALANCES: Beginning of year 333,480 36,580 Residual equity transfer End of year $ 334,921 $ 37,004 92 1997 Financing Authority Revenue Bonds $ Budget 659,660 10,400 670,060 443,075 224,835 667,910 $ Actual 719,264 24,577 743,841 424,000 252,503 676,503 Variance Favorable (Unfavorable) $ 59,604 14,177 73,781 19,075 (27,668) (8,593) Redevelopment Agency Funds Budget $ 3,552,790 3,552,790 1,240,000 2,312,790 3,552,790 Actual $ 3,552,787 273 3,553,060 1,240,000 2,312,787 3,552,787 Variance Favorable (Unfavorable) $ (3) 273 270 3 3 Budget $ 4,462,300 25,800 4,488,100 1,891,940 2,599,620 4,491,560 Totals Actual $ 4,526,131 36,144 4,562,275 1,849,000 2,641,111 4,490,111 Variance Favorable (Unfavorable) $ 63,831 10,344 74,175 42,940 (41,491) 1,449 2,150 67,338 65,188 273 273 (3,460) 72,164 75,624 ---- __ ~(4.:.-,8_62~) (4,862) (7,550) (7,550) ___ _ __ ~(4.:.-,8_62~) (4,862) (7,550) (7,550) ___ _ $ (2,712) 62,476 $ 65,188 $ ====== 976,156 2,397 $ 1,041,029 273 $ 273 $ (11,010) 631,537 $ 631,810 93 64,614 $ 75,624 1,977,753 2,397 $ 2,042,367 (Concluded) v6 CAPITAL PROJECTS FUNDS Capital Projects Funds were established for all resources used for the acquisition and improvement of capital facilities of the City. Funds included are: Open Space Fund -Established for the acquisition of open space. 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 Districts 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 partnerships with the community. Redevelopment Agency Funds -Consists of five funds: l)The 1985 Capital Projects and Administration Fund which was established to account for all financial resources related to project planning, support services, and economic development efforts for the Redevelopent Agency except those required to be accounted for in the Low and Moderate Income Housing Fund by law; 2)The Low and Moderate Income Housing Fund which was established to account fot the 20% set-aside required by the State for low and moderate income housing projects of the Redevelopment Agency; 3)The 1992 Bonds Capital Projects Fund which was established to account for additional major capital projects of the Redevelopment Agency's 1992 refunding project bond; 4)The 1995 Bonds Capital Projects Fund which was established to account for major capital projects of the Redevelopment Agency's 1995 project bond, such as the Lindero Street Under grounding and Corporation Yard relocation; 5)The 1999 Bonds Capital Projects Fund which was established to account for new capital projects of the Redevelopment Agency's 1999 project bond, such as capital needs at the local schools and colleges, utility under grounding along West Francisco and renovation of the Pickleweed Community Center Fields. 95 City of San Rafael Combining Balance Sheet Capital Projects Funds June 30, 2002 (With comparative totals for June 30, 2001) Open Space ASSETS Cash and investments $ 616,727 Accounts receivable Taxes receivable Grants receivable Interest receivable Loans receivable Due from other funds Prepaid expenses Total assets $ 616,727 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ Developer bonds payable Arbitrage payable Due to other funds Deferred revenue Total liabilities Fund Balances: Reserved: Encumbrances Loans receivable Improvement projects Information system projects Assessment districts/ open space 616,727 Housing School payments Corporation yard Total fund balances 616,727 Total liabilities and fund balances $ 616,727 Capital Improvement $ 4,441,153 140,000 $ 4,581,153 $ 131,418 131,418 8,400 956,154 1,258,931 2,226,250 4,449,735 $ 4,581,153 96 Park Bedroom Assessment Capital Tax Districts Projects $ 109,596 $ 223,674 $ 166,000 35,000 $ 109,596 $ 223,674 $ 201,000 $ $ $ 35,000 35,000 70,000 109,596 131,000 223,674 109,596 223,674 131,000 $ 109,596 $ 223,674 $ 201,000 Redevelopment Agency Funds $ 12,177,006 938,240 12,633 471,185 932,735 15,000 $ 14,546,799 $ 603,381 25,000 358,840 987,221 51,420 450,521 9,515,227 1,355,823 308,000 1,878,587 13,559,578 $ 14,546,799 $ $ $ $ Totals 2002 2001 17,734,156 $ 26,560,313 694,941 938,240 945,608 140,000 12,633 47,150 506,185 491,696 932,735 15,000 952,666 20,278,949 $ 29,692,374 734,799 $ 734,154 25,000 25,000 358,840 338,867 35,000 59,931 35,000 40,000 1,188,639 1,197,952 59,820 312,125 450,521 451,696 10,711,977 19,467,209 1,258,931 1,499,581 840,401 823,849 1,355,823 2,555,201 308,000 308,000 4,104,837 3,076,761 19,090,310 28,494,422 20,278,949 $ 29,692,374 97 City of San Rafael Combining Statement of Revenues, Expenditures and Changes in Fund Balances Capital Projects Funds For the year ended June 30,2002 (With comparative totals for the year ended June 30,2001) Capital Bedroom Assessment Open Space Improvement Tax Districts REVENUES: Taxes and special assessments $ $ $ 19,455 $ Uses of money and property 25,562 225,688 3,988 Intergovernmental 368,312 Charges for current services Other revenues 162,950 Total revenues 25,562 756,950 23,443 EXPENDITURES: Current: Public works 9,010 428,177 Community development! redevelopment Capital outlay Capital improvement/special projects 2,439,323 Total expenditures 9,010 2,867,500 REVENUES OVER (UNDER) EXPENDITURES 16,552 (2,110,550) 23,443 OTHER FINANCING SOURCES (USES): Operating transfers in 874,416 Operating transfers out (43,000) Total other financing sources (uses) 874,416 (43,000) REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES 16,552 (1,236,134) (19,557) FUND BALANCES: Beginning of year 600,175 5,685,869 129,153 223,674 End of year $ 616,727 $ 4,449,735 $ 109,596 $ 223,674 98 Park Capital Projects $ 6,383 11,716 18,900 36,999 11,355 30,673 42,028 (5,029) 120,000 120,000 114,971 16,029 $ 131,000 Redevelopment Totals $ Agency Fund 938,241 $ 935,047 126,270 147,647 225,459 2,372,664 1,525,091 17,109 9,110,408 10,652,608 (8,279,944) 2002 957,696 1,196,668 506,298 147,647 407,309 3,215,618 448,542 1,525,091 17,109 11,580,404 13,571,146 (10,355,528) 994,416 (43,000) 951,416 $ 2001 969,583 1,720,443 1,043,988 125,893 4,576,643 8,436,550 144,820 1,468,722 20,400 6,807,408 8,441,350 (4,800) 1,470,456 (1,178,356) 292,100 (8,279,944) (9,404,112) 287,300 21,839,522 28,494,422 28,207,122 $ 13,559,578 $ 19,090,310 $ 28,494,422 99 001 ENTERPRISE 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 officer services. 101 City of San Rafael Combining Balance Sheet Enterprise Fund June 30, 2002 (With comparative totals for June 30, 2001) ASSETS Cash and invesbnents Accounts receivable Total assets LIABILITIES AND FUND EQUITY Liabilities: Accounts payable Deferred revenue Total liabilities Fund Equity: Retained earnings: Unreserved Total fund equity Total liabilities and equity 102 Totals 2002 2001 $ 969,477 $ 457,217 20,056 19,535 $ 989,533 $ 476,752 $ 50,360 $ 7,060 5,000 55,360 7,060 934,173 469,692 934,173 469,692 $ 989,533 $ 476,752 City of San Rafael Combining Statement of Revenues, Expenses and Changes in Retained Earnings Enterprise Fund For the year ended June 3D, 2002 (With comparative totals for the year ended June 30, 2001) Totals 2002 OPERATING REVENUES: Charges for current services $ 1,544,815 $ Refunds 125 Total operating revenues 1,544,940 OPERATING EXPENSES: Capital outlay 24,312 General and administrative 993,729 Total operating expenses 1,018,041 OPERATING INCOME (LOSS) 526,899 NONOPERATING REVENUES (EXPENSES): Operating transfers out (98,683) Investment income 36,265 Total nonoperating revenues (expenses) (62,418) NET INCOME (LOSS) 464,481 RETAINED EARNINGS: Beginning of year 469,692 End of year $ 934,173 $ 103 2001 864,571 864,571 652,998 652,998 211,573 (56,396) (56,396) 155,177 314,515 469,692 City of San Rafael Combining Statement of Cash Flows Enterprise Fund For the year ended June 30, 2002 (With comparative totals for the year ended June 30, 2001) CASH FLOWS FROM OPERATING ACTIVITIES: Operating income (loss) Change in current assets and liabilities: Accounts receivable Accounts payable Deferred revenue Net cash provided (used) by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating transfers out Net cash provided (used) by noncapital financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment income Net cash provided (used) by investing activities Net increase (decrease) in cash and investments CASH AND INVESTMENTS: Beginning of year End of year 104 Totals 2002 2001 $ 526,899 $ 211,573 (521) 6,152 43,300 5,448 5,000 574,678 223,173 (98,683) (56,396) (98,683) (56,396) 36,265 36,265 512,260 166,777 457,217 290,440 $ 969,477 $ 457,217 INTERNAL SERVICE FUNDS Internal Service Funds account for the financing of goods or services provided by a department for other departments on a cost reimbursement basis. Funds included are: Equipment Replacement Fund -Established to facilitate the replacement of the City's fleet of vehicles and rolling equipment, plus personal computer systems, including licensing and maintenance and other non- vehicle equipment in the fire department. Building Maintenance Fund -Established to account for construction projects and cyclical large dollar maintenance tasks (i.e., roof, painting) completed on City owned buildings. 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 -Established to maintain sufficient reserves for dental claims. All costs associated with dental claims and administration are paid from this fund. Radio Replacement Fund -Established to maintain sufficient reserves for radio replacement and pays for operating and debt service to MERA. 105 City of San Rafael Combining Balance Sheet Internal Service Funds June 30,2002 (With comparative totals for June 30, 2001) ASSETS Cash and investments Total assets LIABILITIES AND FUND EQUITY Liabilities: Accounts payable Insurance claims payable Total liabilities Fund Equity: Retained earnings: Reserved Total fund equity Total liabilities and equity Equipment Replacement $ 1,339,323 $ 1,339,323 $ 51,732 51,732 1,287,591 1,287,591 $ 1,339,323 106 Building Liability Workers' Maintenance Insurance Compensation $ 432,358 $ 1,139,373 $ 3,177,527 $ 432,358 $ 1,139,373 $ 3,177,527 $ 43,220 $ 7,163 $ 12,728 689,675 3,163,937 43,220 696,838 3,176,665 389,138 442,535 862 389,138 442,535 862 $ 432,358 $ 1,139,373 $ 3,177,527 $ $ $ $ Dental Insurance 76 76 76 76 76 $ $ $ $ Radio Replacement 2,136,833 2,136,833 2,136,833 2,136,833 2,136,833 $ $ $ $ Totals 2002 8,225,490 8,225,490 114,843 3,853,612 3,968,455 4,257,035 4,257,035 8,225,490 $ $ $ $ 107 2001 7,412,748 7,412,748 75,839 2,754,026 2,829,865 4,582,883 4,582,883 7,412,748 City of San Rafael Combining Statement of Revenues, Expenses and Changes in Retained Earnings Internal Service Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 30, 2001) Equipment Building Liability Replacement Maintenance Insurance OPERATING REVENUES: Charges for current services $ 1,148,402 $ 58,526 $ 807,252 Refunds 129,435 Other operating revenues 594,681 35,060 Total operating revenues 1,743,083 93,586 936,687 OPERATING EXPENSES: Services 348,522 94,933 Insurance premiums and claims 1,495,684 Capital outlay 2,085,127 1,759 Capital improvement projects 1,564,364 Total operating expenses 2,433,649 1,659,297 1,497,443 OPERATING INCOME (LOSS) (690,566) (1,565,711) (560,756) NONOPERATING REVENUES: Operating transfers in 40,000 674,440 Operating transfers out (78,000) Investment income 131,531 46,856 45,989 Total nonoperating revenues 93,531 721,296 45,989 NET INCOME (LOSS) (597,035) (844,415) (514,767) RETAINED EARNINGS: Beginning of year 1,884,626 1,233,553 957,302 End of year $ 1,287,591 $ 389,138 $ 442,535 108 Workers' Compensation $ 1,054,098 41,214 1,095,312 1,921,385 1,921,385 (826,073) 145,000 119,391 264,391 (561,682) 562,544 $ 862 Dental Radio Totals Insurance Replacement 2002 2001 $ 347,630 $ 316,999 $ 3,732,907 $ 3,104,777 3,853 174,502 95,560 629,741 351,483 316,999 4,537,150 3,200,337 52,251 495,706 115,906 384,549 3,801,618 2,643,102 2,086,886 4,434 6,430 1,570,794 226,515 384,549 58,681 7,955,004 2,989,957 (33,066) 258,318 (3,417,854) 210,380 859,440 850,000 (78,000) (90,000) 178 81,995 425,940 358,614 178 81,995 1,207,380 1,118,614 (32,888) 340,313 (2,210,474) 1,328,994 32,964 1,796,520 6,467,509 3,253,889 $ 76 $ 2,136,833 $ 4,257,035 $ 4,582,883 109 City of San Rafael Combining Statement of Cash Flows Internal Service Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 30, 2001) Equipment Replacement CASH FLOWS FROM OPERATING ACTIVITIES: Operating income (loss) $ (690,566) Change in current assets and liabilities: Accounts payable (551,100) Insurance claims payable Net cash provided (used) by operating activities (1,241,666) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating transfers in 40,000 Operating transfers out (78,000) Net cash provided (used) by noncapital (38,000) financing activities CASH FLOWS FROM INVESTING ACTIVITIES: Investment income 131,531 Net cash provided (used) by investing activities 131,531 Net increase (decrease) in cash and investments (1,148,135) CASH AND INVESTMENTS: Beginning of year 2,487,458 End of year $ 1,339,323 110 $ $ Building Liability Workers' Maintenance Insurance Compensation (1,565,711) $ (560,756) $ (826,073) (4,097) (11,960) 5,057 504,972 594,614 (1,569,808) (67,744) (226,402) 674,440 145,000 674,440 145,000 46,856 45,989 119,391 46,856 45,989 119,391 (848,512) (21,755) 37,989 1,280,870 1,161,128 3,139,538 432,358 $ 1,139,373 $ 3,177,527 Dental Insurance $ (33,066) $ (1,728) (34,794) 178 178 (34,616) 34,692 $ 76 $ Radio Replacement 258,318 258,318 81,995 81,995 340,313 1,796,520 2,136,833 Totals 2002 $ (3,417,854) $ $ (563,828) 1,099,586 (2,882,096) 859,440 (78,000) 781,440 425,940 425,940 (1,674,716) 9,900,206 8,225,490 $ 111 2001 210,380 67,763 355,563 633,706 850,000 (90,000) 760,000 358,614 358,614 1,752,320 5,660,428 7,412,748 'GIl EXPENDABLE TRUST FUNDS Expendable Trust Funds account for assets held by the City in a trustee capacity or as an agent for individual, private organizations, and other governmental units. Funds included are: Business Improvement Fund -Established to account for activities held in Downtown San Rafael, such as the Farmers Market. Library Fiduciary Fund -Established to account for various memorial funds including the Davidson Bequest, which the City Council allocates annual amounts to purchase additional library books. Recreation Fiduciary Fund -Established to account for the Recreation Memorial Fund. 113 City of San Rafael Combining Balance Sheet Expendable Trust Funds June 30, 2002 (With comparative totals for June 30, 2001) ASSETS Cash and investments Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Total liabilities Fund Balances: Unreserved, designated for: Library / endowments Park projects Total fund balances Total liabilities and fund balances Business Library Improvement Fiduciary $ 5,852 $ 390,136 $ 5,852 $ 390,136 $ $ 9,575 9,575 380,561 5,852 5,852 380,561 $ 5,852 $ 390,136 114 Totals Recreation Fiduciary 2002 2001 $ 35,775 $ 431,763 $ 469,546 $ 35,775 $ 431,763 $ 469,546 $ $ 9,575 $ 4,593 9,575 4,593 380,561 424,982 35,775 41,627 36,971 35,775 422,188 461,953 $ 35,775 $ 431,763 $ 466,546 City of San Rafael Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Expendable Trust Funds For the year ended June 30, 2002 (With comparative totals for the year ended June 30, 2001) Totals Business Library Recreation Improvement Fiduciary Fiduciary 2002 REVENUES: Uses of money and property $ 298 $ 17,286 $ 1,479 $ 19,063 $ Intergovernmental 35,000 35,000 Other revenues 15,311 6,200 21,511 Total revenues 50,609 17,286 7,679 75,574 EXPENDITURES: Current: General government 52,330 52,330 Culture and recreation 61,707 4,302 66,009 Total expenditures 52,330 61,707 4,302 118,339 REVENUES OVER (UNDER) EXPENDITURES (1,721) (44,421) 3,377 (42,765) FUND BALANCES: Beginning of year 7,573 424,982 32,398 464,953 End of year $ 5,852 $ 380,561 $ 35,775 $ 422,188 $ 115 2001 25,612 35,000 17,761 78,373 53,975 10,193 64,168 14,205 450,748 464,953 City of San Rafael Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual-Expendable Trust Funds (With Budgets) For the year ended June 30, 2002 Business Improvement Budget Actual REVENUES: Uses of money and property $ $ 298 Intergovernmental 35,000 35,000 Other revenues 17,000 15,311 Total revenues 52,000 50,609 EXPENDITURES: Current: General government 52,000 52,330 Culture and recreation Total expenditures 52,000 52,330 REVENUES OVER (UNDER) EXPENDITURES $ (1,721) FUND BALANCES: Beginning of year 7,573 End of year $ 5,852 116 Variance Favorable (Unfavorable) $ 298 (1,689) (1,391) (330) (330) $ (1,721) Library Fiduciary Budget Actual $ 22,210 $ 17,286 $ 22,210 17,286 30,960 61,707 30,960 61,707 $ (8,750) (44,421) $ 424,982 $ 380,561 Variance Favorable (Unfavorable) (4,924) (4,924) (30,747) (30,747) $ Budget 22,210 35,000 17,000 74,210 52,000 30,960 82,960 (35,671) $ (8,750) 117 $ $ Totals Actual 17,584 35,000 15,311 67,895 52,330 61,707 114,037 $ Variance Favorable (Unfavorable) (4,626) (1,689) (6,315) (330) (30,747) (31,077) (46,142) $ (37,392) 432,555 386,413 gIl J" /' ;- F-=:=i4 ~ I s FISCAL YEAR ENDED GENERAL JUNE 30 GOVERNMENT 1993 $ 4,604,503 1994 $ 5,185,675 1995 $ 5,074,185 1996 $ 6,905,043 1997 $ 6,291,284 1998 $ 4,514,221 1999 $ 6,084,501 2000 $ 5,678,095 2001 $ 5,683,368 2002 $ 6,188 ,702 CITY OF SAN RAFAEL GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) LAST TEN FISCAL YEARS PUBLIC ~ $ 14,268,361 $ 13,925,831 $ 15,648,130 $ 16,365,089 $ 17,417,258 $ 19,595,147 $ 20,938,064 $ 23,756,604 $ 24,437,700 $ 25,898,206 PUBLIC COMMUNITY CAPITAL WORKS DEVELOPMENT CULTURE & OUTLAY & DEBT AND PARKS & REDEVELOP. RECREATION PROJECTS SERVICE $ 5,386,198 # $2,597,082 $ 5,113,752 $ 5,561,241 $ 6,907,480 # $1,242,761 $ 1,257,281 $ 5,384,283 $ 5,775,033 # $ 3,084,633 $ 3,382,997 $ 4,219,647 $ 10,781,451 $ 2,054,557 $4,427,669 $ 2,294,518 $ 3,837,491 $ $ $ $ $ $ 6,292,167 $ 927,646 $4,556,110 $14,475,690 $ 9,262,024 6,977,167 $ 3,048,015 $4,727,074 $18,128,414 $ 2,710,490 6,962,957 $ 3,488,279 $5,439,046 $ 6,981,913 $ 3,197,003 7,607,760 $ 2,914,886 $6,184,412 $19,965,738 $ 4,575,668 8,669,755 $ 3,454,234 $6,371,532 $13,859,374 $ 4,532,333 9,329,346 $ 3,610,108 $7,077,117 $16,067,569 $ 4,490,111 General Governmental Expenditures by Function Fiscal Year Ended June 30, 2002 • Debl Service 6.2% E!I Capilal Outtay 22.1% ~ /' ~~ /. • General Government 8.5% • Public Safely 35.7% • Cultural and Recreation 9.7% C PubliC Wor1<s and Par1<s 12.9',," C Community Development 5.0% (1) Includes General, Special Revenue, De bt Service, and Capital Projects Funds ~ $ $ $ $ $ $ $ $ $ $ ~ City of San Rafael audited Financial Statements, including Redevelopment Agency and Financing Authority # -included in "Other" category for 1994-95 and prior fiscal years. 119 OTHER !Qlli $2,592,152 $ 40,123,289 $3,580,755 $ 37,484,066 $3,103,472 $ 40,288,097 $ 175,971 $ 46,841,789 $ $ 59,222,179 $ $ 59,700,528 $ $ 53 ,091,763 $ $ 70,683,163 $ $ 67,008,296 $ $ 72,661,159 FISCAL YEAR ENDED JUNE 30 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 TAXES AND SPECIAL CITY OF SAN RAFAEL GENERAL GOVERNMENTAL REVENUES BY SOURCE (1) LAST TEN FISCAL YEARS LICENSES FINES USES OF INTER· CHARGES AND AND MONEY AND GOVERN· FOR SALE OF FIXED ASSESSMENTS PERMITS FORFEITURES PROPERTY MENTAL SERVICES ~ ASSETS $ $ $ $ $ $ $ $ $ $ 22,802,115 $ 960,746 $ 25,171,565 $ 988,716 $ 24,503,327 $ 919,234 $ 26,137,439 $ 1,151,547 $ 26,248,915 $ 1,213,641 $ 28,833,850 $ 830,052 $ 31,207,566 $ 946,388 $ 36,267,264 $ 846,005 $ 39,753,729 $ 844,793 $ 38,530,602 $ 690,077 $ 456,264 $ 3,426,165 $ 4,792,657 $ 4,323,047 476,433 $ 1,733,453 $ 4,962,636 $ 4,092,883 370,599 $ 1,895,721 $ 5,261,506 $ 4,594,910 422,250 $ 2,535,719 $ 9,958,206 $ 5,172,466 533,426 $ 2,194,476 $11,544,333 $ 4,915,361 736,142 $ 2,007,714 $11,258,881 $ 8,391,181 1,303,946 $ 1,459,075 $ 6,272,253 $ 11,095,035 1,466,685 $ 2,616,579 $ 9,061,449 $ 10,590,021 1,337,617 $ 3,989,893 $ 9,223,148 $12,019,807 773,239 $ 2,465,306 $ 8,590,790 $ 9,704,113 General Government Revenue By Source Fiscal Year ended June 30, 2002 $ 586,720 $ $2,603,011 $ $1 ,509,772 $ $1,411,472 $ $2,082,363 $ $4,675,745 $ $ 973,965 $ $ 7,014,228 $ $4,684,447 $ $1,148,767 $ Uses of Money & Property Fines and Forfeitures 3 .9% Intergovernmental 13.4% Charges for Services 15.6% 2,2% Licenses and Permits 1 .2% ~ .. /~~ : --....... ( ---'- " ,. --1 / /' Other 10.3% Taxes and Special Assessments 53.4% (1) Includes General, Special Revenue, Debt Service, Capital Projects, and Expendible Trust Funds Source : City of San Rafael audited Financial Statements, including the Redevelopment Agency and Financing Authority. 120 !Q!Ak $37,347,714 $40,028,697 $ 39,055,069 $46,789,099 $48,732,515 $ 56,733,565 $ 53,258,228 $67,862,231 $ 71 ,853,434 $ 61,902,894 CITY OF SAN RAFAEL SECURED PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS OUTSTANDING DELINQUENT FISCAL TOTAL OUTSTANDING TAXES AS YEAR ENDED TAX TAX DELINQUENT A PERCENT OF JUNE 30 LEVY COLLECTIONS TAXES (1) CURRENT LEVY 1993 $ 7,862,865 $ 7,590,810 $ 272,055 3.46% 1994* $ 7,672,488 $ 7,672,488 N/A N/A 1995* $ 7,539,388 $ 7,539,388 N/A N/A 1996* $ 7,516,496 $ 7,516,496 N/A N/A 1997* $ 8,210,688 $ 8,210,688 N/A N/A 1998* $ 8,195,563 $ 8,195,563 N/A N/A 1999* $ 8,661,660 $ 8,661,660 N/A N/A 2000* $ 8,844,272 $ 8,844,272 N/A N/A 2001* $ 9,895,312 $ 9,895,312 N/A N/A 2002* $ 10,606,386 $ 10,606,386 N/A N/A (1) Represents delinquent taxes due for current year only • Beginning FYE 93/94, the City began participating in the Teeter Plan through the County . Every year, the County distributes the full amount of secured property taxes levied to the City and the County retains any delinquent taxes collected, including interest and penalties. In 93/94, the County paid the City a lump-sum amount for all outstanding delinquencies. Source: Marin County Auditor-Controller 121 CITY OF SAN RAFAEL SUMMARY OF SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS LAST THREE FISCAL YEARS FISCAL YEAR ENDED Special Assessments JUNE 30 Billings Collections 2000 $991,453 $1,018,504 2001 $1,037,125 $1,022,358 2002 $1,028,652 $1,059,950 Notes : Total col/ections reflect actual assessments paid plus any lump-sum pay-ofts from property owners. Source: Marin County Auditor-Control/er Muni Financial Services Special Assessment Annual Reporls 122 Ratio of Collections to Billings 102.73% 98.58% 103.04% FISCAL YEAR ENDED JUNE 30 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: SBE= LAND $ 1,430,683 $ 1,500,340 $ 1,567,183 $ 1,621,593 $ 1,667,992 $ 1,748,734 $ 1,841,837 $ 1,997,698 $ 2,190,561 $ 2,444,881 CITY OF SAN RAFAEL ASSESSED VALUATION OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (In Thousands) NET TAXABLE NET PUBLIC UNSECURED SECURED TAXABLE UTILITIES REAL AND IMPROVE-PERSONAL LESS SECURED ASSESSED PERSONAL MENTS PROPERTY EXEMPTIONS PROPERTY BYSBE PROPERTY $2,526,695 $ 38,062 $ (177,361) $ 3,818,079 $ 10,015 $ 228,494 $2,614,391 $ 36,654 $ (180,954) $ 3,970,431 $ 7,651 $ 249,683 $2,724,705 $ 41,169 $ (220,731) $ 4,112,326 $ 8,036 $ 258,813 $2,797,318 $ 45,631 $ (246,674) $ 4,217,868 $ 7,154 $ 240,210 $2,852,856 $ 47,074 $ (255,991) $ 4,311,932 $ 7,160 $ 320,993 $2,988,843 $ 48,595 $ (264,613) $ 4,521,558 $ 11,036 $ 340,302 $3,127,041 $ 46,829 $ (271,046) $ 4,744,661 $ 10,707 $ 338,264 $3,328,567 $ 44,626 $ (281,585) $ 5,089,306 $ 2,106 $ 372,618 $3,605,972 $ 50,542 $ (295,016) $ 5,552,060 $ 2,790 $ 397,697 $3,875,631 $ 50,542 $ (304,626) $ 6,066,428 $ 2,778 $ 422,969 Reconciliation to Debt Service Schedules 2001-2002 Total Subject to Taxation Secured Homeowners Exemptions Unsecured Homeowners Exemptions TOTAL PROPERTY SUBJECT TO TAXATION $ 4,056,588 $ 4,227,765 $ 4,379,175 $ 4,465,232 $ 4,640,085 $ 4,872,897 $ 5,093,632 $ 5,464,031 $ 5,952,547 $ 6,492,176 $ 6,492,176 73,427 69 Total Used for "Overlapping Debt Schedule" I $ 6,565 ,672 1 Marin County Auditor -Controller and Assessor includes all property within city limits State Board of Equalization 123 FISCAL YEAR ENDED JUNE 30 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 FISCAL CITY OF SAN RAFAEL PROPERTY TAX RATES-DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS BASIC SCHOOL CITY TAX BOND BOND RATE RATE RATE 1.0000% N/A 0.0010% 1.0000% N/A N/A 1.0000% N/A N/A 1.0000% N/A N/A 1.0000% N/A N/A 1.0000% N/A N/A 1.0000% N/A N/A 1.0000% 0.0170% N/A 1.0000% 0.0170% N/A 1.0000% 0.0230% N/A SPECIAL TAXES AND CHARGES MARiA' SAN SAN MUNICIPAL RAFAEL SAN RAFAEL RAFAEL WATER SANITARY SAN RAFAEL ELEMENTARY HIGH MOSQUITO SAN RAFAEL DISTRICT YEAR ENDED DISTRICT PARAMEDIC SCHOOL SCHOOL DISTRICT RUNOFF FIREFLOW JUNE 30 CHARGE TAX TAX TAX CHARGE CHARGE CHARGE 1993 176 28 60 60 10 N/A N/A 1994 191 28 60 60 N/A N/A N/A 1995 199 34 N/A 60 N/A N/A N/A 1996 206 37 90 60 N/A 15 N/A 1997 211 40 90 60 N/A 20 N/A 1998 245 40 90 60 N/A 22 75 1999 245 40 90 60 10 24 75 2000 258 40 108 74 6 26 75 2001 258 40 108 74 6 26 75 2002 284 52 119 81 10 28 75 TOTAL TAX RATE 1.0010% 1.0000% 1.0000% 1.0000% 1.0000% 1.0000% 1.0000% 1.0170% 1.0170% 1.0230% TOTAL SPECIAL TAXES AND CHARGES 334 339 293 408 421 532 544 587 587 649 Note: Data shown represents average residential rates in Central San Rafael. The residents that live in North San Rafael are served by a different sanitation district and elementary school district. This schedule excludes Mello Roos and Benefit Assessment Districts, whose assessments are limited to a small portion of the City's parcels. NIA -Not applicable Source: Marin County Assessor and Auditor-Controller 124 CITY OF SAN RAFAEL RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUATION AND NET GENERAL BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS RATIO OF NET NET GENERAL FISCAL GROSS LESS DEBT NET BONDED DEBT BONDED YEAR ENDED ESTIMATED ASSESSED BONDED SERVICE BONDED TO ASSESSED DEBT PER JUNE 30 POPULATION ~ VALUATION IB) DEBTIC) BlliQ§. DEBT VALUATION ~ 1993 51 ,000 $ 4,056,588,000 $ 19,720,000 $ (2,057,879) $ 17,662,121 0.435 346 .32 1994 51,700 $ 4,227,765,000 $ 18,660,000 $ (1,801,806) $ 16,858,194 0.399 326.08 1995 51,600 $ 4,379,175,000 $ 17,740,000 $ (1,810,888) $ 15,929,112 0.364 308.70 1996 53,200 $ 4,465,232,000 $ 25,345,000 $ (1,282,239) $ 24,062,761 0.539 452 .31 1997 53,427 $ 4,640,085,000 $ 24,790,000 $ (630,728) $ 24,159,272 0.521 452.19 1998 54,010 $ 4,872,897,000 $ 24,210,000 $ (631,485) $ 23,578,515 0.484 436 .56 1999 54,402 $ 5,093 ,632,000 $ 43,479,004 $ (631 ,810) $ 42,847,194 0.841 787.60 2000 54,752 $ 5,464,031,000 $ 43,479,004 $ (631,810) $ 42,847,194 0.784 782.57 2001 56,943 $ 5,952 ,547,000 $ 44,719,004 $ (631,810) $ 44,087,194 0.741 774 .23 2002 56,657 $ 6,492 ,176,000 $ 43,479,004 $ 631,810 $ 44,110,814 0 .679 778.56 Gross Bonds Reconciliation: Total -Combined Balance Sheet $ 47,684,004 $ 2,125,852 Less : Assessment District Bonds $ (870,000) $ (453,013) Financing Authority Revenue Bonds $ (3,335,000) $ p,041,029) Gross General Obligation Bonds $ 43,479,004 $ 631,810 Source: (A) = CA State Department of Finance (B) = "Total Property Subject to Ta x ation" from Schedule of "Assessed Valuation of Taxable Property" (C) = Includes General Obligation Bonds and Tax Allocation Bonds (Redevelopment Agency) which are supported by general property taxes and tax increment received by the Redevelopment Agency. 125 FISCAL YEAR ENDED JUNE 30 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 $ $ $ $ $ $ $ $ $ $ CITY OF SAN RAFAEL RATIO OF ANNUAL DEBT SERVICE TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES PRINCIPAL 2,534,000 $ 2,647,131 $ 2,276,688 $ 1,807,000 $ 6,925,650 $ 801,000 $ 1,323,000 $ 1,875,000 $ 1,786,000 $ 1,849,000 $ LAST TEN FISCAL YEARS INTEREST 3,027,241 2,737,152 1,942,959 2,030,491 2,336,374 1,909,490 1,874,003 2,700,668 2,746,333 2,641,111 $ $ $ $ $ $ $ $ $ $ TOTAL DEBT SERVICE 5,561,241 5,384,283 4,219,647 3,837,491 9,262,024 2,710,490 3,197,003 4,575,668 4,532,333 4,490,111 TOTAL GOVERNMENTAL EXPENDITURES (1) $ 40,123,289 $ 37,484,066 $ 40,288,097 $ 46,841,789 $ 59,222,179 $ 59,700,528 $ 53,091,763 $ 70,683,163 $ 16,704,254 $ 10,847,880 Source: City of San Rafael audited Financial Statements (1) -includes all governmental fund types, excluding fiduciary expendable trust funds . 126 RATIO OF DEBT SERVICE TO TOTAL GOVERNMENTAL EXPENDITURES 13.9% 14.4% 10.5% 8.2% 15.6% 4.5% 6.0% 6.5% 27.1% 41.4% CITY OF SAN RAFAEL COMPUTATION OF DIRECT AND OVERLAPPING DEBT JUNE 30, 2002 2001-02 Assessed Valuation: Redevelopment Incremental Valuation: Adjusted Assessed Valuation: $6,573,753,689 1,444,400,886 $5,129,352,803 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % AE!E!licable City of San Rafael City of San Rafael 1915 Act Bonds San Rafael High School District Tamalpais Union High School District Dixie School District San Rafael School District Ross Valley School District TOTAL GROSS DIRECT AND OVERLApPING TAX AND ASSESSMENT DEBT OVERLAPPING GENERAL FUND OBLIGATION DEBT: Marin County Certificates of Participation Marin County Transit District General Fund Obligations Marin County Water District General Fund Obligations Dixie School District Certificates of Participation Ross School District General Fund Obligations Marin-Sonoma Mosquito and Vector Control District Certificates of Participation TOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT GROSS COMBINED TOTAL DEBT 100.000 100.000 75.573 0.082 70.572 78.694 0.012 16.107 16.107 20.747 70.572 1.704 8.362 Debt 6/30/00 $ 4,171,000 4,677,969 17,072 7,054,243 5,112,364 2,340 $ 21,034,988 $ 10,267,312 51,203 53,657 1,457,312 20,951 400,958 $ 12,251,393 $ 33,286,381 (1) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations Ratios to 2001-02 Assessed Valuation: Direct Debt .............................................................................. 0 .00% Direct and Overlapping Tax and Assessment Debt ................ 0.32% Combined Total Debt ...................................................... 0.65% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/02: $0 Source: California Municipal Statistics, Inc. 127 (1 ) CITY OF SAN RAFAEL COMPUTATION OF LEGAL DEBT MARGIN JUNE 30, 2002 TOTAL ASSESSED VALUE OF REAL AND PERSONAL PROPERTY (excluding homeowners exemptions) DEBT LIMIT PERCENTAGE TOTAL DEBT LIMIT AMOUNT OF DEBT APPLICABLE TO DEBT LIMIT (1) LEGAL DEBT MARGIN $ 6,573,753,689 3.75% $ 246,515,763 $ 246,515,763 Note: The general laws of the State of California for Municipalities provide for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was established based upon 25% of market value. Effective in fiscal year 1981-82, taxable property is assessed at 100% of market value. Although debt limit provisions have not been modified by the State since the 81-82 change, the percentage has been proportionally modified to 3.75% (15% X 25%) for the purpose of this calculation in order to reflect consistency within the State's original intention of debt limitation. (1) -REFLECTS THE AMOUNT OF GENERAL OBLIGATION BONDS ISSUED BY THE CITY OF SAN RAFAEL; EXCLUDES AGENCY TAX ALLOCATION BONDS. Source: California Municipal Statistics, Inc. and City of San Rafael's Management Service Department 128 COMPANY Nortgate Mall Association AMG Realty Partners LP Lucas Digital LTD LLC Regency Center & Regency Center II Association LP Autodesk 4040 Civic Center LLC MHV Joint Venture San Rafael Corporate Center LLC Marin Sanitary Service Grubarges-San Rafael & Grubarges-San Rafael LLC Subtotal Principal Taxpayers All Others TOTAL CITY OF SAN RAFAEL PRINCIPAL TAXPAYERS JUNE 30, 2002 TYPE OF BUSINESS Retail Stores Technology Center Film and Entertainment Property Management Computer Software Develop Property Management Hotel Property Management Waste Collection Hotel Source: Marin County Assessor 2001-2002 Tax Roll Information 129 % OF TOTAL ASSESSED ASSESSED VALUATION VALUATION $ 79,681,533 1.21% $ 68,440,700 1.04% $ 49,129,959 .75% $ 35,611,216 .54% $ 33,940,581 .52% $ 33,422,001 .51% $ 28,130,567 .43% $ 27,382,000 .42% $ 25,036,849 .38% $ 21,342,150 .32% $ 402,117,556 6.12% $6,171,636,133 93.88% $6,573,753,689 100.00% HOME DEPOT RA B MOTORS MACYS R & G TOYOTA & VOLVO SONNEN BMW CITY OF SAN RAFAEL SALES TAX BY INDUSTRY GROUP FISCAL YEAR 2001-02 TOP FIFTEEN SALES TAX PRODUCERS -2001-02 LEXUS OF MARIN SONNEN VOLKWAGEN AUDI PORSCHE GOLDEN STATE LUMBER MICHAEL STEADS MARIN FORD SEARS ROEBUCK JACKSONS HARDWARE JAGUAR MARIN COMP USA JOHN IRISH AUTO PLAZA SONNEN MOTORCARS SALES TAX PRODUCERS BY INDUSTRY -2001-02 Fuel And Service Stations Restaurants and Hotels 4% Food and Drugs 6% General Consumer Goods 23% Business and Industry 14% 6 % NOTE: -Top fifteen sales tax producers are listed alphabetically; chart by industry reflects point of sales activity for the sales quarters of July 2001 through June 2002. Source: State Board of Equalization 130 CITY OF SAN RAFAEL CONSTRUCTION ACTIVITY LAST TEN FISCAL YEARS NUMBER OF PERMITS ISSUED FISCAL YEAR ENDED COMMERCIAU NEW JUNE 30 INDUSTRIAL RESIDENTIAL ALTERATIONS TOTAL 1993 3 83 1,030 1,116 1994 4 102 1,117 1,223 1995 6 41 1,109 1,156 1996 3 90 1,147 1,240 1997 9 50 1,139 1,198 1998 8 65 1,053 1,126 1999 10 79 1,133 1,222 2000 3 63 1,019 1,085 2001 10 22 1,076 1,108 2002 4 22 1,113 1,139 N/A -not available Source.' San Rafael Building Department 131 TOTAL TOTAL PERMIT INCREASE IN BANK VALUATION LIVING UNITS DEPOSITS 29,559,332 84 1,772,758,000 42,077,753 139 1,666,609,000 34,386,454 74 1,717,388,000 64,269,981 264 1,804,771,000 53,172,130 124 1 ,863,602,000 67,125,883 151 2,049,398,000 77,892,405 128 N/A 63,402,582 241 N/A 65,894,336 148 N/A 44,950,965 66 N/A CITY OF SAN RAFAEL SCHEDULE OF INSURANCE IN FORCE JUNE 30, 2002 POLICY EXP. COMPANY NUMBER DATE TYPE OF COVERAGE LIMITS OF COVERAGE MachineD! and Egpi{2ment Insurance: CJPRMA 3XN-022-370-05 8/31/2003 Boiler and Machinery Coverage including $ 10.000,000 Covered Property Production Machines and Public Utility $ 100,000 Extra Expense Equipment $ 5,000 Deductible -Engine $ 1,000 Deductible -Other $ 1,000 Deductible -Extra Exp. Marsh Risk & Insurance Services CAH-822007 11/1/2003 Hull and Machinery Insurance for Police Boat $ 250,000 Covered Property $ 5,000 Deductible Commercial Pro{2e!tt. Insurance: The Travelers Insurance Co KTJCMB-122D827-A-98 7/1/2003 Real and Personal Property, Business $ 2,500,000 Company's portion Lexington Insurance Co. 8533918 7/1/2003 Transit, Accounts Receivable, Leaseholds $ 2,500,000 Company's portion $ 5,000,000 Each occurrence $ 25,000 Deductible CJPRMA 659-96-69 7/1/2003 Excess Property Coverage $ 295,000,000 excess of $ 5,000,000 Worker's Com{2ensation: Discover Re D003XOOO05 7/1/2004 Excess Worker's Compensation $ 9,750,000 Excess of $250,000 $ 250,000 Self-insured Retention S{2ecial Event Insurance: General Star Indemnity Co. IYG-325268A 1/1/2003 Special Event Liability Insurance -Primary $ 1,000,000 Aggregate Limit $ 250,000 Each occurrence $ 50,000 Fire damage $ 2,000 Medical, per person Genesis Indemnity Insurance Co. ZXB300176B 1/1/2003 Special Event Liability Insurance -Excess $ 1,500,000 Aggregate Limit $ 750,000 Each occurrence Liability Insurance: Ace USA ACL687738 7/1/2003 Aircraft Liability -Non-owned $ 10,000,000 Each occurrence California Joint Powers Risk NIA 7/1/2003 Property damage, bodily injury, personal injury, $ 24,500,000 Excess of $500,000 Management Authority public official errors and omissions $ 500,000 Self-insured Retention Public Official Bonds: Western Surety Company 58476739 11/12/2003 Elected City Clerk $ 5,000 Western Surety Company 58476738 11/12/2003 Appointed Deputy Treasurer $ 10,000 Kemper Insurance Companies 3S30604500 11/4/2003 Administrative Services Director $ 50,000 Western Surety Company 58476740 11/5/2003 Elected City Attomey $ 1,000 Marin Pacific Company 57 -PEB-GG9385 7/1/2003 Public Officials $ 5,000 Marin Pacific Company 57 -PEB-GG9377 7/1/2003 Public Employee Dishonesty Bond $ 100,000 Source -City of San Rafael Human Resouces Division -Risk Manager 132 Date of Incorporation Form of Government CITY OF SAN RAFAEL MISCELLANEOUS STATISTICAL DATA JUNE 30, 2002 Incorporated as a Charter City, effective July 1, 1913 Council/Manager February 18, 1874 City Council consists of a directly elected Mayor and four council members, all elected to four year terms. Number of City employees Election (1) Registered voters N umber of votes cast last general election Percentage of registered voters voting Population (2) Location 17 miles north of San Francisco in Marin County Elevation Ranges from sea level to 900 feet Area in square miles 541 27 ,214 10,150 37.3% 56,657 22 square miles -consisting of 17 square miles of land and 5 of water and tidelands Police Number of stations Number of sUb-stations Number of employees Sworn Civilian Ratio of sworn personnel per 1,000 population Public Works Miles of streets Number of major intersections with traffic signals Number of street lights Recreation Parks Number of acres Recreation facilities 133 1 2 78 34.5 1.4 % 171 85 4200 22 146.00 3 Library Services Number of volumes CITY OF SAN RAFAEL MISCELLANEOUS STATISTICAL DATA JUNE 30, 2002 Hours of service per week Library facilities Housing (3) Single family -Detached Single family -Attached Multi family Mobile Homes Total Units Total Occupied Percent Vacant Education Elementary schools Middle schools High schools Parochial schools Colleges Churches (4) Financial institutes (5) Banks Savings & Loans Credit unions Ethnic breakdown (6) White Hispanic African-American Asian Sources: (1) Marin County Registrar of Voters, July 2002 (2) California Department of Finance Estimates 130,000 59 2 10,490 1,992 9,992 413 22,887 22,517 2.51% 10 2 3 9 2 42 19 13 1 75.8% 23.3% 2.2% 5.6% (3) Planning Department, San Rafael (Population and Housing Estimates, Department of Finance, State of California) (4) Marin County Pacific Bell SMART Yellow Pages, May 2002 (5) The Findley Reports, June 30, 2002 (6) San Rafael Chamber of Commerce, 2002 Economic Profile 134 SALES TAX Description: Sales and use tax is imposed upon most retail transactions. The Marin County rate reflects only the basic tax as charged by the State. Of the total 7.25%, 1.00% is returned to San Rafael. The remainder is allocated to the State's General Fund (5.00%) and the County for transportation, public safety and other programs (1.25%). Beginning January 2001, the State portion was reduced 1/4% pursuant to legislation in Sacramento tied to growth in California tax revenues. Background: Voter approved laws, restricting tax raising limits, began with Proposition 13 in 1978 and have occurred up through Proposition 218 in 1996. These revenue restrictions, coupled with State redistribution of property taxes, have forced cities to rely more and more on sales tax for municipal services. San Rafael continues to be the retail hub of Marin County, and as such has benefited from retail uses created by market forces and the Redevelopment Agency efforts over the past few years . Results: The early part of this decade represented a deep recession that lasted for several years. $20.000 $18.000 $16 .000 :q ~ $14.000 i $12.000 $10.000 $8.000 Beginning in 1995-96, the City began to see real increases in sales tax that reflected an economy on the rise. For the last few years, a combination of global expansion, international commerce, new local retail business and significant new and leased automobile sales have translated into significant increases in sales tax. Taxes in 2000-01 are at levels 60% above those in 1995-96. The economic recession of 2001 and 2002 has produced dramatic drops in this funding source. Modest growth is expected in the middle of 2003. Sales Tax -12 Year Trend $18.442 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 Fiscal Year (est.) Actual/Estimated Results -+-10% 'boom' growth 135 PROPERTY TAX Description: Property tax is imposed on real property (land and permanent improvements) as well as tangible personal property (furniture, fixtures and equipment). The general levy tax rate is 1 % of assessed value, adjusted by an annual inflation factor not to exceed 2%. Property is assessed by the Marin County Assessor's office, except for certain public utility property which is assessed by the State Board of Equalization. Background: Growth in property tax revenues is realized from either increased valuation occurring when property is sold and subsequently reassessed or from the 2% annual increase allowed under Proposition 13. Since 1992-93, the State has redirected 26% of local San Rafael taxes into its own budget. Beginning in 1994-1995, the City adopted the "teeter" plan which allows the City to receive 100% of its property tax, regardless of when the taxes are paid. Results: The graph below takes on two elements. The first bar shows the actual and estimated 1 % levy revenues for the City. The additional bar shows the amount of money lost to the State via tax redistribution. The City receives approximately 12% of each dollar net of redistribution to the State. The cumulative losses to the City from 1992-93 through 2001-02 total $10,167,618 (per League of California City data). Property taxes continue to rise as recent development hits the assessor rolls and high demand to be in Marin County remains. :! ~ i Property Taxes -12 Year Trend $7.000 $5.500 - $4 .000 I.e Pi j r ' r ;=-..-;. r I .. r . 1i ·'ZP -'-..r;; J!' ... r 91·92 92·93 93·94 94-95 95·96 96·97 97-98 98·99 99·00 00·01 01·02 02·03 (est.) Fiscal Year Total paid to City _Loss to State I 136 MOTOR VEHICLE IN LIEU FEES Description: A special license fee is imposed by the State on motor vehicles "in lieu" of property tax. The Motor Vehicle In lieu Fees are paid by the registered owner of a vehicle. This fee is paid initially at the date of purchase on new or used vehicles . In second and subsequent years, it is remitted as part of the vehicle registration process. Background: A two percent rate is applied to vehicle value annually in order to compute the fee paid by the registered owner. The 2% rate applies to the original sales value in the year of purchase. By State Statute, the valuation declines each year by 10% of the remaining value, leveling off at a 15% valuation factor in year 11 . Of the total fees collected by the State, approximately 12% are distributed to cities . The State approved a reduction of 25% in the personal property tax to voters for calendar year 1999. An additional 10% rate reduction occurred January 1, 2000, and the final allowable trigger of 30.5% was completed in 2001 . All tolled, this 67.5% tax reduction leaves the City at risk because the revenue is "backfilled" from State general fund revenues. This revenue remains unstable so long as State legislators have the ability to manipulate collection and distribution reductions during each year of the budget sessions. Results: Modest increase in revenues are expected in the next two years . Sales of new and used vehicles should climb moderately, with prices moving close to cost of liv ing indices. The new Chevrolet dealership in East San Rafael should add some overall car sales volume, and corresponding vehicle license fees to the City's coffers. Motor Vehicle In Lieu Fees -12 Year Trend $3.500 $3.000 '1-1 --------------------------_ $2 .500 cn$2 .000 s:: ~ i.s1 .500 $1.000 $0 .500 $0 .000 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 ** 99-00 " 00-01 ** 01-02 ** 02-03 Fiscal Year (est.) .* _ Motor Vehicle Fees (** -total includes 'backfill' which started 1/1/98 and is now 67.5% of total VLF $ received) -5% annual growth 137 BUSINESS LICENSE TAX Description : Business License Tax is imposed on all business for the privilege of conducting business within the City. Most retail, wholesale, professional and service industries pay this tax on a gross receipts basis. A small portion of businesses pay a tax rate based upon the number of employees. Apartments pay a tax based upon the number of rental units. Background: The tax rates are identified in Municipal Code Section 10.04, subject to indexing for inflation. The rates were last modified in 1991. Future rate restructuring would likely fall under Proposition 218 voter approval reqUirements. Estimated tax revenues are based upon a combination of inflation factors, business expansion and retention, turnover, desk and field audits. Results: This source of revenues is sensitive to economic cycles. For the past several years, the strong economy has produced fairly strong growth in this source, particularly those businesses who pay licenses on a gross receipts basis. Beginning in 1998-99, a field audit position captured well over 200 new businesses that added to the increases in tax revenues. For 2001-2003, growth is mostly focused on new business identified via a number of external reference checking sources. Special project revenues added total dollars through 2001-2002. ~ ~ i Business License Tax -12 Year Trend $2 $1.500- $1.000 I'" r::1 E , "' P!7 B'i rtp " r : "-7 "f ' r 'l r ~sz ' .,. -, r ~ 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 (est.) Fiscal Year [m Business taxes (no penalties) I 138 HOTEL (OCCUPANCY) TAX Description : Hotel tax, also referred to as occupancy tax, is imposed on occupants of hotels, inns, motels and other lodging facilities unless such occupancy is for a period of 30 or more days. The tax is applied to a customer's lodging bill . Taxes are remitted either monthly or quarterly for all approved lodging operators. Background: The current hotel tax rate is 10%. It was last modified in 1988. Factors that influence this revenue source include room rates, occupancy levels , the number of rooms available for lodging , business retention, new business development and tourism. The City currently has 9 hotels/motels. These range in scope from a bed and breakfast inn all the way up to corporate chain facilities . The two largest hotels generate 83% of the total tax received by the City. Results: $2.500 For 1998-99, remodeling of the old Bermuda Palms into the Days Inn has translated into improved tax from this location. In 1999-00 the Wyndham was acquired by the Four Points Hotel. Occupancy rates started declining in 2001 when the business economy slowed. 9-11 created traveling fears, thereby resulting in a 24% decline in 2001-02. The development of a new Hilton Hotel is expected to add future hotel revenues in 2004. Hotel (Occupancy) Tax -12 Year Trend $2.000 -I _------- $1 .500 -I ~ 1/1 C ~ !i $1 .000 $0.500 $- 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 Fiscal Year _ Actual Results/Estimates ---8% annual growth 139 01 -02 02-03 (est.) PROPERTY TRANSFER TAX Description: Property transfer tax is imposed on any conveyance of real property when a change in "deed" is filed with the County of Marin. Background: The City's Real Property Transfer Tax regulations are laid out in Municipal Code Section 3.22. San Rafael's tax is imposed at the rate of two dollars for each thousand dollars or fractional part of one thousand dollars in sales value. This revenue source was last modified in 1990, resulting in an increase in rates from $1.10 to $2.00 per thousand dollars of value. This rate change is reflect in the chart below. Results: This resource, like many tax revenues, is tied to the overall economic vitality of the City. A boom in market activity resulted in a 45% increase in 1996-97 over 1995-96. Likewise, 1997- 98 was another banner year, up 15% over 1996-97. 1998-99 was 4% less due to limited housing stock available on the market. In 1999-00 and 2000-01, double digit increases in real estate values on pre-Proposition 13 properties that turned over and new commercial and office sites resulted in a large gains once again. For the 2001-2003 period, resources are expected to decline because of decreased volume in housing and real estate sales; values should rise sliohtlv. $1.500 $1.000 ~ ~ i $0.500 +1 ---I $0.000 Property Transfer Tax -12 Year Trend 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 Fiscal Year (est.) Actual Results/Estimates -8% annual growth 140 FRANCHISE FEES Description: San Rafael imposes a fee on the distribution and sales of public utility services. City Charter Article XIV provides regulations concerning franchised agencies and businesses. Currently, the City charges PG&E a franchise fee of 1% for gas and 1/2% for electricity. The local cable provider, AT&T, pays a 5% franchise fee on a quarterly basis to San Rafael. Background: In 1997, the City adopted a new franchisee fee for refuse services. The 10% rate is imposed on Marin Sanitary Service for refuse and recycling services provided in the franchisee's service area (all of the City except North San Rafael). For the other utilities, the current rates are applied to revenues generated within the City limits. Statewide utility deregulation is causing cities, including San Rafael, to see lower overall franchise fees from the major utility provider. Results: The graph below takes on two elements. The first bar shows the franchise fees on utility companies only (PG&E and AT&T Cable). The second portion shows the new franchise fee for refuse that began in 1997-98. For the 2001-through 2003 period , the taxes on the refuse hauler increase due to service volume and additional customers. Fiscal year 2001-2002 represents two anomalies. Statewide electricity rate spikes in 2001 translated to higher than expected utility franchise revenues. back payments on local refuse hauler collections added new one time dollars to the refuse franchise category. $1.800 $1.600 $1.400 $1.200 en $1.000 I: ~ i $0.800 $0 .600 $0.400 $0.200 $- Franchise Fees -12 Year Trend 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 (est.) Fiscal Year • Utility Companies 11 Refuse Company 141 CITY OF SAN RAFAEL ALLOCATION OF $1.00 OF PROPERTY TAX REVENUE FISCAL YEAR 2001-2002 Source: 2001-2002 HdL-Coren & Cone Property Tax Distribution 142 S 0.295 COUllt}· Geneml S 0.21,'\ 5.!tn Rafad Sc hool s -E lellle nlar}, S 0.17 I 5.!tn Rafae I High Schools S O.CI.'\O Marin COllllllunity College S o.on Count}' School Ser.·ice Fund S O.m2 5.111 Rafae I Sani tati 0 n 50 11.0116 ~bri" C< ... 1~·(~"" Sf"" s U.OI:~~ ~brill Ca.,} him~il Di,uio.:l S 11.00.35 M:lrill-StllL:fI'tl \11'!Iol(uil,) .. \b::lll.:'mCl1 ~ !I.O!)1.:! Iby }\r":-:I/..ir Q.Jillity \i:lllilS"-"fn.mt $ 1.000